Identification and elimination of $7.5 million of annualized run-rate costs, focusing on future growth and sustainable profitability
Cost optimization activities will simplify operations, improve execution, strengthen customer focus, support cross-selling, and enable CloudMD to continue investing in innovation to drive industry leading health navigation solutions for individuals and organizations
Strategy will continue to focus on refinement of the business to have the most efficient and effective operating model
CloudMD Software & Services Inc. (“CloudMD” or the “Company”), a healthcare technology and innovative health services company transforming the delivery of care, is pleased to provide an update on its cost optimization process, integration of its comprehensive health services platform and organizational structure.
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CloudMD’s cost optimization team is dedicated to creating shareholder and client value through the integration of people, process, and technology across the entire organization. Since the start of the year, approximately $7.5 million of annualized run-rate costs have been eliminated from the organization through integration, cost-synergies and streamlining operational functions across the entire business. The full benefit of these cost savings is expected to be realized in the second quarter. This exceeds the expected $4 million in cost savings the Company previously disclosed.
“We are pleased with our ability to accelerate the identification and elimination of $7.5 million of run-rate costs which we have already been taken out of the business since the beginning of the year. In addition, we have used this opportunity to re-evaluate the organizational structure and streamline our business operations to prioritize exemplary service for our customers. This will result in our customers realizing increased return on investment and return on employee satisfaction,” commented John Plunkett, EVP, Transformation and Strategic Planning at CloudMD.
CloudMD has demonstrated its ability to execute on its cost optimization strategy to drive sustainable profitability by:
- Integrating MindBeacon’s iCBT solution into CloudMD’s Mental Health Support Solutions, providing user engagement through assessment and treatment options for mild, moderate and chronic conditions.
- Streamlining and consolidating key operational functions across Finance, IT, Human Resources, Marketing and Sales and leveraging industry leading talent to drive innovation, retention and capitalize on human capital.
- Strengthening Digital Health Solutions by creating a new product management team focused on innovation and continuing to meet the health needs of individuals.
The Company believes there are additional efficiencies to be realized as it continues its integration efforts this year. In addition, CloudMD is also focused on cross-sell revenue synergies through its complete and connected health ecosystem, which will support continued strong top-line growth.
As part of the cost optimization, CloudMD has made some changes to its organizational structure to streamline the operations and create a more efficient business. Several positions have been reorganized and / or consolidated to leverage important capabilities, share best practices and drive growth throughout the organization. As part of the reorganization, effective March 31, 2022, Kanchan Thindal has stepped down as the Company’s Chief Operating Officer (COO). Karen Adams, President, will assume the roles and responsibilities of COO for the Company. CloudMD would like to thank Kanchan for her dedication and support over the last four years through the Company’s significant growth.
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Through the organizational restructure, CloudMD has made several changes to consolidate and strengthen the depth of its leadership team including appointing Lu Barbuto, EVP Enterprise Health Solutions; Adam Kelly, Chief Commercial Officer; Aida Begovic, EVP Digital Health Solutions; John Plunkett, EVP Transformation and Strategic Planning; Jon Harju, SVP, Engineering; Bronwyn Ott, SVP, Human Resources and Olga McRae, Corporate Secretary. CloudMD has also introduced a process to continually review and evaluate its operational integration and additional changes may be implemented as indicated by such process.
No changes have been made to CloudMD’s current business units, Clinics & Pharmacies, Digital Health Solutions and Enterprise Health Solutions.
“Execution of our strategy is dependent on diligent cost management throughout the year. We are focusing on higher productivity and sustainable cost effectiveness to position us for increased profit and scalability,” stated Karen Adams, President of CloudMD. “The focus is on delivering the product vision, while ensuring we have the operating model and capabilities to deliver profitable growth. The actions we are announcing today, and the processes we have introduced, will better align our organization and cost structure to achieve these objectives. We will continue driving revenue and margin expansion by adding capabilities to our patented integrated healthcare platform, cross selling our capabilities portfolio, and bringing new, innovative healthcare solutions to the market.”