Signify Health Announces First Quarter 2022 Results Maintains 2022 Full Year Guidance
Signify Health reported strong first-quarter 2022 results with revenue of $216.5 million, a 20% increase from Q1 2021. The net loss improved to $16.3 million from $51.7 million a year ago, despite a $28.9 million expense related to equity rights remeasurement. Non-GAAP adjusted EBITDA rose 31% to $45.0 million, with a margin of 20.8%. The company maintains its full-year 2022 revenue guidance of $948 million to $971 million and adjusted EBITDA of $212 million to $222 million.
- Revenue growth of 20% in Q1 2022 compared to Q1 2021.
- Improved net loss to $16.3 million from $51.7 million year-over-year.
- Non-GAAP adjusted EBITDA increased 31% to $45.0 million.
- HCS segment revenue reached a record $186.9 million, driven by increased in-home evaluations.
- None.
Financial Highlights
First Quarter 2022:
-
First quarter revenue of
, an increase of$216.5 million 20% from first quarter 2021 -
GAAP net loss of
improved compared to net loss of$16.3 million in first quarter 2021$51.7 million -
Non-GAAP adjusted EBITDA1 of
, an increase of$45.0 million 31% from first quarter 2021
2022 Guidance:
-
Total revenue in the range of
to$948 million ; and$971 million -
Total adjusted EBITDA1 in the range of
to$212 million $222 million
“Our strong first quarter results demonstrate the significant value we are delivering to our clients as we continue to execute our growth strategy and make strategic investments in our business,” said
First Quarter 2022 Financial Results
-
Total revenue for the first quarter increased
20% to , up from$216.5 million in the same period a year ago. Overall growth in the first quarter of 2022 was driven by a$180.0 million 23% increase in Home & Community Services (HCS) segment revenue to and a$186.9 million 7% increase in Episodes of Care Services (ECS) segment revenue to compared to a year ago.$29.6 million - The strong HCS revenue was a quarterly record and is attributable to an increase in in-home evaluations (IHE) volume, which grew to approximately 564 thousand from approximately 462 thousand in the first quarter of 2021.
-
ECS first quarter revenue growth was driven by an increase in program size and revenue generated by
Caravan Health for one-month post acquisition. -
First quarter total net loss improved to
compared to a net loss of$16.3 million for the same period a year ago. Net loss included$51.7 million of other expense related to the remeasurement of the fair value of our Equity Appreciation Rights (EAR) due to an increase in the Company’s stock price in the first quarter.$28.9 million -
Non-GAAP Adjusted EBITDA1 for the first quarter increased
31% to , compared to$45.0 million for the first quarter 2021, driven primarily by HCS revenue growth.$34.4 million -
Non-GAAP Adjusted EBITDA margin1 for the first quarter was
20.8% , a 170-basis point improvement from the comparable year ago period.
2022 Outlook
The Company is maintaining its full year 2022 estimates as follows:
-
Total revenue in the range of
to$948 million ; and$971 million -
Total adjusted EBITDA1 in the range of
to$212 million .$222 million
1Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. Refer to the reconciliation in “Non-GAAP Financial Measures.” We have not reconciled 2022 guidance for adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, and have not provided forward-looking guidance for net income (loss) because of the uncertainty around certain items that may impact net income (loss), including, among others, stock-based compensation and the fair valuation of the EARs, that are not within our control or cannot be reasonably estimated.
Conference Call Information
About
Forward Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical fact included in this press release are forward-looking statements. These statements may be preceded by, followed by or include the words “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business, our plan to drive better patient outcomes, our 2022 Outlook, including our 2022 estimates for total GAAP revenue, total Adjusted EBITDA, in-home evaluations, bundled payment program size and bundled payment weighted average savings rate improvements. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include: our failure to maintain and grow our network of high-quality network providers; the COVID-19 pandemic and whether the pandemic will subside in 2022; our ability to realize synergies from the acquisition of
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
About Non-GAAP Financial Measures
This press release contains certain financial measures not presented in accordance with generally accepted accounting principles in the United State (“GAAP”), including Adjusted EBITDA and Adjusted EBITDA margin, which are used by management in making operating decisions, allocating financial resources, and internal planning and forecasting and for business strategy purposes. Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing our financial results. Therefore, these measures should not be considered in isolation or as an alternative to GAAP measures. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similarly-titled measures used by other companies. Management believes that such measures are commonly reported by issuers and widely used by investors as indicators of a company’s operating performance. Please refer to the reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable financial measures prepared in accordance with GAAP below.
Table 1 |
|||||||
|
|||||||
Consolidated Statement of Operations |
|||||||
(unaudited) |
|||||||
|
Three months ended
|
||||||
($ in millions) |
|
2022 |
|
|
|
2021 |
|
|
|
||||||
Home & Community Services |
$ |
186.9 |
|
|
$ |
152.4 |
|
Episodes of Care Services |
|
29.6 |
|
|
|
27.6 |
|
Revenue |
|
216.5 |
|
|
|
180.0 |
|
Operating expenses: |
|
|
|
||||
Service expense |
|
114.5 |
|
|
|
98.5 |
|
Selling, general and administrative expense |
|
70.3 |
|
|
|
57.3 |
|
Transaction-related expenses |
|
3.2 |
|
|
|
5.6 |
|
Depreciation and amortization |
|
18.0 |
|
|
|
16.7 |
|
Total operating expenses |
|
206.0 |
|
|
|
178.1 |
|
Income from operations |
|
10.5 |
|
|
|
1.9 |
|
Interest expense |
|
4.0 |
|
|
|
6.8 |
|
Other (income) expense |
|
28.8 |
|
|
|
56.7 |
|
Other (income) expense, net |
|
32.8 |
|
|
|
63.5 |
|
Loss before income taxes |
|
(22.3 |
) |
|
|
(61.6 |
) |
Income tax benefit |
|
(6.0 |
) |
|
|
(9.9 |
) |
Net loss |
$ |
(16.3 |
) |
|
$ |
(51.7 |
) |
Net loss attributable to pre-Reorganization period |
|
— |
|
|
|
(17.2 |
) |
Net loss attributable to noncontrolling interest |
|
(5.4 |
) |
|
|
(11.3 |
) |
Net loss attributable to |
$ |
(10.9 |
) |
|
$ |
(23.2 |
) |
|
|
|
|
||||
Loss per share of Class A common stock |
|||||||
Basic |
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
Diluted |
$ |
(0.06 |
) |
|
$ |
(0.14 |
) |
Weighted average shares of Class A common stock outstanding |
|||||||
Basic |
|
172,761,665 |
|
|
|
165,486,015 |
|
Diluted |
|
172,761,665 |
|
|
|
165,486,015 |
|
Table 2 |
||||
|
||||
Consolidated Balance Sheet |
||||
(unaudited) |
||||
|
|
|
||
($ in millions) |
|
2022 |
|
2021 |
|
|
|
||
ASSETS |
|
|
||
Current assets |
|
|
||
Cash and cash equivalents |
$ |
451.3 |
$ |
678.5 |
Accounts receivable, net |
|
220.7 |
|
217.2 |
Contract assets |
|
132.5 |
|
84.3 |
Restricted cash |
|
2.3 |
|
5.7 |
Prepaid expenses and other current assets |
|
19.1 |
|
14.9 |
Total current assets |
|
825.9 |
|
1,000.6 |
Property and equipment, net |
|
23.4 |
|
23.7 |
|
|
796.4 |
|
597.1 |
Intangible assets, net |
|
540.2 |
|
455.3 |
Operating lease right-of-use assets |
|
21.3 |
|
— |
Deferred tax assets |
|
53.5 |
|
38.8 |
Other assets |
|
10.7 |
|
11.7 |
Total assets |
$ |
2,271.4 |
$ |
2,127.2 |
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
||
Current liabilities |
|
|
||
Accounts payable and accrued expenses |
$ |
105.5 |
$ |
136.7 |
Contract liabilities |
|
44.0 |
|
32.9 |
Current maturities of long-term debt |
|
3.5 |
|
3.5 |
Other current liabilities |
|
18.3 |
|
10.0 |
Total current liabilities |
|
171.3 |
|
183.1 |
Long-term debt |
|
334.5 |
|
334.9 |
Contingent consideration |
|
30.6 |
|
— |
Customer EAR liability |
|
84.0 |
|
48.6 |
Tax receivable agreement liability |
|
56.3 |
|
56.3 |
Deferred tax liabilities |
|
22.4 |
|
— |
Noncurrent operating lease liabilities |
|
25.2 |
|
— |
Other noncurrent liabilities |
|
1.2 |
|
11.4 |
Total liabilities |
|
725.5 |
|
634.3 |
|
|
|
||
Class A common stock, par value |
|
1.8 |
|
1.7 |
Class B common stock, par value |
|
0.6 |
|
0.6 |
Additional paid-in capital |
|
1,160.0 |
|
1,101.3 |
Retained earnings |
|
8.4 |
|
19.7 |
Contingently redeemable noncontrolling interest |
|
375.1 |
|
369.6 |
Total stockholders' equity |
|
1,545.9 |
|
1,492.9 |
|
|
|
||
Total liabilities and stockholders' equity |
$ |
2,271.4 |
$ |
2,127.2 |
Table 3 |
|||||||
|
|||||||
Consolidated Statement of Cash Flows |
|||||||
(unaudited) |
|||||||
|
|
Three months ended |
|||||
($ in millions) |
|
2022 |
|
|
2021 |
|
|
Operating activities |
|
|
|
||||
Net loss |
|
$ |
(16.3 |
) |
$ |
(51.7 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
|
18.0 |
|
|
16.7 |
|
Equity-based compensation |
|
|
6.6 |
|
|
2.5 |
|
Customer equity appreciation rights |
|
|
6.5 |
|
|
4.9 |
|
Remeasurement of customer equity appreciation rights |
|
|
28.9 |
|
|
56.8 |
|
Amortization of deferred financing fees |
|
|
0.6 |
|
|
0.7 |
|
Amortization of right-of-use assets |
|
|
1.7 |
|
|
— |
|
Remeasurement of contingent consideration |
|
|
0.1 |
|
|
0.2 |
|
Deferred income taxes |
|
|
(12.9 |
) |
|
(14.0 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
|
(1.9 |
) |
|
101.2 |
|
Prepaid expenses and other current assets |
|
|
(2.3 |
) |
|
2.4 |
|
Contract assets |
|
|
(39.1 |
) |
|
(33.5 |
) |
Other assets |
|
|
1.3 |
|
|
(1.0 |
) |
Accounts payable and accrued expenses |
|
|
(32.1 |
) |
|
(13.8 |
) |
Contract liabilities |
|
|
11.1 |
|
|
14.6 |
|
Other current liabilities |
|
|
(0.7 |
) |
|
1.9 |
|
Noncurrent lease liabilities |
|
|
(1.9 |
) |
|
— |
|
Other noncurrent liabilities |
|
|
0.1 |
|
|
(1.2 |
) |
Net cash (used in) provided by operating activities |
|
|
(32.3 |
) |
|
86.7 |
|
|
|
|
|
||||
Investing activities |
|
|
|
||||
Capital expenditures - property and equipment |
|
|
(1.7 |
) |
|
(0.7 |
) |
Capital expenditures - internal-use software development |
|
|
(6.8 |
) |
|
(5.7 |
) |
Purchase of long-term investment |
|
|
(0.3 |
) |
|
— |
|
Business combinations, net of cash acquired |
|
|
(189.6 |
) |
|
— |
|
Net cash used in investing activities |
|
|
(198.4 |
) |
|
(6.4 |
) |
|
|
|
|
||||
Financing activities |
|
|
|
||||
Repayment of long-term debt |
|
|
(0.9 |
) |
|
(1.0 |
) |
Repayments of borrowings under financing agreement |
|
|
(0.3 |
) |
|
(0.3 |
) |
Proceeds from IPO, net |
|
|
— |
|
|
604.8 |
|
Distributions to/on behalf of non-controlling interest members |
|
|
(0.3 |
) |
|
— |
|
Proceeds related to the issuance of common stock under stock plans |
|
|
1.6 |
|
|
0.1 |
|
Net cash provided by financing activities |
|
|
0.1 |
|
|
603.6 |
|
|
|
|
|
||||
(Decrease) increase in cash, cash equivalents and restricted cash |
|
|
(230.6 |
) |
|
683.9 |
|
Cash, cash equivalents and restricted cash - beginning of period |
|
|
684.2 |
|
|
77.0 |
|
Cash, cash equivalents and restricted cash - end of period |
|
$ |
453.6 |
|
$ |
760.9 |
|
|
|
|
|
||||
Table 4 |
|||||||
|
|||||||
Reconciliation of net loss to Adjusted EBITDA (non-GAAP) |
|||||||
(Unaudited) |
|||||||
|
Three months ended |
||||||
($ in millions) |
|
2022 |
|
|
|
2021 |
|
Net loss |
$ |
(16.3 |
) |
|
$ |
(51.7 |
) |
Interest expense |
|
4.0 |
|
|
|
6.8 |
|
Income tax benefit |
|
(6.0 |
) |
|
|
(9.9 |
) |
Depreciation and amortization |
|
18.0 |
|
|
|
16.7 |
|
Other expense (income), net(a) |
|
28.8 |
|
|
|
56.7 |
|
Transaction-related expenses(b) |
|
3.2 |
|
|
|
5.6 |
|
Equity-based compensation(c) |
|
6.5 |
|
|
|
2.5 |
|
Customer equity appreciation rights(d) |
|
6.5 |
|
|
|
4.9 |
|
Remeasurement of contingent consideration(e) |
|
0.1 |
|
|
|
0.2 |
|
SEU Expense(f) |
|
0.1 |
|
|
|
1.5 |
|
Non-recurring expenses(g) |
|
0.1 |
|
|
|
1.1 |
|
Adjusted EBITDA |
$ |
45.0 |
|
|
$ |
34.4 |
|
|
|
|
|
||||
Adjusted EBITDA Margin(h) |
|
20.8 |
% |
|
|
19.1 |
% |
|
|
|
|
||||
Segment Adjusted EBITDA: |
|
|
|
||||
Home & Community Services |
$ |
55.9 |
|
|
$ |
41.1 |
|
Episodes of Care Services |
|
(10.9 |
) |
|
|
(6.7 |
) |
(a) |
Represents other non-operating (income) expense that consists primarily of the quarterly remeasurement of fair value of the outstanding customer EARs and EAR letter agreement as well as interest and dividends earned on cash and cash equivalents. |
|
(b)
|
Represents transaction-related expenses that consist primarily of expenses incurred in connection with acquisitions and other corporate development activities, including the |
|
(c)
|
Represents expense related to equity incentive awards, including incentive units, stock options and RSUs, granted to certain employees, officers and non-employee directors as long-term incentive compensation. We recognize the related expense for these awards ratably over the vesting period or as achievement of performance criteria become probable. |
|
(d)
|
Represents the reduction of revenue related to the grant date fair value of the customer EARs granted pursuant to the customer EAR agreements we entered into in |
|
(e)
|
Represents remeasurement of contingent consideration in 2022 related to potential payment due upon completion of certain milestones in connection with our acquisition of |
|
(f)
|
Represents compensation expense related to awards of synthetic equity units subject to time-based vesting. A limited number of synthetic equity units were granted in 2020 and 2021 at the time of the IPO; no future grants will be made. Compensation expense related to these awards is tied to the 30-trading day average price of our Class A common stock, and therefore is subject to volatility and may fluctuate from period to period until settlement occurs. |
|
(g)
|
Represents certain gains and expenses incurred that are not expected to recur, including those associated with the closure of certain facilities and the early termination of certain contracts as well as one-time expenses associated with the COVID-19 pandemic. |
|
(h) |
We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220504006142/en/
Investors
Vice President, Investor Relations
investor.relations@signifyhealth.com
Media
Vice President, Communications
lshepherd@signifyhealth.com
Source:
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