InnovAge Holding Corp. (“InnovAge” or the “Company”) (Nasdaq:
INNV), an industry leader in providing comprehensive healthcare
programs to frail, predominantly dual-eligible seniors through the
Program of All-inclusive Care for the Elderly (PACE), today
announced financial results for its fiscal first quarter ended
September 30, 2023.
“The Company’s first quarter results were in
line with our expectations and reflect continued improvement,” said
Patrick Blair, President, and CEO of InnovAge. “We remain focused
on demonstrating incremental improvement in each of our core focus
areas. I believe there is momentum building from our team’s work,
and in time, this will translate into improved financial
performance and enable us to return to normalized margins.”
Financial Results
|
Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
in thousands, except
percentages and per share amounts |
|
|
|
Total revenues |
$ |
182,485 |
|
|
$ |
171,218 |
|
Loss Before Income Taxes |
|
10,736 |
|
|
|
17,169 |
|
Net Loss |
|
10,962 |
|
|
|
13,699 |
|
Net Loss margin |
|
6.0 |
% |
|
|
8.0 |
% |
|
|
|
|
Net Loss Attributable to
InnovAge Holding Corp. |
|
10,304 |
|
|
|
13,073 |
|
Net Loss per share - basic and
diluted |
$ |
0.08 |
|
|
$ |
0.10 |
|
|
|
|
|
Center-level Contribution
Margin(1) |
$ |
27,877 |
|
|
$ |
21,424 |
|
Adjusted EBITDA(1) |
$ |
2,226 |
|
|
$ |
(3,815 |
) |
Adjusted EBITDA margin(1) |
|
1.2 |
% |
|
(2.2)% |
Fiscal First Quarter 2024 Financial
Performance
- Total revenue
of $182.5 million, increased approximately 6.6% compared to
$171.2 million in the first quarter of fiscal year 2023
- Loss Before Income Taxes of $10.7
million, compared to a loss before income taxes of $17.2 million in
the first quarter of fiscal year 2023
- Loss Before Income Taxes as a
percent of revenue of 5.9% decreased 4.1% percentage points
compared to Loss Before Income Tax as a percent of revenue of 10.0%
in in the first quarter of fiscal year 2023
- Center-level Contribution Margin(1)
of $27.9 million, increased 30.1% compared to $21.4 million in the
first quarter of fiscal year 2023
- Center-level Contribution
Margin(1) as a percent of revenue of 15.3%, increased 2.8
percentage points compared to 12.5% in the first quarter of fiscal
year 2023
- Net loss of $11.0 million, compared
to net loss of $13.7 million in the first quarter of fiscal year
2023
- Net loss margin of 6.0%, a decrease
of 2.0 percentage points compared to a net loss margin of 8.0% in
the first quarter of fiscal year 2023
- Net loss attributable to InnovAge
Holding Corp. of $10.3 million, or a loss of $0.08 per share,
compared to net loss of $13.1 million, or a loss of $0.10 per share
in the first quarter of fiscal year 2023
- Adjusted EBITDA(1) of $2.2
million, an increase of $6.0 million compared to an Adjusted EBITDA
loss of $3.8 million in the first quarter of fiscal year 2023
- Adjusted EBITDA(1) margin of
1.2%, an increase of 3.4 percentage points compared to negative
2.2% in the first quarter of fiscal year 2023
- Census of approximately 6,580
participants compared to 6,540 participants in the first quarter of
fiscal year 2023
- Ended the first quarter of fiscal
year 2024 with $88.4 million in cash and cash equivalents plus
$46.8 million in short-term investments, and $85.5 million in debt
on the balance sheet, representing debt under the Company’s senior
secured term loan, convertible term loan and finance leases
(1) Center-level Contribution Margin and as a
percentage of revenue, Adjusted EBITDA and Adjusted EBITDA margin
are non-GAAP measures. For a definition and reconciliation of these
non-GAAP measures to the most closely comparable GAAP measures for
the periods indicated, see “Note Regarding Use of Non-GAAP
Financial Measures” and “Reconciliation of GAAP and Non-GAAP
Measures.”
Conference Call
The Company will host a conference call this
afternoon at 5:00 PM Eastern Time. A live audio webcast of
the call will be available on the Company’s
website, https://investor.innovage.com/. A replay of the call
will be available via webcast for on-demand listening shortly after
the completion of the call, at the same web link, and will remain
available for a limited time. To access the call by phone,
please go to this link (registration link), for dialing
instructions and a unique access pin. We encourage
participants to dial into the call fifteen minutes ahead of the
scheduled start time.
About InnovAge
InnovAge is a market leader in managing the care
of high-cost, frail, predominantly dual-eligible seniors. Our
mission is to enable seniors to age independently in their own
homes for as long as safely possible. Our patient-centered care
model is designed to improve the quality of care our participants
receive, while reducing over-utilization of high-cost care
settings. InnovAge believes its healthcare model is one in which
all constituencies — participants, their families, providers
and government payors — “win.” As of September 30, 2023, InnovAge
served approximately 6,580 participants across 17 centers in five
states. https://www.innovage.com/.
Investor Contact:
Ryan Kubotarkubota@innovage.com
Media Contact:
Lara
Hazenfieldlhazenfield@innovage.com
Forward-Looking Statements - Safe
HarborThis press release may contain “forward-looking
statements” within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by words such as:
“anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,”
“expect,” “may,” “should,” “will” and other words and terms of
similar meaning in connection with any discussion of the timing or
nature of future operating or financial performance or other
events. Forward-looking statements may be identified by the fact
that they do not relate strictly to historical or current facts.
Examples of forward-looking statements include, among others,
statements we may make regarding quarterly or annual guidance;
financial outlook, including future revenues and future earnings;
our expectations to increase the number of participants we serve,
to grow enrollment and capacity within existing centers, to build
and/or open de novo centers, or to find targets and execute tuck-in
acquisitions; our ability to control costs, mitigate the effects of
elevated expenses, expand our payer capabilities, implement
clinical value initiatives and strengthen enterprise functions; the
potential effects of the macro-economic environment and lingering
COVID-19 impacts on our business; our expectations with respect to
current audit post-sanction work, legal proceedings and government
investigations and actions; relationships and discussions with
regulatory agencies; our ability to effectively implement
remediation measures, including creating operational excellence as
a provider across all our centers; reimbursement and regulatory
developments; market developments; new services; integration
activities; industry and market opportunity; and the effects of any
of the foregoing on our future results of operations or financial
conditions.
Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based only on currently available information and our
current beliefs, expectations and assumptions regarding the future
of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. You should not place undue reliance on our
forward-looking statements. Because forward-looking statements
relate to the future, they are subject to inherent uncertainties,
risks and changes in circumstances that are difficult to predict
and many of which are outside of our control. Our actual results
and financial condition may differ materially from those indicated
in the forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
include, among others, the following: (i) the viability of our
growth strategy; (ii) our ability to identify and successfully
complete acquisitions; (iii) our ability to attract new
participants and retain existing participants and grow our revenue
throughout our existing centers; (iv) the results of periodic
inspections, reviews, audits, investigations under the federal and
state government programs, including our ability to sufficiently
cure deficiencies identified by the respective federal and state
government programs; (v) the adverse impact of
inspections, reviews, audits, investigations, legal proceedings,
enforcement actions and litigation, including the current civil
investigative demands initiated by federal and state agencies, as
well as the litigation and other proceedings initiated by, or on
behalf, of our stockholders; (vi) the risk that the cost of
providing services will exceed our compensation under PACE; (vii)
our increased costs and expenditures and our inability to execute
or realize the benefits of our clinical value initiatives; (viii)
the impact on our business from ongoing macroeconomic and
COVID-19-related challenges, including labor shortages and
inflation; (ix) the dependence of our revenues upon a limited
number of government payors; (x) the risk that our submissions to
government payors may contain inaccurate or unsupportable
information regarding risk adjustment scores of participants; (xi)
the impact on our business of renegotiation, non-renewal or
termination of capitation agreements with government payors; (xii)
the difficulty to predict our future results, which could cause
such results to fall below any guidance we provide; (xiii) the
impact of state and federal efforts to reduce healthcare spending;
(xiv) the effects of a pandemic, epidemic or outbreak of an
infectious disease, such as COVID-19; (xv) our dependence on our
senior management team and other key employees; (xvi) the impact of
failures by our suppliers or limitations on our ability to access
new technology or medical products; (xvii) the concentration of our
presence in Colorado; (xviii) our ability to manage our operations
effectively, execute our business plan, maintain effective levels
of service and participant satisfaction and adequately address
competitive challenges; (xix) our ability to compete in the
healthcare industry; (xx) our ability to establish a presence in
new geographic markets; (xxi) the impact of competition for
physicians and other clinical personnel and related increases in
our labor costs; (xxii) the impact on our business of security
breaches, loss of data or other disruptions causing the compromise
of sensitive information or preventing us from accessing critical
information; (xxiii) our ability to effectively invest in,
implement improvements to and properly maintain the uninterrupted
operation and data integrity of our information technology and
other business systems; (xxiv) our ability to accurately estimate
incurred but not reported medical expense or the risk scores of our
participants; (xxv) risks associated with our use of “open-source”
software; (xxvi) the impact on our business of the termination of
our leases, increases in rent or inability to renew or extend
leases; (xxvii) the impact of weather and other factors beyond our
control; (xxviii) the effect of our relatively limited operating
history as a for-profit company on investors' ability to evaluate
our current business and future prospects; (xxiv) our ability to
adhere to complex and changing government laws and regulations in
the healthcare industry, including U.S. Healthcare reform, the
regulation of the corporate practice of medicine and the Health
Information Technology for Economic and Clinical Health Act of 2009
(the “HITECH Act”), and their implementing regulations
(collectively, “HIPAA”), the California Consumer Privacy Act
(“CCPA”) and other privacy laws and regulations in the healthcare
industry; (xxv) our status as a “controlled company”; (xxvi) our
ability to maintain effective internal controls over financial
reporting and other enhanced requirements of being a public
company; (xxvii) our ability to maintain and enhance our reputation
and brand recognition; (xxviii) the impact on our business of
disruptions in our disaster recovery systems or business continuity
planning; (xxix) impact of negative publicity regarding the managed
healthcare industry; and (xxx) changes in accounting principles and
guidance, resulting in unfavorable accounting charges or effects;
and other factors disclosed in the section entitled “Risk Factors”
in our Annual Report for the year ended June 30, 2023 filed with
the Securities and Exchange Commission (the “SEC”) on September 12,
2023, and our subsequent filings with the SEC.
Any forward-looking statement made by the
Company in this press release is based only on information
currently available to us and speaks only as of the date on which
it is made. Except as required by law, we undertake no obligation
to publicly update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Note Regarding Use of Non-GAAP
Financial MeasuresIn addition to reporting financial
information in accordance with generally accepted accounting
principles (“GAAP”), the Company is also reporting Center-level
Contribution Margin, and as a percentage of revenue, Adjusted
EBITDA and Adjusted EBITDA margin, which are non-GAAP financial
measures. Center-level Contribution Margin and as a percentage of
revenue, Adjusted EBITDA and Adjusted EBITDA margin are
supplemental measures of operating performance monitored by
management that are not defined under GAAP and that do not
represent, and should not be considered as, an alternative to net
income (loss) and net income (loss) margin, respectively, as
determined by GAAP. We believe that Center-level Contribution
Margin and as a percentage of revenue, Adjusted EBITDA and Adjusted
EBITDA margin are appropriate measures of operating performance
because the metrics eliminate the impact of revenue and expenses
that do not relate to our ongoing business performance, allowing us
to more effectively evaluate our core operating performance and
trends from period to period. We believe that Center-level
Contribution Margin and as a percentage of revenue, Adjusted EBITDA
and Adjusted EBITDA margin help investors and analysts in comparing
our results across reporting periods on a consistent basis by
excluding items that we do not believe are indicative of our core
operating performance. These non-GAAP financial measures have
limitations as analytical tools and should not be considered in
isolation from, or as a substitute for, the analysis of other GAAP
financial measures, including net income (loss) and net income
(loss) margin.
The Company’s management uses Center-level
Contribution Margin as the measure for assessing performance of its
segments. In evaluating Center-level Contribution
Margin on a center-by-center basis, you should be aware that we do
not allocate our sales and marketing expense or corporate, general
and administrative expenses across our centers. We define
Center-level Contribution Margin as total revenues less external
provider costs and cost of care, excluding depreciation and
amortization, which includes all medical and pharmacy
costs.
In evaluating Adjusted EBITDA, you should be
aware that in the future we may incur expenses that are the same as
or similar to some of the adjustments in this presentation. Our
presentation of Adjusted EBITDA should not be construed to imply
that our future results will be unaffected by the types of items
excluded from the calculation of Adjusted EBITDA. Our use of the
term Adjusted EBITDA varies from others in our industry. We define
Adjusted EBITDA as net income (loss) adjusted for interest expense,
depreciation and amortization, and provision for income tax as well
as addbacks for non-recurring expenses or exceptional items,
including relating to management equity compensation, executive
severance and recruitment, class action litigation costs and
settlement, M&A and de novo center development, business
optimization and electronic medical record (EMR) implementation.
Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage
of our total revenue. For a full reconciliation of Center-level
Contribution Margin and Adjusted EBITDA to the most closely
comparable GAAP financial measure, please see the attachment to
this earnings release.
Schedule 1
InnovAgeCONDENSED
CONSOLIDATED BALANCE SHEETS(IN THOUSANDS)
(UNAUDITED)
|
September 30,2023 |
|
June 30,2023 |
Assets |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
88,398 |
|
|
$ |
127,249 |
|
Short-term investments |
|
46,833 |
|
|
|
46,213 |
|
Restricted cash |
|
15 |
|
|
|
16 |
|
Accounts receivable, net of allowance ($4,492 – September 30,
2023 and $4,161 – June 30, 2023) |
|
44,185 |
|
|
|
24,344 |
|
Prepaid expenses |
|
16,412 |
|
|
|
17,145 |
|
Income tax receivable |
|
262 |
|
|
|
262 |
|
Total current assets |
|
196,105 |
|
|
|
215,229 |
|
Noncurrent Assets |
|
|
|
Property and equipment, net |
|
190,060 |
|
|
|
192,188 |
|
Operating lease assets |
|
20,454 |
|
|
|
21,210 |
|
Investments |
|
5,493 |
|
|
|
5,493 |
|
Deposits and other |
|
4,232 |
|
|
|
3,823 |
|
Goodwill |
|
124,217 |
|
|
|
124,217 |
|
Other intangible assets, net |
|
5,033 |
|
|
|
5,198 |
|
Total noncurrent assets |
|
349,489 |
|
|
|
352,129 |
|
Total assets |
$ |
545,594 |
|
|
$ |
567,358 |
|
Liabilities and
Stockholders' Equity |
|
|
|
Current Liabilities |
|
|
|
Accounts payable and accrued expenses |
$ |
46,923 |
|
|
$ |
54,935 |
|
Reported and estimated claims |
|
42,322 |
|
|
|
42,999 |
|
Due to Medicaid and Medicare |
|
10,282 |
|
|
|
9,142 |
|
Income tax payable |
|
1,212 |
|
|
|
1,212 |
|
Current portion of long-term debt |
|
3,795 |
|
|
|
3,795 |
|
Current portion of finance lease obligations |
|
4,612 |
|
|
|
4,722 |
|
Current portion of operating lease obligations |
|
3,577 |
|
|
|
3,530 |
|
Deferred revenue |
|
26,090 |
|
|
|
28,115 |
|
Total current liabilities |
|
138,813 |
|
|
|
148,450 |
|
Noncurrent Liabilities |
|
|
|
Deferred tax liability, net |
|
6,462 |
|
|
|
6,236 |
|
Finance lease obligations |
|
12,048 |
|
|
|
13,114 |
|
Operating lease obligations |
|
18,080 |
|
|
|
18,828 |
|
Other noncurrent liabilities |
|
1,141 |
|
|
|
1,086 |
|
Long-term debt, net of debt issuance costs |
|
64,003 |
|
|
|
64,844 |
|
Total liabilities |
|
240,547 |
|
|
|
252,558 |
|
Commitments and
Contingencies |
|
|
|
Redeemable
Noncontrolling Interests |
|
12,138 |
|
|
|
12,708 |
|
Stockholders’
Equity |
|
|
|
Common stock, $0.001 par value; 500,000,000 authorized as of
September 30, 2023 and June 30, 2023; 135,884,840 and
135,639,845 issued shares as of September 30, 2023 and
June 30, 2023, respectively |
|
136 |
|
|
|
136 |
|
Additional paid-in capital |
|
333,316 |
|
|
|
332,107 |
|
Retained deficit |
|
(46,248 |
) |
|
|
(35,944 |
) |
Total InnovAge Holding Corp. |
|
287,204 |
|
|
|
296,299 |
|
Noncontrolling interests |
|
5,705 |
|
|
|
5,793 |
|
Total stockholders’ equity |
|
292,909 |
|
|
|
302,092 |
|
Total liabilities and stockholders’ equity |
$ |
545,594 |
|
|
$ |
567,358 |
|
Schedule 2
InnovAgeCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(IN
THOUSANDS) (UNAUDITED)
|
Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
Capitation revenue |
$ |
182,173 |
|
|
$ |
170,931 |
|
Other service revenue |
|
312 |
|
|
|
287 |
|
Total revenues |
|
182,485 |
|
|
|
171,218 |
|
Expenses |
|
|
|
External provider costs |
|
99,358 |
|
|
|
96,237 |
|
Cost of care, excluding depreciation and amortization |
|
55,250 |
|
|
|
53,557 |
|
Sales and marketing |
|
5,379 |
|
|
|
4,413 |
|
Corporate, general and administrative |
|
28,947 |
|
|
|
30,181 |
|
Depreciation and amortization |
|
4,269 |
|
|
|
3,433 |
|
Total expenses |
|
193,203 |
|
|
|
187,821 |
|
Operating
Loss |
|
(10,718 |
) |
|
|
(16,603 |
) |
|
|
|
|
Other Income
(Expense) |
|
|
|
Interest expense, net |
|
(661 |
) |
|
|
(603 |
) |
Other income (expense) |
|
643 |
|
|
|
37 |
|
Total other expense |
|
(18 |
) |
|
|
(566 |
) |
Loss Before Income
Taxes |
|
(10,736 |
) |
|
|
(17,169 |
) |
Provision (Benefit)
for Income Taxes |
|
226 |
|
|
|
(3,470 |
) |
Net Loss |
|
(10,962 |
) |
|
|
(13,699 |
) |
Less: net loss attributable to noncontrolling interests |
|
(658 |
) |
|
|
(626 |
) |
Net Loss Attributable
to InnovAge Holding Corp. |
$ |
(10,304 |
) |
|
$ |
(13,073 |
) |
|
|
|
|
Weighted-average
number of common shares outstanding - basic |
|
135,790,401 |
|
|
|
135,566,117 |
|
Weighted-average
number of common shares outstanding - diluted |
|
135,790,401 |
|
|
|
135,566,117 |
|
|
|
|
|
Net loss per share -
basic |
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
Net loss per share -
diluted |
$ |
(0.08 |
) |
|
$ |
(0.10 |
) |
Schedule 3
InnovAgeCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS) (UNAUDITED)
|
For the Three Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
Operating
Activities |
|
|
|
Net loss |
$ |
(10,962 |
) |
|
$ |
(13,699 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities |
|
|
|
Gain on disposal of assets |
|
(18 |
) |
|
|
(37 |
) |
Provision for uncollectible accounts |
|
1,077 |
|
|
|
1,571 |
|
Depreciation and amortization |
|
4,269 |
|
|
|
3,433 |
|
Operating lease rentals |
|
1,103 |
|
|
|
761 |
|
Amortization of deferred financing costs |
|
107 |
|
|
|
107 |
|
Stock-based compensation |
|
1,823 |
|
|
|
1,209 |
|
Deferred income taxes |
|
226 |
|
|
|
(3,470 |
) |
Other |
|
76 |
|
|
|
— |
|
Changes in operating assets and liabilities |
|
|
|
Accounts receivable, net |
|
(20,918 |
) |
|
|
(3,180 |
) |
Prepaid expenses |
|
734 |
|
|
|
1,678 |
|
Income tax receivable |
|
— |
|
|
|
1,750 |
|
Deposits and other |
|
(591 |
) |
|
|
246 |
|
Accounts payable and accrued expenses |
|
(7,303 |
) |
|
|
1,155 |
|
Reported and estimated claims |
|
(676 |
) |
|
|
(2,480 |
) |
Due to Medicaid and Medicare |
|
1,140 |
|
|
|
1,503 |
|
Operating lease liabilities |
|
(1,048 |
) |
|
|
(781 |
) |
Deferred revenue |
|
(2,024 |
) |
|
|
23,361 |
|
Net cash (used) provided by operating activities |
|
(32,985 |
) |
|
|
13,127 |
|
Investing
Activities |
|
|
|
Purchases of property and equipment |
|
(2,571 |
) |
|
|
(7,666 |
) |
Purchases of short-term investments |
|
(570 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(3,141 |
) |
|
|
(7,666 |
) |
Financing
Activities |
|
|
|
Payments for finance lease obligations |
|
(1,164 |
) |
|
|
(720 |
) |
Principal payments on long-term debt |
|
(948 |
) |
|
|
(948 |
) |
Taxes paid related to net share settlements of stock-based
compensation awards |
|
(614 |
) |
|
|
— |
|
Net cash used in financing
activities |
|
(2,726 |
) |
|
|
(1,668 |
) |
|
|
|
|
INCREASE (DECREASE) IN
CASH, CASH EQUIVALENTS & RESTRICTED CASH |
|
(38,852 |
) |
|
|
3,793 |
|
CASH, CASH EQUIVALENTS
& RESTRICTED CASH, BEGINNING OF PERIOD |
|
127,265 |
|
|
|
184,446 |
|
CASH, CASH EQUIVALENTS
& RESTRICTED CASH, END OF PERIOD |
$ |
88,413 |
|
|
$ |
188,239 |
|
|
|
|
|
Supplemental Cash Flows Information |
|
|
|
Interest paid |
$ |
404 |
|
|
$ |
700 |
|
Income taxes paid |
$ |
— |
|
|
$ |
13 |
|
Property and equipment included in accounts payable |
$ |
281 |
|
|
$ |
2,446 |
|
Property and equipment purchased under finance leases |
$ |
— |
|
|
$ |
80 |
|
Schedule 4
InnovAgeRECONCILIATION
OF GAAP AND NON-GAAP MEASURES(IN THOUSANDS)
(UNAUDITED)
Adjusted EBITDA
|
Three months ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net loss |
$ |
(10,962 |
) |
|
$ |
(13,699 |
) |
Interest expense, net |
|
661 |
|
|
|
603 |
|
Depreciation and
amortization |
|
4,269 |
|
|
|
3,433 |
|
Provision (benefit) for income
tax |
|
226 |
|
|
|
(3,470 |
) |
Stock-based compensation |
|
1,823 |
|
|
|
1,300 |
|
Litigation costs and
settlement(a) |
|
1,707 |
|
|
|
1,668 |
|
M&A and de novo center
development(b) |
|
409 |
|
|
|
206 |
|
Business optimization(c) |
|
2,159 |
|
|
|
5,554 |
|
EMR implementation(d) |
|
1,934 |
|
|
|
590 |
|
Adjusted EBITDA |
$ |
2,226 |
|
|
$ |
(3,815 |
) |
|
|
|
|
Net income (loss) margin |
|
6.0 |
% |
|
|
8.0 |
% |
Adjusted EBITDA margin |
|
1.2 |
% |
|
(2.2)% |
_______________________
(a) Reflects charges/(credits) related to
litigation by stockholders, litigation related to de novo center
development, and civil investigative demands. Refer to Note 9,
"Commitments and Contingencies" to our condensed consolidated
financial statements for more information regarding litigation by
stockholders and civil investigative demands. Costs reflected
consist of litigation costs considered one-time in nature and
outside of the ordinary course of business based on the following
considerations which we assess regularly: (i) the frequency of
similar cases that have been brought to date, or are expected to be
brought within two years, (ii) complexity of the case, (iii) nature
of the remedies sought, (iv) litigation posture of the Company, (v)
counterparty involved, and (vi) the Company's overall litigation
strategy.(b) Reflects charges related to M&A transaction and
integrations, and de novo center developments.(c) Reflects charges
related to business optimization initiatives. Such charges related
to one-time investments in projects designed to enhance our
technology and compliance systems, improve and support the
efficiency and effectiveness of our operations, and third party
support to address efforts to remediate deficiencies in audits. For
the three months ended September 30, 2023 this includes (i) $1.8
million of costs associated with third party consultants as we
implement our core provider initiatives, assess our risk-bearing
payor capabilities, and strengthen our enterprise capabilities and
(ii) $0.4 million related to other non-recurring projects aimed at
reducing costs and improving efficiencies. For the three months
ended September 30, 2022 this includes (i) $0.7 million related to
consultants and contractors performing audit and other related
services at sanctioned centers, (ii) $4.3 million of costs
associated with third party consultants as we implement our core
provider initiatives, assess our risk-bearing payor capabilities,
and strengthen our enterprise capabilities, and (iii) $0.6 million
related to other non-recurring projects aimed at reducing costs and
improving efficiencies. (d) Reflects non-recurring expenses
relating to the implementation of a new EMR vendor.
|
Three months ended June 30, |
|
|
2023 |
|
|
|
Net loss |
$ |
(11,995 |
) |
Interest expense, net |
|
291 |
|
Depreciation and
amortization |
|
4,332 |
|
Provision (benefit) for income
tax |
|
506 |
|
Stock-based compensation |
|
1,272 |
|
Litigation costs and
settlement(a) |
|
1,943 |
|
M&A and de novo center
development(b) |
|
682 |
|
Business optimization(c) |
|
2,117 |
|
EMR implementation(d) |
|
1,568 |
|
Adjusted EBITDA |
$ |
716 |
|
|
|
Net income (loss) margin |
(6.8)% |
Adjusted EBITDA margin |
|
0.4 |
% |
(a) Reflects charges/(credits) related to
litigation by stockholders, litigation related to de novo center
development, and civil investigative demands. See Item 3, “Legal
Proceedings” included in the Company’s Annual Report on Form 10-K.
Costs reflected consist of litigation costs considered one-time in
nature and outside of the ordinary course of business based on the
following considerations which we assess regularly: (i) the
frequency of similar cases that have been brought to date, or are
expected to be brought within two years, (ii) complexity of the
case, (iii) nature of the remedies sought, (iv) litigation posture
of the Company, (v) counterparty involved, and (vi) the Company's
overall litigation strategy.(b) Reflects charges related to M&A
transaction and integrations, and de novo center development.(c)
For the three months ended June 30, 2023 includes (i) $0.3
million related to consultants and contractors performing audit and
other related services at sanctioned centers, (ii) $0.4 million of
costs associated with third party consultants as we implement our
core provider initiatives, assess our risk-bearing payor
capabilities, and strengthen our enterprise capabilities, (iii)
$1.1 million related to organizational restructure, and (iv) $0.3
million related to other non-recurring projects aimed at reducing
costs and improving efficiencies. (d) Reflects non-recurring
expenses relating to the implementation of a new EMR vendor.
Center-Level Contribution
Margin
|
|
|
|
|
September 30, 2023 |
|
September 30, 2022 |
(In thousands) |
PACE |
|
All other |
|
Totals |
|
PACE |
|
All other(a) |
|
Totals |
Capitation revenue |
$ |
182,173 |
|
|
$ |
— |
|
|
$ |
182,173 |
|
|
$ |
170,931 |
|
|
$ |
— |
|
|
$ |
170,931 |
|
Other service revenue |
|
86 |
|
|
|
226 |
|
|
|
312 |
|
|
|
77 |
|
|
|
210 |
|
|
|
287 |
|
Total revenues |
|
182,259 |
|
|
|
226 |
|
|
|
182,485 |
|
|
|
171,008 |
|
|
|
210 |
|
|
|
171,218 |
|
External provider costs |
|
99,358 |
|
|
|
— |
|
|
|
99,358 |
|
|
|
96,237 |
|
|
|
— |
|
|
|
96,237 |
|
Cost of care, excluding depreciation and amortization |
|
55,097 |
|
|
|
153 |
|
|
|
55,250 |
|
|
|
53,411 |
|
|
|
146 |
|
|
|
53,557 |
|
Center-Level
Contribution Margin |
|
27,804 |
|
|
|
73 |
|
|
|
27,877 |
|
|
|
21,360 |
|
|
|
64 |
|
|
|
21,424 |
|
Overhead costs(b) |
|
34,317 |
|
|
|
9 |
|
|
|
34,326 |
|
|
|
34,574 |
|
|
|
20 |
|
|
|
34,594 |
|
Depreciation and amortization |
|
4,157 |
|
|
|
112 |
|
|
|
4,269 |
|
|
|
3,326 |
|
|
|
107 |
|
|
|
3,433 |
|
Interest expense, net |
|
616 |
|
|
|
45 |
|
|
|
661 |
|
|
|
557 |
|
|
|
46 |
|
|
|
603 |
|
Other income |
|
(643 |
) |
|
|
— |
|
|
|
(643 |
) |
|
|
(37 |
) |
|
|
— |
|
|
|
(37 |
) |
Loss Before Income
Taxes |
$ |
(10,643 |
) |
|
$ |
(93 |
) |
|
$ |
(10,736 |
) |
|
$ |
(17,060 |
) |
|
$ |
(109 |
) |
|
$ |
(17,169 |
) |
Loss Before Income
Taxes as a % of revenue |
|
|
|
|
(5.9)% |
|
|
|
|
|
(10.0)% |
Center- Level
Contribution Margin as a % of revenue |
|
|
|
|
|
15.3 |
% |
|
|
|
|
|
|
12.5 |
% |
|
|
|
June 30, 2023 |
(In thousands) |
PACE |
|
All other(a) |
|
Totals |
Capitation revenue |
$ |
176,568 |
|
|
$ |
— |
|
|
$ |
176,568 |
|
Other service revenue |
|
84 |
|
|
|
222 |
|
|
|
306 |
|
Total revenues |
|
176,652 |
|
|
|
222 |
|
|
|
176,874 |
|
External provider costs |
|
94,978 |
|
|
|
— |
|
|
|
94,978 |
|
Cost of care, excluding depreciation and amortization |
|
53,252 |
|
|
|
138 |
|
|
|
53,390 |
|
Center-Level
Contribution Margin |
|
28,422 |
|
|
|
84 |
|
|
|
28,506 |
|
Overhead costs(b) |
|
35,116 |
|
|
|
— |
|
|
|
35,116 |
|
Depreciation and amortization |
|
4,220 |
|
|
|
112 |
|
|
|
4,332 |
|
Interest expense, net |
|
247 |
|
|
|
44 |
|
|
|
291 |
|
Other income |
|
256 |
|
|
|
— |
|
|
|
256 |
|
Loss Before Income
Taxes |
$ |
(11,417 |
) |
|
$ |
(72 |
) |
|
$ |
(11,489 |
) |
Loss Before Income
Taxes as a % of revenue |
|
|
|
|
(6.5)% |
Center- Level
Contribution Margin as a % of revenue |
|
|
|
|
|
16.1 |
% |
_________________________________
(a) Center-level Contribution Margin from
segments below the quantitative thresholds are primarily
attributable to the Senior Housing operating segment of the
Company. This segment has never met any of the quantitative
thresholds for determining reportable segments.
(b) Overhead consists of the Sales and marketing
and Corporate, general and administrative financial statement line
items.
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