WASHINGTON, Feb. 23, 2022 /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 and full year
ended December 31, 2021.
Highlights from the fourth quarter and full year 2021
announcement include (all comparisons are to the quarter and full
year ended December 31, 2020):
Quarter ended December 31,
2021:
- GAAP revenue of $248.4 million,
an increase of $1.8 million, or 0.7%,
from the three months ended December 31,
2020.
-
- Revenue excluding revenue from divested assets increased 39.7%
from the three months ended December 31,
2020.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(5.6) million.
- Achieved Adjusted EBITDA of $24.3
million.
- Total Lives on Platform of 20.0 million as of December 31, 2021, composed of 1.6 million
Evolent Health Services Lives on Platform and 18.4 million Clinical
Solutions Lives on Platform.
Full year Ended December 31,
2021:
- GAAP revenue of $908.0 million, a
decrease of $16.7 million, or (1.8)%,
from the year ended December 31,
2020.
-
- Revenue excluding revenue from divested assets increased 36.7%
from the year ended December 31,
2020.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(37.6) million.
- Achieved Adjusted EBITDA of $66.3
million.
- Expenditures for software development and other capitalized
assets of $25 million for the year
ended December 31, 2021.
Also today, Evolent announced four new partnerships and a new
initial partner implementation:
- During 2022, three additional Molina health plans, in
Kentucky, Washington, and Nevada, will implement New Century Health's
Performance suite for Cardiology. The Kentucky and Washington plans are migrating up from their
initial implementation of New Century Health's Technology and
Services suite, and Nevada will be
going live for the first time.
- Blue Cross and Blue Shield of North
Carolina entered into a new Performance suite with Evolent
Care Partners to manage a portion of its Blue Premier Commercial
line of business beginning in Q1 2022.
- Evolent Health Services recently went live with its previously
announced health plan partner, Bright HealthCare, initiating a
multi-year operational partnership. Evolent Health Services will
support approximately 350,000 Bright HealthCare plan members in
2022 with its comprehensive administrative and value-based
solutions services.
Seth Blackley, Chief Executive
Officer and Co-Founder of Evolent Health stated, "2021 was a highly
successful year for Evolent Health on multiple fronts. Our
excellent fourth quarter results cap a year characterized by strong
performance financially, operationally and from a sales
perspective. We exceeded our original 2021 commitments through
strong execution across the year. The new partner announcements
today are further evidence of the differentiation of our value
proposition to a broad range of customers. Together with the ten
agreements announced during the prior year, these new wins provide
Evolent Health strong visibility into strong and durable forward
revenue and earnings growth."
Mr. Blackley added, "I want to thank Evolent's 3,500 Evolenteers
worldwide for their passion and commitment to improving healthcare
through innovation focused on quality and efficiency of healthcare
delivery. We are excited to capitalize on our momentum with health
plans and healthcare providers and to help drive the continuing
evolution of value-based care in the U.S."
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 $161.1 million, up
9.9%, from $146.6 million from the
three months ended December 31,
2020.
-
- Revenue excluding revenue from divested assets of $162.1 million, up 47.7%, from the three months
ended December 31, 2020.
- Adjusted EBITDA of $29.5 million
and $8.6 million for the three months
ended December 31, 2021 and 2020,
respectively.
-
- Adjusted EBITDA margin of 18.3% and 5.9% for the three months
ended December 31, 2021 and 2020,
respectively.
- Clinical Solutions Lives on Platform in our Performance suite
was 1.5 million with a Clinical Solutions Performance suite Average
PMPM of $32.33, and in our New
Century Health Technology and Services suite Lives on Platform was
16.9 million with a New Century Health Technology and Services
suite Average PMPM of $0.39 as of
December 31, 2021.
- Acquisition of Vital Decisions included in the New Century
Health Technology and Services suite.
Segment Highlights: Evolent Health Services
- Revenue of $87.2 million, down
12.7%, from $100.0 million for the
three months ended December 31, 2020,
respectively.
-
- Revenue excluding revenue from divested assets of $83.8 million, up 26.5% from the three months
ended December 31, 2020.
- Adjusted EBITDA of $7.9 million
and $21.4 million for the three
months ended December 31, 2021 and
2020, respectively.
-
- Adjusted EBITDA margin of 9.1% and 21.2% for the three months
ended December 31, 2021 and 2020,
respectively.
- Evolent Health Services Lives on Platform was 1.6 million with
a Evolent Health Services Average PMPM of $17.25 as of December 31, 2021.
Reported Results
Evolent Health, Inc. reported the following results in
accordance with U.S. generally accepted accounting principles
("GAAP"):
- Revenue of $248.4 million and
$246.5 million for the three months
ended December 31, 2021 and 2020,
respectively, and $908.0 million and
$924.6 million for the years ended
December 31, 2021 and 2020,
respectively.
- Cost of revenue of $164.5 million
and $174.8 million for the three
months ended December 31, 2021 and
2020, respectively, and $657.6
million and $696.6 million for
the years ended December 31, 2021 and
2020, respectively.
- Selling, general and administrative expenses of $66.9 million and $58.7
million for the three months ended December 31, 2021 and 2020, respectively, and
$219.5 million and $210.4 million for the years ended December 31, 2021 and 2020, respectively.
- Net loss attributable to common shareholders of Evolent Health,
Inc. of $(5.6) million and
$(14.6) million for the three months
ended December 31, 2021 and 2020,
respectively, and $(37.6) million and
$(334.2) million for the years ended
December 31, 2021 and 2020,
respectively.
-
- Net loss margin of (2.3)% and (5.9)% for the three months ended
December 31, 2021 and 2020, respectively, and (4.1)% and
(36.1)% for the years ended December 31, 2021 and 2020,
respectively.
- Loss attributable to common shareholders of Evolent Health,
Inc., per basic and diluted share, of $(0.06) and $(0.17)
for the three months ended December 31, 2021 and 2020,
respectively, and $(0.44) and
$(3.94) for the years ended
December 31, 2021 and 2020, respectively.
Total cash and cash equivalents was $266.3 million as of December 31, 2021.
Adjusted Results
- Adjusted cost of revenue of $163.8
million and $174.4 million for
the three months ended December 31,
2021 and 2020, respectively. Adjusted cost of revenue of
$655.0 million and $689.0 million for the years ended December 31, 2021 and 2020, respectively.
- Adjusted selling, general and administrative expenses of
$60.2 million and $51.7 million for the three months ended
December 31, 2021 and 2020,
respectively. Adjusted selling, general and administrative expenses
of $186.6 million and $187.1 million for the years ended December 31, 2021 and 2020, respectively.
- Adjusted EBITDA of $24.3 million
and $20.4 million for the three
months ended December 31, 2021 and
2020, respectively. Adjusted EBITDA of $66.3
million and $48.6 million for
the years ended December 31, 2021 and
2020, respectively.
-
- Adjusted EBITDA margin of 9.8% and 8.3% for the three months
ended December 31, 2021 and 2020,
respectively. Adjusted EBITDA margin of 7.3% and 5.3% for the years
ended December 31, 2021 and 2020, respectively.
- Adjusted income attributable to common shareholders of
$6.9 million and $2.4 million for the three months ended
December 31, 2021 and 2020, respectively. Adjusted income
(loss) attributable to common shareholders of $1.3 million and $(12.3)
million for the years ended December 31, 2021 and 2020,
respectively.
- Adjusted income per share attributable to common shareholders
of $0.08 and $0.03 for the three months ended
December 31, 2021 and 2020, respectively. Adjusted income
(loss) per share attributable to common shareholders of
$0.02 and $(0.14) for the years ended December 31,
2021 and 2020, respectively.
Business Outlook
First Quarter 2022 Guidance
For the three months ending March 31,
2022, revenue is expected to be in the range of
approximately $280.0 million to
$295.0 million. Adjusted EBITDA is
expected to be in the range of approximately $20.0 million to $25.0
million.
Full Year 2022 Guidance
Revenue for the year ending December 31,
2022 is expected to be in the range of approximately
$1.12 billion to $1.18 billion. Adjusted EBITDA is expected to be
in the range of approximately $80.0
million to $90.0 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").
Additional Outlook Information
Cash deployed for software development is expected to be in the
range of $25 million - $30 million.
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a
conference call to discuss its fourth quarter performance this
evening, February 23, 2022, at 5:00
p.m., Eastern Time. To listen to a live broadcast via the
internet and view the accompanying materials, please visit 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:
Seth Frank
Investor Relations
sfrank@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, loss on extinguishment of debt, goodwill
impairment, gain (loss) from equity method investees, loss on
disposal of assets and consolidation, changes in fair value of
contingent consideration and indemnification asset, net loss
attributable to non-controlling interests, other income (expense),
net, repositioning costs, stock-based compensation expense,
severance costs, amortization of contract cost assets, strategy and
shareholder advisory expenses, 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. Management uses Adjusted EBITDA margin as a supplemental
performance measure because it allows the investor to understand
operational performance compared to revenues over time. 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 Earnings (Loss) Available to Common Shareholders is
defined as earnings (loss) attributable to common shareholders
adjusted to exclude gain from equity method investees, other income
(expense), net, gain on transfer of membership, loss on repayment
of debt, goodwill impairment, loss on disposal of assets,
impairment of equity method investees, changes in fair value of
contingent consideration and indemnification assets, net loss
attributable to non-controlling interests, loss on extinguishment
of debt, 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,
strategy and 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.
Revenue Excluding Divested Assets is defined as the sum of
revenue, less revenue from our divested health plan assets of
Passport, Lighthouse and Miami Children's when divested. 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
Total Lives on Platform are calculated by summing our Evolent
Health Services Lives on Platform and our Clinical Solutions Lives
on Platform. Evolent Health Services Lives on Platform are
calculated by summing members on our value-based care and
comprehensive health plan administrative platform. Clinical
Solutions Lives on Platform are calculated by summing the Clinical
Solutions Lives on Platform in our Performance suite and New
Century Health Technology and Services suite Lives on Platform.
Clinical Solutions Lives on Platform in our Performance suite are
calculated by summing members covered for oncology specialty care
services and members covered for cardiology specialty care services
for contracts not under ASO arrangements. New Century Health
Technology and Services suite Lives on Platform are calculated by
summing members covered for oncology specialty care services,
members covered for cardiology specialty care services and members
covered for advance care planning services for contracts under ASO
arrangements. Members covered for more than one category are
counted in each category.
Evolent Health Services average per member per month ("PMPM")
fee is defined as platform and operations revenue pertaining to the
Evolent Health Services segment during the period reported divided
by the average of the beginning and ending Evolent Health Services
segment membership during the period reported divided by the number
of months in the period. Clinical Solutions Performance suite
Average PMPM fee is defined as platform and operations services
revenue pertaining to our Clinical Solutions Performance suite
during the period reported divided by the average of the beginning
and ending Clinical Solutions Performance suite membership during
the period reported divided by the number of months in the period.
New Century Health Technology and Services suite Average PMPM fee
is defined as platform and operations revenue pertaining to the New
Century Health Technology and Services suite during the period
reported divided by the average of the beginning and ending New
Century Health Technology and Services suite membership during the
period reported divided by the number of months in the period.
Management uses lives on 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 December 31,
|
|
For the Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenue
|
|
|
|
|
|
|
|
Transformation
services
|
$
6,220
|
|
$
1,190
|
|
$
11,204
|
|
$
11,990
|
Platform and
operations services
|
242,138
|
|
245,346
|
|
896,753
|
|
912,649
|
Total
revenue
|
248,358
|
|
246,536
|
|
907,957
|
|
924,639
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization expenses presented
separately below)
|
164,480
|
|
174,833
|
|
657,551
|
|
696,581
|
Selling, general and
administrative expenses
|
66,917
|
|
58,663
|
|
219,499
|
|
210,412
|
Depreciation and
amortization expenses
|
15,075
|
|
14,705
|
|
60,037
|
|
60,835
|
Loss (gain) on
disposal of assets and consolidation
|
—
|
|
(5,749)
|
|
—
|
|
698
|
Loss on
extinguishment of debt, net
|
—
|
|
—
|
|
—
|
|
4,789
|
Goodwill
impairment
|
—
|
|
—
|
|
—
|
|
215,100
|
Change in fair value
of contingent consideration and indemnification asset
|
14,100
|
|
4,352
|
|
13,281
|
|
3,860
|
Total operating
expenses
|
260,572
|
|
246,804
|
|
950,368
|
|
1,192,275
|
Operating
loss
|
(12,214)
|
|
(268)
|
|
(42,411)
|
|
(267,636)
|
Interest
income
|
96
|
|
(1)
|
|
407
|
|
2,633
|
Interest
expense
|
(6,447)
|
|
(8,338)
|
|
(25,425)
|
|
(28,325)
|
Impairment of equity
method investments
|
—
|
|
—
|
|
—
|
|
(47,133)
|
Gain from equity
method investees
|
454
|
|
(975)
|
|
13,179
|
|
10,039
|
Gain on transfer of
membership
|
22,969
|
|
—
|
|
45,938
|
|
—
|
Loss on repayment of
debt
|
(2,185)
|
|
—
|
|
(21,343)
|
|
—
|
Other expense,
net
|
(73)
|
|
(292)
|
|
(146)
|
|
(118)
|
Loss from continuing
operations before income taxes
|
2,600
|
|
(9,874)
|
|
(29,801)
|
|
(330,540)
|
Provision (benefit)
for income taxes
|
(453)
|
|
763
|
|
483
|
|
(2,368)
|
Loss from continuing
operations
|
3,053
|
|
(10,637)
|
|
(30,284)
|
|
(328,172)
|
Loss from discontinued
operations, net of tax (1)
|
(8,700)
|
|
(3,166)
|
|
(7,317)
|
|
(6,074)
|
Net loss
|
(5,647)
|
|
(13,803)
|
|
(37,601)
|
|
(334,246)
|
Net loss attributable
to non-controlling interests
|
—
|
|
822
|
|
—
|
|
—
|
Net loss attributable
to common shareholders of Evolent Health, Inc
|
$
(5,647)
|
|
$
(14,625)
|
|
$
(37,601)
|
|
$
(334,246)
|
|
|
|
|
|
|
|
|
Loss per common
share
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.03
|
|
$
(0.13)
|
|
$
(0.35)
|
|
$
(3.86)
|
Discontinued
operations
|
(0.09)
|
|
(0.04)
|
|
(0.09)
|
|
(0.08)
|
Basic and diluted
loss per share attributable to common shareholders of Evolent
Health, Inc
|
$
(0.06)
|
|
$
(0.17)
|
|
$
(0.44)
|
|
$
(3.94)
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding
|
|
|
|
|
|
|
|
Basic and
diluted
|
88,326
|
|
84,289
|
|
86,067
|
|
84,928
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
Net loss
|
$
(5,647)
|
|
$
(13,803)
|
|
$
(37,601)
|
|
$
(334,246)
|
Other comprehensive
loss, net of taxes, related to:
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
1
|
|
42
|
|
(84)
|
|
(44)
|
Total comprehensive
loss
|
(5,646)
|
|
(13,761)
|
|
(37,685)
|
|
(334,290)
|
Total comprehensive
loss attributable to non-controlling interests
|
—
|
|
822
|
|
—
|
|
—
|
Total comprehensive
loss attributable to common shareholders of Evolent Health,
Inc
|
$
(5,646)
|
|
$
(14,583)
|
|
$
(37,685)
|
|
$
(334,290)
|
————————
|
(1)
|
Includes
$6.8 million loss on disposal of discontinued operations for
the year ended December 31, 2021.
|
Evolent Health,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(in thousands,
unaudited)
|
|
|
December
31,
|
|
2021
|
|
2020
|
Cash and cash
equivalents
|
$
266,280
|
|
$
319,002
|
Restricted cash and
restricted investments
|
88,662
|
|
21,028
|
Total current
assets
|
523,960
|
|
547,649
|
Intangible assets,
net
|
279,784
|
|
264,992
|
Goodwill
|
426,297
|
|
349,029
|
Total
assets
|
1,419,458
|
|
1,371,700
|
|
|
|
|
Accounts
payable
|
96,084
|
|
31,975
|
Debt, net of
discount
|
215,676
|
|
289,900
|
Total
liabilities
|
725,825
|
|
752,100
|
|
|
|
|
Total shareholders'
equity
|
693,633
|
|
619,600
|
Total liabilities and
shareholders' equity
|
1,419,458
|
|
1,371,700
|
Evolent Health,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(in thousands,
unaudited)
|
|
|
For the Year Ended
December 31,
|
|
2021
|
|
2020
|
Net cash and
restricted cash (used in) provided by continuing
operations
|
|
|
|
Net cash and
restricted cash provided by (used in) operating
activities
|
$
38,747
|
|
$
(16,225)
|
Net cash and
restricted cash (used in) provided by investing
activities
|
(15,786)
|
|
261,072
|
Net cash and
restricted cash used in financing activities
|
(29,548)
|
|
(11,862)
|
Effect of exchange
rate on cash and cash equivalents and restricted cash
|
(52)
|
|
65
|
Net (decrease)
increase in cash and cash equivalents and restricted
cash
|
(6,639)
|
|
233,050
|
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)
|
$
354,942
|
|
$
361,581
|
|
|
|
|
Net cash and
restricted cash provided by (used in) discontinued
operations
|
|
|
|
Cash flows provided
by operating activities
|
$
5,002
|
|
$
6,852
|
Cash flows (used in)
provided by investing activities
|
(2,494)
|
|
2,636
|
————————
|
(1)
|
As a result of the
closing of the sale of True Health during the first quarter of
2021, 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 December 31, 2021
|
|
|
For the Three
Months Ended December 31, 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
|
$
6,220
|
|
$
—
|
|
$
6,220
|
|
|
$
1,190
|
|
$
—
|
|
$
1,190
|
|
$
5,030
|
|
422.7 %
|
|
$
5,030
|
|
422.7 %
|
Platform and
operations services (1)
|
242,138
|
|
—
|
|
242,138
|
|
|
245,346
|
|
—
|
|
245,346
|
|
(3,208)
|
|
(1.3) %
|
|
(3,208)
|
|
(1.3) %
|
Total
revenue
|
248,358
|
|
—
|
|
248,358
|
|
|
246,536
|
|
—
|
|
246,536
|
|
1,822
|
|
0.7 %
|
|
1,822
|
|
0.7 %
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization expenses presented
separately below) (1)
|
164,480
|
|
(654)
|
|
163,826
|
|
|
174,833
|
|
(409)
|
|
174,424
|
|
(10,353)
|
|
(5.9) %
|
|
(10,598)
|
|
(6.1) %
|
Selling, general and
administrative expenses (2)
|
66,917
|
|
(6,682)
|
|
60,235
|
|
|
58,663
|
|
(6,944)
|
|
51,719
|
|
8,254
|
|
14.1 %
|
|
8,516
|
|
16.5 %
|
Depreciation and
amortization expenses (3)
|
15,075
|
|
(3,539)
|
|
11,536
|
|
|
14,705
|
|
(5,823)
|
|
8,882
|
|
370
|
|
2.5 %
|
|
2,654
|
|
29.9 %
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
— %
|
|
—
|
|
— %
|
Gain on disposal of
assets
|
—
|
|
—
|
|
—
|
|
|
(5,749)
|
|
5,749
|
|
—
|
|
5,749
|
|
100.0 %
|
|
—
|
|
— %
|
Change in fair value
of contingent consideration and indemnification asset
|
14,100
|
|
(14,100)
|
|
—
|
|
|
4,352
|
|
(4,352)
|
|
—
|
|
9,748
|
|
224.0 %
|
|
—
|
|
— %
|
Total operating
expenses
|
260,572
|
|
(24,975)
|
|
235,597
|
|
|
246,804
|
|
(11,779)
|
|
235,025
|
|
13,768
|
|
5.6 %
|
|
572
|
|
0.2 %
|
Operating income
(loss)
|
$
(12,214)
|
|
$
24,975
|
|
$
12,761
|
|
|
$
(268)
|
|
$
11,779
|
|
$
11,511
|
|
$
(11,946)
|
|
(4,457.5)
%
|
|
$
1,250
|
|
10.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a percentage of total revenue
|
104.9 %
|
|
|
|
94.9 %
|
|
|
100.1 %
|
|
|
|
95.3 %
|
|
|
|
|
|
|
|
|
————
|
(1)
|
Adjustments to cost
of revenue include $(0.6) million and $(0.5) million in stock-based
compensation expense and $(9) thousand and $48 thousand
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 December 31, 2021 and 2020,
respectively.
|
(2)
|
Adjustments to
selling, general and administrative expenses include $(4.3) million
and $(3.8) million in stock-based compensation expense, $(2.3)
million and $(2.1) million of acquisition-related costs resulting
from acquisitions and business combinations and $(58.0) thousand
and $(1.1) million of severance costs for the three months ended
December 31, 2021 and 2020.
|
(3)
|
Adjustments to
depreciation and amortization expenses of approximately $3.5
million and $5.8 million for the three months ended
December 31, 2021 and 2020, respectively, relate to
amortization of intangible assets acquired via asset acquisitions
and business combinations.
|
|
For the Year Ended
December 31, 2021
|
|
|
For the Year Ended
December 31, 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
|
$
11,204
|
|
$
—
|
|
$
11,204
|
|
|
$
11,990
|
|
$
—
|
|
$
11,990
|
|
$
(786)
|
|
(6.6) %
|
|
$
(786)
|
|
(6.6) %
|
Platform and
operations services
|
896,753
|
|
—
|
|
896,753
|
|
|
912,649
|
|
—
|
|
912,649
|
|
(15,896)
|
|
(1.7) %
|
|
(15,896)
|
|
(1.7) %
|
Total
revenue
|
907,957
|
|
—
|
|
907,957
|
|
|
924,639
|
|
—
|
|
924,639
|
|
(16,682)
|
|
(1.8) %
|
|
(16,682)
|
|
(1.8) %
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization expenses presented
separately below) (1)
|
657,551
|
|
(2,538)
|
|
655,013
|
|
|
696,581
|
|
(7,629)
|
|
688,952
|
|
(39,030)
|
|
(5.6) %
|
|
(33,939)
|
|
(4.9) %
|
Selling, general and
administrative expenses (2)
|
219,499
|
|
(32,872)
|
|
186,627
|
|
|
210,412
|
|
(23,298)
|
|
187,114
|
|
9,087
|
|
4.3 %
|
|
(487)
|
|
(0.3) %
|
Goodwill
impairment
|
—
|
|
—
|
|
—
|
|
|
215,100
|
|
(215,100)
|
|
—
|
|
(215,100)
|
|
(100.0) %
|
|
—
|
|
— %
|
Depreciation and
amortization expenses (3)
|
60,037
|
|
(20,529)
|
|
39,508
|
|
|
60,835
|
|
(23,336)
|
|
37,499
|
|
(798)
|
|
(1.3) %
|
|
2,009
|
|
5.4 %
|
Loss on disposal of
assets
|
—
|
|
—
|
|
—
|
|
|
698
|
|
(698)
|
|
—
|
|
(698)
|
|
(100.0) %
|
|
—
|
|
— %
|
Loss on
extinguishment of debt
|
—
|
|
—
|
|
—
|
|
|
4,789
|
|
(4,789)
|
|
—
|
|
(4,789)
|
|
(100.0) %
|
|
—
|
|
— %
|
Change in fair value
of contingent consideration and indemnification asset
|
13,281
|
|
(13,281)
|
|
—
|
|
|
3,860
|
|
(3,860)
|
|
—
|
|
9,421
|
|
244.1 %
|
|
—
|
|
— %
|
Total operating
expenses
|
950,368
|
|
(69,220)
|
|
881,148
|
|
|
1,192,275
|
|
(278,710)
|
|
913,565
|
|
(241,907)
|
|
(20.3) %
|
|
(32,417)
|
|
(3.5) %
|
Operating income
(loss)
|
$
(42,411)
|
|
$
69,220
|
|
$
26,809
|
|
|
$
(267,636)
|
|
$
278,710
|
|
$
11,074
|
|
$
225,225
|
|
84.2 %
|
|
$
15,735
|
|
142.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses as a percentage of total revenue
|
104.7 %
|
|
|
|
97.0 %
|
|
|
128.9 %
|
|
|
|
98.8 %
|
|
|
|
|
|
|
|
|
————
|
(1)
|
Adjustments to cost
of revenue include $(2.3) million and $(1.8) million in stock-based
compensation expense, $(0.3) million and $(3.7) million related to
the amortization of contract cost assets recorded as a result of
the one-time ASC 606 transition adjustment for the year ended
December 31, 2021 and 2020, respectively. Adjustments for the year
ended December 31, 2020 also include $(2.2) million of severance
costs.
|
(2)
|
Adjustments to
selling, general and administrative expenses include $(14.4)
million and $(12.8) million in stock-based compensation expense,
$(7.3) million and $(1.3) million of repositioning costs,
$(4.2) million and $(2.4) million of acquisition-related costs
resulting from acquisitions and business combinations and $(0.2)
million and $(6.8 million) of severance costs for the year
ended December 31, 2021 and 2020, respectively. Adjustments for the
year ended December 31, 2021 also include $(6.5) million of
shareholder advisory services and $(0.2) million of amortization of
contract cost assets.
|
(3)
|
Adjustments to
depreciation and amortization expenses of approximately
$20.5 million and $23.3 million for the year ended
December 31, 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 December 31, 2021
|
|
|
|
|
|
|
Transformation
services
|
$
6,220
|
|
$
—
|
|
$
—
|
|
$
6,220
|
|
$
—
|
|
$
6,220
|
Platform and
operations services
|
81,483
|
|
161,113
|
|
(458)
|
|
242,138
|
|
—
|
|
242,138
|
Total
revenue
|
$
87,703
|
|
$
161,113
|
|
$
(458)
|
|
$
248,358
|
|
$
—
|
|
$
248,358
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended December 31, 2020
|
|
|
|
|
|
|
Transformation
services
|
$
1,190
|
|
$
—
|
|
$
—
|
|
$
1,190
|
|
$
—
|
|
$
1,190
|
Platform and
operations services
|
99,561
|
|
146,556
|
|
(771)
|
|
245,346
|
|
—
|
|
245,346
|
Total
revenue
|
$
100,751
|
|
$
146,556
|
|
$
(771)
|
|
$
246,536
|
|
$
—
|
|
$
246,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evolent Health
Services
|
|
Clinical
Solutions
|
|
Subtotal
|
|
Corporate
(1)
|
|
Segments
Total
|
|
|
For the Three
Months Ended December 31, 2021
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
7,943
|
|
$
29,464
|
|
$
37,407
|
|
$
(13,108)
|
|
$
24,299
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended December 31, 2020
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
21,370
|
|
$
8,595
|
|
$
29,965
|
|
$
(9,570)
|
|
$
20,395
|
|
|
|
Evolent Health
Services
|
|
Clinical
Solutions
|
|
Intersegment
Eliminations
|
|
Subtotal
|
|
Corporate
(1)
|
|
Consolidated
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31, 2021
|
|
|
|
|
|
|
Transformation
services
|
$
11,204
|
|
$
—
|
|
$
—
|
|
$
11,204
|
|
$
—
|
|
$
11,204
|
Platform and
operations services
|
300,423
|
|
598,144
|
|
(1,814)
|
|
896,753
|
|
—
|
|
896,753
|
Total
revenue
|
$
311,627
|
|
$
598,144
|
|
$
(1,814)
|
|
$
907,957
|
|
$
—
|
|
$
907,957
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31, 2020
|
|
|
|
|
|
|
Transformation
services
|
$
11,990
|
|
$
—
|
|
$
—
|
|
$
11,990
|
|
$
—
|
|
$
11,990
|
Platform and
operations services
|
373,144
|
|
542,279
|
|
(2,774)
|
|
912,649
|
|
—
|
|
912,649
|
Total
revenue
|
$
385,134
|
|
$
542,279
|
|
$
(2,774)
|
|
$
924,639
|
|
$
—
|
|
$
924,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Evolent Health
Services
|
|
Clinical
Solutions
|
|
Subtotal
|
|
Corporate
(1)
|
|
Segments
Total
|
|
|
For the Year Ended
December 31, 2021
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
17,063
|
|
$
82,920
|
|
$
99,983
|
|
$
(33,666)
|
|
$
66,317
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended
December 31, 2020
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
57,731
|
|
$
26,864
|
|
$
84,595
|
|
$
(36,022)
|
|
$
48,573
|
|
|
————————
|
(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 December 31,
|
|
For the Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss
attributable to common shareholders of Evolent Health,
Inc.
|
$
(5,647)
|
|
$ (14,625)
|
|
$ (37,601)
|
|
$
(334,246)
|
Net income
margin
|
(2.3)
%
|
|
(5.9)
%
|
|
(4.1)
%
|
|
(36.1)
%
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Interest
income
|
96
|
|
(1)
|
|
407
|
|
2,633
|
Interest
expense
|
(6,447)
|
|
(8,338)
|
|
(25,425)
|
|
(28,325)
|
Benefit (provision) for
income taxes
|
453
|
|
(763)
|
|
(483)
|
|
2,368
|
Depreciation and
amortization expenses
|
(15,075)
|
|
(14,705)
|
|
(60,037)
|
|
(60,835)
|
EBITDA
|
15,326
|
|
9,182
|
|
47,937
|
|
(250,087)
|
Less:
|
|
|
|
|
|
|
|
Impairment of equity
method investees
|
—
|
|
—
|
|
—
|
|
(47,133)
|
Gain on transfer of
membership
|
22,969
|
|
—
|
|
45,938
|
|
—
|
Loss on repayment of
debt
|
(2,185)
|
|
—
|
|
(21,343)
|
|
—
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
(4,789)
|
Goodwill
impairment
|
—
|
|
—
|
|
—
|
|
(215,100)
|
Gain (loss) from
equity method investees
|
454
|
|
(975)
|
|
13,179
|
|
10,039
|
Loss (gain) on
disposal of assets and consolidation
|
—
|
|
5,749
|
|
—
|
|
(698)
|
Change in fair value
of contingent consideration and indemnification asset
|
(14,100)
|
|
(4,352)
|
|
(13,281)
|
|
(3,860)
|
Net loss attributable
to non-controlling interests
|
—
|
|
(822)
|
|
—
|
|
—
|
Other income
(expense), net
|
(73)
|
|
(292)
|
|
(146)
|
|
(118)
|
Repositioning
costs
|
(1,275)
|
|
(1,275)
|
|
(7,318)
|
|
(1,275)
|
Stock-based
compensation expense
|
(4,957)
|
|
(4,231)
|
|
(16,711)
|
|
(14,606)
|
Severance
costs
|
(146)
|
|
(1,096)
|
|
(198)
|
|
(8,986)
|
Amortization of
contract cost assets
|
(43)
|
|
(127)
|
|
(476)
|
|
(3,944)
|
Strategy and
shareholder advisory expenses
|
—
|
|
—
|
|
(6,513)
|
|
—
|
Acquisition-related
costs
|
(917)
|
|
(626)
|
|
(4,194)
|
|
(2,116)
|
Gain (loss) from
discontinued operations (1)
|
(8,700)
|
|
(3,166)
|
|
(7,317)
|
|
(6,074)
|
Adjusted
EBITDA
|
$ 24,299
|
|
$ 20,395
|
|
$ 66,317
|
|
$ 48,573
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
9.8
%
|
|
8.3
%
|
|
7.3
%
|
|
5.3
%
|
————————
|
(1)
|
Includes
$6.8 million loss on disposal of discontinued operations for
the year ended December 31, 2021.
|
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)
|
|
|
Evolent Health
Services
|
|
Clinical
|
|
Corporate
|
|
For the Three
Months Ended December 31,
|
|
For the Three
Months Ended December 31,
|
|
For the Three
Months Ended December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss
attributable to common shareholders of Evolent Health,
Inc.
|
$
(3,348)
|
|
$
9,185
|
|
$ 22,480
|
|
$
4,385
|
|
$
(24,779)
|
|
$
(28,195)
|
Net income
margin
|
(3.8)
%
|
|
9.1
%
|
|
14.0
%
|
|
3.0
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
—
|
|
—
|
|
—
|
|
—
|
|
96
|
|
(1)
|
Interest
expense
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,447)
|
|
(8,338)
|
Benefit (provision) for
income taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
453
|
|
(763)
|
Depreciation and
amortization expenses
|
(9,968)
|
|
(10,900)
|
|
(5,107)
|
|
(3,805)
|
|
—
|
|
—
|
EBITDA
|
6,620
|
|
20,085
|
|
27,587
|
|
8,190
|
|
(18,881)
|
|
(19,093)
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) from
equity method investees
|
—
|
|
—
|
|
—
|
|
—
|
|
454
|
|
(975)
|
Gain on transfer of
membership
|
—
|
|
—
|
|
—
|
|
—
|
|
22,969
|
|
—
|
Loss (gain) on
disposal of assets
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,749
|
Change in fair value
of contingent consideration and indemnification asset
|
—
|
|
—
|
|
—
|
|
—
|
|
(14,100)
|
|
(4,352)
|
Other expense,
net
|
—
|
|
—
|
|
—
|
|
—
|
|
(73)
|
|
(292)
|
Net loss attributable
to non-controlling interests
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(822)
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,185)
|
|
—
|
Repositioning
costs
|
(671)
|
|
—
|
|
—
|
|
—
|
|
(604)
|
|
(1,275)
|
Stock-based
compensation expense
|
(611)
|
|
(389)
|
|
(1,350)
|
|
(422)
|
|
(2,996)
|
|
(3,420)
|
Severance
costs
|
2
|
|
(768)
|
|
—
|
|
17
|
|
(148)
|
|
(345)
|
Amortization of
contract cost assets
|
(43)
|
|
(127)
|
|
—
|
|
—
|
|
—
|
|
—
|
Acquisition-related
costs
|
—
|
|
—
|
|
(527)
|
|
—
|
|
(390)
|
|
(626)
|
Loss from discontinued
operations
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,700)
|
|
(3,166)
|
Adjusted
EBITDA
|
$
7,943
|
|
$ 21,369
|
|
$ 29,464
|
|
$
8,595
|
|
$
(13,108)
|
|
$
(9,569)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
9.1 %
|
|
21.2 %
|
|
18.3 %
|
|
5.9
%
|
|
|
|
|
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 December 31,
|
|
For the Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net Loss
Attributable to Common Shareholders of Evolent Health, Inc.
(a)
|
$
(5,647)
|
|
$
(14,625)
|
|
$
(37,601)
|
|
$
(334,246)
|
Less:
|
|
|
|
|
|
|
|
Gain (loss) from
equity method investees
|
454
|
|
(975)
|
|
13,179
|
|
10,039
|
Other expense,
net
|
(73)
|
|
(292)
|
|
(146)
|
|
(118)
|
Gain on transfer of
membership
|
22,969
|
|
—
|
|
45,938
|
|
—
|
Loss on repayment of
debt
|
(2,185)
|
|
—
|
|
(21,343)
|
|
—
|
Loss (gain) on
disposal of assets and consolidation
|
—
|
|
5,749
|
|
—
|
|
(698)
|
Goodwill
impairment
|
—
|
|
—
|
|
—
|
|
(215,100)
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
(4,789)
|
Impairment of equity
method Investees
|
—
|
|
—
|
|
—
|
|
(47,133)
|
Change in fair value
of contingent consideration and indemnification asset
|
(14,100)
|
|
(4,352)
|
|
(13,281)
|
|
(3,860)
|
Net loss attributable
to non-controlling interests
|
—
|
|
(822)
|
|
—
|
|
—
|
Purchase accounting
adjustments
|
(3,539)
|
|
(5,823)
|
|
(20,529)
|
|
(23,336)
|
Repositioning
costs
|
(1,275)
|
|
(1,275)
|
|
(7,318)
|
|
(1,275)
|
Stock-based
compensation expense
|
(4,957)
|
|
(4,231)
|
|
(16,711)
|
|
(14,606)
|
Severance
costs
|
(146)
|
|
(1,096)
|
|
(198)
|
|
(8,986)
|
Amortization of
contract cost assets
|
(43)
|
|
(127)
|
|
(476)
|
|
(3,944)
|
Loss from discontinued
operations (1)
|
(8,700)
|
|
(3,166)
|
|
(7,317)
|
|
(6,074)
|
Strategy and
shareholder advisory expenses
|
—
|
|
—
|
|
(6,513)
|
|
—
|
Acquisition-related
costs
|
(917)
|
|
(626)
|
|
(4,194)
|
|
(2,116)
|
Adjusted Income
(Loss) Attributable to Common Shareholders (b)
|
$
6,865
|
|
$
2,411
|
|
$
1,308
|
|
$
(12,250)
|
|
|
|
|
|
|
|
|
Loss per Share
Attributable to Common Shareholders - Basic and Diluted (a)
(2)
|
$
(0.06)
|
|
$
(0.17)
|
|
$
(0.44)
|
|
$
(3.94)
|
|
|
|
|
|
|
|
|
Adjusted Income
(Loss) per Share Available to Common Shareholders
(b)
|
$
0.08
|
|
$
0.03
|
|
$
0.02
|
|
$
(0.14)
|
|
|
|
|
|
|
|
|
Weighted-average
common shares - basic and diluted (2)
|
88,326
|
|
84,289
|
|
86,067
|
|
84,928
|
————————
|
(1)
|
Includes
$6.8 million loss on disposal of discontinued operations for
the year ended December 31, 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 December 31,
|
|
For the Year
Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Total
revenue
|
$
248,358
|
|
$
246,536
|
|
$
907,957
|
|
$
924,639
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
2,501
|
|
70,543
|
|
17,355
|
|
273,015
|
Total revenue
excluding divested assets
|
245,857
|
|
175,993
|
|
890,602
|
|
651,624
|
|
|
|
|
|
|
|
|
Clinical Solutions
revenue
|
$
161,113
|
|
$
146,556
|
|
$
598,144
|
|
$
542,279
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
(973)
|
|
36,806
|
|
(411)
|
|
134,442
|
Clinical Solutions
revenue excluding divested assets
|
162,086
|
|
109,750
|
|
598,555
|
|
407,837
|
|
|
|
|
|
|
|
|
Evolent Health
Services revenue
|
87,245
|
|
99,980
|
|
309,813
|
|
382,360
|
Less:
|
|
|
|
|
|
|
|
Revenue from divested
assets
|
3,474
|
|
33,737
|
|
17,766
|
|
138,573
|
Evolent Health
Services revenue excluding divested assets
|
83,771
|
|
66,243
|
|
292,047
|
|
243,787
|
Total revenue
excluding divested assets
|
$
245,857
|
|
$
175,993
|
|
$
890,602
|
|
$
651,624
|
Evolent Health,
Inc.
|
Guidance
Reconciliation
|
(in thousands,
unaudited)
|
|
|
For the Three
Months Ended
March 31, 2022
|
|
For the
Year
Ended
December
31,
2022
|
Net loss
attributable to common shareholders of Evolent Health,
Inc.
|
$
(4,900)
|
|
$
(27,000)
|
Less:
|
|
|
|
Interest
income
|
125
|
|
500
|
Interest
expense
|
(6,000)
|
|
(24,000)
|
Depreciation and
amortization expenses
|
(16,250)
|
|
(65,000)
|
EBITDA
|
17,225
|
|
61,500
|
Less:
|
|
|
|
Gain from equity
method investees
|
800
|
|
800
|
Other income
(expense), net
|
(50)
|
|
(200)
|
Stock-based
compensation expense
|
(5,000)
|
|
(20,000)
|
Amortization of
contract cost assets
|
(25)
|
|
(100)
|
Acquisition-related
costs
|
(1,000)
|
|
(4,000)
|
Adjusted
EBITDA
|
$
22,500
|
|
$
85,000
|
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, partner relationships, 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:
- We derive a significant portion of our revenues from our
largest partners.
- The market for value-based health care in the United States is rapidly evolving.
- The health care regulatory and political framework is uncertain
and evolving.
- If we are unable to offer new and innovative products and
services or our products and services fail to keep pace with
advances in industry standards, technology and our partners' needs,
our partners may terminate or fail to renew their relationships
with us and our revenue and results of operations may suffer.
- We have made and entered, and may in the future make and enter
acquisitions, investments and alliances and joint ventures, which
may be difficult to integrate, divert management resources, result
in unanticipated costs or dilute our stockholders.
- The financial benefits we expect to receive as a result of our
sale of certain assets of Passport to Molina may not be
realized.
- Our revenues and the growth of our business rely, in part, on
the growth and success of our partners and certain revenues from
our engagements, which are difficult to predict and are subject to
factors outside of our control, including governmental funding
reductions and other policy changes.
- Failure to accurately underwrite performance-based contracts
could result in a reduction in profitability for our Specialty Care
Management solution.
- If we fail to effectively manage our growth and cost structure,
our business and results of operations could be harmed.
- Public health emergencies such as the COVID-19 pandemic have
adversely affected, and could in the future, adversely affect our
business and the business of our customers and suppliers.
- Our offshore support and professional services may prove
difficult to manage or may not allow us to realize our cost
reduction goals.
- If we lose key members of our management team or employees or
are unable to attract and retain the employees we need, our
compensation costs will increase and our business and operating
results will be adversely affected.
- We have recorded a significant amount of goodwill, and we may
never realize the full value of our intangible assets, causing us
to record impairments that may negatively affect our results of
operations.
- We may need to obtain additional financing which may not be
available or, if it is available, may result in a reduction in the
ownership of our stockholders.
- We have experienced net losses in the past and we may not
achieve profitability in the future.
- We are and may become subject to litigation, proceedings,
government inquiries, reviews, audits or investigations which could
have a material adverse effect on our business, financial condition
and results of operations.
- We typically incur significant upfront costs in our partner
relationships, and if we are unable to develop or grow these
partner relationships over time, we are unlikely to recover these
costs and our operating results may suffer.
- If we do not continue to attract new partners and successfully
capture new opportunities, we may not achieve our financial
projections, and our results of operations would be harmed.
- As we enter into an increasing number and variety of risk
sharing arrangements with partners, our revenues and profitability
could be limited and negatively impacted.
- If the estimates and assumptions we use to determine the size
of the target markets for our services are inaccurate, our future
growth rate may be impacted and our business would be harmed.
- If we are not able to maintain and enhance our reputation and
brand recognition, our business and results of operations will be
harmed.
- Consolidation in the health care industry could have a material
adverse effect on our business, financial condition and results of
operations.
- We face intense competition, which could limit our ability to
maintain or expand market share within our industry, and if we do
not maintain or expand our market share our business and operating
results will be harmed.
- Our offerings could be subject to audits by CMS and other
governmental payers and whistleblower claims under the False Claims
Act.
- Exclusivity and right of first refusal clauses in some of our
partner and founder contracts may prohibit us from partnering with
certain other providers in the future, and as a result may limit
our growth.
- We are subject to privacy and data protection laws.
- Data loss or corruption may adversely affect our reputation and
relationships.
- Our business is subject to online security risks, and if we are
unable to safeguard the security and privacy of confidential data,
we may face significant liabilities and our reputation and business
will be harmed.
- If we are unable to obtain, maintain and enforce intellectual
property protection for our technology and products or if the scope
of our intellectual property protection is not sufficiently broad,
others may be able to develop and commercialize technology and
products substantially similar to ours, and our ability to
successfully commercialize our technology and products may be
adversely affected.
- If our trademarks and trade names are not adequately protected,
we may not be able to build name recognition in our markets of
interest and our business may be adversely affected.
- Third parties may initiate proceedings alleging that we are
violating their intellectual property rights.
- Open source software could adversely affect our ability to
offer our services and subject us to possible litigation.
- If we are unable to protect the confidentiality of our trade
secrets, know-how and other proprietary information, the value of
our technology and products could be adversely affected.
- We depend on certain technologies that are licensed to us. We
do not control the intellectual property rights covering these
technologies and any loss of our rights to these technologies or
the rights licensed to us could prevent us from developing and/or
commercializing our products.
- Any restrictions on our use of, or ability to license, data, or
our failure to license data and integrate third-party technologies,
could have a material adverse effect on our business, financial
condition and results of operations.
- We rely on Internet infrastructure, bandwidth providers, data
center providers, other third parties and our own systems for
providing services to our partners, and any failure or interruption
in the services provided by these third parties or our own systems
could expose us to litigation and negatively impact our
relationships with partners, adversely affecting our brand and our
business.
- We rely on third-party vendors to host and maintain our
technology platform.
- We have previously identified material weaknesses in our
internal control over financial reporting. Although the material
weaknesses were remediated, if we identify additional material
weaknesses in the future, we and our auditor may conclude that our
internal control over financial reporting is not effective and we
may be unable to produce timely and accurate financial statements,
any of which could adversely impact our investors' confidence and
our stock price.
- We will not be reimbursed for any payments made under the TRA
in the event that any tax benefits are disallowed.
- We are required to pay certain of our pre-IPO investors for
certain tax benefits we may claim in the future, and these amounts
are expected to be material.
- We may not be able to realize all or a portion of the tax
benefits that resulted from the exchanges of Class B common units
for our Class A common stock or from the utilization of NOLs
previously held by Evolent Health Holdings and an affiliate of TPG
and from payments made under the TRA.
- In certain cases, payments by us under the TRA may be
accelerated or significantly exceed the tax benefits we realize in
respect of the tax attributes subject to the TRA.
- The agreements between us and certain of our pre-IPO investors
were made in the context of an affiliated relationship and may
contain different terms than comparable agreements with
unaffiliated third parties.
- The conditional conversion feature of the 2025 Notes, if
triggered, may adversely affect our financial condition and
operating results.
- The accounting method for convertible debt securities that may
be settled in cash, such as the 2024 Notes and the 2025 Notes,
could have a material effect on our reported financial
results.
- We expect that our stock price will be volatile and may
fluctuate or decline significantly.
- We are subject to securities class action litigation and an
adverse outcome in such litigation could have an adverse effect on
our financial condition.
- The market price of our Class A common stock could decline due
to the large number of shares of Class A common stock issuable upon
conversion of our convertible notes, or by sales or issuances of
substantial amounts of our Class A common stock.
- Some provisions of Delaware
law, our second amended and restated certificate of incorporation
and our third amended and restated by-laws and certain of our
contracts may deter third parties from acquiring us.
- Our second amended and restated certificate of incorporation
and stockholders' agreement contain provisions renouncing our
interest and expectation to participate in certain corporate
opportunities identified by or presented to certain of our pre-IPO
investors.
- Our second amended and restated certificate of incorporation
designates courts in the State of
Delaware as the sole and exclusive forum for certain types
of actions and proceedings that may be initiated by our
stockholders, which could limit our stockholders' ability to obtain
a favorable judicial forum for disputes with us or our directors,
officers or employees.
- We do not anticipate paying any cash dividends in the
foreseeable future.
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