R1 RCM Reports Second Quarter 2024 Results
R1 RCM Inc. (NASDAQ: RCM) reported its Q2 2024 results, showing revenue of $627.9 million, up 12.0% year-over-year. The company posted a GAAP net loss of $7.6 million, compared to a $1.0 million loss in Q2 2023. Adjusted EBITDA reached $156.1 million, up from $142.9 million last year. The quarter was impacted by recent vendor and customer outages.
Notably, R1 announced a definitive agreement to be acquired by TowerBrook Capital Partners and Clayton, Dubilier & Rice in an all-cash transaction valued at $14.30 per share. Upon completion, R1 will become a private company and delist from Nasdaq. The deal is expected to close by year-end, subject to stockholder and regulatory approvals.
R1 RCM Inc. (NASDAQ: RCM) ha riportato i suoi risultati del Q2 2024, mostrando ricavi di 627,9 milioni di dollari, in aumento del 12,0% rispetto all’anno precedente. L'azienda ha registrato una perdita netta GAAP di 7,6 milioni di dollari, rispetto a una perdita di 1,0 milione di dollari nel Q2 2023. L'EBITDA rettificato ha raggiunto 156,1 milioni di dollari, rispetto ai 142,9 milioni dell'anno scorso. Il trimestre è stato influenzato da recenti interruzioni da parte di fornitori e clienti.
Inoltre, R1 ha annunciato un accordo definitivo per essere acquisita da TowerBrook Capital Partners e Clayton, Dubilier & Rice in una transazione completamente in contante valorizzata a 14,30 dollari per azione. Al termine dell'operazione, R1 diventerà una società privata e sarà rimossa dal Nasdaq. Si prevede che l'affare si chiuda entro la fine dell'anno, soggetto ad approvazioni da parte degli azionisti e delle autorità di regolamentazione.
R1 RCM Inc. (NASDAQ: RCM) reportó sus resultados del Q2 2024, mostrando ingresos de 627.9 millones de dólares, un aumento del 12.0% en comparación con el año anterior. La compañía registró una pérdida neta GAAP de 7.6 millones de dólares, en comparación con una pérdida de 1.0 millón de dólares en el Q2 2023. El EBITDA ajustado alcanzó 156.1 millones de dólares, en comparación con los 142.9 millones del año pasado. El trimestre se vio afectado por recientes interrupciones de proveedores y clientes.
Además, R1 anunció un acuerdo definitivo para ser adquirida por TowerBrook Capital Partners y Clayton, Dubilier & Rice en una transacción en efectivo valorada en 14.30 dólares por acción. Al finalizar, R1 se convertirá en una empresa privada y se retirará del Nasdaq. Se espera que el acuerdo se cierre a fin de año, sujeto a las aprobaciones de accionistas y regulatorias.
R1 RCM Inc. (NASDAQ: RCM)는 2024년 2분기 실적을 발표하며 6억 2790만 달러의 수익을 기록하여 전년 대비 12.0% 증가했다고 밝혔습니다. 회사는 GAAP 기준 순손실 760만 달러를 기록했으며, 이는 2023년 2분기의 100만 달러 손실과 비교됩니다. 조정 EBITDA는 1억 5610만 달러에 도달하며 지난해 1억 4290만 달러에서 증가했습니다. 이번 분기는 최근 공급업체와 고객의 장애로 영향을 받았습니다.
특히 R1은 타워브룩 캐피탈 파트너스와 클레이튼, 더빌리어 & 라이스에 의해 인수되는 확정 계약을 발표했으며, 주당 14.30달러로 평가된 현금 거래입니다. 거래가 완료되면 R1은 비상장 회사가 되며 Nasdaq에서 상장 폐지됩니다. 이 거래는 주주 및 규제 당국의 승인을 조건으로 연말까지 마무리될 것으로 예상됩니다.
R1 RCM Inc. (NASDAQ: RCM) a publié ses résultats du Q2 2024, affichant des revenus de 627,9 millions de dollars, en hausse de 12,0 % par rapport à l’an dernier. L’entreprise a enregistré une perte nette GAAP de 7,6 millions de dollars, contre une perte de 1,0 million de dollars au Q2 2023. Le EBITDA ajusté a atteint 156,1 millions de dollars, en hausse par rapport aux 142,9 millions de dollars de l’année précédente. Le trimestre a été impacté par des pannes récentes auprès des fournisseurs et des clients.
Notamment, R1 a annoncé un accord définitif pour être acquis par TowerBrook Capital Partners et Clayton, Dubilier & Rice dans une transaction entièrement en espèces évaluée à 14,30 dollars par action. Une fois l’opération terminée, R1 deviendra une entreprise privée et sera retirée de Nasdaq. L’accord devrait être finalisé d’ici la fin de l'année, sous réserve des approbations des actionnaires et réglementaires.
R1 RCM Inc. (NASDAQ: RCM) hat seine Q2 2024 Ergebnisse veröffentlicht und dabei Einnahmen von 627,9 Millionen Dollar, ein Anstieg von 12,0% im Vergleich zum Vorjahr, gezeigt. Das Unternehmen meldete einen GAAP-Nettoverlust von 7,6 Millionen Dollar, verglichen mit einem Verlust von 1,0 Millionen Dollar im Q2 2023. Das bereinigte EBITDA erreichte 156,1 Millionen Dollar, im Vergleich zu 142,9 Millionen Dollar im letzten Jahr. Das Quartal wurde durch kürzliche Ausfälle von Anbietern und Kunden beeinträchtigt.
Bemerkenswerterweise kündigte R1 eine definitive Vereinbarung zur Übernahme durch TowerBrook Capital Partners und Clayton, Dubilier & Rice in einer Bartransaktion im Wert von 14,30 Dollar pro Aktie an. Nach Abschluss wird R1 ein privates Unternehmen werden und von Nasdaq delistet. Der Deal soll bis zum Jahresende abgeschlossen werden, vorbehaltlich der Genehmigungen durch die Aktionäre und der Aufsichtsbehörden.
- Revenue increased by 12.0% year-over-year to $627.9 million
- Adjusted EBITDA grew to $156.1 million from $142.9 million in Q2 2023
- Announced acquisition deal at $14.30 per share, providing potential value for shareholders
- GAAP net loss widened to $7.6 million from $1.0 million in Q2 2023
- Recent vendor and customer outages impacted both revenue and costs
- Company is not providing financial guidance due to the proposed acquisition
Insights
R1 RCM's Q2 2024 results show mixed performance. Revenue increased by
The adjusted EBITDA of
The proposed acquisition by TowerBrook and CD&R at
R1 RCM's performance reflects the resilience of its technology platform in the face of industry challenges. The company's ability to grow revenue despite "recent vendor and customer outages" demonstrates the robustness of its solutions. This is important in the healthcare technology sector, where system reliability directly impacts patient care and provider finances.
The emphasis on executing against their technology roadmap while leveraging global scale suggests a focus on innovation and efficiency. This dual approach is essential in the competitive healthcare tech landscape, potentially positioning R1 RCM to capture more market share.
However, the lack of forward guidance due to the proposed acquisition creates uncertainty about future technological investments and innovations. The transition to private ownership could either accelerate R1's tech development by freeing it from short-term market pressures or potentially slow it down if the new owners prioritize cost-cutting over innovation.
The proposed acquisition of R1 RCM by TowerBrook and CD&R is a significant move in the healthcare technology sector. The all-cash offer of
The unanimous approval by the independent Special Committee suggests thorough due diligence and consideration of shareholder interests. However, the transaction is subject to stockholder approval and regulatory clearances, which introduces some uncertainty about its completion.
This deal reflects ongoing consolidation in the healthcare tech space, driven by private equity's interest in the sector. The move to take R1 private could allow for more aggressive growth strategies and potentially larger investments in technology and market expansion, free from the scrutiny of quarterly reporting. However, it also means reduced transparency for current public shareholders post-acquisition.
MURRAY, Utah, Aug. 07, 2024 (GLOBE NEWSWIRE) -- R1 RCM Inc. (NASDAQ: RCM) (“R1” or the “Company”), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, today announced results for the three months ended June 30, 2024.
Second Quarter 2024 Results:
- Revenue of
$627.9 million , up$67.2 million or12.0% compared to the same period last year. - GAAP net loss of
$7.6 million , compared to net loss of$1.0 million in the same period last year. - Adjusted EBITDA of
$156.1 million , compared to adjusted EBITDA of$142.9 million in the same period last year.
The quarter reflects impacts to both revenue and costs as a result of recent vendor and customer outages.
“Our second quarter results reflect the strength of R1’s technology platform, our focus on delivering excellent customer results, and our ability to execute on our growth strategy while navigating industry and customer specific events,” stated Lee Rivas, R1’s CEO. “R1 remains committed to executing against our technology roadmap while leveraging our global scale to drive increased value for our customers and partners.”
Proposed Acquisition by TowerBrook and CD&R
On August 1, 2024, R1 announced that it had entered into a definitive agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners (“TowerBrook”) and Clayton, Dubilier & Rice (“CD&R”), in an all-cash transaction. Under the terms of the agreement, TowerBrook and CD&R will acquire all the outstanding common stock that TowerBrook does not currently own for
Guidance
Due to the recently proposed acquisition, R1 is not providing financial guidance.
Webcast Information
R1’s management team will make available a pre-recorded call today at 8:00 a.m. Eastern Time to discuss the Company’s financial results. To access the pre-recorded call, please dial 888-596-4144 (646-968-2525 outside the U.S. and Canada) using conference code number 9123341. The pre-recorded call will also be available at the Investor Relations section of the Company’s website at ir.r1rcm.com.
Non-GAAP Financial Measures
In order to provide a more comprehensive understanding of the information used by R1’s management team in financial and operational decision making, the Company supplements its GAAP consolidated financial statements with certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP cost of services, non-GAAP selling, general and administrative expenses, and net debt. Adjusted EBITDA is defined as GAAP net income (loss) before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, including the amortization of cloud computing arrangement implementation fees, share-based compensation expense, CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense, and certain other items, including acquisition and integration costs, various exit activities costs, strategic and transformation initiatives costs, costs related to organization changes to improve business alignment and cost structure, and costs related to review of strategic alternatives and stockholder litigation. Non-GAAP cost of services is defined as GAAP cost of services less share-based compensation expense, CoyCo 2 share-based compensation expense, and depreciation and amortization expense attributed to cost of services. Non-GAAP selling, general and administrative expenses is defined as GAAP selling, general and administrative expenses less share-based compensation expense, CoyCo 2 share-based compensation expense, and depreciation and amortization expense attributed to selling, general and administrative expenses. Net debt is defined as debt less cash and cash equivalents, inclusive of restricted cash. Adjusted EBITDA guidance is reconciled to operating income guidance, the most closely comparable available GAAP measure.
Our board of directors and management team use adjusted EBITDA as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations and (ii) a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation programs for employees. Non-GAAP cost of services and non-GAAP selling, general and administrative expenses are used to calculate adjusted EBITDA. Net debt is used as a supplemental measure of our liquidity.
Tables 4 through 7 present a reconciliation of GAAP financial measures to non-GAAP financial measures. Non-GAAP measures should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release are forward-looking statements. The words “anticipate,” “believe,” “contemplate,” “designed,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “see,” “seek,” “target,” “would” and similar expressions or variations or negatives of these words are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements include, among other things, statements about the Company’s current expectations relating to the merger of Project Raven Merger Sub, Inc. with and into the Company, with the Company continuing as the surviving corporation (the “Merger”) and the other transactions contemplated in the Merger Agreement, dated as of July 31, 2024, among the Company, Raven Acquisition Holdings, LLC and Project Raven Merger Sub, Inc. (collectively, the “Transaction”), our strategy, future operations, future financial position, prospects, plans, challenges faced by health systems and their revenue cycle operations and the role of business therein, objectives of management, ability to successfully deliver on commitments to customers, impacts of recent cyberattacks, including the Ascension cyberattack and the Change Healthcare cyberattack, and a customer bankruptcy on the business, ability to deploy new business as planned, ability to successfully implement new technologies, ability to complete or integrate acquisitions as planned and to realize the expected benefits from acquisitions, including the acquisition of Acclara, the expected outcome or impact of pending or threatened litigation, and expected market growth. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause the Company’s actual results to differ materially from those expressed or implied in its forward-looking statements. Subsequent events and developments, including actual results or changes in the Company’s assumptions, may cause the Company’s views to change. The Company does not undertake to update its forward-looking statements except to the extent required by applicable law. Readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by these cautionary statements. The Company’s actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, the completion of the Transaction on anticipated terms and timing or at all, including obtaining required stockholder and regulatory approvals, and the satisfaction of other conditions to the completion of the Transaction; the risk that disruptions from the Transaction, including the diversion of management’s attention from the Company’s ongoing business operations will harm the Company’s business, including current plans and operations; the Company’s ability to retain and hire key personnel in light of the Transaction; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Transaction; potential litigation relating to the Transaction that could be instituted against the Company and the members of the Company’s Board of Directors, arising out of the Merger, which may delay or prevent the Merger; the quality of global financial markets; the Company’s ability to timely and successfully achieve the anticipated benefits and potential synergies of the acquisitions of Cloudmed and Acclara; the Company’s ability to retain existing customers or acquire new customers; the development of markets for the Company’s revenue cycle management offering; variability in the lead time of prospective customers; competition within the market; breaches or failures of the Company’s or their vendors’ information security measures or unauthorized access to a customer’s data; delayed or unsuccessful implementation of the Company’s technologies or services, or unexpected implementation costs; disruptions in or damages to the Company’s global business services centers, third-party operated data centers or other services provided by other third-parties; the volatility of the Company’s stock price; the Company’s substantial indebtedness; and the factors set forth under the heading “Risk Factors” in the Company’s most recent annual report on Form 10-K, and any other periodic reports that the Company may file with the U.S. Securities and Exchange Commission.
Important Additional Information and Where to Find It
In connection with the Transaction, the Company will file with the SEC a proxy statement on Schedule 14A, the definitive version of which will be sent or provided to Company stockholders. The Company, affiliates of the Company and affiliates of each of Clayton, Dubilier & Rice, LLC and TowerBrook Capital Partners L.P. intend to jointly file a transaction statement on Schedule 13E-3 (the “Schedule 13E-3”) with the SEC. The Company may also file other documents with the SEC regarding the Transaction. This document is not a substitute for the Proxy Statement, the Schedule 13E-3 or any other document which the Company may file with the SEC. Promptly after filing its definitive proxy statement with the SEC, the Company will mail or provide the definitive proxy statement, the Schedule 13E-3 and a proxy card to each Company stockholder entitled to vote at the meeting relating to the Transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE TRANSACTION BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the proxy statement, Schedule 13E-3 and other documents that are filed or will be filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov, the Company’s website at ir.r1rcm.com or by contacting the Company’s Investor Relations Team at investorrelations@r1rcm.com.
The Transaction will be implemented solely pursuant to the Merger Agreement dated as of July 31, 2024, among the Company, Raven Acquisition Holdings, LLC and Project Raven Merger Sub, Inc., which contains the full terms and conditions of the Transaction.
Participants in the Solicitation
The Company and certain of its directors, executive officers and other employees, may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the Transaction. Information regarding the Company’s directors and executive officers is contained in the “Director Compensation,” “Executive Compensation” and “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” sections of the definitive proxy statement for the 2024 annual meeting of stockholders of R1 RCM Inc., which was filed with the SEC on April 12, 2024 (the “Annual Meeting Proxy Statement”) and will be contained in the proxy statement to be filed by the Company in connection with the Transaction. Any change of the holdings of the Company’s securities by its directors or executive officers from the amounts set forth in the Annual Meeting Proxy Statement have been reflected in the following Statements of Changes in Beneficial Ownership on Form 4 filed with the SEC: by Michael C. Feiner, filed on May 23, 2024; by Agnes Bundy Scanlan, filed on May 23, 2024; by John B. Henneman, III, filed on May 23, 2024; by Anthony R. Tersigni, filed on May 23, 2024; by Jill Smith, filed on May 23, 2024; by Joseph Flanagan, filed on May 23, 2024; by Jeremy Delinsky, filed on May 23, 2024; by David M. Dill, filed on May 23, 2024; by Bradford Kyle Armbrester, filed on May 23, 2024; by Anthony J. Speranzo, filed on May 23, 2024; by Jennifer Williams, filed on June 3, 2024; by John Sparby, filed on June 3, 2024; by Pamela L. Spikner, filed on June 3, 2024; by Lee Rivas, filed on June 3, 2024; and by Kyle Hicok, filed on June 3, 2024. Additional information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, will be included in the definitive proxy statement relating to the Transaction when it is filed with the SEC. These documents (when available) may be obtained free of charge from the SEC’s website at www.sec.gov, the Company’s website at ir.r1rcm.com or by contacting the Company’s Investor Relations Team at investorrelations@r1rcm.com.
About R1 RCM
R1 is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. R1’s proven and scalable operating models seamlessly complement a healthcare organization’s infrastructure, quickly driving sustainable improvements to net patient revenue and cash flows while driving revenue yield, reducing operating costs, and enhancing the patient experience. To learn more, visit: r1rcm.com.
Contact:
R1 RCM Inc.
Investor Relations:
Evan Smith, CFA
516-743-5184
investorrelations@r1rcm.com
Media Relations:
Josh Blumenthal
media@r1rcm.com
| Table 1 | ||||||||
| R1 RCM Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In millions) | ||||||||
| (Unaudited) | ||||||||
| June 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 163.0 | $ | 173.6 | ||||
| Accounts receivable, net of | 314.5 | 243.3 | ||||||
| Accounts receivable - related party, net of | 42.6 | 26.1 | ||||||
| Current portion of contract assets, net | 100.3 | 94.4 | ||||||
| Prepaid expenses and other current assets | 135.3 | 95.9 | ||||||
| Total current assets | 755.7 | 633.3 | ||||||
| Property, equipment and software, net | 193.0 | 173.7 | ||||||
| Operating lease right-of-use assets | 70.1 | 62.5 | ||||||
| Non-current portion of contract assets, net | 42.9 | 37.7 | ||||||
| Non-current portion of deferred contract costs | 33.3 | 30.4 | ||||||
| Intangible assets, net | 1,567.4 | 1,310.7 | ||||||
| Goodwill | 3,045.9 | 2,629.4 | ||||||
| Deferred tax assets | 10.9 | 10.9 | ||||||
| Other assets | 59.1 | 71.6 | ||||||
| Total assets | $ | 5,778.3 | $ | 4,960.2 | ||||
| Liabilities | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 43.9 | $ | 22.7 | ||||
| Current portion of customer liabilities | 30.7 | 39.8 | ||||||
| Current portion of customer liabilities - related party | 6.9 | 5.2 | ||||||
| Accrued compensation and benefits | 111.7 | 126.3 | ||||||
| Current portion of operating lease liabilities | 22.2 | 19.3 | ||||||
| Current portion of long-term debt | 91.0 | 67.0 | ||||||
| Accrued expenses and other current liabilities | 104.9 | 65.9 | ||||||
| Total current liabilities | 411.3 | 346.2 | ||||||
| Non-current portion of customer liabilities | 2.8 | 2.7 | ||||||
| Non-current portion of customer liabilities - related party | 10.8 | 11.8 | ||||||
| Non-current portion of operating lease liabilities | 83.0 | 77.8 | ||||||
| Long-term debt | 2,173.1 | 1,570.5 | ||||||
| Deferred tax liabilities | 253.8 | 176.6 | ||||||
| Other non-current liabilities | 23.3 | 23.2 | ||||||
| Total liabilities | 2,958.1 | 2,208.8 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 4.5 | 4.5 | ||||||
| Additional paid-in capital | 3,318.3 | 3,197.4 | ||||||
| Accumulated deficit | (179.4 | ) | (136.7 | ) | ||||
| Accumulated other comprehensive loss | (7.0 | ) | (5.9 | ) | ||||
| Treasury stock | (316.2 | ) | (307.9 | ) | ||||
| Total stockholders’ equity | 2,820.2 | 2,751.4 | ||||||
| Total liabilities and stockholders’ equity | $ | 5,778.3 | $ | 4,960.2 | ||||
| Table 2 | ||||||||||||||||
| R1 RCM Inc. | ||||||||||||||||
| Consolidated Statements of Operations (Unaudited) | ||||||||||||||||
| (In millions, except share and per share data) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net operating fees | $ | 374.6 | $ | 357.8 | $ | 756.1 | $ | 718.8 | ||||||||
| Incentive fees | 21.7 | 30.8 | 37.3 | 54.4 | ||||||||||||
| Modular and other | 231.6 | 172.1 | 438.4 | 333.1 | ||||||||||||
| Net services revenue | 627.9 | 560.7 | 1,231.8 | 1,106.3 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of services | 506.3 | 445.9 | 1,003.9 | 880.6 | ||||||||||||
| Selling, general and administrative | 58.2 | 62.6 | 122.6 | 109.6 | ||||||||||||
| Other expenses | 34.3 | 28.3 | 68.2 | 58.5 | ||||||||||||
| Total operating expenses | 598.8 | 536.8 | 1,194.7 | 1,048.7 | ||||||||||||
| Income from operations | 29.1 | 23.9 | 37.1 | 57.6 | ||||||||||||
| Net interest expense | 43.6 | 32.5 | 84.9 | 63.2 | ||||||||||||
| Loss before income tax benefit | (14.5 | ) | (8.6 | ) | (47.8 | ) | (5.6 | ) | ||||||||
| Income tax benefit | (6.9 | ) | (7.6 | ) | (5.1 | ) | (6.2 | ) | ||||||||
| Net income (loss) | $ | (7.6 | ) | $ | (1.0 | ) | $ | (42.7 | ) | $ | 0.6 | |||||
| Net income (loss) per common share: | ||||||||||||||||
| Basic | $ | (0.02 | ) | $ | — | $ | (0.10 | ) | $ | — | ||||||
| Diluted | $ | (0.02 | ) | $ | — | $ | (0.10 | ) | $ | — | ||||||
| Weighted average shares used in calculating net income (loss) per common share: | ||||||||||||||||
| Basic | 421,332,136 | 418,525,625 | 420,879,636 | 417,939,489 | ||||||||||||
| Diluted | 421,332,136 | 418,525,625 | 420,879,636 | 454,097,654 | ||||||||||||
| Table 3 | ||||||||
| R1 RCM Inc. | ||||||||
| Consolidated Statements of Cash Flows (Unaudited) | ||||||||
| (In millions) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net income (loss) | $ | (42.7 | ) | $ | 0.6 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 159.5 | 134.8 | ||||||
| Amortization of debt issuance costs | 3.7 | 2.8 | ||||||
| Share-based compensation | 40.0 | 30.5 | ||||||
| CoyCo 2 share-based compensation | 3.5 | 3.7 | ||||||
| Loss on disposal and right-of-use asset write-downs | 0.4 | 4.9 | ||||||
| Provision for credit losses | 1.5 | 16.5 | ||||||
| Deferred income taxes | (5.3 | ) | (8.4 | ) | ||||
| Non-cash lease expense | 6.9 | 5.8 | ||||||
| Other | 2.4 | 3.0 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable and related party accounts receivable | (41.6 | ) | (20.2 | ) | ||||
| Contract assets | (10.9 | ) | (10.8 | ) | ||||
| Prepaid expenses and other assets | (26.9 | ) | (5.7 | ) | ||||
| Accounts payable | 15.6 | (11.5 | ) | |||||
| Accrued compensation and benefits | (36.6 | ) | (16.1 | ) | ||||
| Lease liabilities | (10.7 | ) | (8.9 | ) | ||||
| Other liabilities | 24.2 | 6.9 | ||||||
| Customer liabilities and customer liabilities - related party | 0.5 | (15.8 | ) | |||||
| Net cash provided by operating activities | 83.5 | 112.1 | ||||||
| Investing activities | ||||||||
| Purchases of property, equipment, and software | (54.8 | ) | (48.7 | ) | ||||
| Acquisition of Acclara, net of cash acquired | (662.0 | ) | — | |||||
| Other | (8.0 | ) | 1.5 | |||||
| Net cash used in investing activities | (724.8 | ) | (47.2 | ) | ||||
| Financing activities | ||||||||
| Issuance of senior secured debt, net of discount and issuance costs | 561.5 | — | ||||||
| Borrowings on revolver | 155.0 | 30.0 | ||||||
| Repayment of senior secured debt | (18.2 | ) | (24.8 | ) | ||||
| Repayments on revolver | (75.0 | ) | (40.0 | ) | ||||
| Refund of inducement dividend | 16.4 | — | ||||||
| Payment of equity issuance costs | (0.4 | ) | — | |||||
| Exercise of vested stock options | 1.3 | 0.9 | ||||||
| Shares withheld for taxes | (9.2 | ) | (18.1 | ) | ||||
| Other | (0.2 | ) | (0.1 | ) | ||||
| Net cash provided by (used in) financing activities | 631.2 | (52.1 | ) | |||||
| Effect of exchange rate changes in cash, cash equivalents and restricted cash | (0.5 | ) | 0.2 | |||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (10.6 | ) | 13.0 | |||||
| Cash, cash equivalents and restricted cash, at beginning of period | 173.6 | 110.1 | ||||||
| Cash, cash equivalents and restricted cash, at end of period | $ | 163.0 | $ | 123.1 | ||||
| Table 4 | ||||||||||||||||||||||||||||||
| R1 RCM Inc. | ||||||||||||||||||||||||||||||
| Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited) | ||||||||||||||||||||||||||||||
| (In millions, except percentages) | ||||||||||||||||||||||||||||||
| Three Months Ended June 30, | 2024 vs. 2023 Change | Six Months Ended June 30, | 2024 vs. 2023 Change | |||||||||||||||||||||||||||
| 2024 | 2023 | Amount | % | 2024 | 2023 | Amount | % | |||||||||||||||||||||||
| Net income (loss) | $ | (7.6 | ) | $ | (1.0 | ) | $ | (6.6 | ) | 660 | % | $ | (42.7 | ) | $ | 0.6 | $ | (43.3 | ) | n.m. | ||||||||||
| Net interest expense | 43.6 | 32.5 | 11.1 | 34 | % | 84.9 | 63.2 | 21.7 | 34 | % | ||||||||||||||||||||
| Income tax benefit | (6.9 | ) | (7.6 | ) | 0.7 | (9 | )% | (5.1 | ) | (6.2 | ) | 1.1 | (18 | )% | ||||||||||||||||
| Depreciation and amortization expense | 81.2 | 68.8 | 12.4 | 18 | % | 159.5 | 134.8 | 24.7 | 18 | % | ||||||||||||||||||||
| Share-based compensation expense | 9.8 | 20.0 | (10.2 | ) | (51 | )% | 40.0 | 30.5 | 9.5 | 31 | % | |||||||||||||||||||
| CoyCo 2 share-based compensation expense | 1.7 | 1.9 | (0.2 | ) | (11 | )% | 3.5 | 3.7 | (0.2 | ) | (5 | )% | ||||||||||||||||||
| Other expenses (1) | 34.3 | 28.3 | 6.0 | 21 | % | 68.2 | 58.5 | 9.7 | 17 | % | ||||||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 156.1 | $ | 142.9 | $ | 13.2 | 9 | % | $ | 308.3 | $ | 285.1 | $ | 23.2 | 8 | % | ||||||||||||||
(1) For details, see Note 9 to the Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q.
| Table 5 | ||||||||||||
| R1 RCM Inc. | ||||||||||||
| Reconciliation of GAAP Cost of Services to Non-GAAP Cost of Services (Unaudited) | ||||||||||||
| (In millions) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Cost of services | $ | 506.3 | $ | 445.9 | $ | 1,003.9 | $ | 880.6 | ||||
| Less: | ||||||||||||
| Share-based compensation expense | 4.8 | 12.4 | 23.1 | 18.8 | ||||||||
| CoyCo 2 share-based compensation expense | 0.3 | 0.4 | 0.8 | 0.9 | ||||||||
| Depreciation and amortization expense | 80.2 | 68.6 | 157.9 | 134.2 | ||||||||
| Non-GAAP cost of services | $ | 421.0 | $ | 364.5 | $ | 822.1 | $ | 726.7 | ||||
| Table 6 | ||||||||||||
| R1 RCM Inc. | ||||||||||||
| Reconciliation of GAAP Selling, General and Administrative to Non-GAAP Selling, General and Administrative (Unaudited) | ||||||||||||
| (In millions) | ||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Selling, general and administrative | $ | 58.2 | $ | 62.6 | $ | 122.6 | $ | 109.6 | ||||
| Less: | ||||||||||||
| Share-based compensation expense | 5.0 | 7.6 | 16.9 | 11.7 | ||||||||
| CoyCo 2 share-based compensation expense | 1.4 | 1.5 | 2.7 | 2.8 | ||||||||
| Depreciation and amortization expense | 1.0 | 0.2 | 1.6 | 0.6 | ||||||||
| Non-GAAP selling, general and administrative | $ | 50.8 | $ | 53.3 | $ | 101.4 | $ | 94.5 | ||||
| Table 7 | ||||||
| R1 RCM Inc. | ||||||
| Reconciliation of Total Debt to Net Debt (Unaudited) | ||||||
| (In millions) | ||||||
| June 30, | December 31, | |||||
| 2024 | 2023 | |||||
| Senior Revolver | $ | 80.0 | $ | — | ||
| Term A Loans | 1,147.0 | 1,162.5 | ||||
| Term B Loans | 1,066.0 | 493.8 | ||||
| Total debt | 2,293.0 | 1,656.3 | ||||
| Less: | ||||||
| Cash and cash equivalents | 163.0 | 173.6 | ||||
| Net Debt | $ | 2,130.0 | $ | 1,482.7 | ||
FAQ
What were R1 RCM's (RCM) key financial results for Q2 2024?
Has R1 RCM (RCM) agreed to be acquired, and at what price?
When is the acquisition of R1 RCM (RCM) expected to close?
How did vendor and customer outages affect R1 RCM's (RCM) Q2 2024 results?
