Tivity Health Delivers Strong Third Quarter 2021 Results With Year Over Year Revenue Growth Of 32%; Raises Full Year Guidance
Tivity Health, Inc. (Nasdaq:TVTY) reported robust Q3 2021 results, with revenue increasing by 32% to $126.3 million compared to Q3 2020. The growth was driven by an uptick in SilverSneakers visits, which rose by 8 million, contributing an additional $27.2 million in revenue. Income from continuing operations surged to $103.7 million, aided by unrealized gains from the investment in Sharecare. The company raised its full-year financial guidance, anticipating revenues of $475 - $485 million and earnings per diluted share of $2.92 - $2.98. Tivity also authorized a $100 million share repurchase program.
- Revenue increased by 32% to $126.3 million.
- Income from continuing operations rose to $103.7 million, up from $16.8 million.
- SilverSneakers visits increased by 8 million, adding $27.2 million in revenue.
- The company raised its 2021 guidance for revenue and earnings per share.
- Authorized a $100 million share repurchase program.
- Adjusted EBITDA decreased slightly to $40.5 million from $41.0 million.
NASHVILLE, Tenn., Nov. 2, 2021 /PRNewswire/ -- Tivity Health, Inc. (Nasdaq:TVTY) (the "Company"), a leading provider of healthy life-changing solutions, including SilverSneakers®, today announced financial results for the third quarter ended September 30, 2021.
Richard Ashworth, President and Chief Executive Officer, commented, "We delivered strong results for the third quarter of 2021. We are raising guidance ranges on revenue, adjusted EBITDA and cash flow for the full year. SilverSneakers in-person visits showed continued sequential growth as members return to the gym even with the impacts from the Delta variant. We are driving differentiated growth through new SilverSneakers virtual offerings for social engagement and mental enrichment, while also launching an expanded premium gym network, bringing our total SilverSneakers network to over 22,000 locations."
Third Quarter Highlights and Business Updates
- Revenue from continuing operations increased
32% to$126.3 million during the third quarter of 2021, compared to$95.5 million for the third quarter of 2020; - SilverSneakers revenue increased by
$27.2 million compared to the prior year period due to an 8.0 million increase in total visits, and Prime Fitness revenue increased by$2.6 million compared to the prior year period; - Income from continuing operations was
$103.7 million , reflecting unrealized and realized gains of$80.7 million and$2.5 million , respectively, related to the Company's investment in Sharecare; - Adjusted EBITDA from continuing operations was
$40.5 million , compared to$41.0 million for the third quarter of 2020; - The Company ended the quarter with cash on hand of
$51.8 million and a leverage ratio of 2.02x, as calculated under its new credit agreement, compared to 3.81x as of September 30, 2020; - In September 2021, the Company's Board of Directors authorized a
$100 million share repurchase program; and - Virtual fitness new member activation continued to accelerate, with
45% of participants year-to-date being new to SilverSneakers.
Third Quarter 2021 Financial Information
Dollars in millions, except per-share data | |||
Three Months Ended September 30, | |||
2021 | 2020 | ||
Revenues from Continuing Operations | |||
Income from Continuing Operations (1) | |||
Income from Continuing Operations Margin (1) | |||
Adjusted EBITDA from Continuing Operations (2) | |||
Adjusted EBITDA from Continuing Operations Margin (2) | |||
Earnings Per Diluted Share from Continuing Operations (1) | |||
Adjusted Earnings Per Diluted Share from Continuing Operations (2) | |||
Cash Flows from Operating Activities – former Healthcare segment (3) | |||
Free Cash Flow – former Healthcare segment (2) (3) | |||
(1) | Results for the third quarter of 2021 include unrealized and realized gains of |
(2) | Adjusted EBITDA, adjusted earnings per diluted share, and free cash flow are non-GAAP financial measures. See pages 10-14 for a reconciliation of non-GAAP financial measures. |
(3) | For comparability, figures for 2020 represent cash flows from the Company's former Healthcare segment. |
Revenues in the third quarter of 2021 of
Income from continuing operations for the third quarter of 2021 was
Adjusted EBITDA was
As of September 30, 2021 net debt (total debt less cash and cash equivalents) was
Updated 2021 Financial Guidance
Tivity Health announced today that it has raised 2021 guidance based on the Company's outlook for the remainder of 2021, as follows:
Dollars in millions, except per-share data | ||
August 4, 2021 (Prior Guidance) | November 2, 2021 (Updated Guidance) (3) | |
Revenues | ||
Income from Continuing Operations | ||
Adjusted EBITDA (2) | ||
Depreciation Expense | Approximately | Approximately |
Interest Expense | Approximately including | Unchanged |
Effective Tax Rate | Approximately | Approximately |
Weighted Average Diluted Shares Outstanding | 50.0 million – 50.5 million | 50.4 million – 50.5 million |
Earnings per Diluted Share | ||
Adjusted Earnings per Diluted Share (2) | ||
Cash Flows from Operating Activities | ||
Free Cash Flow (2) | ||
Capital Expenditures |
Tivity Health's detailed guidance considerations for 2021 are available in the supplemental information posted on the Company's website at http://investors.tivityhealth.com.
(1) | Includes unrealized and realized gains of |
(2) | Adjusted EBITDA, adjusted earnings per diluted share, and free cash flow are non-GAAP financial measures. See pages 10-14 for a reconciliation of non-GAAP financial measures. |
(3) | The Company's guidance does not include any potential impacts that may occur in the fourth quarter of 2021 from the Company's investment in Sharecare or from any share repurchases made by the Company. |
Conference Call
Tivity Health will hold a conference call to discuss this release today at 5:00 p.m. Eastern Time. Investors will have the opportunity to listen to the conference call live by dialing 877-683-2218, or 647-689-5447 for international callers, and referencing code 4783268 or over the Internet by going to www.tivityhealth.com and clicking "Investors" at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 800-585-8367 or 416-621-4642 for international callers, code 4783268, and the replay will also be available on the Company's web site for the next 7 days.
About Tivity Health
Tivity Health® Inc. (Nasdaq: TVTY) is a leading provider of healthy life-changing solutions, including SilverSneakers®, Prime® Fitness, WholeHealth Living® and Wisely WellTM. We plan to become the modern destination for healthy living through our industry-leading fitness offerings and enhanced digital engagement platform. We are continuously developing the SilverSneakers suite of digital offerings and services to provide seniors with everything they need to maintain and improve their health, including physical activity, social connection, community involvement, volunteer opportunities and mental enrichment. Our goal is to partner with payers and service providers to enable a personalized, interactive, and intuitive experience to offer the right solutions to each member. We deliver solutions that help adults feel better, work better and live better, and improve health outcomes while reducing healthcare costs. Learn more at www.tivityhealth.com.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures. Reconciliations of certain of these non-GAAP measures to the comparable GAAP measures are included on pages 10-14.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains certain statements that are "forward-looking" statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based upon current expectations and include all statements that are not historical statements of fact and those regarding the intent, belief or expectations, including, without limitation, statements that are accompanied by words such as "will," "expect," "outlook," "anticipate," "intend," "plan," "believe," "seek," "see," "would," "target," or other similar words, phrases or expressions and variations or negatives of these words. These forward-looking statements include, but are not limited to, the Company's statements regarding its future financial performance and financial condition. Readers of this press release should understand that these statements are not guarantees of performance or results. Many risks and uncertainties could affect actual results and cause them to vary materially from the forward-looking statements.
These risks and uncertainties include, among other things: impacts from the COVID-19 pandemic (including the response of governmental authorities to combat and contain the pandemic, the closure of fitness centers in the Company's national network (or operational restrictions imposed on such fitness centers), reclosures and potential additional reclosures as a result of surges in positive COVID-19 cases) on the Company's business, operations or liquidity; the risks associated with changes in macroeconomic conditions (including the impacts of any recession or changes in consumer spending resulting from the COVID-19 pandemic), widespread epidemics, pandemics (such as the current COVID-19 pandemic, including variant strains of COVID-19) or other outbreaks of disease, geopolitical turmoil, and the continuing threat of domestic or international terrorism; the Company's ability to collect accounts receivable from its customers and amounts due under its sublease agreements; the market's acceptance of the Company's new products and services; the Company's ability to develop and implement effective strategies and to anticipate and respond to strategic changes, opportunities, and emerging trends in the Company's industry and/or business, as well as to accurately forecast the related impact on the Company's revenues and earnings; the impact of any impairment of the Company's goodwill, intangible assets, or other long-term assets; changes in fair value of the Company's investment in Sharecare and the expected timing and amount of cash proceeds from the disposition of this investment; the expected timing, amount, and impact of any share repurchases made by the Company; the Company's ability to attract, hire, or retain key personnel or other qualified employees and to control labor costs; the effectiveness of the reorganization of the Company's business and the Company's ability to realize the anticipated benefits; the Company's ability to effectively compete against other entities, whose financial, research, staff, and marketing resources may exceed its resources; the impact of legal proceedings involving the Company and/or its subsidiaries, products, or services, including any claims related to intellectual property rights, as well as the Company's ability to maintain insurance coverage with respect to such legal proceedings and claims on terms that would be favorable to it; the impact of severe or adverse weather conditions, the current COVID-19 pandemic (including variant strains of COVID-19), and the potential emergence of additional health pandemics or infectious disease outbreaks on member participation in the Company's programs; the risks associated with deriving a significant concentration of revenues from a limited number of the Company's customers, many of whom are health plans; the Company's ability and/or the ability of its customers to enroll participants and to accurately forecast their level of enrollment and participation in the Company's programs in a manner and within the timeframe anticipated by the Company; the Company's ability to sign, renew and/or maintain contracts with its customers and/or the Company's fitness partner locations under existing terms or to restructure these contracts on terms that would not have a material negative impact on the Company's results of operations; the ability of the Company's health plan customers to maintain the number of covered lives enrolled in those health plans during the terms of the Company's agreements; the Company's ability to add and/or retain active subscribers in its Prime Fitness program; the impact of any changes in tax rates, enactment of new tax laws, revisions of tax regulations or any claims or litigation with taxing authorities; the impact of a reduction in Medicare Advantage health plan reimbursement rates or changes in plan design; the impact of any new or proposed legislation, regulations and interpretations relating to Medicare, Medicare Advantage, Medicare Supplement, and privacy and security laws; the impact of healthcare reform on the Company's business; the risks associated with potential failures of the Company's information systems or those of its third-party vendors, including as a result of telecommuting issues associated with personnel working remotely, which may include a failure to execute on policies and processes in a work-from-home or remote model; the risks associated with data privacy or security breaches, computer hacking, network penetration and other illegal intrusions of the Company's information systems or those of third-party vendors or other service providers, including those risks that result from the increase in personnel working remotely, which may result in unauthorized access by third parties, loss, misappropriation, disclosure or corruption of customer, employee or the Company's information, or other data subject to privacy laws and may lead to a disruption in the Company's business, costs to modify, enhance, or remediate its cybersecurity measures, enforcement actions, fines or litigation against the Company, or damage to its business reputation; the risks associated with changes to traditional office-centered business processes and/or conducting operations out of the office in a work-from-home or remote model by the Company or its third-party vendors during adverse situations (e.g., during a crisis, disaster, or pandemic), which may result in additional costs and/or may negatively impact productivity and cause other disruptions to the Company's business; the Company's ability to enforce its intellectual property rights; the risk that the Company's indebtedness may limit the Company's ability to adapt to changes in the economy or market conditions, expose the Company to interest rate risk for the variable rate indebtedness and require a substantial portion of cash flows from operations to be dedicated to the payment of indebtedness; the Company's ability to service its debt, make principal and interest payments as those payments become due, and remain in compliance with its debt covenants; the Company's ability to obtain adequate financing to provide the capital that may be necessary to support its current or future operations; counterparty risk associated with the Company's interest rate swap agreements and changes in fair value of certain interest rate swap agreements that no longer qualify for hedge accounting treatment; and other risks detailed in the Company's filings with the Securities and Exchange Commission.
For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to the Company's filings with the SEC. Except as required by law, the Company undertakes no obligation to update any such forward-looking statements to reflect new information, subsequent events or circumstances.
Investor Relations Contact:
Matt Milanovich, VP of Investor Relations; (602) 562-2595; matt.milanovich@tivityhealth.com
TIVITY HEALTH, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited)
| ||||||||
September 30, 2021 | December 31, 2020 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 51,755 | $ | 100,385 | ||||
Accounts receivable, net | 63,963 | 25,981 | ||||||
Prepaid expenses | 6,781 | 5,556 | ||||||
Income taxes receivable | — | 10,996 | ||||||
Investment in equity securities | 91,183 | — | ||||||
Other current assets | 15,610 | 11,336 | ||||||
Total current assets | 229,292 | 154,254 | ||||||
Property and equipment, net of accumulated depreciation of | 20,105 | 20,959 | ||||||
Right-of-use assets | 12,577 | 18,139 | ||||||
Long-term deferred tax asset | 1,643 | 3,601 | ||||||
Intangible assets, net | 29,049 | 29,049 | ||||||
Goodwill, net | 334,680 | 334,680 | ||||||
Investment in equity securities, long-term | — | 10,773 | ||||||
Other assets | 4,093 | 7,528 | ||||||
Total assets | $ | 631,439 | $ | 578,983 | ||||
Current liabilities: | ||||||||
Accounts payable | $ | 21,188 | $ | 19,741 | ||||
Accrued salaries and benefits | 8,110 | 8,949 | ||||||
Accrued liabilities | 34,516 | 18,424 | ||||||
Deferred revenue | 3,686 | 4,460 | ||||||
Current portion of long-term debt | 4,000 | 7,456 | ||||||
Current portion of lease liabilities | 8,096 | 8,052 | ||||||
Current portion of other long-term liabilities | 13,234 | 14,753 | ||||||
Total current liabilities | 92,830 | 81,835 | ||||||
Long-term debt | 381,051 | 459,250 | ||||||
Long-term lease liabilities | 5,428 | 11,494 | ||||||
Other long-term liabilities | 11,461 | 22,748 | ||||||
Commitments and contingent liabilities | ||||||||
Stockholders' equity: | ||||||||
Preferred stock $.001 par value, 5,000,000 shares authorized, none outstanding | — | — | ||||||
Common Stock $.001 par value, 120,000,000 shares authorized, 49,747,809 and 48,983,735 shares outstanding, respectively | 49 | 49 | ||||||
Additional paid-in capital | 514,313 | 513,263 | ||||||
Accumulated deficit | (333,825) | (464,085) | ||||||
Treasury stock, at cost, 2,254,953 shares in treasury | (28,182) | (28,182) | ||||||
Accumulated other comprehensive loss | (11,686) | (17,389) | ||||||
Total stockholders' equity | 140,669 | 3,656 | ||||||
Total liabilities and stockholders' equity | $ | 631,439 | $ | 578,983 | ||||
TIVITY HEALTH, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except earnings per share data) (Unaudited)
| |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||
Revenues | $ | 126,289 | $ | 95,481 | $ | 354,444 | $ | 337,096 | |||||||||
Cost of revenue (exclusive of depreciation of below) | 74,509 | 47,594 | 200,434 | 196,546 | |||||||||||||
Marketing expense | 1,356 | 935 | 3,983 | 8,999 | |||||||||||||
Selling, general and administrative expenses | 10,639 | 9,688 | 29,986 | 30,645 | |||||||||||||
Depreciation expense | 2,756 | 2,662 | 8,179 | 7,102 | |||||||||||||
Restructuring and related charges | — | 1,107 | — | 2,416 | |||||||||||||
Operating income | 37,029 | 33,495 | 111,862 | 91,388 | |||||||||||||
Interest expense | 7,352 | 10,258 | 27,508 | 32,782 | |||||||||||||
Loss on extinguishment and modification of debt | — | — | 19,027 | — | |||||||||||||
Other (income) expense, net | (82,947) | — | (83,818) | — | |||||||||||||
Total non-operating (income) expense, net | (75,595) | 10,258 | (37,283) | 32,782 | |||||||||||||
Income before income taxes | 112,624 | 23,237 | 149,145 | 58,606 | |||||||||||||
Income tax expense | 8,925 | 6,486 | 16,731 | 16,379 | |||||||||||||
Income from continuing operations | $ | 103,699 | $ | 16,751 | $ | 132,414 | $ | 42,227 | |||||||||
Loss from discontinued operations, net of income tax benefit of | (932) | (59,168) | (2,154) | (254,240) | |||||||||||||
Net income (loss) | $ | 102,767 | $ | (42,417) | $ | 130,260 | $ | (212,013) | |||||||||
Earnings (loss) per share - basic: | |||||||||||||||||
Continuing operations | $ | 2.09 | $ | 0.34 | $ | 2.68 | $ | 0.87 | |||||||||
Discontinued operations | $ | (0.02) | $ | (1.21) | $ | (0.04) | $ | (5.22) | |||||||||
Net income (loss) (1) | $ | 2.07 | $ | (0.87) | $ | 2.63 | $ | (4.35) | |||||||||
Earnings (loss) per share - diluted: | |||||||||||||||||
Continuing operations | $ | 2.06 | $ | 0.34 | $ | 2.63 | $ | 0.86 | |||||||||
Discontinued operations | $ | (0.02) | $ | (1.20) | $ | (0.04) | $ | (5.19) | |||||||||
Net income (loss) (1) | $ | 2.04 | $ | (0.86) | $ | 2.58 | $ | (4.33) | |||||||||
Comprehensive income (loss) | $ | 104,243 | $ | (39,570) | $ | 135,963 | $ | (230,140) | |||||||||
Weighted average common shares and equivalents: | |||||||||||||||||
Basic | 49,732 | 48,783 | 49,490 | 48,702 | |||||||||||||
Diluted | 50,360 | 49,401 | 50,401 | 49,017 | |||||||||||||
(1) | Figures may not add due to rounding. |
TIVITY HEALTH, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
| ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Income from continuing operations | $ | 132,414 | $ | 42,227 | ||||
Loss from discontinued operations | (2,154) | (254,240) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Loss on extinguishment of debt | 18,237 | — | ||||||
Depreciation and amortization | 8,179 | 40,997 | ||||||
Amortization and write-off of deferred loan costs | 2,483 | 3,540 | ||||||
Amortization and write-off of debt discount | 1,798 | 3,145 | ||||||
Share-based employee compensation expense | 8,053 | 8,005 | ||||||
Unrealized gain on derivatives | (680) | — | ||||||
Unrealized gain on investments in equity securities | (80,669) | — | ||||||
Realized gain on investments in equity securities | (2,469) | — | ||||||
Impairment of goodwill and intangible assets of discontinued operation | — | 265,698 | ||||||
Deferred income taxes | 2 | (17,889) | ||||||
(Increase) decrease in accounts receivable, net | (37,982) | 60,644 | ||||||
Changes in income taxes receivable and payable | 13,118 | (1,040) | ||||||
Decrease in inventory | — | 14,991 | ||||||
(Increase) decrease in other current assets | (810) | 2,086 | ||||||
(Decrease) increase in accounts payable | (1,786) | 3,479 | ||||||
Decrease in accrued salaries and benefits | (839) | (2,811) | ||||||
Increase (decrease) in other current liabilities | 6,533 | (10,974) | ||||||
Other | 1,794 | 7,094 | ||||||
Net cash flows provided by operating activities | $ | 65,222 | $ | 164,952 | ||||
Cash flows from investing activities: | ||||||||
Acquisition of property and equipment | $ | (6,654) | $ | (13,265) | ||||
Proceeds from sale of business, net of cash transferred | 2,747 | — | ||||||
Proceeds from sale of equity securities | 2,728 | — | ||||||
Settlement on derivatives not designated as hedges | (4,996) | — | ||||||
Net cash flows used in investing activities | $ | (6,175) | $ | (13,265) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from issuance of long-term debt | $ | 398,000 | $ | 196,525 | ||||
Payments of long-term debt | (497,275) | (276,100) | ||||||
Deferred loan costs | (3,953) | — | ||||||
Payments related to tax withholding for share-based compensation | (7,637) | (3,293) | ||||||
Exercise of stock options | 634 | 719 | ||||||
Change in cash overdraft and other | 2,554 | (15,584) | ||||||
Net cash flows used in financing activities | $ | (107,677) | $ | (97,733) | ||||
Net (decrease) increase in cash and cash equivalents | $ | (48,630) | $ | 53,954 | ||||
Cash and cash equivalents, beginning of period | $ | 100,385 | $ | 2,486 | ||||
Cash and cash equivalents, end of period | $ | 51,755 | $ | 56,440 | ||||
TIVITY HEALTH, INC. RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES (Unaudited) Reconciliation of Income from Continuing Operations, GAAP Basis to Adjusted EBITDA from Continuing Operations, Non-GAAP Basis (in thousands)
| |||||||||||||
Three Months | % of | Three Months | % of | ||||||||||
Income from continuing operations, GAAP basis | $ | 103,699 | $ | 16,751 | |||||||||
Income tax expense | 8,925 | 6,486 | |||||||||||
Interest expense | 7,352 | 10,258 | |||||||||||
Depreciation expense | 2,756 | 2,662 | |||||||||||
EBITDA from continuing operations, non-GAAP basis (1) | $ | 122,732 | $ | 36,157 | |||||||||
Acquisition, integration, project and CEO transition costs (2) | 681 | 3,701 | |||||||||||
Restructuring charges (3) | — | 1,107 | |||||||||||
Other (income) expense, net (4) | (82,947 | — | |||||||||||
Adjusted EBITDA from continuing operations, non-GAAP basis (5) | $ | 40,466 | $ | 40,965 | |||||||||
(1) | EBITDA from continuing operations is a non-GAAP financial measure. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider EBITDA from continuing operations in isolation or as a substitute for income from continuing operations determined in accordance with U.S. GAAP. |
(2) | Acquisition, integration, project, and CEO transition costs consist of pre-tax charges of |
(3) | Restructuring charges consist of pre-tax charges of |
(4) | Other (income) expense, net consists of pre-tax income of ( |
(5) | Adjusted EBITDA from continuing operations is a non-GAAP financial measure. The Company excludes acquisition, integration, project, and CEO transition costs, restructuring charges, and other (income) expense from this measure because of its comparability to the Company's historical operating results. The Company updated its definition of adjusted EBITDA during the third quarter of 2021 to exclude realized and unrealized gains and losses on its investment in Sharecare (which are recorded to other (income) expense). The Company considers this item to be outside the performance of its ongoing core business operations and believes that presenting Adjusted EBITDA excluding this item provides increased transparency as to the operating costs of its current business performance. The Company did not revise the prior period's Adjusted EBITDA amounts because there was no income or loss similar in nature to this item. The Company believes it is useful to investors to provide disclosures of its operating results on the same basis as that used by management. You should not consider Adjusted EBITDA from continuing operations in isolation or as a substitute for income from continuing operations determined in accordance with U.S. GAAP. Additionally, because Adjusted EBITDA from continuing operations may be defined differently by other companies in the Company's industry, the non-GAAP financial measure presented here may not be comparable to similarly titled measures of other companies. |
Reconciliation of Income from Continuing Operations Guidance, GAAP Basis to Adjusted EBITDA from Continuing Operations Guidance, Non-GAAP Basis (in millions)
| ||||||
Year Ending December 31, 2021 | ||||||
Income from continuing operations guidance, GAAP basis | ||||||
Depreciation expense | 11 | |||||
Interest expense | 35 | |||||
Income tax expense | 23.1 – 23.5 | |||||
EBITDA from continuing operations guidance, non-GAAP basis (6) | ||||||
Integration, project, and CEO transition costs (7) | 4 | |||||
Loss on extinguishment and modification of debt (8) | 19 | |||||
Other income (9) | (83.8) | |||||
Adjusted EBITDA from continuing operations guidance, non-GAAP basis (10) | ||||||
(6) | EBITDA from continuing operations guidance is a non-GAAP financial measure. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider EBITDA from continuing operations guidance in isolation or as a substitute for income from continuing operations guidance determined in accordance with U.S. GAAP. Figures may not add due to rounding. |
(7) | Integration, project, and CEO transition costs primarily relate to strategic projects and the Company's transition to a new CEO during 2020. |
(8) | Loss on extinguishment and modification of debt relates to the Company's entering into a new credit facility on June 30, 2021. |
(9) | Other income consists of pre-tax income of |
(10) | Adjusted EBITDA from continuing operations guidance is a non-GAAP financial measure. The Company excludes integration, project, and CEO transition costs and loss on extinguishment and modification of debt from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider Adjusted EBITDA from continuing operations guidance in isolation or as a substitute for income from continuing operations guidance determined in accordance with U.S. GAAP. Additionally, because Adjusted EBITDA from continuing operations guidance may be defined differently by other companies in the Company's industry, the non-GAAP financial measure presented here may not be comparable to similarly titled measures of other companies. |
Reconciliation of Net Cash Flows Provided by Operations, GAAP Basis to Free Cash Flow, Non-GAAP Basis (in thousands)
| |||||||||
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||
Net cash flows provided by operations, GAAP basis | $ | 28,792 | $ | 34,009 | |||||
Acquisition of property and equipment | (2,615) | (2,903) | |||||||
Settlement on derivatives not designated as hedges | (1,695) | — | |||||||
Proceeds from sale of equity securities | 2,728 | — | |||||||
Free cash flow, non-GAAP basis (11) | $ | 27,210 | $ | 31,106 | |||||
(11) | Free cash flow is a non-GAAP financial measure and is defined by the Company as net cash flows provided by operating activities less acquisition of property and equipment and settlement on derivatives not designated as hedges. The Company updated its definition of free cash flow during the fourth quarter of 2020 to exclude settlement on derivatives not designated as hedges. The Company considers these costs to be a reduction of cash available for other uses and believes that presenting free cash flow excluding settlement on derivatives provides increased transparency. During the third quarter of 2021, the Company further updated its definition of free cash flow to include proceeds from the sale of equity securities, as these proceeds are available to be used to support the business. The Company did not revise prior periods' free cash flow because there were no costs similar in nature to these items. The Company believes free cash flow is a useful measure of performance and an indication of the strength of the Company and its ability to generate cash. The Company believes it is useful to investors to provide disclosures of its results on the same basis as that used by management. You should not consider free cash flow in isolation or as a substitute for net cash flows provided by operating activities determined in accordance with U.S. GAAP. Additionally, because free cash flow may be defined differently by other companies in the Company's industry, the non-GAAP financial measure presented here may not be comparable to similarly titled measures of other companies. |
Reconciliation of Net Cash Flows Provided by Operations from Former Healthcare Segment, GAAP Basis | |||||||||
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | ||||||||
Net cash flows provided by operations from former Healthcare | $ | 28,792 | $ | 11,631 | |||||
Acquisition of property and equipment | (2,615) | (1,100) | |||||||
Settlement on derivatives not designated as hedges | (1,695) | — | |||||||
Proceeds from sale of equity securities | 2,728 | — | |||||||
Free cash flow from former Healthcare segment, non-GAAP | $ | 27,210 | $ | 10,531 | |||||
(12) | Free cash flow from former Healthcare segment is a non-GAAP financial measure and is defined by the Company as net cash flows provided by operating activities less acquisition of property and equipment and settlement on derivatives not designated as hedges. The Company updated its definition of free cash flow during the fourth quarter of 2020 to exclude settlement on derivatives not designated as hedges. The Company considers these costs to be a reduction of cash available for other uses and believes that presenting free cash flow excluding settlement on derivatives provides increased transparency. During the third quarter of 2021, the Company further updated its definition of free cash flow to include proceeds from the sale of equity securities as these proceeds are available to be used to support the business. The Company did not revise prior periods' free cash flow because there were no costs similar in nature to these items. The Company believes free cash flow is a useful measure of performance and an indication of the strength of the Company and its ability to generate cash. The Company believes it is useful to investors to provide disclosures of its results on the same basis as that used by management. You should not consider free cash flow from former Healthcare segment in isolation or as a substitute for net cash flows provided by operating activities determined in accordance with U.S. GAAP. Additionally, because free cash flow may be defined differently by other companies in the Company's industry, the non-GAAP financial measure presented here may not be comparable to similarly titled measures of other companies. |
Reconciliation of Net Cash Flows Provided by Operations Guidance, GAAP Basis to Free Cash Flow Guidance, Non-GAAP Basis (in millions)
| ||||||
Year Ending December 31, 2021 | ||||||
Net cash flows provided by operations guidance, GAAP basis | $ | 89.3 – 92.3 | ||||
Acquisition of property and equipment | (15 - 10) | |||||
Settlement on derivatives not designated as hedges | (7 - 6) | |||||
Proceeds from sale of equity securities | 2.7 | |||||
Free cash flow guidance, non-GAAP basis (13) | $ | 70 – 79 | ||||
(13) | Free cash flow guidance is a non-GAAP financial measure and is defined by the Company as net cash flows provided by operating activities less acquisition of property and equipment and settlement on derivatives not designated as hedges, plus actual proceeds from sale of equity securities (which relates to the Company's investment in Sharecare). The Company's guidance does not include potential future proceeds from sale of equity securities as the Company is not able to predict the timing or amount of such sales. The Company believes free cash flow is a useful measure of performance and an indication of the strength of the Company and its ability to generate cash. The Company believes it is useful to investors to provide disclosures of its results and guidance on the same basis as that used by management. You should not consider free cash flow guidance in isolation or as a substitute for net cash flows provided by operating activities guidance determined in accordance with U.S. GAAP. Additionally, because free cash flow may be defined differently by other companies in the Company's industry, the non-GAAP financial measure presented here may not be comparable to similarly titled measures of other companies. |
Reconciliation of Diluted Earnings Per Share ("EPS") from Continuing Operations, GAAP Basis to |
Adjusted EPS from Continuing Operations, Non-GAAP Basis (footnote amounts in thousands) |
Three Months Ended September 30, 2021 | Three Months Ended September 30, 2020 | |||||||
EPS from continuing operations, GAAP basis | $ | 2.06 | $ | 0.34 | ||||
Net loss per share attributable to acquisition, integration, project, | 0.01 | 0.07 | ||||||
Net income per share attributable to other (income) expense, net (15) | (1.65) | — | ||||||
Adjusted EPS from continuing operations, non-GAAP basis (16) | $ | 0.42 | $ | 0.41 | ||||
(14) | Net loss attributable to acquisition, integration, project, CEO transition, and restructuring costs consists of pre-tax charges of |
(15) | Net income attributable to other (income) expense consists of pre-tax income of |
(16) | Adjusted EPS from continuing operations is a non-GAAP financial measure. The Company excludes net (income) loss per share attributable to acquisition, integration, project, CEO transition, and restructuring costs and other (income) expense from this measure because of its comparability to the Company's historical operating results. The Company updated its definition of adjusted EPS from continuing operations during the second quarter of 2021 to exclude loss on extinguishment and modification of debt. The Company considers this item to be outside the performance of its ongoing core business operations and believes that presenting Adjusted EPS from continuing operations excluding this item provides increased transparency as to the operating costs of its current business performance. The Company did not revise the prior period's Adjusted EPS from continuing operations amounts because there were no costs similar in nature to this item. The Company believes it is useful to investors to provide disclosures of its operating results on the same basis as that used by management. You should not consider adjusted EPS from continuing operations in isolation or as a substitute for EPS from continuing operations determined in accordance with U.S. GAAP. Additionally, because adjusted EPS from continuing operations may be defined differently by other companies in the Company's industry, the non-GAAP financial measures presented here may not be comparable to similarly titled measures of other companies. Figures may not add due to rounding. |
Reconciliation of EPS from Continuing Operations Guidance, GAAP Basis to Adjusted EPS from Continuing Operations Guidance, Non-GAAP Basis (footnote amounts in thousands) | |||||
Year Ending December 31, | |||||
EPS from continuing operations guidance, GAAP basis | |||||
Net loss per share attributable to integration, project, and CEO | 0.06 | ||||
Net loss per share attributable to loss on extinguishment and modification of debt (18) | 0.28 | ||||
Net income per share attributable to other income (19) | (1.66) | ||||
Adjusted EPS from continuing operations guidance, non-GAAP basis (20) | $ | ||||
(17) | Net loss per share attributable to integration, project, and CEO transition costs consists of pre-tax charges of |
(18) | Net loss per share attributable to loss on extinguishment and modification of debt consists of pre-tax charges of |
(19) | Net income per share attributable to other income consists of pre-tax income of |
(20) | Adjusted EPS from continuing operations guidance is a non-GAAP financial measure. The Company excludes net loss attributable to integration, project, and CEO transition costs and loss on extinguishment and modification of debt from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EPS from continuing operations guidance in isolation or as a substitute for EPS from continuing operations guidance determined in accordance with U.S. GAAP. Additionally, because adjusted EPS from continuing operations guidance may be defined differently by other companies in the Company's industry, the non-GAAP financial measures presented here may not be comparable to similarly titled measures of other companies. Figures may not add due to rounding. |
Reconciliation of Total Debt, GAAP Basis to Net Debt, Non-GAAP Basis (in thousands)
| |||||||||
September 30, | September 30, 2020 | ||||||||
Total debt, GAAP basis | $ | 385,051 | $ | 974,758 | |||||
Cash and cash equivalents | (51,755) | (56,440) | |||||||
Net debt, non-GAAP basis (21) | $ | 333,296 | $ | 918,318 | |||||
(21) | Net debt is a non-GAAP financial measure. The Company excludes cash and cash equivalents from this measure and believes that net debt is an important measure to monitor its leverage and evaluate the balance sheet. The Company believes it is useful to investors to provide disclosures of its financial position on the same basis as that used by management. You should not consider net debt in isolation or as a substitute for total debt determined in accordance with U.S. GAAP. Additionally, because net debt may be defined differently by other companies in the Company's industry, the non-GAAP financial measures presented here may not be comparable to similarly titled measures of other companies. |
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SOURCE Tivity Health, Inc.
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