FTRP - Field Trip's Clinics Cost More Than The Revenue They Bring In
Field Trip Health Ltd. (NASDAQ: FTRP) reported fiscal fourth-quarter and full-year 2022 results for the period ending March 31, 2022, and provided a business update today. All results are reported in Canadian dollars. For the quarter, Field Trip earned patient services revenues of $1,724,102 from its twelve clinics in operation, an increase of $1,197,667 or 228%, over the fourth quarter ended March 31, 2021.
Analysts put earnings estimate at -$.72/share for 2022, steady to -$.72/per share in 2023. Revenue estimates are encouraging, with analysts predicting 2023 year-end revenue to reach a little over $12 million from $4 million now (an increase of $3,899,234 or 406% over the prior fiscal year), with a projected sales growth of 197 percent. Four of five analysts have positioned Field Trip as a buy for now, as they predict it’s heading toward a price target of $12.84/share.
Field Trip reported a net loss of $14,170,285 which was mostly attributed to total operating costs of $14,323,644. This compares with a net loss of $7,950,590 in the fiscal fourth quarter of 2021. The increase from the prior year primarily reflects the company’s focus on growing the clinic’s business and continued investment in its drug development pipeline. Net loss for the comparative prior fiscal year was $23,117,607.
The company is still working to resolve an issue with NASDAQ that it was not in compliance with the minimum bid price requirement ($1 per share) which is necessary to allow it to continue to be listed on the NASDAQ Global Select Market, one of three tiers of the NASDAQ stock market. The company went below $1 per share on May 4, 2022 . Volume spiked on that same day (803,000) to its second-highest level since the stock was first listed on July 29, 2021 . It has until December 31 to raise its stock price and regain compliance. The stock price hit a low of $.76 on May 11, and has struggled to rise much above that level ever since.
Earnings Call
On the company earnings call were Joseph del Moral, co-founder and CEO; Ronan Levy, co-founder and executive chairman; and Donna Wong, chief financial officer. Paula Amy Hewitt, vice president and general counsel, and Dr. Nathan Bryson, chief scientific officer, also joined in.
Del Moral talked first about the strategic review of the company. “The strategic review confirmed that both divisions of Field Trip are equipped and ready to successfully operate as independent companies, with distinct strategies, dedicated management teams and the capital resources required to execute on the respective business priorities.”
Other highlights included:
– The District of Columbia clinic began generating revenues in March 2022. On a year over year comparative basis, revenue of $526,435 in Q4 2021 was generated from the Toronto, New York, Santa Monica, Chicago and Atlanta clinics. The quarter over quarter revenue increase was in part due to the one additional clinic as compared to the prior quarter.
– Total operating expenses in the fiscal fourth quarter were $14,323,644 and were comprised of the following: general and administrative expenses of $7,432,602, patient services expenses of $2,691,335, research and development (R&D) expenses of $2,333,724, depreciation and amortization of $1,124,854, sales and marketing expenses of $434,781 and occupancy costs of $306,798.
– Total operating costs for fiscal year 2022 were $57,902,159 compared with $20,055,929 in fiscal year 2021.
– As of March 31, 2022 Field Trip had unrestricted cash and cash equivalents and restricted cash of $64,496,653.
– During the fiscal fourth quarter, Field Trip continued to advance its drug discovery work which is focused on the research and development of its novel molecule, FT-104, as well as other molecules under development, specifically the FT-200 series.
Levy said that, over the coming months, there will be an evolution in the business strategy for the clinic’s division as it becomes Fieldtrip Health and Wellness. “The focus today has been on validating that psychedelic assisted therapies can be safely, effectively, and reliably offered as a therapeutic option for the millions of people who struggle with mental health challenges,” he said. “We will continue to build upon our strong foundation as a leader in the industry, with a focus on growth and client numbers but also implementing further operational improvements to scale our physical footprint efficiently.”
He said that there will be a new emphasis on expanding the Field Trip ecosystem in a capital-efficient manner, including building on the launch of their Field Trip at Home program, plus a greater emphasis on their digital tools, particularly the Trip app. “It will start to play a much more central role as the conversation around psychedelics emerges from a third line treatment to a much more social and cultural conversation. The opportunities in the psychedelic industry as it continues to evolve are near boundless. With Field Trip Health and Wellness, we plan to be at the forefront of the most exciting ones.”