Semler Scientific Reports First Quarter 2023 Financial Results

2023 Q1 highlights:

• Revenue was $18.2 million, an increase of 30% compared to the corresponding period of 2022
• Net income was $5.0 million, an increase of 48% compared to the corresponding period of 2022
• Cash, cash equivalents and short-term investments of $43.0 million

SANTA CLARA, Calif., May 10, 2023 /PRNewswire/ -- Semler Scientific, Inc. (Nasdaq: SMLR), a company that develops, manufactures and markets innovative medical products and services that assist in evaluating and treating chronic diseases, today reported financial results for the three months ended March 31, 2023.

"We are pleased to report record quarterly revenues and pre-tax net income predominately from sales of QuantaFlo for peripheral artery disease testing," said Doug Murphy-Chutorian, MD, interim chief executive officer of Semler Scientific. "We are encouraged by our first quarter results and are highly focused on developing our business in two new disease areas, heart dysfunction and diabetes."

FINANCIAL RESULTS

For the first quarter ended March 31, 2023, compared to the corresponding period of 2022, Semler Scientific reported:

• Revenue of $18.2 million, an increase of $4.2 million, or 30%, compared to $14.0 million.
• Fixed fee software license revenues were $9.3 million, an increase of $1.4 million, or 18%, compared to $7.9 million.
• Variable fee software license revenues were $8.6 million, an increase of $2.8 million, or 46%, compared to $5.8 million.
• Sales of other products were $0.3 million, with no change from the prior period.
• Cost of revenues of $1.3 million, an increase of $0.3 million, or 31%, compared to $1.0 million. As a percentage of revenues, cost of revenues was unchanged at 7%.
• Total operating expenses of $12.0 million, which includes cost of revenues, an increase of $1.9 million, or 18%, compared to $10.1 million. As a percentage of revenues, operating expenses decreased to 65% compared to 72%.
• Pre-tax net income of $6.6 million, an increase of $2.7 million, or 68%, compared to $3.9 million.
• Income tax expense of $1.7 million, or an effective tax rate of 25%, compared to $0.6 million, or an effective tax rate of 15%.
• Net income of $5.0 million, or $0.74 per basic share and $0.63 per diluted share, an increase of $1.6 million, or 48%, compared to $3.4 million, or $0.50 per basic share and $0.41 per diluted share.

Semler Scientific's two largest customers (including their affiliates) comprised 40.9% and 33.5% of first quarter revenues in 2023.

OTHER SIGNIFICANT EVENT

In late March 2023, the Centers for Medicare & Medicaid Services (CMS) issued the final 2024 rate announcement with payment changes for the Medicare Advantage and Part D prescription drug programs. Essentially, CMS is phasing in a new Medicare Advantage risk adjustment model (2024 model) from the previous model (2020 model) over a three-year period. The 2024 model does not include risk adjusted payments for peripheral arterial disease (PAD) without complications, which payments many health insurers relied upon for their Medicare Advantage patients in the 2020 model. The changes will be phased in as follows: in calendar year 2023, full payment under the 2020 model; in calendar year 2024, 67% of the 2020 model; in calendar year 2025, 33% of the 2020 model.

Notice of Conference Call

Semler Scientific will host a conference call today at 4:30 p.m. ET. The call will address results of the first quarter ended March 31, 2023, as well as provide a business update on Semler Scientific's market outlook and strategies for the near-term future.

Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10177436/f8f3c160f0. Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time. Those without internet access or who are unable to pre-register may dial in by calling:

Domestic callers: (866) 777–2509
International callers: (412) 317–5413

Please specify to the operator that you would like to join the "Semler Scientific Call." The conference call will be archived on Semler Scientific's website at www.semlerscientific.com.

About Semler Scientific, Inc.:

Semler Scientific, Inc. develops, manufactures and markets innovative products and services that assist in evaluating and treating chronic diseases. Its flagship product, QuantaFlo®, which is patented and cleared by the U.S. Food and Drug Administration (FDA), is a rapid point-of-care test that measures arterial blood flow in the extremities. The QuantaFlo® test aids in the diagnosis of cardiovascular diseases, such as peripheral arterial disease (PAD) and heart dysfunction (HD). QuantaFlo® is used by healthcare providers to evaluate their patient's risk of mortality and major adverse cardiovascular events (MACE). In addition, Semler Scientific has an agreement with Mellitus Health, Inc. (Mellitus) to exclusively market and distribute Insulin Insights™, an FDA cleared software product that recommends optimal insulin dosing for diabetic patients in the United States, including Puerto Rico. Semler Scientific has a minority investment in Mellitus, as well as Monarch Medical Technologies LLC, a privately held company whose product EndoTool® offers a technological solution for inpatient glycemic management. Additional information about Semler Scientific can be found at www.semlerscientific.com.

Forward-Looking Statements

This press release contains "forward-looking" statements. Such statements can be identified by, among other things, the use of forward-looking language such as the words "believe," "goal," "may," "will," "intend," "expect," "anticipate," "estimate," "project," "would," "could" or words with similar meaning or the negatives of these terms or by the discussion of strategy or intentions. The forward-looking statements in this release include express or implied statements regarding developing business in heart dysfunction and diabetes; continued testing of asymptomatic patients; and the benefits of early identification of at-risk patients; among others. Such forward-looking statements are subject to a number of risks and uncertainties that could cause Semler Scientific's actual results to differ materially from those discussed here, such as whether or not insurance plans and other customers will continue to license its cardiovascular testing products, including the risk of changes in the reimbursement landscape for its customers including related to the recent CMS rate announcement; whether or not it will be able to successfully expand its product offering, including into heart dysfunction and diabetes; whether or not QuantaFlo® can successfully aid in the diagnosis of heart dysfunction; along with those risk factors detailed in Semler Scientific's filings with the Securities and Exchange Commission. These forward-looking statements involve assumptions, estimates, and uncertainties that reflect current internal projections, expectations or beliefs. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. All forward-looking statements contained in this press release are qualified in their entirety by these cautionary statements and the risk factors described above. Furthermore, all such statements are made as of the date of this release and Semler Scientific assumes no obligation to update or revise these statements unless otherwise required by law.

INVESTORCONTACT:

Susan A. Noonan
S.A. Noonan Communications
susan@sanoonan.com
917 513 5303

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SOURCE Semler Scientific, Inc.