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, 2024.
“Our first quarter results reflect our continued
momentum and the execution of our strategy to deliver high quality
care, while continuing to enhance our margins,” said CEO Patrick
Blair. “Our strategic initiatives are delivering measurable
results, and we remain focused on operational excellence in our
centers as we drive sustainable long-term value for our
participants and stakeholders.”
Financial Results
| |
Three Months Ended September 30, |
| |
2024 |
|
2023 |
| in thousands, except
percentages and per share amounts |
|
|
|
|
Total revenues |
$ |
205,142 |
|
|
$ |
182,485 |
|
| Loss Before Income Taxes |
|
(5,306 |
) |
|
|
(10,736 |
) |
| Net Loss |
|
(5,710 |
) |
|
|
(10,962 |
) |
| Net Loss margin |
(2.8 |
)% |
|
(6.0 |
)% |
| |
|
|
|
| Net Loss Attributable to
InnovAge Holding Corp. |
|
(4,929 |
) |
|
|
(10,304 |
) |
| Net Loss per share - basic and
diluted |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
| |
|
|
|
| Center-level Contribution
Margin(1) |
$ |
34,541 |
|
|
$ |
27,877 |
|
| Adjusted EBITDA(1) |
$ |
6,476 |
|
|
$ |
1,306 |
|
| Adjusted EBITDA margin(1) |
|
3.2 |
% |
|
|
0.7 |
% |
Fiscal First Quarter 2025 Financial
Performance
- Total revenue
of $205.1 million, increased approximately 12.4% compared to
$182.5 million in the first quarter of fiscal year 2024
- Loss Before Income Taxes of $5.3
million improved approximately 50.6%, compared to a loss before
income taxes of $10.7 million in the first quarter of fiscal year
2024
- Loss Before Income Taxes as a
percent of revenue was 2.6%, a decrease of 3.3 percentage points
compared to Loss Before Income Tax as a percent of revenue of 5.9%
in the first quarter of fiscal year 2024
- Center-level Contribution Margin(1)
of $34.5 million, increased 23.9% compared to $27.9 million in the
first quarter of fiscal year 2024
- Center-level Contribution
Margin(1) as a percent of revenue of 16.8%, increased 1.5
percentage points compared to 15.3% in the first quarter of fiscal
year 2024
- Net loss of $5.7 million, compared
to net loss of $11.0 million in the first quarter of fiscal year
2024
- Net loss margin of 2.8%, a decrease
of 3.2 percentage points compared to a net loss margin of 6.0% in
the first quarter of fiscal year 2024
- Net loss attributable to InnovAge
Holding Corp. of $4.9 million, or a loss of $0.04 per share,
compared to net loss of $10.3 million, or a loss of $0.08 per share
in the first quarter of fiscal year 2024
- Adjusted EBITDA(1) of $6.5
million, an increase of $5.2 million compared to Adjusted EBITDA of
$1.3 million in the first quarter of fiscal year 2024
- Adjusted EBITDA(1) margin of
3.2%, an increase of 2.5 percentage points compared to 0.7% in the
first quarter of fiscal year 2024
- Census of approximately 7,210
participants compared to 6,580 participants in the first quarter of
fiscal year 2024
- Ended the first quarter of fiscal
year 2025 with $39.0 million in cash and cash equivalents plus
$46.7 million in short-term investments, and $81.3 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
Center-level Contribution Margin as a percentage of revenue,
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures.
Effective for the year ended June 30, 2024 and going forward, the
Company has revised its calculation of Adjusted EBITDA and has
recast the presentation for the three months ended September 30,
2023 to conform to the current presentation. For more details and
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.”
Full Fiscal Year 2025 Financial
Guidance
Based on information as of today,
November 5, 2024, InnovAge is confirming the following
financial guidance.
| |
Low |
|
High |
| |
dollars in millions |
|
Census |
|
7,300 |
|
|
7,750 |
| Total Member Months(1) |
|
86,000 |
|
|
89,000 |
| |
|
|
|
| Total revenues |
$ |
815 |
|
$ |
865 |
| Adjusted EBITDA(2) |
$ |
24 |
|
$ |
31 |
| |
|
|
|
|
|
Expected results and estimates may be impacted
by factors outside the Company’s control, and actual results may be
materially different from this guidance. See “Forward-Looking
Statements - Safe Harbor” herein.
(1) We define Total Member Months as the total
number of participants as of period end multiplied by the number of
months within a year in which each participant was enrolled in our
program. Management believes this is a useful metric as it more
precisely tracks the number of participants the Company serves
throughout the year.
(2)Adjusted EBITDA is a non-GAAP measure. See
“Note Regarding Use of Non-GAAP Financial Measures” and
“Reconciliation of GAAP and Non-GAAP Measures” for a definition of
Adjusted EBITDA and a reconciliation to net loss, the most closely
comparable GAAP measure. The Company is unable to provide guidance
for net loss or a reconciliation of the Company’s Adjusted EBITDA
guidance because it cannot provide a meaningful or accurate
calculation or estimation of certain reconciling items without
unreasonable effort. The Company’s inability to do so is due to the
inherent difficulty in forecasting and quantifying certain amounts
that are necessary for such reconciliation, including variations in
effective tax rate, expenses to be incurred for acquisition
activities and other one-time or exceptional items.
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 through
the Program of All-inclusive Care for the Elderly (PACE). With a
mission of enabling older adults to age independently in their own
homes for as long as safely possible, InnovAge’s 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 PACE healthcare model is one
in which all constituencies — participants, their families,
providers and government payors — “win.” As of September 30,
2024, InnovAge served approximately 7,210 participants across 20
centers in six states. https://www.innovage.com.
Investor Contact:
Ryan Kubotarkubota@innovage.com
Media Contact:
Lara Hazenfieldlhazenfield@innovage.com
Forward-Looking Statements - Safe
Harbor
This 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,” “estimate,” “expect,” “project,” “plan,” “intend,”
“believe,” “may,” “will,” “should,” “can have,” “likely,” 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; the viability of our growth strategy including
our ability or expectations to increase the number of participants
we serve, to build and/or open de novo centers, or to identify and
execute tuck-in acquisitions, joint ventures and strategic
partnerships; our ability to control costs, mitigate the effects of
elevated expenses, expand our payor capabilities, implement
clinical value initiatives and strengthen enterprise functions; our
expectations with respect to audits, post-sanction work, legal
proceedings and government investigations and actions;
relationships and discussions with regulatory agencies; our ability
to effectively implement 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. 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 and may cause our actual results and financial condition to
differ materially. Important factors that could cause our actual
results and financial condition to differ materially include, among
others, the following: (i) the viability of our growth strategy,
including our ability to obtain licenses to open our de novo
centers in Downey and Bakersfield, California, and our ability to
ramp up our de novo centers in Florida; (ii) our ability to
identify and successfully complete acquisitions, joint ventures and
strategic partnerships; (iii) our ability to attract new
participants and retain existing participants; (iv) the impact on
our business from ongoing macroeconomic related challenges,
including labor shortages, labor competition and inflation; (v)
inspections, reviews, audits, and investigations under the federal
and state government programs, including any corrective action and
adverse findings thereunder; (vi) legal proceedings, enforcement
actions and litigation malpractice and privacy disputes, which are
costly to defend; (vii) under our PACE contracts, we assume all of
the risk that the cost of providing services will exceed our
compensation; (viii) the dependence of our revenues upon a limited
number of government payors; (ix) the risk that our submissions to
government payors may contain inaccurate or unsupportable
information, including regarding risk adjustment scores of
participants, subjecting us to repayment obligations or penalties;
and (x) the impact on our business of renegotiation, non-renewal or
termination of capitation agreements with government payors.
Forward-looking statements are 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. We advise you to not place undue reliance on
forward-looking statements and to review our risk factors and other
disclosures included in the reports we file or furnish with the
Securities and Exchange Commission, including our Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K.
Note Regarding Use of Non-GAAP
Financial Measures
In addition to reporting financial information
in accordance with generally accepted accounting principles
(“GAAP”), the Company is also reporting Center-level Contribution
Margin, Center-level Contribution Margin as a percentage of
revenue, Adjusted EBITDA and Adjusted EBITDA margin, which are
non-GAAP financial measures. These non-GAAP measures 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) before income taxes, net income (loss) before income
taxes margin, net income (loss) and net income (loss) margin, as
applicable, as determined by GAAP. We believe that these non-GAAP
measures are appropriate measures of operating performance because
the metrics eliminate the impact of certain expenses that, in the
case of Adjusted EBITDA, 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 these non-GAAP measures 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) before taxes,
net income (loss) before taxes margin, 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
operating 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 loss adjusted for interest expense, net,
other investment income, depreciation and amortization, and
provision (benefit) for income tax as well as addbacks for
non-recurring expenses or exceptional items, including charges
relating to management equity compensation, litigation costs and
settlement, M&A diligence, transaction and integration,
business optimization, electronic medical record (EMR)
implementation and gain on cost and equity method investments.
Adjusted EBITDA margin is Adjusted EBITDA expressed as a percentage
of our total revenue. Effective for the year ended June 30, 2024,
and going forward, the Company has revised its calculation of
Adjusted EBITDA to no longer exclude de novo center development
costs and to reflect the impact of other investment income. The
presentation for the three months ended September 30, 2023 has been
recast to conform to the current presentation. 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 30,2024 |
|
June 30,2024 |
| Assets |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
39,019 |
|
|
$ |
56,946 |
|
|
Short-term investments |
|
46,659 |
|
|
|
45,833 |
|
|
Restricted cash |
|
13 |
|
|
|
14 |
|
|
Accounts receivable, net of allowance ($3,693 – September 30,
2024 and $6,729 – June 30, 2024) |
|
46,735 |
|
|
|
48,106 |
|
|
Prepaid expenses |
|
22,804 |
|
|
|
18,919 |
|
|
Income tax receivable |
|
3,324 |
|
|
|
3,324 |
|
|
Total current assets |
|
158,554 |
|
|
|
173,142 |
|
|
Noncurrent Assets |
|
|
|
|
Property and equipment, net |
|
189,900 |
|
|
|
193,022 |
|
|
Operating lease assets |
|
27,385 |
|
|
|
28,416 |
|
|
Investments |
|
2,645 |
|
|
|
2,645 |
|
|
Deposits and other |
|
4,913 |
|
|
|
5,949 |
|
|
Goodwill |
|
139,949 |
|
|
|
139,949 |
|
|
Other intangible assets, net |
|
4,373 |
|
|
|
4,538 |
|
|
Total noncurrent assets |
|
369,165 |
|
|
|
374,519 |
|
|
Total assets |
$ |
527,719 |
|
|
$ |
547,661 |
|
| Liabilities and
Stockholders' Equity |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and accrued expenses |
$ |
45,849 |
|
|
$ |
55,459 |
|
|
Reported and estimated claims |
|
56,443 |
|
|
|
55,404 |
|
|
Due to Medicaid and Medicare |
|
15,584 |
|
|
|
15,197 |
|
|
Current portion of long-term debt |
|
3,795 |
|
|
|
3,795 |
|
|
Current portion of finance lease obligations |
|
5,365 |
|
|
|
4,599 |
|
|
Current portion of operating lease obligations |
|
4,311 |
|
|
|
4,145 |
|
|
Total current liabilities |
|
131,347 |
|
|
|
138,599 |
|
|
Noncurrent Liabilities |
|
|
|
|
Deferred tax liability, net |
|
7,863 |
|
|
|
7,460 |
|
|
Finance lease obligations |
|
10,853 |
|
|
|
12,743 |
|
|
Operating lease obligations |
|
24,992 |
|
|
|
26,275 |
|
|
Other noncurrent liabilities |
|
1,317 |
|
|
|
1,298 |
|
|
Long-term debt, net of debt issuance costs |
|
60,637 |
|
|
|
61,478 |
|
|
Total liabilities |
|
237,009 |
|
|
|
247,853 |
|
| Commitments and
Contingencies |
|
|
|
| Redeemable
Noncontrolling Interests |
|
21,657 |
|
|
|
22,200 |
|
| Stockholders’
Equity |
|
|
|
|
Common stock, $0.001 par value; 500,000,000 authorized as of
September 30, 2024 and June 30, 2024; 136,362,736 issued
and 135,538,698 outstanding as of September 30, 2024 and
136,152,858 issued and 136,116,299 outstanding as of June 30,
2024 |
|
136 |
|
|
|
136 |
|
|
Treasury stock at cost, 837,372 and 36,559 shares as of
September 30, 2024 and June 30, 2024, respectively |
|
(5,000 |
) |
|
|
(179 |
) |
|
Additional paid-in capital |
|
339,048 |
|
|
|
337,615 |
|
|
Retained deficit |
|
(73,240 |
) |
|
|
(68,311 |
) |
|
Total InnovAge Holding Corp. |
|
260,944 |
|
|
|
269,261 |
|
|
Noncontrolling interests |
|
8,109 |
|
|
|
8,347 |
|
|
Total stockholders’ equity |
|
269,053 |
|
|
|
277,608 |
|
|
Total liabilities and stockholders’ equity |
$ |
527,719 |
|
|
$ |
547,661 |
|
Schedule 2
InnovAgeCONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(IN
THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)
(UNAUDITED)
| |
Three Months Ended September 30, |
|
|
|
2024 |
|
|
|
2023 |
|
| Revenues |
|
|
|
|
Capitation revenue |
$ |
204,800 |
|
|
$ |
182,173 |
|
|
Other service revenue |
|
342 |
|
|
|
312 |
|
|
Total revenues |
|
205,142 |
|
|
|
182,485 |
|
| Expenses |
|
|
|
|
External provider costs |
|
107,214 |
|
|
|
99,358 |
|
|
Cost of care, excluding depreciation and amortization |
|
63,387 |
|
|
|
55,250 |
|
|
Sales and marketing |
|
6,492 |
|
|
|
5,379 |
|
|
Corporate, general and administrative |
|
27,535 |
|
|
|
28,947 |
|
|
Depreciation and amortization |
|
5,410 |
|
|
|
4,269 |
|
|
Total expenses |
|
210,038 |
|
|
|
193,203 |
|
| Operating
Loss |
|
(4,896 |
) |
|
|
(10,718 |
) |
| |
|
|
|
| Other Income
(Expense) |
|
|
|
|
Interest expense, net |
|
(1,243 |
) |
|
|
(661 |
) |
|
Other income |
|
833 |
|
|
|
643 |
|
|
Total other expense |
|
(410 |
) |
|
|
(18 |
) |
| Loss Before Income
Taxes |
|
(5,306 |
) |
|
|
(10,736 |
) |
| Provision for Income
Taxes |
|
404 |
|
|
|
226 |
|
| Net Loss |
|
(5,710 |
) |
|
|
(10,962 |
) |
|
Less: net loss attributable to noncontrolling interests |
|
(781 |
) |
|
|
(658 |
) |
| Net Loss Attributable
to InnovAge Holding Corp. |
$ |
(4,929 |
) |
|
$ |
(10,304 |
) |
| |
|
|
|
| Weighted-average
number of common shares outstanding - basic |
|
135,769,835 |
|
|
|
135,790,401 |
|
| Weighted-average
number of common shares outstanding - diluted |
|
135,769,835 |
|
|
|
135,790,401 |
|
| |
|
|
|
| Net loss per share -
basic |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
| Net loss per share -
diluted |
$ |
(0.04 |
) |
|
$ |
(0.08 |
) |
Schedule 3
InnovAgeCONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS) (UNAUDITED)
| |
For the Three Months Ended September
30, |
|
|
|
2024 |
|
|
|
2023 |
|
| Operating
Activities |
|
|
|
|
Net loss |
$ |
(5,710 |
) |
|
$ |
(10,962 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities |
|
|
|
|
Provision for uncollectible accounts |
|
82 |
|
|
|
1,077 |
|
|
Depreciation and amortization |
|
5,410 |
|
|
|
4,269 |
|
|
Operating lease rentals |
|
1,572 |
|
|
|
1,103 |
|
|
Amortization of deferred financing costs |
|
107 |
|
|
|
107 |
|
|
Stock-based compensation |
|
2,161 |
|
|
|
1,823 |
|
|
Deferred income taxes |
|
403 |
|
|
|
226 |
|
|
Other, net |
|
126 |
|
|
|
58 |
|
|
Changes in operating assets and liabilities, net of
acquisitions |
|
|
|
|
Accounts receivable, net |
|
1,290 |
|
|
|
(20,918 |
) |
|
Prepaid expenses |
|
(3,885 |
) |
|
|
734 |
|
|
Deposits and other |
|
653 |
|
|
|
(591 |
) |
|
Accounts payable and accrued expenses |
|
(9,495 |
) |
|
|
(7,303 |
) |
|
Reported and estimated claims |
|
1,039 |
|
|
|
(676 |
) |
|
Due to Medicaid and Medicare |
|
388 |
|
|
|
1,140 |
|
|
Operating lease liabilities |
|
(1,657 |
) |
|
|
(1,048 |
) |
|
Deferred revenue |
|
— |
|
|
|
(2,024 |
) |
|
Net cash used in operating activities |
|
(7,516 |
) |
|
|
(32,985 |
) |
| Investing
Activities |
|
|
|
|
Purchases of property and equipment |
|
(2,200 |
) |
|
|
(2,571 |
) |
|
Purchases of short-term investments |
|
(590 |
) |
|
|
(570 |
) |
|
Net cash used in investing activities |
|
(2,790 |
) |
|
|
(3,141 |
) |
| Financing
Activities |
|
|
|
|
Payments for finance lease obligations |
|
(1,124 |
) |
|
|
(1,164 |
) |
|
Principal payments on long-term debt |
|
(949 |
) |
|
|
(948 |
) |
|
Repurchase of equity securities |
|
(4,821 |
) |
|
|
— |
|
|
Taxes paid related to net settlements of stock-based compensation
awards |
|
(728 |
) |
|
|
(614 |
) |
| Net cash used in financing
activities |
|
(7,622 |
) |
|
|
(2,726 |
) |
| |
|
|
|
| DECREASE IN CASH, CASH
EQUIVALENTS & RESTRICTED CASH |
|
(17,928 |
) |
|
|
(38,852 |
) |
| CASH, CASH EQUIVALENTS
& RESTRICTED CASH, BEGINNING OF PERIOD |
|
56,960 |
|
|
|
127,265 |
|
| CASH, CASH EQUIVALENTS
& RESTRICTED CASH, END OF PERIOD |
$ |
39,032 |
|
|
$ |
88,413 |
|
| |
|
|
|
| Supplemental Cash
Flows Information |
|
|
|
|
Interest paid |
$ |
1,181 |
|
|
$ |
404 |
|
|
Income taxes paid |
$ |
1 |
|
|
$ |
— |
|
|
Property and equipment included in accounts payable |
$ |
102 |
|
|
$ |
281 |
|
Schedule 4
InnovAgeRECONCILIATION
OF GAAP AND NON-GAAP MEASURES(IN THOUSANDS)
(UNAUDITED)
Adjusted EBITDA
| |
Three Months Ended September 30, |
|
|
|
2024 |
|
|
|
2023 |
|
| |
|
|
|
| Net loss |
$ |
(5,710 |
) |
|
$ |
(10,962 |
) |
| Interest expense, net |
|
1,243 |
|
|
|
661 |
|
| Other investment
income(a) |
|
(831 |
) |
|
|
(575 |
) |
| Depreciation and
amortization |
|
5,410 |
|
|
|
4,269 |
|
| Provision (benefit) for income
tax |
|
404 |
|
|
|
226 |
|
| Stock-based compensation |
|
2,161 |
|
|
|
1,823 |
|
| Litigation costs and
settlement(b) |
|
3,059 |
|
|
|
1,707 |
|
| M&A diligence, transaction
and integration(c) |
|
105 |
|
|
|
64 |
|
| Business optimization(d) |
|
635 |
|
|
|
2,159 |
|
| EMR implementation(e) |
|
— |
|
|
|
1,934 |
|
|
Adjusted EBITDA |
$ |
6,476 |
|
|
$ |
1,306 |
|
| |
|
|
|
| Net loss margin |
(2.8 |
)% |
|
(6.0 |
)% |
| Adjusted EBITDA margin |
|
3.2 |
% |
|
|
0.7 |
% |
|
_____________________________ |
|
(a) |
Reflects investment income related to short-term investments
included in our consolidated statement of operations. Effective for
the year ended June 30, 2024 and going forward, the Company has
revised the calculation for Adjusted EBITDA to reflect the impact
of investment income. The presentation for the three months ended
September 30, 2023 has been recast to reflect the impact of other
investment income. |
| (b) |
Reflects charges/(credits) related to litigation by stockholders,
litigation related to de novo center, 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. |
| (c) |
Reflects charges related to M&A transaction and integrations.
The presentation for the three months ended September 30, 2023 has
been recast to no longer exclude de novo center development
costs. |
| (d) |
Reflects charges related to business optimization initiatives. Such
charges related to one-time investments in projects designed to
enhance our technology and compliance systems and improve and
support the efficiency and effectiveness of our operations. For the
three months ended September 30, 2024, this includes (i) $0.4
million of costs associated with organizational restructure and
(ii) $0.2 million related to other non-recurring projects aimed at
reducing costs and improving efficiencies. 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 capabilities, and
strengthen our enterprise capabilities and (ii) $0.4 million
related to other non-recurring projects aimed at reducing costs and
improving efficiencies. |
| (e) |
Reflects non-recurring expenses relating to the implementation of a
new EMR vendor. |
| |
Three MonthsEnded June 30, |
|
|
|
2024 |
|
| |
|
| Net Loss |
$ |
(2,254 |
) |
| Interest expense, net |
|
1,404 |
|
| Other investment
income(a) |
|
(598 |
) |
| Depreciation and
amortization |
|
5,329 |
|
| Provision for income tax |
|
1,308 |
|
| Stock-based compensation |
|
1,692 |
|
| Litigation costs and
settlement(b) |
|
2,076 |
|
| M&A diligence, transaction
and integration(c) |
|
394 |
|
| Business optimization(d) |
|
727 |
|
| EMR implementation(e) |
|
1 |
|
| Gain on cost and equity method
investments(f) |
|
(4,842 |
) |
|
Adjusted EBITDA |
$ |
5,237 |
|
| |
|
| Net loss margin |
(1.1 |
)% |
| Adjusted EBITDA margin |
|
2.6 |
% |
|
_____________________________ |
|
(a) |
Reflects investment income related to short term investments
included in our consolidated statement of operations. Effective for
the year ended June 30, 2024 and going forward, the Company has
revised the calculation for Adjusted EBITDA to reflect the impact
of investment income. |
| (b) |
Reflects charges/(credits) related to litigation by stockholders,
litigation related to de novo center, 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. |
| (c) |
Reflects charges related to M&A transaction and integrations.
Effective for the year ended June 30, 2024 and going forward, the
Company has revised the calculation for Adjusted EBITDA to no
longer exclude de novo center development costs in 2024. De novo
center development costs were $0.4 million the three months ended
June 30, 2024. |
| (d) |
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 June 30, 2024 costs include (i) $0.5 million
in third party consultants as we implement our core provider
initiatives, asses our risk-bearing payor capabilities, and
strengthen our enterprise capabilities and (ii) $0.2 million in
fees associated with the Pinewood Lodge, LLLP (“PWD”)
dissolution. |
| (e) |
Reflects non-recurring expenses relating to the implementation of a
new EMR vendor. |
| (f) |
Reflects $4.8 million net benefit associated with the dissolution
of PWD. |
Center-Level Contribution Margin
| |
|
| |
Three Months Ended September 30, 2024 |
| (In thousands) |
PACE |
|
All other(a) |
|
Totals |
|
Capitation revenue |
$ |
204,800 |
|
|
$ |
— |
|
|
$ |
204,800 |
|
|
Other service revenue |
|
96 |
|
|
|
246 |
|
|
|
342 |
|
| Total revenues |
|
204,896 |
|
|
|
246 |
|
|
|
205,142 |
|
|
External provider costs |
|
107,214 |
|
|
|
— |
|
|
|
107,214 |
|
|
Cost of care, excluding depreciation and amortization |
|
63,234 |
|
|
|
153 |
|
|
|
63,387 |
|
| Center-Level
Contribution Margin |
|
34,448 |
|
|
|
93 |
|
|
|
34,541 |
|
|
Overhead costs(b) |
|
34,027 |
|
|
|
— |
|
|
|
34,027 |
|
|
Depreciation and amortization |
|
5,295 |
|
|
|
115 |
|
|
|
5,410 |
|
|
Interest expense, net |
|
1,199 |
|
|
|
44 |
|
|
|
1,243 |
|
|
Other income |
|
(833 |
) |
|
|
— |
|
|
|
(833 |
) |
| Loss Before Income
Taxes |
$ |
(5,240 |
) |
|
$ |
(66 |
) |
|
$ |
(5,306 |
) |
| Loss Before Income
Taxes as a % of revenue |
|
|
|
|
(2.6 |
)% |
| Center- Level
Contribution Margin as a % of revenue |
|
|
|
|
|
16.8 |
% |
| |
|
| |
Three Months Ended June 30, 2024 |
| (In thousands) |
PACE |
|
All other(a) |
|
Totals |
|
Capitation revenue |
$ |
199,080 |
|
|
$ |
— |
|
|
$ |
199,080 |
|
|
Other service revenue |
|
78 |
|
|
|
243 |
|
|
|
321 |
|
| Total revenues |
|
199,158 |
|
|
|
243 |
|
|
|
199,401 |
|
|
External provider costs |
|
102,691 |
|
|
|
— |
|
|
|
102,691 |
|
|
Cost of care, excluding depreciation and amortization |
|
59,976 |
|
|
|
156 |
|
|
|
60,132 |
|
| Center-Level
Contribution Margin |
|
36,491 |
|
|
|
87 |
|
|
|
36,578 |
|
|
Overhead costs(2) |
|
36,132 |
|
|
|
— |
|
|
|
36,132 |
|
|
Depreciation and amortization |
|
5,213 |
|
|
|
116 |
|
|
|
5,329 |
|
|
Interest expense, net |
|
1,361 |
|
|
|
43 |
|
|
|
1,404 |
|
|
Gain on cost and equity method investments |
|
(4,842 |
) |
|
|
— |
|
|
|
(4,842 |
) |
|
Other income |
|
(499 |
) |
|
|
— |
|
|
|
(499 |
) |
| Loss Before Income
Taxes |
$ |
(874 |
) |
|
$ |
(72 |
) |
|
$ |
(946 |
) |
| Loss Before Income
Taxes as a % of revenue |
|
|
|
|
(0.5 |
)% |
| Center- Level
Contribution Margin as a % of revenue |
|
|
|
|
|
18.3 |
% |
|
_____________________________ |
| (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. |
| |
|
This press release was published by a CLEAR® Verified
individual.
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