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IMAC Holdings, Inc. (BACK)·Q3 2019 Earnings Summary

Executive Summary

  • Net revenues rose 72% year over year to $4.4M, with total patient revenues up 35% to $8.7M; patient visits increased 30% to 35,749 and procedures rose 17% to 82,232 .
  • Sequentially, net revenues improved vs. Q2 ($3.8M), and losses narrowed: net loss was $1.5M (-$0.19 EPS) vs. $1.7M (-$0.21 EPS) in Q2; operating loss improved to $1.6M from $1.94M .
  • Strategic actions included sale of BioFirma for $320,800 with a discounted NeoCyte supply agreement, VA Community Care Network participation across TN, KY, MO, and continued Illinois expansion including the Mike Ditka Center .
  • Stock reaction catalysts: accelerating net revenue growth and VA network access, portfolio focus via BioFirma divestiture, and Illinois market buildout could support near-term sentiment as losses narrow .

What Went Well and What Went Wrong

  • What Went Well

    • Strong top-line momentum: net revenues +72% YoY to $4.4M; total patient revenues +35% YoY to $8.7M; patient visits +30% YoY to 35,749; procedures +17% YoY to 82,232 .
    • Strategic expansion and VA channel access: “We continue to execute on our plan to expand our presence… We continue to look for opportunities to expand in regions we believe have strategic value…” (CEO) and “anticipate further cost savings and increased revenue as we strengthen… relationship with the U.S. Department of Veterans’ Affairs” (COO) .
    • Portfolio focus and supply economics: BioFirma sale proceeds ($320,800) with long-term discounted NeoCyte supply agreement; shift of CSO to external scientific advisor, retaining expertise .

  • What Went Wrong

    • Elevated operating costs: operating expenses rose to $6.0M from $3.7M YoY; operating loss expanded to $1.6M from $1.2M YoY, reflecting integration and public company costs .
    • Cash drawdown: cash declined to $0.7M at quarter-end vs. $2.2M in Q2 and $3.1M in Q1, constraining flexibility .
    • Sequential patient revenue mixed: total patient revenues slipped slightly vs. Q2 ($8.7M vs. $8.9M), though net revenues improved, indicating payer/contractual dynamics and mix effects .

Financial Results

MetricQ3 2018Q1 2019Q2 2019Q3 2019
Total Patient Revenues ($USD Millions)$6.1 $7.3 $8.9 $8.7
Net Revenues ($USD Millions)$2.5 $2.8 $3.8 $4.4
Net Loss ($USD Millions)$(1.0) $(1.6) $(1.7) $(1.5)
Diluted EPS ($USD)$(0.22) $(0.27) $(0.21) $(0.19)
Operating Expenses ($USD Millions)$3.7 $4.1 $5.7 $6.0
Operating Loss ($USD Millions)$(1.2) $(1.34) $(1.94) $(1.6)
Cash & Equivalents ($USD Millions)N/A$3.1 $2.2 $0.7

Sequential and YoY detail:

  • Net revenues: +72% YoY ($2.5M → $4.4M) ; +16% QoQ ($3.8M → $4.4M) .
  • Total patient revenues: +35% YoY ($6.1M → $8.7M) ; -2% QoQ ($8.9M → $8.7M) .
  • Operating loss: $(1.2)M → $(1.6)M YoY ; improved QoQ $(1.94)M → $(1.6)M .

KPIs

KPIQ3 2018Q1 2019Q2 2019Q3 2019
Patient Visits (units)27,526 30,824 35,743 35,749
Procedures (units)70,083 74,340 84,843 82,232
Clinics Owned/Managed (count)N/A11 14 14

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q4Not providedNot providedMaintained: no formal guidance
EPSFY/Q4Not providedNot providedMaintained: no formal guidance
Margins/OpEx/TaxFY/Q4Not providedNot providedMaintained: no formal guidance
Strategic actionsNear-termN/ABioFirma sale ($320,800) with discounted NeoCyte supply; VA CCN participationNew disclosures

Earnings Call Themes & Trends

No Q3 2019 earnings call transcript was found for IMAC Holdings; themes are derived from Q1–Q3 earnings press releases.

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Geographic expansion & brand ambassadorsAdded Chicago clinics; rebranding with Mike Ditka; contiguous markets to leverage marketing Opened Mike Ditka Center in Arlington Heights; expanded to Rockford; Springfield expansion Expanding in Illinois; brand-led awareness building
VA Community Care NetworkNot highlighted previouslyNamed Participant Provider in CCN for TN, KY, MO New access channel; potential volume/cost benefits
Corporate accounts initiativeTargeting self-insured employers; initial wins; positive reception at Validation Institute Summit Anticipates further cost savings and increased revenue with VA relationship Scaling payer/channel strategy
Portfolio focus (BioFirma)FDA lab registration; using/selling NeoCyte products Divested BioFirma; retained discounted NeoCyte supply; CSO transitioned to advisor Focus on core clinics; improved supply economics
Patient volume & outcomesStrong sequential/YoY increases; outcomes data (pain reduction, QoL) Visits +30% YoY; procedures +17% YoY Sustained utilization growth

Management Commentary

  • “We continue to execute on our plan to expand our presence in regions where we can extend our existing geographic footprint… We continue to look for opportunities to expand in regions we believe have strategic value…” — Jeffrey S. Ervin, CEO .
  • “We have seen consistent, significant increases in our Patient Services Revenue, Procedures and Visits… We also anticipate further cost savings and increased revenue as we strengthen our already strong relationship with the U.S. Department of Veterans’ Affairs.” — Matt Wallis, COO .
  • “The momentum established during the first quarter was maintained during the second quarter… The concentration of clinics in contiguous geographic areas allows us to leverage our marketing dollars…” — CEO Q2 commentary .
  • “We immediately put some of our IPO proceeds to work to generate patient awareness via increased marketing… We have long viewed the Chicago area as a prime market for expansion…” — CEO Q1 commentary .
  • “The sale of BioFirma represents a new opportunity… It allows us to continue to utilize the NeoCyte products… without the additional overhead…” — CEO on BioFirma divestiture .

Q&A Highlights

  • No Q3 2019 earnings call transcript available; no Q&A themes or guidance clarifications could be assessed from a call [Search returned none].

Estimates Context

  • Wall Street consensus estimates (S&P Global) for Q3 2019 EPS and revenue were unavailable due to an access limit; IMAC’s micro-cap status likely implies limited analyst coverage. As a result, comparisons vs. consensus cannot be made for this quarter [GetEstimates error].

Key Takeaways for Investors

  • Net revenue growth remains robust (+72% YoY) with sequential improvement; losses narrowed QoQ, indicating operational leverage as integration progresses .
  • Access to VA’s Community Care Network in three states could be a meaningful volume catalyst, supporting patient visit growth and potential payer mix benefits .
  • BioFirma divestiture simplifies the portfolio and secures discounted supply for biologics, potentially improving gross economics without subsidiary overhead .
  • Illinois market buildout (Rockford, Mike Ditka Center) and Springfield expansion should sustain brand-led demand; contiguous market strategy aids marketing efficiency .
  • Elevated operating expenses remain a watch item; continued cost control and scaling are necessary to drive the path toward breakeven .
  • Liquidity tightened ($0.7M cash at Q3), increasing the importance of disciplined growth and potential financing considerations near term .
  • With limited consensus coverage, the stock may trade more on execution milestones and strategic announcements (VA, expansions, divestitures) than on quarterly beats/misses.

Appendix: Prior Quarter References

  • Q2 2019: Net revenues $3.8M; net loss $(1.7)M (-$0.21); visits 35,743; procedures 84,843; cash $2.2M .
  • Q1 2019: Net revenues $2.8M; net loss $(1.6)M (-$0.27); visits 30,824; procedures 74,340; cash $3.1M .