WASHINGTON, Aug. 4, 2021 /PRNewswire/ -- Evolent Health, Inc.
(NYSE: EVH), a health care company that delivers proven clinical
and administrative solutions to payers and providers, today
announced financial results for the quarter ended June 30,
2021.
Highlights from the second quarter of 2021 announcement
include:
Quarter ended June 30, 2021:
- GAAP revenue of $222.1 million,
an increase of $4.8 million, or 2.2%,
from the three months ended June 30,
2020.
-
- Organic revenue growth excluding revenue from divested assets
of 42.3%.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(9.1) million.
- Achieved Adjusted EBITDA of $13.3
million, an increase of $2.8
million from the three months ended June 30, 2020.
- Total lives managed of 12.2 million as of June 30, 2021, composed of 1.5 million lives in
our Evolent Health Services segment and 10.7 million lives in our
Clinical Solutions segment.
Additional announcements:
- Evolent Health enters into a definitive agreement to acquire
Vital Decisions, a leading technology-enabled services business
specializing in advance care planning
- Evolent adds two new provider partnerships with Bond Clinic in
Florida and Patient Physician
Network in Texas, in addition to
expanding total cost of care management services for Medicare
Advantage and commercial lives with a large national payer in the
State of Texas
- Evolent signs agreement with Molina Ohio to provide New Century
Health Performance Suite for cardiology
Seth Blackley, Chief Executive
Officer and Co-Founder of Evolent Health, commented, "Overall, we
are very pleased with our results for the quarter exceeding our
targets and we are raising guidance for the full-year 2021. We
remain focused on driving shareholder value and continue to be on
track towards our medium-term target of mid-teens organic top-line
growth and mid-teens Adjusted EBITDA margins. We continue to see
strong momentum in the market for our value-based care
solutions."
Mr. Blackley continued, "Today we are excited to announce
Evolent Care Partners has entered into two new partnerships with
Patient Physicians Network in Texas and Bond Clinic in Florida. These two new, high-quality physician
groups represent an exciting expansion of Evolent Care Partners'
presence in Texas and initial
market entry into Florida and
present opportunities for future growth. The expansions announced
today bring Evolent Care Partners' national footprint to seven
states. Additionally, we are excited to announce New Century Health
has signed an agreement with Molina Ohio for cardiology services
for approximately 160,000 Medicaid and Exchange members. This
signing further demonstrates our ability to expand organically with
our base of large, national payers and risk-bearing providers, as
well as our ability to convert New Century Health's Technology and
Services Suite into the full Performance Suite."
Mr. Blackley commented, "We are also excited to announce the
acquisition of Vital Decisions. The acquisition is EBITDA per share
accretive before any synergies and we believe that Vital Decisions
will add to the growth and profitability of New Century Health. As
the asset is integrated into New Century Health, we also believe
this transaction will add important patient engagement, telehealth
and end-of-life management capabilities as additional levers for
ensuring patients with complex illnesses receive high-quality,
coordinated care."
Mr. Blackley concluded, "In summary, we remain confident in the
execution of our investment themes of strong organic growth,
expanding margins and efficient capital allocation. We feel very
good about our performance thus far in 2021, and we feel confident
in our momentum heading into 2022."
Financial Results of Evolent Health, Inc.
In our earnings releases, prepared remarks, conference calls,
slide presentations and webcasts, we may use or discuss non-GAAP
financial measures. Definitions of the non-GAAP financial measures,
as well as reconciliations of non-GAAP financial measures to the
most directly comparable GAAP financial measures are included in
this earnings release. See Financial Statement Presentation and
Non-GAAP Financial Measures for more information.
Segment Highlights: Clinical Solutions
- Revenue of $147.2 million and
$130.8 million for the three months
ended June 30, 2021 and 2020,
respectively, representing 12.6% growth year-over-year.
-
- Organic revenue growth excluding revenue from divested assets
of 50.2%
- Adjusted EBITDA of $13.6 million
and $12.2 million for the three
months ended June 30, 2021 and 2020,
respectively.
-
- Adjusted EBITDA margin of 9.2% and 9.3% for the three months
ended June 30, 2021 and 2020,
respectively.
- Membership in our Performance Suite was 1.5 million lives with
a PMPM of $32.39 and in our New
Century Technology & Services Suite was 9.2 million lives with
a PMPM of $0.37 as of June 30, 2021.
Segment Highlights: Evolent Health Services
- Revenue of $75.3 million and
$87.2 million for the three months
ended June 30, 2021 and 2020,
respectively.
-
- Organic revenue growth excluding revenue from divested assets
of 28.0%
- Adjusted EBITDA of $6.5 million
and $6.9 million for the three months
ended June 30, 2021 and 2020,
respectively.
-
- Adjusted EBITDA margin of 8.7% and 8.0% for the three months
ended June 30, 2021 and 2020,
respectively.
- Membership was 1.5 million lives with a PMPM of $13.81.
Reported Results
Evolent Health, Inc. reported the following results in
accordance with U.S. generally accepted accounting principles
("GAAP"):
- Revenue of $222.1 million and
$217.3 million for the three months
ended June 30, 2021 and 2020,
respectively.
- Cost of revenue of $172.1 million
and $164.4 million for the three
months ended June 30, 2021 and 2020,
respectively.
- Selling, general and administrative expenses of $42.7 million and $47.3
million for the three months ended June 30, 2021 and 2020, respectively.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(9.1) million and
$(203.5) million for the three months
ended June 30, 2021 and 2020,
respectively.
- Loss attributable to common shareholders of Evolent Health,
Inc., per basic and diluted share, of $(0.11) and $(2.38)
for the three months ended June 30,
2021 and 2020, respectively.
Total cash and cash equivalents was $207.3 million as of June 30, 2021.
Adjusted Results
- Adjusted cost of revenue of $171.1
million and $163.3 million for
the three months ended June 30, 2021
and 2020, respectively.
- Adjusted selling, general and administrative expenses of
$37.6 million and $43.5 million for the three months ended
June 30, 2021 and 2020,
respectively.
- Adjusted EBITDA of $13.3 million
and $10.5 million for the three
months ended June 30, 2021 and 2020,
respectively.
-
- Adjusted EBITDA margin of 6.0% and 4.8% for the three months
ended June 30, 2021 and 2020,
respectively.
- Adjusted Loss Available to Common Shareholders of $(1.9) million and $(1.0)
million for the three months ended June 30, 2021 and 2020, respectively.
- Adjusted Loss per Share Available to Common Shareholders of
$(0.02) and $(0.01) for the three months ended June 30, 2021 and 2020, respectively.
Business Outlook
Full Year 2021 Guidance
Revenue for the year ending December 31,
2021 is expected to be in the range of approximately
$870 million to $900 million, compared to previous guidance of
$845 million to $880 million.
Adjusted EBITDA is expected to be in the range of approximately
$50 million to $58 million, compared to previous guidance of
$42 million to $52 million.
Third Quarter 2021 Guidance
For the three months ending September 30,
2021, revenue is expected to be in the range of
approximately $215 million to
$230 million. Adjusted EBITDA is
expected to be in the range of approximately $11 million to $15
million.
This "Business Outlook" section contains forward-looking
statements, and actual results may differ materially. Factors that
may cause actual results to differ materially from our current
expectations are set forth below in "Forward Looking Statements -
Cautionary Language" and Evolent Health, Inc.'s filings with the
Securities and Exchange Commission ("SEC").
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a
conference call to discuss its second quarter performance this
evening, August 4, 2021, at 6:00 p.m.,
Eastern Time. The conference call will be available via live
webcast on the Company's Investor Relations website at
http://ir.evolenthealth.com. To participate by telephone, dial
855.940.9467 or 412.317.6034 for international callers, and ask to
join the "Evolent Health call." Participants are advised to dial in
at least fifteen minutes prior to the call to register. The call
will be archived on the company's website for one week and will be
available beginning later this evening. Evolent Health invites all
interested parties to attend the conference call.
About Evolent Health
Evolent Health (NYSE: EVH) delivers proven clinical and
administrative solutions that improve whole-person health while
making health care simpler and more affordable. Our solutions
encompass total cost of care management, specialty care management,
and administrative simplification. Evolent serves a national base
of leading payers and providers, is the first company to receive
the National Committee for Quality Assurance's Population Health
Program Accreditation, and is consistently recognized as a top
place to work in health care nationally. Learn more about how
Evolent is changing the way health care is delivered by visiting
evolenthealth.com.
Contacts:
Chelsea Griffin
Investor Relations
919.817.8045
cgriffin@evolenthealth.com
Dan Paladino
Media Relations
571.306.3470
dpaladino@evolenthealth.com
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined
in accordance with GAAP, we present and discuss Adjusted Revenue,
Adjusted Transformation Services Revenue, Adjusted Platform and
Operations Services Revenue, Adjusted Cost of Revenue, Adjusted
Selling, General and Administrative Expenses, Adjusted Depreciation
and Amortization Expenses, Adjusted Total Operating Expenses,
Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted
Earnings (Loss) Available to Common Shareholders and Adjusted
Earnings (Loss) per Share Available to Common Shareholders, which
are all non-GAAP financial measures, as supplemental measures to
help investors evaluate our fundamental operational
performance.
Adjusted Cost of Revenue and Adjusted Selling, General and
Administrative Expenses are defined as cost of revenue and selling,
general and administrative expenses, respectively, adjusted to
exclude the impact of stock-based compensation expenses, severance
costs, amortization of contract cost assets recorded as a result of
a one-time ASC 606 transition adjustment, acquisition-related costs
related to acquisitions and business combinations, securities
offerings, discontinued operations and other one-time adjustments.
Management uses Adjusted Cost of Revenue and Adjusted Selling,
General and Administrative Expenses as supplemental performance
measures, which are also useful to investors, because they
facilitate an understanding of our long term operational costs
while removing the effect of costs that are not expected to reoccur
frequently (e.g. acquisition-related costs) and non-cash (e.g.
stock-based compensation expenses) in nature. Additionally, these
supplemental performance measures facilitate understanding a
breakdown of our Adjusted Total Operating Expenses. Adjustments for
acquisition-related costs incurred generally represent professional
service fees and direct expenses related to acquisitions. Because
we do not acquire businesses on a predictable cycle, we do not
consider the amount of acquisition-related costs to be a
representative component of the day-to-day operating performance of
our business.
Adjusted Depreciation and Amortization Expenses is defined as
depreciation and amortization expenses adjusted to exclude the
impact of amortization expenses related to intangible assets
acquired through asset acquisitions and business combinations.
Management uses Adjusted Depreciation and Amortization Expenses as
a supplemental performance measure because it reflects a complete
view of the operational results. The measure is also useful to
investors because it facilitates understanding a breakdown of our
Adjusted Total Operating Expenses.
Adjusted Total Operating Expenses is defined as the sum of
Adjusted Cost of Revenue, Adjusted Selling, General and
Administrative Expenses and Adjusted Depreciation and Amortization
Expenses, and reflects the adjustments made in those non-GAAP
measures. Adjusted Total Operating Expenses is further adjusted to
exclude the impact of (gain) loss on disposal of assets and items
arising from acquisitions and business combinations, such as
changes in fair value of contingent consideration and
indemnification assets.
Adjusted Operating Income (Loss) is defined as Adjusted Revenue
less Adjusted Total Operating Expenses, and reflects the
adjustments made in those non-GAAP measures. Management uses
Adjusted Total Operating Expenses and Adjusted Operating Income
(Loss) because the removal of acquisition costs, one-time or
non-cash items (e.g. depreciation, amortization and stock-based
compensation expenses) allows us to focus on operational
performance, and believes these measures are useful to investors
because they give investors insight into our core operating
performance.
Adjusted EBITDA is defined as EBITDA (net loss attributable to
common shareholders of Evolent Health, Inc. before interest income,
interest expense, (provision) benefit for income taxes,
depreciation and amortization expenses), adjusted to exclude equity
method investment impairment, gain on the transfer of membership,
loss on repayment of debt, goodwill impairment, gain (loss) from
equity method investees, gain (loss) on disposal of assets and
consolidation, changes in fair value of contingent consideration
and indemnification asset, other income (expense), net,
repositioning costs, stock-based compensation expense, severance
costs, amortization of contract cost assets, shareholder advisory
services, acquisition-related costs and gain (loss) from
discontinued operations.
Management uses Adjusted EBITDA as a supplemental performance
measure because the removal of acquisition-related costs, one-time
or non-cash items (e.g. depreciation, amortization and stock-based
compensation expenses) allows us to focus on operational
performance. We believe that this measure is also useful to
investors because it allows further insight into the period over
period operational performance in a manner that is comparable to
other organizations in our industry and in the market in
general.
Adjusted EBITDA Margin is as defined Adjusted EBITDA divided by
Revenue.
Adjusted Earnings (Loss) Available to Common Shareholders is
defined as earnings (loss) attributable to common shareholders
adjusted to exclude income (loss) from equity method investees,
other income (expense), net, gain on transfer of membership, loss
on repayment of debt, loss on disposal of assets, impairment of
equity method investees, changes in fair value of contingent
consideration and indemnification assets, purchase accounting
adjustments, repositioning costs, stock-based compensation
expenses, severance costs, amortization of contract cost assets
recorded as a result of a one-time ASC 606 transition adjustment,
gain (loss) from discontinued operations, shareholder advisory
services and acquisition-related costs.
Adjusted Earnings (Loss) per Share Available to Common
Shareholders is defined as Adjusted Earnings (Loss) Available to
Common Shareholders divided by Weighted-Average Common Shares, and
reflects the adjustments made in those non-GAAP measures.
Management uses Adjusted Earnings (Loss) Available to Common
Shareholders and Adjusted Earnings (Loss) per Share Available to
Common Shareholders because excluding non-cash items (e.g.
depreciation, amortization and stock-based compensation expenses)
allows us to focus on operational performance. We believe that
these measures are also useful to investors for the same
reason.
Total Revenue Excluding Divested Assets is defined as the sum of
revenue from our Clinical Solutions and Evolent Health Services
segments, less revenue from our divested health plan assets of
Passport, Lighthouse and Miami Children's. For purposes of
calculating Total Revenue Excluding Divested Assets, the Company
treats is former investment in True Health as a discontinued
operation and excludes it from the calculation. Management uses
Total Revenue Excluding Divested Assets as a supplemental
performance measure because it reflects our on-going operational
results. The measures are useful to investors because it reflects
the full view of our operational performance in line with how we
generate our long-term forecasts.
These adjusted measures do not represent and should not be
considered as alternatives to GAAP measurements, and our
calculations thereof may not be comparable to similarly entitled
measures reported by other companies. A reconciliation of these
adjusted measures to their most comparable GAAP financial measures
is presented in the tables below. We believe these measures are
useful across time in evaluating our fundamental core operating
performance.
Lives on Platform and Per Member Per Month ("PMPM")
Fee
Lives on platform are calculated by summing members on our
value-based care and comprehensive health plan administrative
platform, as well as members covered for oncology specialty care
services and members covered for cardiology specialty care
services. Lives on New Century Technology & Services Suite are
calculated by summing members covered for oncology specialty care
services and members covered for cardiology specialty care services
for contracts under ASO arrangements. Members covered for more than
one category are counted in each category.
Evolent Health Services PMPM fee is defined as platform and
operations revenue pertaining to the Evolent Health Services
segment in the quarter divided by the average of the beginning and
ending Evolent Health Services segment membership during quarter
divided by the number of months in the period. Clinical Solutions
PMPM fee is defined as platform and operations services revenue
pertaining to our Performance Suite in the quarter divided by the
average of the beginning and ending Performance Suite membership
during quarter divided by the number of months in the period. New
Century Technology & Services Suite PMPM fee is defined as
platform and operations revenue pertaining to the New Century
Technology & Services Suite in the quarter divided by the
average of the beginning and ending New Century Technology &
Services Suite membership during quarter divided by the number of
months in the period.
Management uses Lives on our Platform and PMPM fees because we
believe that they provide insight into the unit economics of our
services. We believe that these measures are also useful to
investors because they allow further insight into the period over
period operational performance. We believe that these measures are
also useful to investors because they allow further insight into
the period over period operational performance.
Evolent Health,
Inc
Consolidated
Statements of Operations and Comprehensive Income
(Loss)
(unaudited, in
thousands, except per share data)
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
2,564
|
|
|
$
|
755
|
|
|
$
|
2,909
|
|
|
$
|
5,993
|
|
Platform and
operations services
|
219,493
|
|
|
216,544
|
|
|
434,219
|
|
|
432,538
|
|
Total
revenue
|
222,057
|
|
|
217,299
|
|
|
437,128
|
|
|
438,531
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and
amortization expenses presented separately below)
|
172,113
|
|
|
164,358
|
|
|
329,945
|
|
|
339,987
|
|
Selling, general and
administrative expenses
|
42,699
|
|
|
47,296
|
|
|
101,290
|
|
|
99,383
|
|
Depreciation and
amortization expenses
|
14,916
|
|
|
15,618
|
|
|
30,103
|
|
|
31,596
|
|
Loss on disposal of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
6,447
|
|
Goodwill
impairment
|
—
|
|
|
215,100
|
|
|
—
|
|
|
215,100
|
|
Change in fair value
of contingent consideration and
indemnification asset
|
—
|
|
|
756
|
|
|
(594)
|
|
|
(3,062)
|
|
Total operating
expenses
|
229,728
|
|
|
443,128
|
|
|
460,744
|
|
|
689,451
|
|
Operating
loss
|
(7,671)
|
|
|
(225,829)
|
|
|
(23,616)
|
|
|
(250,920)
|
|
Interest
income
|
68
|
|
|
705
|
|
|
191
|
|
|
1,475
|
|
Interest
expense
|
(6,274)
|
|
|
(6,290)
|
|
|
(12,611)
|
|
|
(12,571)
|
|
Impairment of equity
method investments
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,133)
|
|
Gain from equity
method investees
|
4,879
|
|
|
25,143
|
|
|
12,662
|
|
|
24,731
|
|
Gain from transfer of
membership
|
—
|
|
|
—
|
|
|
22,969
|
|
|
—
|
|
Loss on repayment of
debt
|
—
|
|
|
—
|
|
|
(19,158)
|
|
|
—
|
|
Other expense,
net
|
(18)
|
|
|
354
|
|
|
(32)
|
|
|
284
|
|
Loss from continuing
operations before income taxes
|
(9,016)
|
|
|
(205,917)
|
|
|
(19,595)
|
|
|
(284,134)
|
|
Provision for income
taxes
|
91
|
|
|
(3,904)
|
|
|
702
|
|
|
(3,634)
|
|
Loss from continuing
operations
|
(9,107)
|
|
|
(202,013)
|
|
|
(20,297)
|
|
|
(280,500)
|
|
Gain (loss) from
discontinued operations, net of tax (1)
|
—
|
|
|
(1,508)
|
|
|
1,383
|
|
|
(1,773)
|
|
Net loss
|
(9,107)
|
|
|
(203,521)
|
|
|
(18,914)
|
|
|
(282,273)
|
|
Net loss attributable
to non-controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net loss attributable
to common shareholders of
Evolent Health, Inc
|
$
|
(9,107)
|
|
|
$
|
(203,521)
|
|
|
$
|
(18,914)
|
|
|
$
|
(282,273)
|
|
|
|
|
|
|
|
|
|
Loss per common
share
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.11)
|
|
|
$
|
(2.37)
|
|
|
$
|
(0.24)
|
|
|
$
|
(3.30)
|
|
Discontinued
operations
|
—
|
|
|
(0.01)
|
|
|
0.02
|
|
|
(0.02)
|
|
Basic and diluted
loss per share attributable to common
shareholders of Evolent Health, Inc
|
$
|
(0.11)
|
|
|
$
|
(2.38)
|
|
|
$
|
(0.22)
|
|
|
$
|
(3.32)
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic and
diluted
|
85,448
|
|
|
85,349
|
|
|
85,056
|
|
|
84,977
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
Net loss
|
$
|
(9,107)
|
|
|
$
|
(203,521)
|
|
|
$
|
(18,914)
|
|
|
$
|
(282,273)
|
|
Other comprehensive
loss, net of taxes, related to:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
(58)
|
|
|
(4)
|
|
|
(89)
|
|
|
(157)
|
|
Total comprehensive
loss
|
(9,165)
|
|
|
(203,525)
|
|
|
(19,003)
|
|
|
(282,430)
|
|
Total comprehensive
loss attributable to non-
controlling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total comprehensive
loss attributable to common
shareholders of Evolent Health, Inc
|
$
|
(9,165)
|
|
|
$
|
(203,525)
|
|
|
$
|
(19,003)
|
|
|
$
|
(282,430)
|
|
|
————————
|
(1)
|
Includes
$1.9 million gain on disposal of discontinued operations for
the six months ended June 30, 2021.
|
Evolent Health,
Inc.
Condensed
Consolidated Balance Sheets
(in thousands,
unaudited)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
Cash and cash
equivalents
|
$
|
207,273
|
|
|
$
|
319,002
|
|
Restricted
cash
|
31,137
|
|
|
21,028
|
|
Total current
assets
|
505,552
|
|
|
547,649
|
|
Intangible assets,
net
|
252,045
|
|
|
264,992
|
|
Goodwill
|
349,009
|
|
|
349,029
|
|
Total
assets
|
1,293,367
|
|
|
1,371,700
|
|
|
|
|
|
Accounts
payable
|
39,879
|
|
|
31,975
|
|
Long-term debt, net
of discount
|
206,550
|
|
|
263,343
|
|
Total
liabilities
|
679,177
|
|
|
752,100
|
|
|
|
|
|
Total shareholders'
equity attributable to Evolent Health, Inc
|
614,190
|
|
|
619,600
|
|
Total liabilities and
shareholders' equity
|
1,293,367
|
|
|
1,371,700
|
|
Evolent Health,
Inc.
Condensed
Consolidated Statements of Cash Flows
(in thousands,
unaudited)
|
|
|
For the Six Months
Ended June 30,
|
|
2021
|
|
2020
|
Net cash and
restricted cash provided by (used in) continuing
operations
|
|
|
|
Net cash and
restricted cash provided by (used in) operating
activities
|
$
|
(72,410)
|
|
|
17,125
|
|
Net cash and
restricted cash provided by (used in) investing
activities
|
40,380
|
|
|
(18,382)
|
|
Net cash and
restricted cash provided by (used in) financing
activities
|
(91,087)
|
|
|
25,910
|
|
Effect of exchange
rate on cash and cash equivalents and restricted cash
|
(54)
|
|
|
26
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
(123,171)
|
|
|
24,679
|
|
Cash and cash
equivalents and restricted cash as of beginning-of-period
(1)
|
361,581
|
|
|
128,531
|
|
Cash and cash
equivalents and restricted cash as of end-of-period
(1)
|
$
|
238,410
|
|
|
153,210
|
|
|
|
|
|
Net cash and
restricted cash provided by (used in) discontinued
operations
|
|
|
|
Cash flows provided
by operating activities
|
$
|
5,002
|
|
|
$
|
10,660
|
|
Cash flows provided
by (used in) investing activities
|
(2,494)
|
|
|
382
|
|
|
|
|
|
|
|
|
|
|
————————
|
(1)
|
As a result of the
closing of the sale of True Health SPA, the consolidated statements
of operations, consolidated balance sheets, and related financial
information reflect the Company's operations and assets and
liabilities of True Health as discontinued operations for all
periods presented. Cash flows and comprehensive income have not
been adjusted and are included in the consolidated statements of
cash flows and consolidated statements of comprehensive income
(loss) for all periods presented.
|
Evolent Health,
Inc
Reconciliation of
Adjusted Results of Operations
(in thousands,
unaudited)
|
|
|
For the Three
Months Ended June 30, 2021
|
|
|
For the Three
Months Ended June 30, 2020
|
|
Evolent Health,
Inc
as
Reported
|
|
Evolent Health,
Inc
as
Adjusted
|
|
Evolent
|
|
|
|
Evolent
|
|
|
Evolent
|
|
|
|
Evolent
|
|
|
|
Health,
Inc
|
|
|
|
Health,
Inc
|
|
|
Health,
Inc
|
|
|
|
Health,
Inc
|
|
Change Over Prior
Period
|
|
Change Over Prior
Period
|
|
as
Reported
|
|
Adjustments
|
|
as
Adjusted
|
|
|
as
Reported
|
|
Adjustments
|
|
as
Adjusted
|
|
$
|
|
%
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
2,564
|
|
|
$
|
—
|
|
|
$
|
2,564
|
|
|
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
1,809
|
|
|
239.6
|
%
|
|
$
|
1,809
|
|
|
239.6
|
%
|
Platform and
operations services (1)
|
219,493
|
|
|
—
|
|
|
219,493
|
|
|
|
216,543
|
|
|
—
|
|
|
216,543
|
|
|
2,950
|
|
|
1.4
|
%
|
|
2,950
|
|
|
1.4
|
%
|
Total
revenue
|
222,057
|
|
|
—
|
|
|
222,057
|
|
|
|
217,298
|
|
|
—
|
|
|
217,298
|
|
|
4,759
|
|
|
2.2
|
%
|
|
4,759
|
|
|
2.2
|
%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of
depreciation and amortization
expenses presented separately
below) (1)
|
172,113
|
|
|
(973)
|
|
|
171,140
|
|
|
|
164,357
|
|
|
(1,053)
|
|
|
163,304
|
|
|
7,756
|
|
|
4.7
|
%
|
|
7,836
|
|
|
4.8
|
%
|
Selling, general and
administrative
expenses (2)
|
42,699
|
|
|
(5,126)
|
|
|
37,573
|
|
|
|
47,296
|
|
|
(3,821)
|
|
|
43,475
|
|
|
(4,597)
|
|
|
(9.7)
|
%
|
|
(5,902)
|
|
|
(13.6)
|
%
|
Depreciation and
amortization
expenses (3)
|
14,916
|
|
|
(5,937)
|
|
|
8,979
|
|
|
|
15,618
|
|
|
(5,823)
|
|
|
9,795
|
|
|
(702)
|
|
|
(4.5)
|
%
|
|
(816)
|
|
|
(8.3)
|
%
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
|
215,100
|
|
|
(215,100)
|
|
|
—
|
|
|
(215,100)
|
|
|
(100.0)
|
%
|
|
—
|
|
|
—
|
%
|
Change in fair value
of contingent
consideration and indemnification
asset
|
—
|
|
|
—
|
|
|
—
|
|
|
|
756
|
|
|
(756)
|
|
|
—
|
|
|
(756)
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
%
|
Total operating
expenses
|
229,728
|
|
|
(12,036)
|
|
|
217,692
|
|
|
|
443,127
|
|
|
(226,553)
|
|
|
216,574
|
|
|
(213,399)
|
|
|
(48.2)
|
%
|
|
1,118
|
|
|
0.5
|
%
|
Operating income
(loss)
|
$
|
(7,671)
|
|
|
$
|
12,036
|
|
|
$
|
4,365
|
|
|
|
$
|
(225,829)
|
|
|
$
|
226,553
|
|
|
$
|
724
|
|
|
$
|
218,158
|
|
|
96.6
|
%
|
|
$
|
3,641
|
|
|
502.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a
percentage of total revenue
|
103.5
|
%
|
|
|
|
98.0
|
%
|
|
|
203.9
|
%
|
|
|
|
99.7
|
%
|
|
|
|
|
|
|
|
|
|
————
|
(1)
|
Adjustments to cost
of revenue include $0.9 million and $0.5 million in stock-based
compensation expense for the three months ended June 30, 2021
and 2020, respectively. The adjustments also include approximately
$0.2 million and $0.7 million related to the amortization
of contract cost assets recorded as a result of the one-time ASC
606 transition adjustment for the three months ended June 30,
2021 and 2020, respectively. Adjustments for the three months ended
June 30, 2020 also include $(0.2) million of severance
costs.
|
(2)
|
Adjustments to
selling, general and administrative expenses include $2.8 million
and $3.2 million in stock-based compensation expense for the three
months ended June 30, 2021 and 2020, respectively. Adjustments
also include acquisition-related costs of $0.1 million and
$0.4 million for the three months ended June 30, 2021 and
2020, respectively, resulting from acquisitions and business
combinations. Adjustments for the three months ended June 30,
2021 include $0.7 million of repositioning costs and
$1.5 million of strategy and shareholder advisory expenses.
Adjustments for the three months ended June 30, 2020 also include
$0.2 million of severance costs.
|
(3)
|
Adjustments to
depreciation and amortization expenses of approximately $5.9
million and $5.8 million for the three months ended June 30,
2021 and 2020, respectively, relate to amortization of intangible
assets acquired via asset acquisitions and business
combinations.
|
|
For the Six Months
Ended June 30, 2021
|
|
|
For the Six Months
ended June 30, 2020
|
|
Evolent Health,
Inc
as
Reported
|
|
Evolent Health,
Inc
as
Adjusted
|
|
Evolent
|
|
|
|
Evolent
|
|
|
Evolent
|
|
|
|
Evolent
|
|
|
|
Health,
Inc
|
|
|
|
Health,
Inc
|
|
|
Health,
Inc
|
|
|
|
Health,
Inc
|
|
Change Over Prior
Period
|
|
Change Over Prior
Period
|
|
as
Reported
|
|
Adjustments
|
|
as
Adjusted
|
|
|
as
Reported
|
|
Adjustments
|
|
as
Adjusted
|
|
$
|
|
%
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
2,909
|
|
|
$
|
—
|
|
|
$
|
2,909
|
|
|
|
$
|
5,993
|
|
|
$
|
—
|
|
|
$
|
5,993
|
|
|
$
|
(3,084)
|
|
|
(51.5)
|
%
|
|
$
|
(3,084)
|
|
|
(51.5)
|
%
|
Platform and
operations services
|
434,219
|
|
|
—
|
|
|
434,219
|
|
|
|
432,538
|
|
|
—
|
|
|
432,538
|
|
|
1,681
|
|
|
0.4
|
%
|
|
1,681
|
|
|
0.4
|
%
|
Total
revenue
|
437,128
|
|
|
—
|
|
|
437,128
|
|
|
|
438,531
|
|
|
—
|
|
|
438,531
|
|
|
(1,403)
|
|
|
(0.3)
|
%
|
|
(1,403)
|
|
|
(0.3)
|
%
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of
depreciation and amortization
expenses presented separately
below) (1)
|
329,945
|
|
|
(1,662)
|
|
|
328,283
|
|
|
|
339,987
|
|
|
(4,208)
|
|
|
335,779
|
|
|
(10,042)
|
|
|
(3.0)
|
%
|
|
(7,496)
|
|
|
(2.2)
|
%
|
Selling, general and
administrative
expenses (2)
|
101,290
|
|
|
(20,696)
|
|
|
80,594
|
|
|
|
99,383
|
|
|
(11,026)
|
|
|
88,357
|
|
|
1,907
|
|
|
1.9
|
%
|
|
(7,763)
|
|
|
(8.8)
|
%
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
|
215,100
|
|
|
(215,100)
|
|
|
—
|
|
|
(215,100)
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
%
|
Depreciation and
amortization
expenses (3)
|
30,103
|
|
|
(11,843)
|
|
|
18,260
|
|
|
|
31,596
|
|
|
(11,690)
|
|
|
19,906
|
|
|
(1,493)
|
|
|
(4.7)
|
%
|
|
(1,646)
|
|
|
(8.3)
|
%
|
Loss on disposal of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
|
6,447
|
|
|
(6,447)
|
|
|
—
|
|
|
(6,447)
|
|
|
(100.0)
|
%
|
|
—
|
|
|
—
|
%
|
Change in fair value
of contingent
consideration and indemnification
asset
|
(594)
|
|
|
594
|
|
|
—
|
|
|
|
(3,062)
|
|
|
3,062
|
|
|
—
|
|
|
2,468
|
|
|
80.6
|
%
|
|
—
|
|
|
—
|
%
|
Total operating
expenses
|
460,744
|
|
|
(33,607)
|
|
|
427,137
|
|
|
|
689,451
|
|
|
(245,409)
|
|
|
444,042
|
|
|
(228,707)
|
|
|
(33.2)
|
%
|
|
(16,905)
|
|
|
(3.8)
|
%
|
Operating income
(loss)
|
$
|
(23,616)
|
|
|
$
|
33,607
|
|
|
$
|
9,991
|
|
|
|
$
|
(250,920)
|
|
|
$
|
245,409
|
|
|
$
|
(5,511)
|
|
|
$
|
227,304
|
|
|
90.6
|
%
|
|
$
|
15,502
|
|
|
281.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a
percentage of total revenue
|
105.4
|
%
|
|
|
|
97.7
|
%
|
|
|
157.2
|
%
|
|
|
|
101.3
|
%
|
|
|
|
|
|
|
|
|
|
————
|
(1)
|
Adjustments to cost
of revenue include $1.5 million and $0.9 million in stock-based
compensation expense for the six months ended June 30, 2021 and
2020, respectively. The adjustments also include approximately
$0.2 million and $1.1 million related to the amortization
of contract cost assets recorded as a result of the one-time ASC
606 transition adjustment for the six months ended June 30, 2021
and 2020, respectively. Adjustments for the six months ended
June 30, 2020 also include $2.2 million of severance
costs.
|
(2)
|
Adjustments to
selling, general and administrative expenses include $5.9 million
and $6.3 million in stock-based compensation expense for the six
months ended June 30, 2021 and 2020, respectively. Adjustments also
include acquisition-related costs of $2.1 million and $0.8
million for the six months ended June 30, 2021 and 2020,
respectively, resulting from acquisitions and business
combinations. Adjustments for the six months ended June 30, 2021
include $6.0 million of repositioning costs and $6.5 million of
strategy and shareholder advisory expenses. Adjustments for the six
months ended June 30, 2020 also include $4.0 million of
severance costs.
|
(3)
|
Adjustments to
depreciation and amortization expenses of approximately
$11.8 million and $11.7 million for the six months ended
June 30, 2021 and 2020, respectively, relate to amortization of
intangible assets acquired via asset acquisitions and business
combinations.
|
Evolent Health,
Inc
Segment
Results
(in thousands,
unaudited)
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Intersegment
Eliminations
|
|
Subtotal
|
|
Corporate(1)
|
|
Consolidated
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
2,564
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,564
|
|
|
$
|
—
|
|
|
$
|
2,564
|
|
Platform and
operations services
|
72,759
|
|
|
147,194
|
|
|
(460)
|
|
|
219,493
|
|
|
—
|
|
|
219,493
|
|
Total
revenue
|
$
|
75,323
|
|
|
$
|
147,194
|
|
|
$
|
(460)
|
|
|
$
|
222,057
|
|
|
$
|
—
|
|
|
$
|
222,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
755
|
|
|
$
|
—
|
|
|
$
|
755
|
|
Platform and
operations services
|
86,432
|
|
|
130,780
|
|
|
(668)
|
|
|
216,544
|
|
|
—
|
|
|
216,544
|
|
Total
revenue
|
$
|
87,187
|
|
|
$
|
130,780
|
|
|
$
|
(668)
|
|
|
$
|
217,299
|
|
|
$
|
—
|
|
|
$
|
217,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Subtotal
|
|
Corporate
(1)
|
|
Segments
Total
|
|
|
For the Three
Months Ended June 30, 2021
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
6,531
|
|
|
$
|
13,597
|
|
|
$
|
20,128
|
|
|
$
|
(6,782)
|
|
|
$
|
13,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
6,948
|
|
|
$
|
12,200
|
|
|
$
|
19,148
|
|
|
$
|
(8,629)
|
|
|
$
|
10,519
|
|
|
|
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Intersegment
Eliminations
|
|
Subtotal
|
|
Corporate
(1)
|
|
Consolidated
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2021
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
2,909
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,909
|
|
|
$
|
—
|
|
|
$
|
2,909
|
|
Platform and
operations services
|
157,700
|
|
|
277,417
|
|
|
(898)
|
|
|
434,219
|
|
|
—
|
|
|
434,219
|
|
Total
revenue
|
$
|
160,609
|
|
|
$
|
277,417
|
|
|
$
|
(898)
|
|
|
$
|
437,128
|
|
|
$
|
—
|
|
|
$
|
437,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2020
|
|
|
|
|
|
|
|
|
Transformation
services
|
$
|
5,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,993
|
|
|
$
|
—
|
|
|
$
|
5,993
|
|
Platform and
operations services
|
178,222
|
|
|
255,652
|
|
|
(1,336)
|
|
|
432,538
|
|
|
—
|
|
|
432,538
|
|
Total
revenue
|
$
|
184,215
|
|
|
$
|
255,652
|
|
|
$
|
(1,336)
|
|
|
$
|
438,531
|
|
|
$
|
—
|
|
|
$
|
438,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evolent
Health
Services
|
|
Clinical
Solutions
|
|
Subtotal
|
|
Corporate
(1)
|
|
Segments
Total
|
|
|
For the Six Months
Ended June 30, 2021
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
12,473
|
|
|
$
|
29,573
|
|
|
$
|
42,046
|
|
|
$
|
(13,793)
|
|
|
$
|
28,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended June 30, 2020
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
11,716
|
|
|
$
|
19,243
|
|
|
$
|
30,959
|
|
|
$
|
(16,564)
|
|
|
$
|
14,395
|
|
|
|
|
————————
|
(1)
|
Corporate includes
various finance, human resources, legal, executive, and other
corporate infrastructure expenses.
|
Evolent Health,
Inc.
Reconciliation of
Adjusted EBITDA to Net Loss
Attributable to
Common Shareholders of Evolent Health, Inc.
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss
attributable to common shareholders of
Evolent Health, Inc.
|
$
|
(9,107)
|
|
|
$
|
(203,521)
|
|
|
$
|
(18,914)
|
|
|
$
|
(282,273)
|
|
Net income
margin
|
(4.1)
|
%
|
|
(93.7)
|
%
|
|
(4.3)
|
%
|
|
(64.4)
|
%
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Interest
income
|
68
|
|
|
705
|
|
|
191
|
|
|
1,475
|
|
Interest
expense
|
(6,274)
|
|
|
(6,290)
|
|
|
(12,611)
|
|
|
(12,571)
|
|
Benefit (provision) for
income taxes
|
(91)
|
|
|
3,904
|
|
|
(702)
|
|
|
3,634
|
|
Depreciation and
amortization expenses
|
(14,916)
|
|
|
(15,618)
|
|
|
(30,103)
|
|
|
(31,596)
|
|
EBITDA
|
12,106
|
|
|
(186,222)
|
|
|
24,311
|
|
|
(243,215)
|
|
Less:
|
|
|
|
|
|
|
|
Impairment of equity
method investees
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,133)
|
|
Gain on transfer of
membership
|
—
|
|
|
—
|
|
|
22,969
|
|
|
—
|
|
Loss on repayment of
debt
|
—
|
|
|
—
|
|
|
(19,158)
|
|
|
—
|
|
Goodwill
impairment
|
—
|
|
|
(215,100)
|
|
|
—
|
|
|
(215,100)
|
|
Gain from equity
method investees
|
4,879
|
|
|
25,143
|
|
|
12,662
|
|
|
24,731
|
|
Loss on disposal of
assets and consolidation
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,447)
|
|
Change in fair value
of contingent consideration and
indemnification asset
|
—
|
|
|
(756)
|
|
|
594
|
|
|
3,062
|
|
Other expense,
net
|
(18)
|
|
|
354
|
|
|
(32)
|
|
|
284
|
|
Repositioning
costs
|
(663)
|
|
|
—
|
|
|
(6,043)
|
|
|
—
|
|
Stock-based
compensation expense
|
(3,653)
|
|
|
(3,703)
|
|
|
(7,359)
|
|
|
(7,211)
|
|
Severance
costs
|
—
|
|
|
(30)
|
|
|
(52)
|
|
|
(6,133)
|
|
Amortization of
contract cost assets
|
(196)
|
|
|
(767)
|
|
|
(323)
|
|
|
(1,207)
|
|
Strategy and
shareholder advisory expenses
|
(1,513)
|
|
|
—
|
|
|
(6,513)
|
|
|
—
|
|
Acquisition-related
costs
|
(76)
|
|
|
(374)
|
|
|
(2,070)
|
|
|
(683)
|
|
Gain (loss) from
discontinued operations (1)
|
—
|
|
|
(1,508)
|
|
|
1,383
|
|
|
(1,773)
|
|
Adjusted
EBITDA
|
$
|
13,346
|
|
|
$
|
10,519
|
|
|
$
|
28,253
|
|
|
$
|
14,395
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
6.0
|
%
|
|
4.8
|
%
|
|
6.5
|
%
|
|
3.3
|
%
|
|
|
|
|
|
|
|
|
|
————————
|
(1)
|
Includes
$1.9 million gain on disposal of discontinued operations for
the six months ended June 30, 2021.
|
|
Evolent Health
Services
|
|
Clinical
|
|
Corporate
|
|
For the Three
Months Ended
June 30,
|
|
For the Three
Months Ended
June 30,
|
|
For the Three
Months Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss
attributable to
common shareholders of Evolent Health, Inc.
|
$
|
(4,914)
|
|
|
$
|
(221,297)
|
|
|
$
|
8,131
|
|
|
$
|
8,116
|
|
|
$
|
(12,324)
|
|
|
$
|
9,660
|
|
Net income
margin
|
(6.5)
|
%
|
|
(253.8)
|
%
|
|
5.5
|
%
|
|
6.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
68
|
|
|
705
|
|
Interest
expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,274)
|
|
|
(6,290)
|
|
Benefit (provision) for
income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(91)
|
|
|
3,904
|
|
Depreciation and
amortization expenses
|
(10,679)
|
|
|
(11,918)
|
|
|
(4,237)
|
|
|
(3,700)
|
|
|
—
|
|
|
—
|
|
EBITDA
|
5,765
|
|
|
(209,379)
|
|
|
12,368
|
|
|
11,816
|
|
|
(6,027)
|
|
|
11,341
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
impairment
|
—
|
|
|
(215,100)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Gain from equity
method investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,879
|
|
|
25,143
|
|
Change in fair value
of contingent consideration and
indemnification asset
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(756)
|
|
Other expense,
net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18)
|
|
|
354
|
|
Repositioning
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(663)
|
|
|
—
|
|
Stock-based
compensation expense
|
(570)
|
|
|
(460)
|
|
|
(1,229)
|
|
|
(384)
|
|
|
(1,854)
|
|
|
(2,859)
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(30)
|
|
Amortization of
contract cost assets
|
(196)
|
|
|
(767)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Strategy and
shareholder advisory expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,513)
|
|
|
—
|
|
Acquisition-related
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(76)
|
|
|
(374)
|
|
Gain (loss) from
discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,508)
|
|
Adjusted
EBITDA
|
$
|
6,531
|
|
|
$
|
6,948
|
|
|
$
|
13,597
|
|
|
$
|
12,200
|
|
|
$
|
(6,782)
|
|
|
$
|
(8,629)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
8.7
|
%
|
|
8.0
|
%
|
|
9.2
|
%
|
|
9.3
|
%
|
|
|
|
|
Evolent Health,
Inc.
Reconciliation of
Adjusted Earnings (Loss) Available to Common
Shareholders to
Net Loss Attributable to Common Shareholders
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net Loss
Attributable to Common Shareholders - Basic
and Diluted (a)
|
$
|
(9,107)
|
|
|
$
|
(203,521)
|
|
|
$
|
(18,914)
|
|
|
$
|
(282,273)
|
|
Less:
|
|
|
|
|
|
|
|
Gain from equity
method investees
|
4,879
|
|
|
25,143
|
|
|
12,662
|
|
|
24,731
|
|
Other expense,
net
|
(18)
|
|
|
354
|
|
|
(32)
|
|
|
284
|
|
Gain on transfer of
membership
|
—
|
|
|
—
|
|
|
22,969
|
|
|
—
|
|
Loss on repayment of
debt
|
—
|
|
|
—
|
|
|
(19,158)
|
|
|
—
|
|
Loss on disposal of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,447)
|
|
Goodwill
impairment
|
—
|
|
|
(215,100)
|
|
|
—
|
|
|
(215,100)
|
|
Impairment of equity
method Investees
|
—
|
|
|
—
|
|
|
—
|
|
|
(47,133)
|
|
Change in fair value
of contingent consideration and
indemnification asset
|
—
|
|
|
(756)
|
|
|
594
|
|
|
3,062
|
|
Purchase accounting
adjustments
|
(5,937)
|
|
|
(5,823)
|
|
|
(11,843)
|
|
|
(11,690)
|
|
Repositioning
costs
|
(663)
|
|
|
—
|
|
|
(6,043)
|
|
|
—
|
|
Stock-based
compensation expense
|
(3,653)
|
|
|
(3,703)
|
|
|
(7,359)
|
|
|
(7,211)
|
|
Severance
costs
|
—
|
|
|
(30)
|
|
|
(52)
|
|
|
(6,133)
|
|
Amortization of
contract cost assets
|
(196)
|
|
|
(767)
|
|
|
(323)
|
|
|
(1,207)
|
|
(Gain) loss from
discontinued operations (1)
|
—
|
|
|
(1,508)
|
|
|
1,383
|
|
|
(1,773)
|
|
Strategy and
shareholder advisory expenses
|
(1,513)
|
|
|
—
|
|
|
(6,513)
|
|
|
—
|
|
Acquisition-related
costs
|
(76)
|
|
|
(374)
|
|
|
(2,070)
|
|
|
(683)
|
|
Adjusted Loss
Attributable to Common Shareholders (b)
|
$
|
(1,930)
|
|
|
$
|
(957)
|
|
|
$
|
(3,129)
|
|
|
$
|
(12,973)
|
|
|
|
|
|
|
|
|
|
Loss per Share
Attributable to Common Shareholders -
Basic and Diluted (a) (2)
|
$
|
(0.11)
|
|
|
$
|
(2.38)
|
|
|
$
|
(0.22)
|
|
|
$
|
(3.32)
|
|
|
|
|
|
|
|
|
|
Adjusted Loss per
Share Available to Common
Shareholders (b)
|
$
|
(0.02)
|
|
|
$
|
(0.01)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.15)
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares - basic and diluted (2)
|
85,448
|
|
|
85,349
|
|
|
85,056
|
|
|
84,977
|
|
|
————————
|
(1)
|
Includes
$1.9 million gain on disposal of discontinued operations for
the six months ended June 30, 2021.
|
(2)
|
For periods of net
loss, shares used in both the basic and diluted earnings per share
calculation represent basic shares as using diluted shares would be
anti-dilutive.
|
Evolent Health,
Inc.
Reconciliation of
Revenue from Divested Assets
to
Revenue
(in thousands, except
per share data)
(unaudited)
|
|
|
For the Three
Months Ended
June 30,
|
|
For the Six Months
Ended
June 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total
revenue
|
$
|
222,057
|
|
|
$
|
217,299
|
|
|
$
|
437,128
|
|
|
$
|
438,531
|
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
3,570
|
|
|
63,603
|
|
|
10,322
|
|
|
122,493
|
|
Subtotal
|
218,487
|
|
|
153,696
|
|
|
426,806
|
|
|
316,038
|
|
Eliminations
|
(459)
|
|
|
(459)
|
|
|
(918)
|
|
|
(918)
|
|
Total revenue
excluding divested assets
|
$
|
218,028
|
|
|
$
|
153,237
|
|
|
$
|
425,888
|
|
|
$
|
315,120
|
|
|
|
|
|
|
|
|
|
Clinical Solutions
revenue
|
$
|
147,194
|
|
|
$
|
130,780
|
|
|
$
|
277,417
|
|
|
$
|
255,652
|
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
—
|
|
|
32,787
|
|
|
71
|
|
|
62,721
|
|
Clinical Solutions
revenue excluding divested assets
|
147,194
|
|
|
97,993
|
|
|
277,346
|
|
|
192,931
|
|
|
|
|
|
|
|
|
|
Evolent Health
Services revenue
|
75,323
|
|
|
87,187
|
|
|
160,609
|
|
|
184,215
|
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
4,031
|
|
|
31,484
|
|
|
11,150
|
|
|
61,108
|
|
Evolent Health
Services revenue excluding divested assets
|
71,293
|
|
|
55,703
|
|
|
149,460
|
|
|
123,107
|
|
Eliminations
|
(459)
|
|
|
(459)
|
|
|
(918)
|
|
|
(918)
|
|
Total revenue
excluding divested assets
|
$
|
218,028
|
|
|
$
|
153,237
|
|
|
$
|
425,888
|
|
|
$
|
315,120
|
|
Evolent Health,
Inc.
Guidance
Reconciliation
(in thousands,
unaudited)
|
|
|
|
For the Three
Months Ended
September 30, 2021
|
|
For the Year
Ended
December 31, 2021
|
Net loss
attributable to common shareholders of Evolent Health,
Inc.
|
$
|
(12,896)
|
|
|
$
|
(44,956)
|
|
Less:
|
|
|
|
Interest
income
|
67
|
|
|
325
|
|
Interest
expense
|
(6,195)
|
|
|
(25,000)
|
|
Income Tax Benefit
(Expense)
|
—
|
|
|
(702)
|
|
Depreciation and
amortization expenses
|
(14,948)
|
|
|
(60,000)
|
|
EBITDA
|
8,180
|
|
|
40,421
|
|
Less:
|
|
|
|
Gain from equity
method investees
|
10
|
|
|
12,682
|
|
Gain on transfer of
membership
|
—
|
|
|
22,969
|
|
Loss on repayment of
debt
|
—
|
|
|
(19,158)
|
|
Change in fair value of
contingent consideration and indemnification asset
|
—
|
|
|
594
|
|
Repositioning
costs
|
(470)
|
|
|
(6,887)
|
|
Other income
(expense), net
|
(21)
|
|
|
(75)
|
|
Stock-based
compensation expense
|
(3,750)
|
|
|
(14,859)
|
|
Severance
costs
|
—
|
|
|
(238)
|
|
Amortization of
contract cost assets
|
(89)
|
|
|
(500)
|
|
Gain from discontinued
operations
|
—
|
|
|
1,383
|
|
Shareholder advisory
services
|
—
|
|
|
(6,513)
|
|
Acquisition-related
costs
|
(500)
|
|
|
(2,977)
|
|
Adjusted
EBITDA
|
$
|
13,000
|
|
|
$
|
54,000
|
|
The guidance reconciliation provided above reconciles the
midpoint of the respective guidance ranges to the most comparable
GAAP measure.
FORWARD-LOOKING STATEMENTS - CAUTIONARY
LANGUAGE
Certain statements made in this report and in other written or
oral statements made by us or on our behalf are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 ("PSLRA"). A forward-looking statement is a
statement that is not a historical fact and, without limitation,
includes any statement that may predict, forecast, indicate or
imply future results, performance or achievements, and may contain
words like: "believe," "anticipate," "expect," "estimate,"
"aim," "predict," "potential," "continue," "plan," "project,"
"will," "should," "shall," "may," "might" and other words or
phrases with similar meaning in connection with a discussion of
future operating or financial performance. In particular,
these include statements relating to future actions, trends in our
businesses, prospective services, future performance or financial
results and the closing of pending transactions and the outcome of
contingencies, such as legal proceedings. We claim the
protection afforded by the safe harbor for forward-looking
statements provided by the PSLRA.
These statements are only predictions based on our current
expectations and projections about future events. Forward-looking
statements involve risks and uncertainties that may cause actual
results, level of activity, performance or achievements to differ
materially from the results contained in the forward-looking
statements. Risks and uncertainties that may cause actual
results to vary materially, some of which are described within the
forward-looking statements, include, among others:
- the significant portion of revenue we derive from our largest
partners, and the potential loss, non-renewal, termination or
renegotiation of our relationship or contract with any significant
partner, or multiple partners in the aggregate;
- evolution in the market for value-based care;
- uncertainty in the health care regulatory framework, including
the potential impact of policy changes;
- our ability to offer new and innovative products and
services;
- risks related to completed and future acquisitions,
investments, alliances and joint ventures, including the
acquisitions of Valence Health Inc., excluding Cicerone Health
Solutions, Inc., Aldera Holdings, Inc., New Century Health, and
Passport, which may be difficult to integrate, divert management
resources, or result in unanticipated costs or dilute our
stockholders;
- the financial benefits we expect to receive as a result of the
sale of certain assets of Passport may not be realized;
- the growth and success of our partners, which is difficult to
predict and is subject to factors outside of our control, including
governmental funding reductions and other policy changes,
enrollment numbers for our partners' plans, premium pricing
reductions, selection bias in at-risk membership and the ability to
control and, if necessary, reduce health care costs;
- risks relating to our ability to maintain profitability for our
total cost of care and New Century Health's performance-based
contracts and products, including capitation and risk-bearing
contracts;
- our ability to effectively manage our growth and maintain an
efficient cost structure, and to successfully implement cost
cutting measures;
- the potential negative impact of the COVID-19 pandemic and
other public health emergencies;
- our ability to recover the significant upfront costs in our
partner relationships;
- our ability to attract new partners and successfully capture
new growth opportunities;
- the increasing number of risk-sharing arrangements we enter
into with our partners;
- our ability to estimate the size of our target markets;
- our ability to maintain and enhance our reputation and brand
recognition;
- consolidation in the health care industry;
- competition which could limit our ability to maintain or expand
market share within our industry;
- risks related to governmental payer audits and actions,
including whistleblower claims;
- our ability to partner with providers due to exclusivity
provisions in our contracts;
- risks related to our offshore operations;
- our ability to contain health care costs, implement increases
in premium rates on a timely basis, maintain adequate reserves for
policy benefits or maintain cost effective provider
agreements;
- our dependency on our key personnel, and our ability to
attract, hire, integrate and retain key personnel;
- the impact of additional goodwill and intangible asset
impairments on our results of operations;
- our indebtedness, our ability to service our indebtedness, and
our ability to obtain additional financing;
- our ability to achieve profitability in the future;
- the impact of litigation, including the ongoing class action
lawsuit;
- material weaknesses in the future may impact our ability to
conclude that our internal control over financial reporting is not
effective and we may be unable to produce timely and accurate
financial statements;
- restrictions and penalties as a result of privacy and data
protection laws;
- data loss or corruption due to failures or errors in our
systems and service disruptions at our data centers;
- restrictions and penalties as a result of privacy and data
protection laws;
- adequate protection of our intellectual property, including
trademarks;
- any alleged infringement, misappropriation or violation of
third-party proprietary rights;
- our use of "open source" software;
- our ability to protect the confidentiality of our trade
secrets, know-how and other proprietary information;
- our reliance on third parties and licensed technologies;
- our ability to use, disclose, de-identify or license data and
to integrate third-party technologies;
- our reliance on Internet infrastructure, bandwidth providers,
data center providers, other third parties and our own systems for
providing services to our partners;
- our reliance on third-party vendors to host and maintain our
technology platform;
- our obligations to make payments to certain of our pre-IPO
investors for certain tax benefits we may claim in the future;
- our ability to utilize benefits under the tax receivables
agreement described herein;
- our obligations to make payments under the tax receivables
agreement that may be accelerated or may exceed the tax benefits we
realize;
- the terms of agreements between us and certain of our pre-IPO
investors;
- the conditional conversion features of the 2024 and 2025
convertible notes, which, if triggered, could require us to settle
the 2024 or 2025 convertible notes in cash;
- the impact of the accounting method for convertible debt
securities that may be settled in cash;
- the potential volatility of our Class A common stock
price;
- the potential impact of our securities class action
litigation;
- the potential decline of our Class A common stock price if a
substantial number of shares are sold or become available for
sale;
- provisions in our second amended and restated certificate of
incorporation and third amended and restated by-laws and provisions
of Delaware law that discourage or
prevent strategic transactions, including a takeover of us;
- the ability of certain of our investors to compete with us
without restrictions;
- provisions in our second amended and restated certificate of
incorporation which could limit our stockholders' ability to obtain
a favorable judicial forum for disputes with us or our directors,
officers or employees; and
- our intention not to pay cash dividends on our Class A common
stock.
The risks included here are not exhaustive. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. Our periodic
reports and other documents filed with the SEC include additional
factors that could affect our businesses and financial performance.
Moreover, we operate in a rapidly changing and competitive
environment. New risk factors emerge from time to time, and it
is not possible for management to predict all such risk
factors.
Further, it is not possible to assess the effect of all risk
factors on our businesses or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a
prediction of actual results. In addition, we undertake no
obligation to publicly update any forward-looking statements to
reflect events or circumstances that occur after the date of this
release.
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SOURCE Evolent Health, Inc.