Full Press Release Details
Evolent Health Announces First Quarter 2020 Results
WASHINGTON, D.C., May 7, 2020 - Evolent Health, Inc. (NYSE: EVH), a health care company that delivers proven clinical and administrative solutions to payers and providers, today announced financial results for the quarter ended March 31, 2020.
Highlights from the first quarter of 2020 announcement include (all comparisons are to the quarter ended March 31, 2019):
Frank Williams, chief executive officer of Evolent Health, Inc., commented, "I'm extremely proud of our rapid and comprehensive response to support our partners during the COVID-19 public health crisis. In the last several weeks, we developed a COVID-19 risk stratification model to identify members as high-risk; mobilized outreach to several hundred thousand of those members; and worked collaboratively with our partners to provide guidance on the virus while also addressing broader health and social needs. We are confident that our work meaningfully supported our payer and provider partners in their efforts to flatten the curve and reduce mortality rates in their respective communities."
Mr. Williams commented, "In terms of our results for the quarter, we are pleased that we met our key financial, operational and new business objectives. Based on our experience to date with the COVID-19 crisis, we believe our business remains well-positioned in the market given the mission-critical nature of our service offering, as well as our diversified customer base and focus on Medicaid. In addition, we are continuing to make significant progress on our margin enhancement efforts while expanding and diversifying our national network of payer and provider partners. As a result, we continue to feel confident in achieving the revenue and profit targets for 2020 that we outlined at the beginning of the year. We of course acknowledge that this is an evolving situation, and we are closely monitoring the overall health care environment, as well as each of our businesses, to ensure we are prepared to address any important issues, should they arise."
Mr. Williams continued, "It is also heartening to see the relevance of our data infrastructure and predictive analytics, as well as our population health orientation and virtual care management capabilities in today's environment. Our ability to impact vulnerable patient populations and drive demonstrable improvements in health outcomes has never been more relevant in the face of constrained resources and cost pressure across the health care landscape. Accordingly, we are continuing to see significant interest in our service offerings as reflected in our current pipeline and we're excited to add two new partners to our national network. First, Emblem Health, one of the nation's largest non-profit health insurers, will be deploying a value-based New Century Health offering in New York to support its adult Medicaid and Medicare Advantage populations, as well as a portion of its Commercial and Individual Exchange members. Second, a large regional not-for-profit health plan based in the Northeast has also entered into a partnership with New Century Health to provide comprehensive oncology management services to more than 185,000
Medicaid, Dual-Eligible and Exchange members with a focus on medical oncology, radiation therapy and genetic testing. We are incredibly excited to launch new partnerships with these two highly-respected health plans with strong reputations in their respective communities."
Mr. Williams concluded, "Overall, it has been an honor to support our partners during an incredibly challenging period and their dedication and commitment to community health has been extraordinary. Our focus over the coming weeks and months will be on deploying creative solutions that leverage our unique assets to try and limit incidence rates and mortality, as well as supporting patients with broader health needs. From a broader business perspective, we remain focused on driving growth and margin expansion across the remainder of the year to support our key financial and strategic objectives. Specifically, we have strong visibility into a minimum of 20% revenue growth in our Services business for this year, achieving our goal of becoming cash flow positive by this fall, and driving a strong exit run rate on the bottom line as we enter 2021."
Financial Results of Evolent Health, Inc.
In our earnings releases, prepared remarks, conference calls, slide presentations and webcasts, we may use or discuss non-GAAP financial measures. Definitions of the non-GAAP financial measures, as well as reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this earnings release. See "Financial Statement Presentation" and "Non-GAAP Financial Measures" for more information.
Evolent Health, Inc. reported the following results in accordance with U.S. generally accepted accounting principles ("GAAP"):
Total cash and cash equivalents and investments as of March 31, 2020, was $87.2 million.
We are not providing forward looking guidance for GAAP reported financial measures. A reconciliation of forward looking Adjusted EBITDA financial measures to net loss attributable to common shareholders of Evolent Health, Inc., the most comparable GAAP financial measure, is provided in the "Guidance Reconciliation" table below.
For the full year 2020, Adjusted Revenue is expected to be in the range of approximately $935.0 million to $985.0 million. The components of Adjusted Revenue include Adjusted Services revenue, which is forecasted to be approximately $830.0 million to $870.0 million, and True Health premiums revenue, which is forecasted to be approximately $125.0 million to $135.0 million; intersegment eliminations are forecasted to be approximately $(20.0) million for the full year. Adjusted EBITDA is expected to be in the range of approximately $24.0 million to $32.0 million.
For the three months ended June 30, 2020, Adjusted Revenue is expected to be in the range of approximately $236.0 million to $247.0 million. The components of Adjusted Revenue include Adjusted Services revenue, which is forecasted to be approximately $210.0 million to $220.0 million, and True Health premiums revenue, which is forecasted to be approximately $30.0 million to $32.0 million; intersegment eliminations are forecasted to be approximately $(4.0) million to $(5.0) million for the quarter. Adjusted EBITDA is expected to be in the range of approximately $5.0million to $8.0 million.
This "Business Outlook" section contains forward-looking statements, and actual results may differ materially. Factors that may cause actual results to differ materially from our current expectations are set forth below in "Forward Looking Statements - Cautionary Language" and Evolent Health, Inc.'s filings with the Securities and Exchange Commission ("SEC").
Web and Conference Call Information
As previously announced, Evolent Health, Inc. will hold a conference call to discuss its first quarter and full year performance this evening, May 7, 2020, at 5:00 p.m., Eastern Time. The conference call will be available via live webcast on the Company's Investor Relations website at http://ir.evolenthealth.com. To participate by telephone, dial 855.940.9467 or 412.317.6034 for international callers, and ask to join the Evolent Health call. Participants are advised to dial in at least fifteen minutes prior to the call to register. The call will be archived on the company's website for one week and will be available beginning later this evening. Evolent Health invites all interested parties to attend the conference call.
About Evolent Health
Evolent Health (NYSE: EVH) delivers proven clinical and administrative solutions that improve whole-person health while making health care simpler and more affordable. Our solutions encompass total cost of care management, specialty care management, and administrative simplification. Evolent serves a national base of leading payers and providers, is the first company to receive the National Committee for Quality Assurance's Population Health Program Accreditation, and is consistently recognized as a top place to work in health care nationally. Learn more about how Evolent is changing the way health care is delivered by visiting evolenthealth.com.
| Bob East | Kim Conquest |
| 443.213.0500 | 540.435.2095 |
| Investor Relations | Media Relations |
| InvestorRelations@evolenthealth.com | KConquest@evolenthealth.com |
Financial Statement Presentation
Evolent Health, Inc. is a holding company and its principal asset is all of the Class A common units in its operating subsidiary, Evolent Health LLC, which has owned all of our operating assets and substantially all of our business since inception. The financial results of Evolent Health LLC are consolidated in the financial statements of Evolent Health, Inc.
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined in accordance with GAAP, we present and discuss Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue, Adjusted Platform and Operations Services Revenue, Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses, Adjusted Depreciation and Amortization Expenses, Adjusted Total Operating Expenses, Adjusted Operating Income (Loss), Adjusted EBITDA, Services Adjusted EBITDA, True Health Adjusted EBITDA, Adjusted Earnings (Loss) Available to Common Shareholders, Adjusted Earnings (Loss) per Share Available to Common Shareholders and Adjusted Weighted-Average Common Shares, which are all non-GAAP financial measures, as supplemental measures to help investors evaluate our fundamental operational performance.
Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue are defined as transformation services revenue and platform and operations services revenue, respectively, before the effect of intersegment eliminations and adjusted to exclude the impact of purchase accounting adjustments.
Adjusted Services Revenue is defined as the sum of Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue. Adjusted Revenue is defined as the sum of Adjusted Services Revenue and True Health premiums revenue, less relevant intersegment eliminations. Management uses Adjusted Revenue, Adjusted Services Revenue, Adjusted Transformation Services Revenue and Adjusted Platform and Operations Services Revenue as supplemental performance measures because they reflect a complete view of the operational results. The measures are also useful to investors because they reflect the full view of our operational performance in line with how we generate our long term forecasts.
Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses are defined as cost of revenue and selling, general and administrative expenses, respectively, adjusted to exclude the impact of stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs related to acquisitions and business combinations, securities offerings and other one-time adjustments. Management uses Adjusted Cost of Revenue and Adjusted Selling, General and Administrative Expenses as supplemental performance measures, which are also useful to investors, because they facilitate an understanding of our long term operational costs while removing the effect of costs that are not expected to reoccur frequently (e.g. acquisition-related costs) and non-cash (e.g. stock-based compensation expenses) in nature. Additionally, these supplemental performance measures facilitate understanding a breakdown of our Adjusted Total Operating Expenses. Adjustments for acquisition-related costs incurred generally represent professional service fees and direct expenses related to acquisitions. Because we do not acquire businesses on a predictable cycle, we do not consider the amount of acquisition-related costs to be a representative component of the day-to-day operating performance of our business.
Adjusted Depreciation and Amortization Expenses is defined as depreciation and amortization expenses adjusted to exclude the impact of amortization expenses related to intangible assets acquired through acquisitions and business combinations. Management uses Adjusted Depreciation and Amortization Expenses as a supplemental performance measure because it reflects a complete view of the operational results. The measure is also useful to investors because it facilitates understanding a breakdown of our Adjusted Total Operating Expenses.
Adjusted Total Operating Expenses is defined as the sum of Adjusted Cost of Revenue, Adjusted Selling, General and Administrative Expenses and Adjusted Depreciation and Amortization Expenses, and reflects the adjustments made in those non-GAAP measures. Adjusted Total Operating Expenses is further adjusted to exclude the impact of infrequent adjustments such as goodwill impairment, equity method investment impairment and one-time adjustments, such as severance costs, and items arising from acquisitions and business combinations, such as changes in fair value of contingent consideration and indemnification assets.
Adjusted Operating Income (Loss) is defined as Adjusted Revenue less Adjusted Total Operating Expenses, and reflects the adjustments made in those non-GAAP measures.
Adjusted EBITDA is defined as EBITDA (net loss attributable to common shareholders of Evolent Health, Inc. before interest income, interest expense, (provision) benefit for income taxes, depreciation and amortization expenses), adjusted to exclude equity method investment impairment, loss from equity method investees, loss on disposal of assets, changes in fair value of contingent consideration and indemnification asset, other income (expense), net, net loss attributable to non-controlling interests, ASC 606 transition adjustments, purchase accounting adjustments, stock-based compensation expenses, severance costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs, and other infrequently occurring adjustments.
Management uses Adjusted EBITDA as a supplemental performance measure because the removal of acquisition-related costs, one-time or non-cash items (e.g. depreciation, amortization and stock-based compensation expenses) allows us to focus on operational performance. We believe that this measure is also useful to investors because it allows further insight into the period over period operational performance in a manner that is comparable to other organizations in our industry and in the market in general.
Adjusted Earnings (Loss) Available to Common Shareholders is defined as earnings (loss) available to common shareholders adjusted to exclude, income (loss) from equity method investees, (provision) benefit for income taxes, other income (expense), net, gain on disposal of assets, goodwill impairment, changes in fair value of contingent consideration and indemnification assets, net (income) loss attributable to non-controlling interests, purchase accounting adjustments, stock-based compensation expenses, severance
costs, amortization of contract cost assets recorded as a result of a one-time ASC 606 transition adjustment, acquisition-related costs and other one-time adjustments.
Adjusted Weighted-Average Common Shares is defined as weighted average common shares (diluted) adjusted to include, in periods of net loss, the dilutive or potentially dilutive effect of the assumed conversion of Class B common shares to Class A common shares.
Adjusted Earnings (Loss) per Share Available to Common Shareholders is defined as Adjusted Earnings (Loss) Available to Common Shareholders divided by Adjusted Weighted-Average Common Shares, and reflects the adjustments made in those non-GAAP measures.
Management uses Adjusted Earnings (Loss) Available to Common Shareholders, Adjusted Weighted-Average Common Shares and Adjusted Earnings (Loss) per Share Available to Common Shareholders because these performance measures represent our core operating performance distributed amongst all of our investors which is not represented by the GAAP results across time due to our complex equity structure. We believe that these measures are also useful to investors for the same reason.
These adjusted measures do not represent and should not be considered as alternatives to GAAP measurements, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies. A reconciliation of these adjusted measures to their most comparable GAAP financial measures is presented in the tables below. We believe these measures are useful across time in evaluating our fundamental core operating performance.
Evolent Health, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(in thousands, except per share data)
| For the Three Months Ended March 31, | |||||||
| 2020 | 2019 | ||||||
| Revenue | |||||||
| Transformation services | $ | 5,238 | $ | 3,353 | |||
| Platform and operations services | 209,900 | 147,292 | |||||
| Premiums | 32,147 | 47,111 | |||||
| Total revenue | 247,285 | 197,756 | |||||
| Expenses | |||||||
| Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) | 175,653 | 117,441 | |||||
| Claims expenses | 23,667 | 37,757 | |||||
| Selling, general and administrative expenses | 54,698 | 74,838 | |||||
| Depreciation and amortization expenses | 16,138 | 14,266 | |||||
| Loss on disposal of assets | 6,447 | - | |||||
| Change in fair value of contingent consideration and indemnification asset | (3,818 | ) | 100 | ||||
| Total operating expenses | 272,785 | 244,402 | |||||
| Operating loss | (25,500 | ) | (46,646 | ) | |||
| Interest income | 919 | 1,060 | |||||
| Interest expense | (6,285 | ) | (3,562 | ) | |||
| Impairment of equity method investments | (46,133 | ) | - | ||||
| Loss from equity method investees | (412 | ) | (424 | ) | |||
| Other income (expense), net | (71 | ) | 427 | ||||
| Loss before income taxes and non-controlling interests | (77,482 | ) | (49,145 | ) | |||
| Provision (benefit) for income taxes | 270 | (496 | ) | ||||
| Net loss | (77,752 | ) | (48,649 | ) | |||
| Net loss attributable to non-controlling interests | - | (1,910 | ) | ||||
| Net loss attributable to common shareholders of Evolent Health, Inc. | $ | (77,752 | ) | $ | (46,739 | ) | |
| Loss per Common Share | |||||||
| Basic and diluted | $ | (0.92 | ) | $ | (0.59 | ) | |
| Weighted-Average Common Shares Outstanding | |||||||
| Basic and diluted | 84,793 | 79,335 | |||||
| Comprehensive loss | |||||||
| Net loss | $ | (77,752 | ) | $ | (48,649 | ) | |
| Other comprehensive loss, net of taxes, related to: | |||||||
| Foreign currency translation adjustment | (153 | ) | 24 | ||||
| Total comprehensive loss | (77,905 | ) | (48,625 | ) | |||
| Total comprehensive loss attributable to non-controlling interests | - | (1,910 | ) | ||||
| Total comprehensive loss attributable to common shareholders of Evolent Health, Inc. | $ | (77,905 | ) | $ | (46,715 | ) |
Evolent Health, Inc.
Condensed Consolidated Balance Sheets
(in thousands, unaudited)
| March 31, 2020 | December 31, 2019 | ||||||
| Cash and cash equivalents | $ | 67,944 | $ | 101,008 | |||
| Restricted cash | 61,854 | 27,523 | |||||
| Restricted investments | 817 | 817 | |||||
| Total current assets | 258,473 | 228,801 | |||||
| Investments, at amortized cost | 19,279 | 18,558 | |||||
| Intangible assets, net | 291,627 | 308,459 | |||||
| Goodwill | 569,797 | 572,064 | |||||
| Total assets | 1,451,754 | 1,498,015 | |||||
| Accounts payable | 80,035 | 37,488 | |||||
| Long-term debt, net of discount | 296,676 | 293,667 | |||||
| Total liabilities | 603,682 | 568,968 | |||||
| Total shareholders' equity (deficit) attributable to Evolent Health, Inc. | 848,072 | 922,358 | |||||
| Non-controlling interests | - | 6,689 | |||||
| Total liabilities and shareholders' equity (deficit) | 1,451,754 | 1,498,015 |
Evolent Health, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands, unaudited)
| For the Three Months Ended March 31, | ||||||
| 2020 | 2019 | |||||
| Net cash and restricted cash used in operating activities | $ | (20,541 | ) | (25,709 | ) | |
| Net cash and restricted cash used in investing activities | (10,807 | ) | (25,478 | ) | ||
| Net cash and restricted cash provided by (used in) financing activities | 32,574 | (109,665 | ) | |||
| Effect of exchange rate on cash and cash equivalents and restricted cash | 41 | (19 | ) | |||
| Net increase (decrease) in cash and cash equivalents and restricted cash | 1,267 | (160,871 | ) | |||
| Cash and cash equivalents and restricted cash as of beginning-of-year | 128,531 | 388,325 | ||||
| Cash and cash equivalents and restricted cash as of end-of-year | $ | 129,798 | 227,454 |
Evolent Health, Inc.
Reconciliation of Adjusted Results of Operations
(in thousands, unaudited)
| For the Three Months Ended March 31, 2020 | For the Three Months Ended March 31, 2019 | Evolent Health, Inc. as Reported | Evolent Health, Inc. as Adjusted | |||||||||||||||||||||||||||||||||||
| Evolent | Evolent | Evolent | Evolent | |||||||||||||||||||||||||||||||||||
| Health, Inc. | Health, Inc. | Health, Inc. | Health, Inc. | Change Over Prior Period | Change Over Prior Period | |||||||||||||||||||||||||||||||||
| as Reported | Adjustments | as Adjusted | as Reported | Adjustments | as Adjusted | $ | % | $ | % | |||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||
| Transformation services | $ | 5,238 | $ | - | $ | 5,238 | $ | 3,353 | $ | - | $ | 3,353 | $ | 1,885 | 56.2 | % | $ | 1,885 | 56.2 | % | ||||||||||||||||||
| Platform and operations services (1) | 209,900 | - | 209,900 | 147,292 | 596 | 147,888 | 62,608 | 42.5 | % | 62,012 | 41.9 | % | ||||||||||||||||||||||||||
| Premiums | 32,147 | - | 32,147 | 47,111 | - | 47,111 | (14,964 | ) | (31.8 | )% | (14,964 | ) | (31.8 | )% | ||||||||||||||||||||||||
| Total revenue | 247,285 | - | 247,285 | 197,756 | 596 | 198,352 | 49,529 | 25.0 | % | 48,933 | 24.7 | % | ||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization expenses presented separately below) (2) | 175,653 | (3,153 | ) | 172,500 | 117,441 | (1,609 | ) | 115,832 | 58,212 | 49.6 | % | 56,668 | 48.9 | % | ||||||||||||||||||||||||
| Claims expenses | 23,667 | - | 23,667 | 37,757 | - | 37,757 | (14,090 | ) | (37.3 | )% | (14,090 | ) | (37.3 | )% | ||||||||||||||||||||||||
| Selling, general and administrative expenses (3) | 54,698 | (7,207 | ) | 47,491 | 74,838 | (15,297 | ) | 59,541 | (20,140 | ) | (26.9 | )% | (12,050 | ) | (20.2 | )% | ||||||||||||||||||||||
| Depreciation and amortization expenses (4) | 16,138 | (6,027 | ) | 10,111 | 14,266 | (5,735 | ) | 8,531 | 1,872 | 13.1 | % | 1,580 | 18.5 | % | ||||||||||||||||||||||||
| Loss on disposal of assets | 6,447 | (6,447 | ) | - | - | - | - | 6,447 | - | % | - | - | % | |||||||||||||||||||||||||
| Change in fair value of contingent consideration | (3,818 | ) | 3,818 | - | 100 | (100 | ) | - | (3,918 | ) | (3,918.0 | )% | - | - | % | |||||||||||||||||||||||
| Total operating expenses | 272,785 | (19,016 | ) | 253,769 | 244,402 | (22,741 | ) | 221,661 | 28,383 | 11.6 | % | 32,108 | 14.5 | % | ||||||||||||||||||||||||
| Operating income (loss) | $ | (25,500 | ) | $ | 19,016 | $ | (6,484 | ) | $ | (46,646 | ) | $ | 23,337 | $ | (23,309 | ) | $ | 21,146 | 45.3 | % | $ | 16,825 | 72.2 | % | ||||||||||||||
| Total operating expenses as a percentage of total revenue | 110.3 | % | 102.6 | % | 123.6 | % | 111.8 | % |
Evolent Health, Inc.
(in thousands, unaudited)
| Services | True Health | Intersegment Eliminations | Consolidated | ||||||||||||
| Revenue | |||||||||||||||
| For the Three Months Ended March 31, 2020 | |||||||||||||||
| Services: | |||||||||||||||
| Transformation services | $ | 5,238 | $ | - | $ | - | $ | 5,238 | |||||||
| Platform and operations services | 216,195 | - | (6,295 | ) | 209,900 | ||||||||||
| Services revenue | 221,433 | - | (6,295 | ) | 215,138 | ||||||||||
| True Health: | |||||||||||||||
| Premiums | - | 32,387 | (240 | ) | 32,147 | ||||||||||
| Total revenue | $ | 221,433 | $ | 32,387 | $ | (6,535 | ) | $ | 247,285 | ||||||
| For the Three Months Ended March 31, 2019 | |||||||||||||||
| Services: | |||||||||||||||
| Transformation services | $ | 3,353 | $ | - | $ | - | $ | 3,353 | |||||||
| Platform and operations services | 150,351 | - | (3,059 | ) | 147,292 | ||||||||||
| Services revenue | 153,704 | - | (3,059 | ) | 150,645 | ||||||||||
| True Health: | |||||||||||||||
| Premiums | - | 47,376 | (265 | ) | 47,111 | ||||||||||
| Total revenue | $ | 153,704 | $ | 47,376 | $ | (3,324 | ) | $ | 197,756 | ||||||
| Services | True Health | Segments Total | |||||||||||||
| For the Three Months Ended March 31, 2020 | |||||||||||||||
| Adjusted EBITDA | $ | 3,876 | $ | (249 | ) | $ | 3,627 | ||||||||
| For the Three Months Ended March 31, 2019 | |||||||||||||||
| Adjusted EBITDA | $ | (15,499 | ) | $ | 721 | $ | (14,778 | ) |
Evolent Health, Inc.
Reconciliation of Adjusted EBITDA to Net Loss
Attributable to Common Shareholders of Evolent Health, Inc.
(in thousands, except per share data)
| For the Three Months Ended March 31, | |||||||
| 2020 | 2019 | ||||||
| Net loss attributable to common shareholders of Evolent Health, Inc. | $ | (77,752 | ) | $ | (46,739 | ) | |
| Less: | |||||||
| Interest income | 919 | 1,060 | |||||
| Interest expense | (6,285 | ) | (3,562 | ) | |||
| (Provision) benefit for income taxes | (270 | ) | 496 | ||||
| Depreciation and amortization expenses | (16,138 | ) | (14,266 | ) | |||
| EBITDA | (55,978 | ) | (30,467 | ) | |||
| Less: | |||||||
| Impairment of equity method investees | (46,133 | ) | - | ||||
| Loss from equity method investees | (412 | ) | (424 | ) | |||
| Loss on disposal of assets | (6,447 | ) | - | ||||
| Change in fair value of contingent consideration and indemnification asset | 3,818 | (100 | ) | ||||
| Other income (expense), net | (71 | ) | 427 | ||||
| Net loss attributable to non-controlling interests | - | 1,910 | |||||
| Purchase accounting adjustments | - | (596 | ) | ||||
| Stock-based compensation expense | (3,508 | ) | (4,537 | ) | |||
| Severance costs | (6,103 | ) | (10,602 | ) | |||
| Amortization of contract cost assets | (440 | ) | (754 | ) | |||
| Acquisition-related costs | (309 | ) | (1,013 | ) | |||
| Adjusted EBITDA | $ | 3,627 | $ | (14,778 | ) | ||
| Adjusted EBITDA per Common Share | |||||||
| Basic and diluted | $ | 0.04 | $ | (0.19 | ) | ||
| Weighted-Average Common Shares Outstanding | |||||||
| Basic and diluted | 84,793 | 79,335 |
Evolent Health, Inc.
Reconciliation of Adjusted Earnings (Loss) Available to Common
Shareholders to Net Loss Available to Common Shareholders
(in thousands, except per share data)
| For the Three Months Ended March 31, | |||||||
| 2020 | 2019 | ||||||
| Net Loss Available to Common Shareholders - Basic and Diluted (a) | $ | (77,752 | ) | $ | (46,739 | ) | |
| Less: | |||||||
| Loss from equity method investees | (412 | ) | (424 | ) | |||
| Other income (expense), net | (71 | ) | 431 | ||||
| Loss on disposal of assets | (6,447 | ) | - | ||||
| Impairment of equity method investees | (46,133 | ) | - | ||||
| Change in fair value of contingent consideration and indemnification asset | 3,818 | (100 | ) | ||||
| Net loss attributable to non-controlling interests | - | 1,910 | |||||
| Purchase accounting adjustments | (6,027 | ) | (6,331 | ) | |||
| Stock-based compensation expense | (3,508 | ) | (4,537 | ) | |||
| Severance costs | (6,103 | ) | (10,602 | ) | |||
| Amortization of contract cost assets | (440 | ) | (754 | ) | |||
| Acquisition-related costs | (309 | ) | (1,013 | ) | |||
| Adjusted Loss Available to Common Shareholders (b) | $ | (12,120 | ) | $ | (25,319 | ) | |
| Loss per Share Available to Common Shareholders - Basic and Diluted (a) (1) | $ | (0.92 | ) | $ | (0.59 | ) | |
| Adjusted Loss per Share Available to Common Shareholders (b) (2) | $ | (0.14 | ) | $ | (0.31 | ) | |
| Weighted-average common shares - basic and diluted (1) | 84,793 | 79,335 | |||||
| Adjusted Weighted-Average Common Shares (3) | 84,793 | 82,525 |
Evolent Health, Inc.
Reconciliation of Adjusted Weighted-Average Common
Shares to Diluted Weighted-Average Common Shares
(in thousands, unaudited)
| For the Three Months Ended March 31, | |||||
| 2020 | 2019 | ||||
| Weighted-average common shares - diluted | 84,793 | 79,335 | |||
| Assumed conversion of Class B common shares to Class A common shares (1) | - | 3,190 | |||
| Adjusted Weighted-Average Common Shares | 84,793 | 82,525 |
Evolent Health, Inc.
Guidance Reconciliation
(in thousands, unaudited)
| For the Three Months Ended June 30, 2020 | For the Year Ended December 31, 2020 | ||||||
| Net loss attributable to common shareholders of Evolent Health, Inc. | $ | (22,400 | ) | $ | (138,903 | ) | |
| Less: | |||||||
| Interest expense | (5,200 | ) | (21,000 | ) | |||
| Income tax expense | - | (270 | ) | ||||
| Depreciation and amortization expenses | (16,500 | ) | (66,000 | ) | |||
| EBITDA | (700 | ) | (51,633 | ) | |||
| Less: | |||||||
| Impairment of equity method investments | - | (46,133 | ) | ||||
| Loss on disposal of assets | - | (6,447 | ) | ||||
| Change in fair value of contingent consideration and indemnification asset | - | 3,818 | |||||
| Other income (expense), net | - | (71 | ) | ||||
| Stock-based compensation expense | (3,750 | ) | (15,000 | ) | |||
| Severance costs | (2,000 | ) | (10,000 | ) | |||
| Amortization of contract cost assets | (450 | ) | (1,800 | ) | |||
| Acquisition-related costs | (1,000 | ) | (4,000 | ) | |||
| Adjusted EBITDA | $ | 6,500 | $ | 28,000 |
The guidance reconciliation provided above reconciles the midpoint of the respective guidance ranges to the most comparable GAAP measure.
FORWARD-LOOKING STATEMENTS - CAUTIONARY LANGUAGE
Certain statements made in this report and in other written or oral statements made by us or on our behalf are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is a statement that is not a historical fact and, without limitation, includes any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words like: "believe," "anticipate," "expect," "estimate," "aim," "predict," "potential," "continue," "plan," "project," "will," "should," "shall," "may," "might" and other words or phrases with similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, trends in our businesses, prospective services, future performance or financial results and the outcome of contingencies, such as legal proceedings. We claim the protection afforded by the safe harbor for forward-looking statements provided by the PSLRA.
These statements are only predictions based on our current expectations and projections about future events. Forward-looking statements involve risks and uncertainties that may cause actual results, level of activity, performance or achievements to differ materially from the results contained in the forward-looking statements. Risks and uncertainties that may cause actual results to vary materially, some of which are described within the forward-looking statements, include, among others:
The risks included here are not exhaustive. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Our Annual Report on Form 10-K for the year ended December 31, 2019, and other documents filed with the SEC include additional factors that could affect our businesses and financial performance. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors.
Further, it is not possible to assess the effect of all risk factors on our businesses or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. In addition, we disclaim any obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this release.