NEW YORK, Feb. 27, 2020 (GLOBE NEWSWIRE) -- Conversion Labs, Inc. (OTCQB: CVLB), a direct-to-consumer telemedicine and wellness company, issued its 2020 shareholder letter today in which management highlighted the company’s strong growth since its transition to a direct-to-consumer business model in 2016.

The company’s success was recently recognized with a ranking of #189 in Deloitte’s 2019 Technology Fast 500™ list of the fastest-growing technology, media, and telecommunications companies in North America. Conversion Labs ranked #14 in the Digital Content, Media and Entertainment category.

Conversion Labs earlier announced it expects to report net sales of approximately $3.7 million for the fourth quarter of 2019, up 64% over the same year-ago period. For the full year, it expects net sales to increase 47% to about $12.2 million.

“With only around $4 million of invested capital since the launch of our direct-to-consumer marketing business, we have grown from essentially zero revenue in 2016 to an annualized revenue run-rate in this quarter of $18 million,” commented Justin Schreiber, president and CEO of Conversion Labs. “We see our business continuing to accelerate, with revenue growing by more than 145% in 2020, exceeding $30 million.”

The jump in revenue performance reflects the acceleration of the company’s business over the last few months. Schreiber attributes this success to the dedicated team of professionals the company has assembled over the last few years.

“In early 2019, we identified valuable opportunities forming in telemedicine that could bolster our growth, and we began to strategically invest in people and infrastructure,” said Schreiber. “This is truly the core of what Conversion Labs is all about: identifying opportunity and making smart investments in the future.”

Such investments have included further expanding the company’s team of talented people, growing a strong portfolio of brands, and fine-tuning the business model so that it now includes online direct-to-consumer healthcare and telemedicine. These investments are expected to drive the company’s growth in 2020 and beyond.

Over-The-Counter Business

Conversion Labs’ flagship over-the-counter brand, Shapiro MD, has grown steadily with its highly effective solution for hair loss. Since its inception, Shapiro MD has received more than a billion online impressions and acquired more than 150,000 customers. Despite significant competition in the marketplace, Shapiro MD has quickly become a leading online brand for the treatment of hair loss in both men and women.

Conversion Labs has continued to invest in developing the Shapiro MD brand and its product offerings. One of the brand’s strongest selling points has been its patented formulations and deep roots in clinical science.

The company filed a 510(k) medical device submission with the FDA for a 272-diode laser hair regrowth helmet. This innovative device is another clinically proven product for hair loss that has received strong customer interest. An FDA clearance would demonstrate that the company’s laser hair regrowth product is at least as safe and effective, that is, substantially equivalent, to an already legally marketed device. The company anticipates receiving 510(k) clearance this quarter.

Conversion Labs plans to build upon Shapiro MD’s success as a leading brand for scientifically backed hair growth products by integrating its telemedicine infrastructure and providing virtual medical consultations for hair loss. In addition to finasteride (generic Propecia) for men, the company is beginning to offer proprietary compounded hair loss medications to men and women in 49 states.

“We believe Shapiro MD will become the first hair loss brand in the country where men and women can access clinically studied over-the-counter and prescription products for hair loss via telemedicine, including every FDA approved drug and medical device for hair regrowth,” said Schreiber. “We expect these new product offerings and the introduction of telemedicine services will be a major contributor to our growth in 2020.”

Telemedicine Business Opportunity

In early 2019, Conversion Labs made a strategic decision to enter telemedicine. While many new technologies, including electronic health records, have transformed healthcare in many ways, the company sees the online diagnosis and treatment of patients and associated pharmacy business as the next big wave that will fundamentally change the nation’s $3.5 trillion healthcare market. Driving this transformation is how telemedicine services and online pharmacies have been proven to improve access to healthcare, while dramatically reducing costs for millions of Americans.

“The key to success in telemedicine lies in being able to acquire customers cost-effectively and then retain them over the long term,” noted Schreiber. “The companies that will ultimately dominate the direct-to-consumer telemedicine space will be those that are 1) first-to-market, 2) create a convenient and incredible customer experience, and 3) are the best online marketers. We believe we check all three of these boxes.”

The company launched its first telemedicine brand, Rex MD, in December 2019. Rex MD is a men’s health brand initially focused on treating and prescribing medication for erectile dysfunction (ED). The size of the global ED treatment market is estimated to exceed $2.95 billion by 2023. Capturing even a small percentage of this market would be transformational for Conversion Labs.

The second telemedicine brand the company plans to launch in Q1 2020 is its SOS Rx product line. SOS Rx will initially offer prescription drugs to patients for use in the event of disaster scenarios, such as flu epidemics, radiological exposure or bioterrorism.

“The recent outbreak of the coronavirus in China that has now spread to the U.S. is a perfect case in point,” said Schreiber. “Consumers are looking for ways to protect themselves and their families as the traditional healthcare system falls short of offering effective solutions.”

A recent survey by Finder.com revealed an estimated 68 million Americans (1 in 4) have purchased survival gear in response to unrest over political events or natural disasters. Conversion Labs sees its SOS Rx offering addressing a significant unmet need, and a large number of Americans desire to have the appropriate medications on hand in the event of an emergency.

Strategic Investments

In June 2018, Conversion Labs acquired a 51% stake in LegalSimpli Software, the creators of PDF Simpli. PDF Simpli is a SaaS product that allows users to convert, edit, sign and share PDF documents. It is now marketed in more than 100 countries and demand for these services has been increasing at a strong pace. Since Conversion Lab’s investment, PDF Simpli has grown from 10,000 registrants to now more than 3.8 million worldwide.

The user growth has driven PDF Simpli revenue up 339% over the last year to about $1 million in Q4 2019. Based upon this growth trajectory, Conversion Labs sees PDF Simpli achieving a $10 million annualized run rate by mid-2020.

Priorities & Growth Drivers

Conversion Labs’ priorities and key growth drivers for 2020 include:

  • Continue to grow the Shapiro MD brand by further improving customer experience, introducing product extensions, and integrating telemedicine services and online pharmacy.
  • Scale Rex MD through the addition of new prescription and over-the-counter men’s health products in the coming months.
  • Launch SOS Rx, the company’s second telemedicine brand, by the end of Q1 2020.
  • Support the growth of PDF Simpli, which the company believes will contribute approximately $8 million to $10 million to 2020 overall revenue.
  • Opportunistically acquire, license or launch additional products that are synergistic with the company’s existing portfolio.

“The strength of these initiatives supports the outlook for exceeding $30 million in revenue in 2020, and for us to cross over to profitability,” said Schreiber. “While no plan is ever perfect, we’ll be guided by our history, learning from our successes and failures, as we endeavor to grow each and every day. We will also remain obsessive about doing everything possible to enhance and protect shareholder value.

“We are grateful for the continued support of our shareholders, and extend our thanks to our loyal customers and amazing Conversion Lab teams working hard behind the scenes every day to build a valuable and lasting company.”

About Conversion Labs
Conversion Labs, Inc. is a health and wellness focused e-commerce company with a portfolio of online direct-to-consumer brands. The company’s portfolio of brands includes proprietary over-the-counter products and prescription medications. It also provides online, virtual physician consultations to consumers in 49 states. In addition to its healthcare platform, Conversion Labs is the majority shareholder of PDF Simpli, a direct to consumer SaaS business for editing, signing, and sharing PDF documents. To learn more about Conversion Labs, please visit conversionlabs.com. For more about PDF Simpli, go to pdfsimpli.com.

Important Cautions Regarding Forward-Looking Statements
Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other thing, statements regarding the offering, the expected gross proceeds, the expected use of proceeds and the expected closing of the offering. Any forward-looking statements contained herein are based on current expectations and are subject to a number of risks and uncertainties. The factors that could cause actual future results to differ materially from current expectations include, but are not limited to, risks and uncertainties relating to the Company's ability to develop, market and sell its products; the expected benefits and efficacy of the Company's products; the availability of substantial additional funding for the Company to continue its operations and to conduct research and development, clinical studies and future product commercialization; and, the Company's business, research, product development, regulatory approval, marketing and distribution plans and strategies. These and other factors are identified and described in more detail in our filings with the SEC, including, our current reports on Form 8-K.

These preliminary unaudited results are estimates only and subject to revision until the company reports its financial results for the fourth quarter and audited financial results for the full year of 2019, which it expects to report in March.

Company Contact:
Juan Manuel Piñeiro Dagnery
CFO
Email Contact

Conversion Labs Investor & Media Relations Contact:
Ron Both, CMA
Tel (949) 432-7566
Email Contact