0001550695FALSE00015506952023-11-072023-11-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K 
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 2023 
 
Performant Financial Corporation
(Exact name of registrant as specified in its charter)

Delaware 001-35628 20-0484934
(State or other jurisdiction
of incorporation)
 (Commission
File Number)
 (IRS Employer
Identification No.)
900 South Pine Island Road
Plantation, FL 33324
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (925)  960-4800

N/A
(Former name or former address, if changed since last report.)
 
 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).     

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s) Name of exchange on which registered
Common Stock, par value $.0001 per share
PFMT
The Nasdaq Stock Market LLC



Item 2.02Results of Operations and Financial Condition.
On November 7, 2023 Performant Financial Corporation issued a press release announcing financial results for its quarter ended September 30, 2023. The full text of the press release is furnished as Exhibit 99.1.
The information furnished in this Form 8-K, including the exhibit attached, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01Financial Statements and Exhibits.
(d)Exhibits
99.1   
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 7, 2023
 
PERFORMANT FINANCIAL CORPORATION
By: /s/Rohit Ramchandani
 Rohit Ramchandani
 Chief Financial Officer

Exhibit 99.1
Performant Financial Corporation Announces Financial Results for Third Quarter 2023
Plantation, FL., November 7, 2023 - Performant Financial Corporation (Nasdaq: PFMT), (the "Company"), primarily operating as Performant Healthcare Solutions, a leading provider of technology-enabled audit, recovery, and related analytics services in the United States with a focus in the healthcare payment integrity industry, today reported the following financial results for its third quarter ended September 30, 2023:

Third Quarter Financial Highlights

Healthcare revenues of $28.5 million, compared to $23.5 million in the prior year period, an increase of approximately 21%.
Total revenues of $30.0 million, compared to total revenues of $27.2 million in the prior year period.
Net loss of approximately $0.6 million, or $(0.01) per diluted share, compared to net loss of $1.5 million, or $(0.02) per diluted share, in the prior year period.
Adjusted net income was $0.4 million, or $0.01 per diluted share, compared to adjusted net loss of $1.7 million, or $(0.02) per diluted share, in the prior year period.
Adjusted EBITDA of $1.8 million, compared to $(0.3) million in the prior year period.

Third Quarter 2023 Results
Healthcare revenues in the third quarter of 2023 were $28.5 million, an increase of approximately 21% from $23.5 million in the prior year period. Total revenues in the third quarter were $30.0 million, an increase from total revenues of $27.2 million in the prior year period. Within healthcare, claims-based services revenue in the third quarter of 2023 was $10.3 million, while revenue from eligibility-based services in the third quarter was $18.2 million.
“Our healthcare revenue enjoyed strong double-digit growth in the quarter led by commercial client growth," stated Simeon Kohl, CEO of Performant. "Continuing our first half trend, we implemented 12 additional commercial programs in Q3. This brings our 2023 total to 34 implementations. We anticipate these 34 programs will deliver $16 million in annualized revenues at steady state. On the government side of the business, we were excited to announce the New York State Medicaid RAC win in early October. We continue to feel confident in our growth strategy as we have implemented commercial programs at a more disciplined pace and solidified our government footprint with multiple headline wins over the past few years." Kohl further remarked.
Revenues from our customer care / outsourced services in the third quarter were $1.5 million, down from $3.6 million in the prior year period.
Net loss for the third quarter was $0.6 million, or $(0.01) per diluted share, compared to a net loss of $1.5 million, or $(0.02) per diluted share, in the prior year period. Adjusted net income for the third quarter was $0.4 million, or $0.01 per share on a diluted basis, compared to adjusted net loss of $1.7 million, or $(0.02) per diluted share, in the prior year period. Adjusted EBITDA for the third quarter was $1.8 million as compared to $(0.3) million in the prior year period.
“We remain excited about our growth prospects as we have continued to build upon our record year of commercial implementations in the third quarter alongside further traction with major government wins," stated Rohit Ramchandani, CFO of Performant. "With regard to the near term, we maintain visibility into our annual healthcare market guidance of $105 million to $110 million in revenues. We also maintain annual guidance for the customer care market revenues of $6.75 million to $8 million, thus bringing our total Company revenue guidance to $111.75 million to $118 million. We are seeing gains from our focus on quicker scaling and efficiencies within our business and are excited about our opportunity to expand EBITDA margins as we execute. We are also excited about our new credit agreement which we believe provides us increased flexibility to further grow our business."



Note Regarding Use of Non-GAAP Financial Measures
In this press release, to supplement our consolidated financial statements, the Company presents adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per diluted share. These measures are not in accordance with accounting principles generally accepted in the United States of America (US GAAP) and accordingly reconciliations of adjusted EBITDA and adjusted net income (loss) to net income (loss) determined in accordance with US GAAP are included in the “Reconciliation of Non-GAAP Results” table at the end of this press release. We have included adjusted EBITDA and adjusted net income (loss) in this press release because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. Accordingly, we believe that adjusted EBITDA and adjusted net income (loss) provide useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and board of directors. Our use of adjusted EBITDA and adjusted net income (loss) has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under US GAAP. In particular, many of the adjustments to our US GAAP financial measures reflect the exclusion of items, specifically interest, tax and depreciation and amortization expenses, equity-based compensation expense and certain other non-operating expenses, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be calculated differently from similarly titled non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.
Earnings Conference Call
The Company will hold a conference call to discuss its third quarter 2023 results today at 5:00 p.m. Eastern. A live webcast of the call may be accessed on the Investor Relations section of the Company’s website at investors.performantcorp.com. The conference call is also available by dialing 877-704-4453 (domestic) or 201-389-0920 (international). A webcast link will be also be available on the investor relations portion of our website.
A replay of the call will be available on the Company's website or by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13741089. The telephonic replay will be available approximately three hours after the call, through November 14, 2023.
About Performant Healthcare Solutions
Performant provides technology-enabled audit, recovery, and analytics services in the United States to the healthcare industry. Performant works with healthcare payers through claims auditing and eligibility-based (also known as coordination-of-benefits, or COB) services to identify improper payments. The Company engages clients in both government and commercial markets. The Company also has a call center which serves clients with complex consumer engagement needs. Clients of the Company typically operate in complex and highly regulated environments and contract for their payment integrity needs in order to reduce losses on improper healthcare payments.

To learn more, please visit http://www.performanthealth.com



Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's outlook for revenues, net income (loss), and adjusted EBITDA in 2023 and beyond. These forward-looking statements are based on current expectations, estimates, assumptions, and projections that are subject to change and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the Company’s ability to generate revenue following long implementation periods associated with new customer contracts; client relationships and the Company’s ability to maintain such client relationships; downturns in domestic or global economic conditions and other macroeconomic factors; the Company’s ability to generate sufficient cash flows to fund our ongoing operations and other liquidity needs; the Company’s ability to hire and retain employees with specialized skills that are required for its healthcare business; anticipated trends and challenges in our business and competition in the markets in which the Company operates; the impact of COVID-19 on the Company’s business and operations, opportunities and expectations for the markets in which the Company operates; the Company’s indebtedness and compliance, or failure to comply, with restrictive covenants in the Company’s credit agreement; opportunities and expectations for growth in the various markets in which the Company operates; anticipated trends and challenges in the Company’s business and competition in the markets in which it operates; the adaptability of the Company’s technology platform to new markets and processes; the Company’s ability to invest in and utilize our data and analytics capabilities to expand its capabilities; the Company’s growth strategy of expanding in existing markets and considering strategic alliances or acquisitions; the Company’s ability to meet liquidity and working capital needs; expectations regarding future expenses; expected future financial performance; and the Company’s ability to comply with and adapt to industry regulations and compliance demands.
More information on potential factors that could affect the Company's financial condition and operating results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's annual report on Form 10-K for the year ended December 31, 2022 and subsequently filed reports on Forms 10-Q and 8-K. The forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements to conform these statements to actual results or revised expectations.
Contact Information
Investor Relations
investors@performantcorp.com


PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except per share amounts)
 September 30,
2023
December 31,
2022
 (Unaudited) 
Assets
Current assets:
Cash and cash equivalents$17,308 $23,384 
Restricted cash81 81 
Trade accounts receivable14,129 15,794 
Contract assets6,850 11,460 
Prepaid expenses and other current assets3,104 3,665 
Income tax receivable516 3,123 
Total current assets41,988 57,507 
Property, equipment, and leasehold improvements, net9,790 10,897 
Goodwill47,372 47,372 
Right-of-use assets646 2,057 
Other assets914 1,000 
Total assets$100,710 $118,833 
Liabilities and Stockholders’ Equity
Current liabilities:
Current maturities of notes payable, net of unamortized debt issuance costs of $78 and $17, respectively
$1,672 $983 
Accrued salaries and benefits5,643 6,938 
Accounts payable872 1,262 
Other current liabilities2,147 2,252 
Contract liabilities500 438 
Estimated liability for appeals and disputes906 1,106 
Lease liabilities333 1,228 
Total current liabilities12,073 14,207 
Notes payable, net of current portion and unamortized debt issuance costs of $423 and $316, respectively
9,077 18,184 
Lease liabilities326 1,076 
Other liabilities903 881 
Total liabilities22,379 34,348 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.0001 par value. Authorized, 500,000 shares at September 30, 2023 and December 31, 2022 respectively; issued and outstanding 76,875 and 75,505 shares at September 30, 2023 and December 31, 2022, respectively
Additional paid-in capital144,880 142,261 
Accumulated deficit(66,557)(57,783)
Total stockholders’ equity78,331 84,485 
Total liabilities and stockholders’ equity$100,710 $118,833 



PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
 Three Months Ended  
September 30,
Nine Months Ended  
September 30,
 2023202220232022
Revenues$29,962 $27,178 $81,176 $79,942 
Operating expenses:
Salaries and benefits22,980 21,759 67,139 63,101 
Other operating expenses7,632 7,733 22,077 23,945 
Total operating expenses30,612 29,492 89,216 87,046 
Loss from operations(650)(2,314)(8,040)(7,104)
Gain on sale of certain recovery contracts— — 382 
Gain on sale of land and buildings— 1,120 — 1,120 
Interest expense(423)(277)(1,188)(648)
Interest income86 — 86 — 
Loss before provision for income taxes(987)(1,471)(9,139)(6,250)
Provision for (benefit from) income taxes(407)(11)(365)52 
Net loss$(580)$(1,460)$(8,774)$(6,302)
Net loss per share
Basic$(0.01)$(0.02)$(0.12)$(0.09)
Diluted$(0.01)$(0.02)$(0.12)$(0.09)
Weighted average shares
Basic76,454 74,021 75,907 72,480 
Diluted76,454 74,021 75,907 72,480 


PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
 Nine Months Ended  
September 30,
 20232022
Cash flows from operating activities:
Net loss$(8,774)$(6,302)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Loss on disposal of assets and impairment of long-lived assets258 40 
Depreciation and amortization3,805 3,355 
Right-of-use assets amortization1,411 841 
Stock-based compensation2,815 2,212 
Interest expense from debt issuance costs256 71 
Gain on sale of certain recovery contracts(3)(382)
Gain on sale of land and buildings— (1,120)
Changes in operating assets and liabilities:
Trade accounts receivable1,665 4,958 
Contract assets4,610 (1,622)
Prepaid expenses and other current assets561 682 
Income tax receivable2,607 (52)
Other assets86 (7)
Accrued salaries and benefits(1,295)(1,944)
Accounts payable(390)(339)
Contract liabilities and other current liabilities(43)(1,515)
Estimated liability for appeals, disputes, and refunds(200)(42)
Lease liabilities(1,645)(997)
Other liabilities 23 (19)
Net cash provided by (used in) operating activities5,747 (2,182)
Cash flows from investing activities:
Purchase of property, equipment, and leasehold improvements(2,956)(2,198)
Proceeds from sale of certain recovery contracts382 
Proceeds from sales of property, equipment, and leasehold improvements— 4,934 
Net cash (used in) provided by investing activities(2,953)3,118 
Cash flows from financing activities:
Repayment of notes payable(8,250)(375)
Debt issuance costs paid(424)(2)
Taxes paid related to net share settlement of stock awards(196)— 
Proceeds from exercise of warrants— 5,563 
Net cash (used in) provided by financing activities(8,870)5,186 
Net (decrease) increase in cash, cash equivalents and restricted cash(6,076)6,122 
Cash, cash equivalents and restricted cash at beginning of period23,465 19,550 
Cash, cash equivalents and restricted cash at end of period$17,389 $25,672 
Reconciliation of the Consolidated Statements of Cash Flows to the
Consolidated Balance Sheets:
Cash and cash equivalents$17,308 $25,591 
Restricted cash81 81 
Total cash, cash equivalents and restricted cash at end of period$17,389 $25,672 
Supplemental disclosures of cash flow information:
Cash (received) paid for income taxes$(2,904)$267 
Cash paid for interest$1,084 $449 


PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Results
(In thousands, except per share amount)
(Unaudited)
 Three Months Ended  
September 30,
Nine Months Ended  
September 30,
 2023202220232022
(in thousands)(in thousands)
Adjusted EBITDA:
Net income (loss)$(580)$(1,460)$(8,774)$(6,302)
Provision for (benefit from) income taxes(407)(11)(365)52 
Interest expense (1)
423 277 1,188 648 
Interest income(86)— (86)— 
Stock-based compensation1,129 931 2,815 2,212 
Depreciation and amortization1,293 1,095 3,805 3,355 
Severance expenses (3)
64 10 246 189 
Other (4)
34 (373)
Gain on sale of land and buildings (6)
— (1,120)— (1,120)
Adjusted EBITDA$1,841 $(275)$(1,137)$(1,339)

 Three Months Ended  
September 30,
Nine Months Ended  
September 30,
 2023202220232022
(in thousands)(in thousands)
Adjusted Net Income (Loss):
Net income (loss)$(580)$(1,460)$(8,774)$(6,302)
Stock-based compensation1,129 931 2,815 2,212 
Amortization of debt issuance costs (2)
134 23 256 71 
Severance expenses (3)
64 10 246 189 
Other (4)
34 (373)
Gain on sale of land and buildings (6)
— $(1,120)— (1,120)
Tax adjustments (5)
(366)(42)(921)(269)
Adjusted net income (loss)$386 $(1,655)$(6,344)$(5,592)


Three Months Ended  
September 30,
Nine Months Ended  
September 30,
2023202220232022
(in thousands)(in thousands)
Adjusted Net Income (Loss) Per Diluted Share:
Net income (loss)$(580)$(1,460)$(8,774)$(6,302)
Plus: Adjustment items per reconciliation of adjusted net income (loss)966 (195)2,430 710 
Adjusted net income (loss)$386 $(1,655)$(6,344)$(5,592)
Adjusted net income (loss) per diluted share$0.01 $(0.02)$(0.08)$(0.08)
Diluted average shares outstanding (7)
76,830 74,021 75,907 72,480 


PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Reconciliation of Non-GAAP Results
(In thousands, except per share amount)
(Unaudited)
We are providing the following preliminary estimates of our financial results as follows:
Nine Months EndedThree Months EndedYear Ended
September 30, 2023December 31, 2023December 31, 2023December 31, 2022
ActualEstimateEstimateActual
Adjusted EBITDA:
Net income (loss)$(8,774)
$ 1,577 to 725
$ (6,464) to (8,015)
$(6,537)
Provision for (benefit from) income taxes(365)
115 to 1,115
(250) to 750132 
Interest expense (1)
1,188 
0 to 812
1,000 to 2,0001,007 
Interest income(86)
0 to (64)
(86) to (150)
— 
Stock-based compensation2,815 
0 to 685
2,500 to 3,5003,036 
Depreciation and amortization3,805 
1,445 to 2,695
5,250 to 6,5004,524 
Severance expenses (3)
246 
0 to 169
50 to 415274 
Other (4)
34 — — (372)
Gain on sale of land and buildings (6)
— — — (1,120)
Adjusted EBITDA$(1,137)
$ 3,137 to 6,137
$ 2,000 to 5,000$944 

(1)Represents interest expense and amortization of debt issuance costs related to our MUFG Credit Agreement.
(2)Represents amortization of debt issuance costs related to our MUFG Credit Agreement.
(3)Represents severance expenses incurred in connection with a reduction in force for our non-healthcare recovery services.
(4)Represents professional fees related to strategic corporate development activities and gain on sale of certain non-healthcare recovery contracts in prior years.
(5)Represents tax adjustments assuming a marginal tax rate of 27.5% at full profitability.
(6)Represents gain on the sale of land and two office buildings in September of 2022.


PERFORMANT FINANCIAL CORPORATION AND SUBSIDIARIES
Quarterly and Annual Revenues
(In thousands)
(Unaudited)
We are providing the following historical breakdown of the quarterly and annual revenue contributions under the new contribution breakdowns of our healthcare revenue results for the nine months ended September 30, 2023, and for the years ended December 31, 2022 and 2021:
Three Months Ended
Nine Months Ended
March 31, 2023June 30, 2023September 30, 2023
September 30, 2023
Eligibility-based$12,480 $14,131 $18,165 $44,776 
Claims-based10,412 9,798 10,325 30,535 
Healthcare Total22,892 23,929 28,490 75,311 
Recovery19 14 33 
Customer Care / Outsourced Services2,818 1,542 1,472 5,832 
Total$25,729 $25,485 $29,962 $81,176 

Three Months Ended
Year Ended
March 31, 2022June 30, 2022September 30, 2022December 31, 2022December 31, 2022
Eligibility-based$14,214 $12,417 $13,142 $13,511 $53,284 
Claims-based9,150 9,339 10,377 12,516 41,382 
Healthcare Total23,364 21,756 23,519 26,027 94,666 
Recovery118 41 75 241 
Customer Care / Outsourced Services3,601 3,918 3,618 3,140 14,277 
Total$27,083 $25,681 $27,178 $29,242 $109,184 

Three Months Ended
Year Ended
March 31, 2021June 30, 2021September 30, 2021December 31, 2021December 31, 2021
Eligibility-based$7,911 $11,577 $12,727 $16,061 $48,276 
Claims-based5,375 7,025 7,280 9,498 29,178 
Healthcare Total13,286 18,602 20,007 25,559 77,454 
Recovery14,491 11,091 5,490 2,333 33,405 
Customer Care / Outsourced Services3,613 3,149 3,085 3,687 13,534 
Total$31,390 $32,842 $28,582 $31,579 $124,393 




v3.23.3
Cover
Nov. 07, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2023
Entity Registrant Name Performant Financial Corporation
Entity Incorporation, State or Country Code DE
Entity File Number 001-35628
Entity Tax Identification Number 20-0484934
Entity Address, Address Line One 900 South Pine Island Road
Entity Address, City or Town Plantation
Entity Address, State or Province FL
Entity Address, Postal Zip Code 33324
City Area Code (925)
Local Phone Number 960-4800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Trading Symbol PFMT
Security Exchange Name NASDAQ
Title of 12(b) Security Common Stock, par value $.0001 per share
Entity Central Index Key 0001550695
Amendment Flag false

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