- Delivered strong full year 2023 results in Continuing
Business, focused on serving all populations through
differentiated, value-driven care model
- Served 461,000 consumers, an increase of 294% from prior
year on a comparable basis
- NeueCare and NeueSolutions segments well-positioned to drive
strong performance in 2024, resulting in expected Enterprise
Adjusted EBITDA between $15 million and $25 million †
NeueHealth, Inc. (“NeueHealth” or the “Company”) (NYSE: NEUE),
the value-driven healthcare company, today reported financial
results for its fourth quarter and full year ended December 31,
2023.
“We achieved significant milestones as a company this past year,
completing the sale of our California Medicare Advantage business
and fully focusing on where we have proven to have the greatest
impact - through our care delivery and provider enablement
business,” said Mike Mikan, President and CEO of NeueHealth. “Our
NeueHealth business drove strong results in 2023, delivering $1.2
billion in revenue, up 55% year over year, and serving 461,000
consumers across the country. We have great confidence in this
business and the value-driven, consumer-centric care model we have
built, and we look forward to continuing to align the interests of
providers, payors, and consumers to drive differentiated value for
all in 2024.”
Key Metrics
As of December 31,
2023
2022
Consumer and Patient Metrics
Value-Based Consumers served1
355,000
117,000
Enablement Services Lives
106,000
—
1The value-based care consumers at
December 31, 2022 excludes approximately 419,000 consumers
attributable to our Bright HealthCare-Commercial business that we
exited at the end of 2022.
Three Months Ended
Years Ended
($ in thousands)
December 31,
December 31,
2023
2022
2023
2022
Financial Metrics
Revenue
$
292,871
$
227,696
$
1,160,802
$
751,163
Net Loss from Continuing Operations
$
(62,827
)
$
(84,671
)
$
(627,742
)
$
(385,242
)
Adjusted EBITDA (non-GAAP)
$
(10,356
)
$
(22,247
)
$
(8,480
)
$
(75,095
)
See the table at the end of this release for additional
information and a reconciliation of the non-GAAP measures used in
the table above. Full Year 2023 Net Loss from Continuing Operations
of $(627,742) includes $(515,791) related to non-cash items. See
table at the end of this release for more detail.
Financial Outlook
For full year 2024, NeueHealth is providing the following
guidance and commentary:
- NeueHealth’s Enterprise Revenue is expected to be approximately
$1 billion
- On a segment basis, NeueCare Revenue is expected to be between
$310 million and $320 million, while NeueSolutions Revenue is
expected to be between $690 million and $700 million
- Enterprise Adjusted Operating Cost Ratio is expected to be
between 15% and 16%†
- Enterprise Adjusted EBITDA is expected to be between $15
million and $25 million in 2024†
† Reconciliations of projected Adjusted EBITDA and projected
Adjusted Operating Cost Ratio to the most directly comparable GAAP
financial measures are not provided because the Company is unable
to provide such reconciliations without unreasonable effort. The
inability to provide a reconciliation is due to the uncertainty and
inherent difficulty predicting the occurrence, the financial impact
and the periods in which the non-GAAP adjustments may be
recognized. With respect to Adjusted EBITDA, these GAAP measures
may include the impact of such items as interest expense, income
tax expense, transaction costs, depreciation and amortization,
share-based compensation expense, restructuring costs, contract
termination costs, impairment of goodwill or intangible assets,
financial solvency of contractual counterparties, changes in the
fair value of equity securities and derivatives, changes in the
fair value of contingent consideration; and the tax effect of all
such items. Historically, the Company has excluded these items from
non-GAAP financial measures. With respect to Adjusted Operating
Cost Ratio, these GAAP measures may include the impact of such
items as share-based compensation. The Company currently expects to
continue to exclude these items in future disclosures of non-GAAP
financial measures and may also exclude other items that may arise
(collectively, “non-GAAP adjustments”). The decisions and events
that typically lead to the recognition of non-GAAP adjustments,
such as a decision to exit part of the business, are inherently
unpredictable as to if or when they may occur. For the same
reasons, the Company is unable to address the probable significance
of the unavailable information, which could be material to future
results.
Earnings Conference Call
As previously announced, NeueHealth will discuss the Company’s
results, strategy, and outlook on a conference call with investors
at 8:00 a.m. Eastern Time today. NeueHealth will host a live
webcast of this conference call which can be accessed from the
Investor Relations page of the company’s website
(investors.neuethealth.com). Following the call, a webcast replay
will be available on the same site. This earnings release and the
Form 8-K filed March 6, 2024 can be accessed on the Investor
Relations page of the Company’s website. We routinely post
important information on our website, including corporate and
investor presentations and financial information. We intend to use
our website as a means of disclosing material, non-public
information and for complying with our disclosure obligations under
Regulation FD. Such disclosures will be included in the Investor
Relations section of our website. Accordingly, investors should
monitor this portion of our website, in addition to following our
press releases, U.S. Securities and Exchange Commission (“SEC”)
filings and public conference calls and webcasts.
About NeueHealth
NeueHealth is a value-driven healthcare company grounded in the
belief that all health consumers are entitled to high-quality,
coordinated care. By uniquely aligning the interests of health
consumers, providers, and payors, NeueHealth helps to make
healthcare accessible and affordable to all populations across the
ACA Marketplace, Medicare, and Medicaid. NeueHealth delivers
high-quality clinical care to over 460,000 health consumers through
owned clinics and unique partnerships with over 3,000 affiliated
providers. We also enable independent providers and medical groups
to thrive in performance-based arrangements through a suite of
technology and services scaled centrally and deployed locally. We
believe our value-driven, consumer-centric care model can transform
the healthcare experience and maximize value across the healthcare
system. For more information, visit: www.neuehealth.com.
Forward-Looking Statements
Statements made in this release that are not statements of
historical fact, including statements about our beliefs and
expectations, are forward-looking statements and should be
evaluated as such. Forward-looking statements include information
concerning possible or assumed future results of operations,
including descriptions of our business plan and strategies. These
statements often include words such as “anticipate,” “expect,”
“plan,” “believe,” “intend,” “project,” “forecast,” “estimates,”
“projections,” “outlook,” “ensure,” and other similar expressions.
These forward-looking statements include any statements regarding
our plans and expectations. Such forward-looking statements are
subject to various risks, uncertainties and assumptions.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. Factors that might materially affect
such forward-looking statements include: our ability to continue as
a going concern; our ability to comply with the terms of our credit
facility or any credit facility into which we enter in the future;
our ability to receive the remaining proceeds from the sale of our
Medicare Advantage business in California in a timely manner; our
ability to obtain any short or long term debt or equity financing
needed to operate our business; our ability to quickly and
efficiently complete the wind down our IFP businesses and MA
businesses outside of California, including by satisfying
liabilities of those businesses when due and payable; potential
disruptions to our business due to corporate restructuring and any
resulting headcount reduction; our ability to accurately estimate
and effectively manage the costs relating to changes in our
businesses offerings and models; a delay or inability to withdraw
regulated capital from our subsidiaries; a lack of acceptance or
slow adoption of our business model; our ability to retain existing
consumers and expand consumer enrollment; our and our Care
Partner’s abilities to obtain and accurately assess, code, and
report risk adjustment factor scores; our ability to contract with
care providers and arrange for the provision of quality care; our
ability to accurately estimate our medical expenses, effectively
manage our costs and claims liabilities or appropriately price our
products and charge premiums; our ability to obtain claims
information timely and accurately; the impact of any pandemic or
epidemic on our business and results of operations; the risks
associated with our reliance on third-party providers to operate
our business; the impact of modifications or changes to the U.S.
health insurance markets; our ability to manage any growth of our
business; our ability to operate, update or implement our
technology platform and other information technology systems; our
ability to retain key executives; our ability to successfully
pursue acquisitions and integrate acquired businesses; the
occurrence of severe weather events, catastrophic health events,
natural or man-made disasters, and social and political conditions
or civil unrest; our ability to prevent and contain data security
incidents and the impact of data security incidents on our members,
patients, employees and financial results; our ability to comply
with requirements to maintain effective internal controls; our
ability to adapt to the new risks associated with our ACO Reach
businesses, including any unanticipated market or regulatory
developments; and the other factors set forth under the heading
“Risk Factors” in the Company’s reports on Form 10-K, Form 10-Q,
and Form 8-K (including all amendments to those reports) and our
other filings with the SEC. Except as required by law, we undertake
no obligation to update publicly any forward-looking statements for
any reason after the date of this release to conform these
statements to actual results or changes in our expectations.
NeueHealth, Inc. and
Subsidiaries
Consolidated Balance
Sheets
(in thousands, except share and
per share data)
(Unaudited)
December 31,
2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
87,299
$
217,006
Short-term investments
6,265
869
Accounts receivable, net of allowance of
$14,023 and $6,098, respectively
39,084
19,576
ACO REACH performance year receivable
115,878
99,181
Current assets of discontinued
operations
822,570
3,187,464
Prepaids and other current assets
17,831
46,538
Total current assets
1,088,927
3,570,634
Other assets:
Long-term investments
—
5,401
Property, equipment and capitalized
software, net
14,499
21,298
Goodwill
—
401,385
Intangible assets, net
93,238
104,952
Long-term assets of discontinued
operations
—
529,117
Other non-current assets
28,816
32,265
Total other assets
136,553
1,094,418
Total assets
$
1,225,480
$
4,665,052
Liabilities, Redeemable Noncontrolling
Interest, Redeemable Preferred Stock and Shareholders’ Equity
(Deficit)
Current liabilities:
Medical costs payable
$
157,903
$
116,021
Accounts payable
11,841
18,714
Short-term borrowings
303,947
303,947
Current liabilities of discontinued
operations
699,758
3,157,236
Risk share payable to deconsolidated
entity
123,981
—
Warrant liability
13,971
—
Other current liabilities
79,856
97,241
Total current liabilities
1,391,257
3,693,159
Long-term borrowings
66,400
—
Other liabilities
22,441
32,208
Total liabilities
1,480,098
3,725,367
Commitments and contingencies
Redeemable noncontrolling interests
88,908
219,758
Redeemable Series A preferred stock,
$0.0001 par value; 750,000 shares authorized in 2023 and 2022;
750,000 shares issued and outstanding in 2023 and 2022
747,481
747,481
Redeemable Series B preferred stock,
$0.0001 par value; 175,000 shares authorized in 2023 and 2022;
175,000 shares issued and outstanding in 2023 and 2022
172,936
172,936
Shareholders’ equity (deficit):
Common stock, $0.0001 par value;
3,000,000,000 shares authorized in 2023 and 2022; 8,053,576 and
7,878,394 shares issued and outstanding in 2023 and 2022*,
respectively
1
1
Additional paid-in capital
3,056,027
2,972,333
Accumulated deficit
(4,307,849
)
(3,156,395
)
Accumulated other comprehensive loss
(122
)
(4,429
)
Treasury stock, at cost, 31,526 shares at
December 31, 2023 and 2022
(12,000
)
(12,000
)
Total shareholders’ equity
(deficit)
(1,263,943
)
(200,490
)
Total liabilities, redeemable
noncontrolling interests, redeemable preferred stock and
shareholders’ equity (deficit)
$
1,225,480
$
4,665,052
*Shares have been retroactively
adjusted to reflect the reverse stock split effective May 22,
2023
NeueHealth, Inc. and
Subsidiaries
Consolidated Statements of
Income (Loss)
(in thousands, except share and
per share data)
(Unaudited)
Three Months Ended December
31,
Years Ended December
31,
2023
2022
2023
2022
Revenue:
Capitated revenue
$
60,091
$
33,609
$
219,774
$
112,904
ACO REACH revenue
219,659
188,652
896,504
654,087
Service revenue
13,051
8,563
44,438
39,601
Investment income (loss)
70
(3,128
)
86
(55,429
)
Total revenue
292,871
227,696
1,160,802
751,163
Operating expenses:
Medical costs
264,864
200,573
996,582
662,972
Operating costs
65,441
93,085
287,138
354,436
Bad debt expense
4,353
1
27,407
12
Restructuring charges
123
19,516
6,990
29,178
Goodwill impairment
—
—
401,385
—
Intangible assets impairment
—
—
—
42,611
Depreciation and amortization
4,025
5,427
18,296
30,710
Total operating expenses
338,806
318,602
1,737,798
1,119,919
Operating loss
(45,935
)
(90,906
)
(576,996
)
(368,756
)
Interest expense
11,205
6,387
38,203
12,822
Warrant expense
4,097
—
13,971
—
Other income
—
—
—
—
Loss from continuing operations before
income taxes
(61,237
)
(97,293
)
(629,170
)
(381,578
)
Income tax (benefit) expense
1,590
(12,622
)
(1,428
)
3,664
Net loss from continuing
operations
(62,827
)
(84,671
)
(627,742
)
(385,242
)
Loss from discontinued operations, net of
tax
(397,745
)
(573,120
)
(638,066
)
(974,638
)
Net Loss
(460,572
)
(657,791
)
(1,265,808
)
(1,359,880
)
Net earnings from continuing operations
attributable to noncontrolling interests
230,856
(11,013
)
114,354
(95,664
)
Series A preferred stock dividend
accrued
(10,305
)
(9,806
)
(40,139
)
(37,889
)
Series B preferred stock dividend
accrued
(2,311
)
(1,798
)
(9,006
)
(1,798
)
Net loss attributable to NeueHealth,
Inc. common shareholders
$
(242,332
)
$
(680,408
)
$
(1,200,599
)
$
(1,495,231
)
Basic and diluted loss per share
attributable to NeueHealth, Inc. common shareholders
Continuing operations
$
19.54
$
(13.64
)
$
(70.72
)
$
(66.17
)
Discontinued operations
(50.01
)
(72.84
)
(80.22
)
(123.87
)
Basic and diluted loss per share
(30.47
)
(86.48
)
(150.94
)
(190.04
)
Basic and diluted weighted-average common
shares outstanding*
7,954
7,868
7,954
7,868
*Shares have been retroactively
adjusted to reflect the reverse stock split effective May 22,
2023
NeueHealth, Inc. and
Subsidiaries
Consolidated Statements of
Cash Flows
(in thousands)
(Unaudited)
Years Ended December
31,
2023
2022
Cash flows from operating activities:
Net loss
$
(1,265,808
)
$
(1,359,880
)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
24,167
50,575
Impairment of intangible assets
—
49,331
Impairment of goodwill
587,535
75,372
Share-based compensation
83,692
109,713
Deferred income taxes
(3,063
)
2,027
Unrealized loss on equity securities
—
55,449
Impairment of investments
—
67,723
Warrant expense
13,971
—
Amortization of investments
(17,986
)
2,551
Loss on disposal of property, equipment,
and capitalized software
6,418
10,981
Other, net
1,858
10,631
Changes in assets and liabilities, net of
acquired assets and liabilities:
Accounts receivable
(7,756
)
28,787
ACO REACH performance year receivable
(16,697
)
(99,181
)
Other assets
191,441
(21,832
)
Medical cost payable
(635,616
)
279,563
Risk adjustment payable
(1,652,744
)
1,012,720
Accounts payable and other liabilities
(149,325
)
2,696
Unearned revenue
(10,614
)
(42,760
)
Risk share payable to deconsolidated
entity
123,981
—
Net cash (used in) provided by
operating activities
(2,726,546
)
234,466
Cash flows from investing activities:
Purchases of investments
(837,074
)
(1,457,444
)
Proceeds from sales, paydown, and
maturities of investments
1,960,283
1,055,479
Purchases of property and equipment
(2,897
)
(27,448
)
Business divestiture
(682
)
—
Business acquisitions, net of cash
acquired
—
(310
)
Net cash provided by (used in)
investing activities
1,119,630
(429,723
)
Cash flows from financing activities:
Proceeds from issuance of preferred
stock
—
920,417
Proceeds from issuance of common stock
—
1,315
Proceeds from long-term borrowings
66,400
—
Proceeds from short-term borrowings
—
303,947
Repayments of short-term borrowings
—
(155,000
)
Distributions to noncontrolling interest
holders
(16,494
)
(4,311
)
Net cash (used in) provided by
financing activities
49,906
1,066,368
Net (decrease)/ increase in cash and
cash equivalents
(1,557,010
)
871,111
Cash and cash equivalents – beginning of
year
$
1,932,290
$
1,061,179
Cash and cash equivalents – end of
period
$
375,280
$
1,932,290
NeueHealth, Inc. and
Subsidiaries
Segment Information
(in thousands)
(Unaudited)
NeueCare
($ in thousands)
Three Months Ended
December 31,
Years Ended December
31,
Statement of income (loss) and
operating data:
2023
2022
2023
2022
Revenue:
Capitated revenue
$
60,091
$
33,609
$
219,774
$
112,904
Service revenue
11,848
8,527
41,559
39,487
Total unaffiliated revenue
71,939
42,136
261,333
152,391
Affiliated revenue
(611
)
209,522
5,876
1,039,620
Total segment revenue
71,328
251,658
267,209
1,192,011
Operating expenses
Medical Costs
33,158
367,731
97,483
1,217,742
Operating Costs
26,896
30,796
119,922
124,780
Goodwill impairment
—
—
401,385
—
Intangible assets impairment
—
—
—
42,611
Bad debt expense
4,345
1
4,984
5
Restructuring charges
—
—
130
—
Depreciation and amortization
3,181
3,115
12,651
22,234
Total operating expenses
67,580
401,643
636,555
1,407,372
Operating income (loss)
$
3,748
$
(149,985
)
$
(369,346
)
$
(215,361
)
NeueSolutions
($ in thousands)
Three Months Ended
December 31,
Years Ended December
31,
Statement of income (loss) and
operating data:
2023
2022
2023
2022
Revenue:
ACO REACH revenue
$
219,659
$
188,652
$
896,504
654,087
Service revenue
1,203
36
2,879
114
Total segment revenue
220,862
188,688
899,383
654,201
Operating expenses
Medical Costs
231,095
187,108
904,986
644,269
Operating Costs
4,391
2,030
14,474
8,508
Bad debt expense
8
—
22,423
—
Total operating expenses
235,494
189,138
941,883
652,777
Operating income
$
(14,632
)
$
(450
)
$
(42,500
)
$
1,424
Non-GAAP Financial Measures
We use the non-GAAP financial measures Adjusted EBITDA, Adjusted
Operating Cost Ratio, NeueCare Adjusted EBITDA, and NeueSolutions
Adjusted EBITDA. We define Adjusted EBITDA as Net Loss excluding
loss from discontinued operations, interest expense, income taxes,
transaction costs, depreciation and amortization, share-based
compensation expense, restructuring and contract termination costs,
impairment of goodwill and intangible assets, losses related to the
bankruptcy of one of our ACO REACH partners, changes in the fair
value of equity securities and derivatives, changes in the fair
value of contingent consideration. We define Adjusted Operating
Cost Ratio as Operating Cost Ratio excluding share-based
compensation expense. We define NeueCare Adjusted EBITDA as
NeueCare Net Loss excluding interest expense, income taxes,
transaction costs, depreciation and amortization, share-based
compensation expense, restructuring and contract termination costs,
impairment of goodwill and intangible assets, losses related to the
bankruptcy of one of our ACO REACH partners, changes in the fair
value of equity securities and derivatives, and changes in fair
value of contingent consideration. We define NeueSolutions Adjusted
EBITDA as NeueSolutions Net Loss excluding interest expense, income
taxes, transaction costs, depreciation and amortization,
share-based compensation expense, restructuring and contract
termination costs, impairment of goodwill and intangible assets,
losses related to the bankruptcy of one of our ACO REACH partners,
changes in the fair value of equity securities and derivatives, and
changes in fair value of contingent consideration. These non-GAAP
measures have been presented in this quarterly Earnings Release or
in the earnings conference call as supplemental measures of
financial performance that are not required by or presented in
accordance with GAAP because we believe they assist management and
investors in comparing our operating performance across reporting
periods on a consistent basis by excluding and including items that
we do not believe are indicative of our core operating performance.
Management believes these measures are useful to investors in
highlighting trends in our operating performance, while other
measures can differ significantly depending on long-term strategic
decisions regarding capital structure, the tax jurisdictions in
which we operate and capital investments. Management uses Adjusted
EBITDA, Adjusted Operating Cost Ratio, NeueCare Adjusted EBITDA,
and NeueSolutions Adjusted EBITDA to supplement GAAP measures of
performance in the evaluation of the effectiveness of our business
strategies, to make budgeting decisions, to establish discretionary
annual incentive compensation and to compare our performance
against that of other peer companies using similar measures.
Management supplements GAAP results with non-GAAP financial
measures to provide a more complete understanding of the factors
and trends affecting the business than GAAP results alone.
Adjusted EBITDA is not a recognized term under GAAP and should
not be considered as an alternative to Net Income (Loss) as a
measure of financial performance or any other performance measure
derived in accordance with GAAP. Additionally, Adjusted EBITDA is
not intended to be a measure of free cash flow available for
management’s discretionary use as it does not consider certain cash
requirements such as interest payments, tax payments and debt
service requirements. The presentation of Adjusted EBITDA 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 GAAP. Because not all companies use identical
calculations, the presentation of these measures may not be
comparable to other similarly titled measures of other companies
and can differ significantly from company to company.
Adjusted Operating Cost Ratio is not a recognized term under
GAAP and should not be considered as an alternative to Operating
Cost Ratio as a measure of financial performance or any other
performance measure derived in accordance with GAAP. The
presentation of Adjusted Operating Cost Ratio 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 GAAP.
Because not all companies use identical calculations, the
presentation of these measures may not be comparable to other
similarly titled measures of other companies and can differ
significantly from company to company.
Neither NeueCare Adjusted EBITDA nor NeueSolutions Adjusted
EBITDA are recognized terms under GAAP and should not be considered
as alternatives to NeueCare Net Loss or NeueSolutions Net Loss,
respectively, as a measure of financial performance or any other
performance measure derived in accordance with GAAP. The
presentation of NeueCare Adjusted EBITDA and NeueSolutions Adjusted
EBITDA have limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of our
results as reported under GAAP. Because not all companies use
identical calculations, the presentation of these measures may not
be comparable to other similarly titled measures of other companies
and can differ significantly from company to company.
The following table provides a reconciliation of net loss to
Adjusted EBITDA for the periods presented:
Three Months Ended
December 31,
Years Ended December
31,
($ in thousands)
2023
2022
2023
2022
Net loss
$
(460,572
)
$
(657,792
)
$
(1,265,808
)
$
(1,359,880
)
Loss from Discontinued Operations (a)
397,745
573,120
638,066
974,638
EBITDA adjustments from continuing
operations
Interest expense
11,206
6,387
38,203
12,822
Income tax (benefit) expense
1,591
(12,622
)
(1,428
)
3,664
Transaction costs (b)
4,363
—
23,252
386
Depreciation and amortization
4,024
5,426
18,296
30,710
Share-based compensation expense (c)
18,081
32,450
83,692
109,713
Restructuring and contract termination
costs (d)
122
19,560
6,990
29,678
Impairment of goodwill and long-lived
assets
274
—
401,659
42,611
ACO REACH care partner bankruptcy (e)
8,713
—
36,454
—
Change in fair value of warrant liability
(f)
4,097
—
13,971
—
Change in fair value of contingent
consideration (g)
—
332
(1,827
)
332
Change in fair value of equity
securities
—
10,892
—
80,231
EBITDA adjustments from continuing
operations
$
52,471
$
62,425
$
619,262
$
310,147
Adjusted EBITDA
$
(10,356
)
$
(22,247
)
$
(8,480
)
$
(75,095
)
(a)
Beginning in the fourth quarter of 2022,
Adjusted EBITDA excludes the impact of discontinued operations. The
comparable period in 2022 has been recast to exclude these impacts.
Represents losses associated with the Commercial business segment
and MA Legacy operations that we exited at the end of 2022 and the
California Medicare Advantage business classified as held for
sale.
(b)
Transaction costs include accounting, tax,
valuation, consulting, legal and investment banking fees directly
relating to financing initiatives. These costs can vary from period
to period and impact comparability, and we do not believe such
transaction costs reflect the ongoing performance of our
business.
(c)
Represents non-cash compensation expense
related to stock option and restricted stock unit award grants,
which can vary from period to period based on a number of factors,
including the timing, quantity and grant date fair value of the
awards.
(d)
Restructuring and contract termination
costs represent severance costs as part of a workforce reduction,
amounts paid for early termination of leases, and impairment of
certain long-lived assets primarily relating to our decision to
exit the Commercial business for the 2023 plan year.
(e)
Represents the costs expected to be
incurred as a result of one of our ACO REACH care partners filing
for bankruptcy; includes the full allowance established for the
outstanding receivable and ongoing costs incurred to manage and
provide service to members attributed to the care partner that
would have otherwise been reimbursed prior to the care partner’s
bankruptcy.
(f)
Represents the non-cash change in the fair
value of the warrant liability established for warrants included in
our financing arrangements, which are remeasured at fair value each
reporting period.
(g)
Represents the non-cash change in fair
value of contingent consideration from business combinations, which
is remeasured at fair value each reporting period.
The following table provides a reconciliation of Adjusted
Operating Cost Ratio for the periods presented:
Three Months Ended
December 31,
Years Ended December
31,
2023
2022
2023
2022
Operating Cost Ratio
22.3%
40.9%
24.7%
47.2%
Impact of share-based compensation expense
(a)
(6.2)%
(14.3)%
(7.2)%
(14.6)%
Adjusted Operating Cost Ratio
(b)
16.1%
26.6%
17.5%
32.6%
(a)
Represents non-cash compensation expense
related to stock option and restricted stock unit award grants,
which can vary from period to period based on a number of factors,
including the timing, quantity and grant date fair value of the
awards.
(b)
The three months ended December 31, 2023
is lower by 10.5% and the year ended December 31, 2023 is higher by
15.1%, respectively, due to the impacts of income (loss) driven
from unrealized gains and losses on equity securities and realized
gains and losses on sales of investments.
The following table provides a reconciliation of NeueCare net
loss to NeueCare Adjusted EBITDA for the periods presented:
NeueCare
Three Months Ended
December 31,
Years Ended December
31,
($ in thousands)
2023
2022
2023
2022
NeueCare Net Income (Loss)
$
3,748
$
(149,985
)
$
(369,346
)
$
(215,361
)
Interest expense
—
—
—
—
Income tax (benefit) expense
—
—
—
—
Transaction costs (a)
—
—
—
—
Depreciation and amortization
3,181
3,115
12,651
$
22,234
Share-based compensation expense (b)
—
—
—
—
Restructuring and contract termination
costs (c)
—
—
130
—
Impairment of goodwill and intangible
assets
—
—
401,385
—
ACO REACH care partner bankruptcy (d)
—
—
—
—
Change in fair value of warrant liability
(e)
—
—
—
—
Change in fair value of contingent
consideration (f)
—
—
(1,827
)
—
Change in fair value of equity
securities
—
—
—
—
NeueCare Adjusted EBITDA
$
6,929
$
(146,870
)
$
42,993
$
(193,127
)
The following table provides a reconciliation of NeueSolutions
net loss to NeueSolutions Adjusted EBITDA for the periods
presented:
NeueSolutions
Three Months Ended
December 31,
Years Ended December
31,
($ in thousands)
2023
2022
2023
2022
NeueSolutions Net loss
$
(14,632
)
$
(450
)
$
(42,500
)
$
1,424
Interest expense
—
—
—
—
Income tax (benefit) expense
—
—
—
—
Transaction costs (a)
—
—
—
—
Depreciation and amortization
—
—
—
—
Share-based compensation expense (b)
—
—
—
—
Restructuring and contract termination
costs (c)
—
—
—
—
Impairment of goodwill and intangible
assets
—
—
—
—
ACO REACH care partner bankruptcy (d)
8,713
—
36,454
—
Change in fair value of warrant liability
(e)
—
—
—
—
Change in fair value of contingent
consideration (f)
—
—
—
—
Change in fair value of equity
securities
—
—
—
—
NeueSolutions Adjusted EBITDA
$
(5,919
)
$
(450
)
$
(6,046
)
$
1,424
(a)
Transaction costs include accounting, tax,
valuation, consulting, legal and investment banking fees directly
relating to financing initiatives. These costs can vary from period
to period and impact comparability, and we do not believe such
transaction costs reflect the ongoing performance of our
business.
(b)
Represents non-cash compensation expense
related to stock option and restricted stock unit award grants,
which can vary from period to period based on a number of factors,
including the timing, quantity and grant date fair value of the
awards.
(c)
Restructuring and contract termination
costs represent severance costs as part of a workforce reduction,
amounts paid for early termination of leases, and impairment of
certain long-lived assets primarily relating to our decision to
exit the Commercial business for the 2023 plan year.
(d)
Represents the costs expected to be
incurred as a result of one of our ACO REACH care partners filing
for bankruptcy; includes the full allowance established for the
outstanding receivable and ongoing costs incurred to manage and
provide service to members attributed to the care partner that
would have otherwise been reimbursed prior to the care partner’s
bankruptcy.
(e)
Represents the non-cash change in the fair
value of the warrant liability established for warrants included in
our financing arrangements, which are remeasured at fair value each
reporting period.
(f)
Represents the non-cash change in fair
value of contingent consideration from business combinations, which
is remeasured at fair value each reporting period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240306256153/en/
Investor Contact: IR@neuehealth.com
Media Contact: media@neuehealth.com
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