Sign In  |  Register  |  About San Rafael  |  Contact Us

San Rafael, CA
September 01, 2020 1:37pm
7-Day Forecast | Traffic
  • Search Hotels in San Rafael

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

Change Healthcare Inc. Reports Second Quarter Fiscal 2022 Financial Results

Change Healthcare Inc. (Nasdaq: CHNG) (the “Company” or “Change Healthcare”), a leading healthcare technology company, today reported financial results for the second quarter of fiscal year 2022 ended September 30, 2021.

“Our results this quarter continue to demonstrate solid execution of our growth strategy and the underlying strength and momentum in our business,” said Neil de Crescenzo, president and chief executive officer. “We continue to create value for our payer, provider and consumer customers by delivering innovative and transformative solutions. Along with our customers, we remained focused on lowering cost, enhancing access, and improving outcomes for the benefit of everyone in the healthcare system.”

Fiscal 2022 Second Quarter Highlights:

Financial Summary

  • Total revenue of $826.8 million, including solutions revenue of $774.2 million
  • Net loss of $36.4 million, resulting in net loss of $0.11 per diluted share
  • Adjusted net income of $114.3 million, resulting in adjusted net income of $0.35 per diluted share
  • Adjusted EBITDA of $246.5 million

Recent Business Highlights

  • Introduced Change Healthcare Stratus Imaging PACS, our new, comprehensive cloud-native solution, which is now in production with standalone radiology groups, with contracts to deploy in hospital-affiliated practices in 2022.
  • Added 118 new products to our Change Healthcare Marketplace in the second quarter, which now offers 198 products representing API, software, and hardware products from all parts of our portfolio.
  • Continued to establish new data solutions partnerships with major academic medical research centers, bringing the total to more than 75 partnerships developed to improve health equity through our Data Science as a Service offering and other solutions.
  • Continued momentum with our electronic prior authorization offering, which uses AI and predictive analytics to automate the prior authorization process and drive transparency between healthcare constituents to help the industry deliver the right care, in the right place, at the right time in a transparent manner.

Impact of McKesson Exit on Comparability of Results

On March 10, 2020, Change Healthcare Inc. acquired the interest in Change Healthcare LLC (“the Joint Venture”) previously held by McKesson. The transaction resulted in Change Healthcare Inc. acquiring control of the Joint Venture, which was accounted for as a business combination resulting in fair value adjustments to various assets and liabilities, including deferred revenue, goodwill, and intangible assets.

Financial Results for Second Quarter of Fiscal 2022

  • Solutions revenue was $774.2 million, compared to $705.9 million for second quarter of fiscal 2021. Solutions revenue includes the impact of fair value adjustments to deferred revenue resulting from the McKesson exit, which reduced revenue recognized by $3.3 million and $38.9 million in the second quarter of fiscal 2022 and 2021, respectively. Total revenue, which includes postage revenue, was $826.8 million compared to $755.9 million in the same period of the prior year. Solutions revenue for the current period reflects the negative $6.0 million impact during the quarter from the Capacity Management divestiture which closed in fiscal year 2021. Solutions revenue in the current period was positively impacted by volume recovery and incremental revenue from COVID-19 vaccines and new sales.
  • Net loss was $36.4 million, resulting in net loss of $0.11 per diluted share, compared with net loss of $42.6 million and $0.13 per diluted share, respectively, for the second quarter of fiscal 2021.
  • Adjusted net income was $114.3 million, resulting in adjusted net income of $0.35 per diluted share, compared with adjusted net income of $103.5 million and $0.32 per diluted share, respectively, for the second quarter of fiscal 2021. Net loss per diluted share and adjusted net income per diluted share for the current period is based on 324 million shares compared to 321 million shares in the prior year period.
  • Adjusted EBITDA was $246.5 million, compared with $231.8 million for the second quarter of fiscal 2021. The results in the current quarter reflect the aforementioned revenue growth, partially offset by investments to support business initiatives.

Cash Flow and Balance Sheet Highlights

Net cash provided by operating activities was $261.4 million and free cash flow was $134.5 million, in each case, for the six months ended September 30, 2021. For the six months ended September 30, 2020, net cash provided by operating activities and free cash flow was $296.6 million and $170.1 million, respectively.

Net cash provided by operating activities and free cash flow each are affected by pass-thru funds we receive from certain pharmaceutical industry participants in advance of our obligation to remit these funds to participating retail pharmacies. Such pass-thru funds on hand increased by $4.4 million in the six months ended September 30, 2021, increasing free cash flow for the period by that amount, and decreased by $1.4 million for the six months ended September 30, 2020.

The Company ended the quarter with approximately $80.4 million of cash and cash equivalents, and approximately $4,662.4 million of total debt. During the second quarter, the Company repaid $100.0 million on its Term Loan Facility, and repaid an additional $60.0 million subsequent to the end of the quarter.

Update on Proposed Merger with OptumInsight

On January 5, 2021, OptumInsight, a diversified health services company and part of UnitedHealth Group, and Change Healthcare agreed to combine (the “Merger”). Under the terms of the merger agreement, UnitedHealth Group, through a wholly-owned subsidiary, will acquire all of the outstanding shares of Change Healthcare common stock for $25.75 per share in cash. The Boards of Directors of both UnitedHealth Group and Change Healthcare have unanimously approved the terms of the Merger. At a special meeting held April 13, 2021, Change Healthcare stockholders voted to approve the Merger. Of the approximately 222 million shares voted, 99.9% voted in favor of the adoption of the merger agreement. The closing of the Merger is subject to applicable regulatory approval and other customary closing conditions.

As previously disclosed, on March 24, 2021, the Company and UnitedHealth Group each received a request for additional information and documentary materials (collectively, the “Second Request”) from the Department of Justice (“DOJ”) in connection with the DOJ’s review of the Merger, and on August 7, 2021, the parties entered into a timing agreement (the “Timing Agreement”) with the DOJ pursuant to which they agreed not to consummate the Merger before 120 days following the date on which both parties certified substantial compliance with the Second Request.

Both the Company and UnitedHealth Group have now certified substantial compliance with the Second Request. On November 1, 2021, the Company and UnitedHealth Group entered into an amendment to the Timing Agreement with the DOJ pursuant to which they agreed not to consummate the Merger before 12:01 a.m. Eastern Time on February 22, 2022 (subject to extension in certain limited circumstances relating to the potential unavailability of certain requested data), unless they have received written notice from the DOJ prior to such date that the DOJ has closed its investigation. The parties have been working cooperatively with the DOJ and will continue to do so.

Guidance

Due to the proposed transaction with OptumInsight, we will no longer be providing financial guidance.

Webcast Information

Change Healthcare will host a conference call on Thursday, November 4, 2021, at 8:00 a.m. ET. Due to the previously announced transaction with OptumInsight, the Company will not be taking questions during the conference call.

Investors and other interested parties are invited to listen to the conference call via the Company's website at https://ir.changehealthcare.com/. The webcast will be available for on-demand listening at the aforementioned URL until November 4, 2022.

About Change Healthcare

Change Healthcare (Nasdaq: CHNG) is a leading healthcare technology company, focused on insights, innovation, and accelerating the transformation of the U.S. healthcare system through the power of the Change Healthcare platform. We provide data and analytics-driven solutions to improve clinical, financial, administrative, and patient engagement outcomes in the U.S. healthcare system. Learn more at changehealthcare.com.

CHNG-IR

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations and businesses of Change Healthcare. Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,” “plan,” “project,” “predict” and similar expressions. Change Healthcare cautions readers of this press release that such “forward looking statements,” including without limitation, those relating to the timing of the proposed merger and Change Healthcare’s future business prospects, revenue, working capital, liquidity, capital needs, interest costs and income, wherever they occur in this press release or in other statements attributable to Change Healthcare, are necessarily estimates reflecting the judgment of Change Healthcare’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.”

Factors that could cause Change Healthcare’s actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to, the inability to complete the proposed merger due to the failure to satisfy conditions to completion of the proposed merger, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the transaction; risks related to disruption of management’s attention from Change Healthcare’s ongoing business operations due to the transaction; the effect of the announcement of the proposed merger on Change Healthcare’s relationships with its customers, operating results and business generally; the risk that the proposed merger will not be consummated in a timely manner; exceeding the expected costs of the merger; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets; uncertainty and risks related to the impact of the COVID-19 pandemic (including the rise of COVID-19 variant strains such as the Delta variant) on the national and global economy, Change Healthcare’s business, suppliers, customers, and employees; Change Healthcare’s ability to retain or renew existing customers and attract new customers; Change Healthcare’s ability to connect a large number of payers and providers; Change Healthcare’s ability to provide competitive services and prices while maintaining its margins; further consolidation in end-customer markets; Change Healthcare’s ability to effectively manage costs; Change Healthcare’s ability to effectively develop and maintain relationships with channel partners; Change Healthcare’s ability to timely develop new services and the market’s willingness to adopt new services; Change Healthcare’s ability to deliver services timely without interruption; a decline in transaction volume in the U.S. healthcare industry; Change Healthcare’s ability to maintain access to its data sources; Change Healthcare’s ability to maintain the security and integrity of its data; Change Healthcare’s ability to retain and recruit key management personnel and other talent (including while the proposed merger is pending and in light of Change Healthcare’s recently imposed COVID-19 vaccine mandate); Change Healthcare’s ability to manage and expand its operations and keep up with rapidly changing technologies; the ability of outside service providers and key vendors to fulfill their obligations to Change Healthcare; risks related to international operations; Change Healthcare’s ability to protect and enforce its intellectual property, trade secrets and other forms of unpatented intellectual property; Change Healthcare’s ability to defend its intellectual property from infringement claims by third parties; government regulation and changes in the regulatory environment; changes in local, state, federal and international laws and regulations, including related to taxation; economic and political instability in the U.S. and international markets where Change Healthcare operates; litigation or regulatory proceedings; losses against which Change Healthcare does not insure; Change Healthcare’s ability to make acquisitions and integrate the operations of acquired businesses; Change Healthcare’s ability to make timely payments of principal and interest on its indebtedness; Change Healthcare’s ability to satisfy covenants in the agreements governing its indebtedness; Change Healthcare’s ability to maintain liquidity; our adoption of new, or amendments to existing, accounting standards, and other risks. For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Change Healthcare’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on May 27, 2021 as such factors may be updated from time to time in our periodic filings with the SEC.

Change Healthcare’s forward-looking statements speak only as of the date of this press release or as of the date they are made. Change Healthcare disclaims any intent or obligation to update any “forward-looking statement” made in this press release to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

Non-GAAP Financial Measures

In the Company’s earnings releases, prepared remarks, conference calls, slide presentations and webcasts, there may be use or discussion of non-GAAP financial measures. We believe such measures provide supplemental information to investors with regards to our operating performance and assist investors’ ability to compare our financial results to those of other companies in the same industry. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between the comparable GAAP financial measure and each non-GAAP financial measure are included in this press release after the consolidated financial statements. These non-GAAP financial measures are calculated and presented on the basis of methodologies other than in accordance with GAAP. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP and may be defined and calculated differently by others in the same industry.

 

Consolidated Statements of Operations

(unaudited and amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2021

 

2020

Revenue:

 

 

 

 

 

 

Solutions revenue

 

$

774,214

 

$

705,913

Postage revenue

 

 

52,550

 

 

50,023

Total revenue

 

 

826,764

 

 

755,936

Operating expenses:

 

 

 

 

 

 

Cost of operations (exclusive of depreciation and amortization below)

 

 

346,632

 

 

326,653

Research and development

 

 

67,070

 

 

54,052

Sales, marketing, general and administrative

 

 

183,041

 

 

171,606

Customer postage

 

 

52,550

 

 

50,023

Depreciation and amortization

 

 

163,469

 

 

146,869

Accretion and changes in estimate with related parties, net

 

 

2,870

 

 

3,564

Gain on sale of businesses

 

 

 

 

(176)

Total operating expenses

 

 

815,632

 

 

752,591

Operating income (loss)

 

 

11,132

 

 

3,345

Non-operating (income) and expense

 

 

 

 

 

 

Interest expense, net

 

 

59,466

 

 

61,627

Loss on extinguishment of debt

 

 

2,232

 

 

1,489

Other, net

 

 

2,587

 

 

(3,761)

Total non-operating (income) and expense

 

 

64,285

 

 

59,355

Income (loss) before income tax provision (benefit)

 

 

(53,153)

 

 

(56,010)

Income tax provision (benefit)

 

 

(16,749)

 

 

(13,388)

Net income (loss)

 

$

(36,404)

 

$

(42,622)

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.11)

 

$

(0.13)

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic and diluted

 

 

324,060,460

 

 

320,638,116

 
 

Consolidated Statements of Operations

(unaudited and amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Revenue:

 

 

 

 

 

 

Solutions revenue

 

$

1,590,862

 

$

1,354,325

Postage revenue

 

 

103,758

 

 

95,795

Total revenue

 

 

1,694,620

 

 

1,450,120

Operating expenses:

 

 

 

 

 

 

Cost of operations (exclusive of depreciation and amortization below)

 

 

698,695

 

 

645,195

Research and development

 

 

138,310

 

 

109,787

Sales, marketing, general and administrative

 

 

360,997

 

 

337,080

Customer postage

 

 

103,758

 

 

95,795

Depreciation and amortization

 

 

331,681

 

 

285,409

Accretion and changes in estimate with related parties, net

 

 

5,907

 

 

9,459

Gain on sale of businesses

 

 

 

 

(28,270)

Total operating expenses

 

 

1,639,348

 

 

1,454,455

Operating income (loss)

 

 

55,272

 

 

(4,335)

Non-operating (income) and expense

 

 

 

 

 

 

Interest expense, net

 

 

118,852

 

 

124,294

Loss on extinguishment of debt

 

 

2,232

 

 

1,489

Other, net

 

 

(605)

 

 

(1,953)

Total non-operating (income) and expense

 

 

120,479

 

 

123,830

Income (loss) before income tax provision (benefit)

 

 

(65,207)

 

 

(128,165)

Income tax provision (benefit)

 

 

(25,198)

 

 

(26,849)

Net income (loss)

 

$

(40,009)

 

$

(101,316)

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

Basic and diluted

 

$

(0.12)

 

$

(0.32)

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic and diluted

 

 

323,309,280

 

 

320,347,128

 
 

Consolidated Balance Sheets

(unaudited and amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

September 30, 2021

 

March 31, 2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

80,414

 

$

113,101

Accounts receivable, net

 

 

704,595

 

 

732,614

Contract assets, net

 

 

128,010

 

 

132,856

Prepaid expenses and other current assets

 

 

149,176

 

 

140,258

Total current assets

 

 

1,062,195

 

 

1,118,829

Property and equipment, net

 

 

150,579

 

 

174,370

Operating lease right-of-use assets, net

 

 

80,562

 

 

93,412

Goodwill

 

 

4,110,823

 

 

4,108,792

Intangible assets, net

 

 

3,942,164

 

 

4,187,072

Other noncurrent assets, net

 

 

503,405

 

 

430,141

Total assets

 

$

9,849,728

 

$

10,112,616

Liabilities

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

64,756

 

$

57,449

Accrued expenses

 

 

463,510

 

 

484,293

Deferred revenue

 

 

377,270

 

 

436,666

Due to related parties, net

 

 

11,392

 

 

10,766

Current portion of long-term debt

 

 

19,152

 

 

27,339

Current portion of operating lease liabilities

 

 

28,948

 

 

30,608

Total current liabilities

 

 

965,028

 

 

1,047,121

Long-term debt, excluding current portion

 

 

4,643,245

 

 

4,734,775

Long-term operating lease liabilities

 

 

62,001

 

 

75,396

Deferred income tax liabilities

 

 

578,584

 

 

605,291

Tax receivable agreement obligations to related parties

 

 

97,606

 

 

103,151

Tax receivable agreement obligations

 

 

196,687

 

 

229,082

Other long-term liabilities

 

 

62,411

 

 

65,572

Total liabilities

 

 

6,605,562

 

 

6,860,388

Commitments and contingencies

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

Common Stock (par value, $0.001), 9,000,000,000 and 9,000,000,000 shares authorized and 311,311,208 and 306,796,076 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively

 

 

311

 

 

307

Preferred stock (par value, $0.001), 900,000,000 shares authorized and no shares issued and outstanding at both September 30, 2021 and March 31, 2021

 

 

 

 

Additional paid-in capital

 

 

4,313,759

 

 

4,283,391

Accumulated other comprehensive income (loss)

 

 

12,796

 

 

11,221

Accumulated deficit

 

 

(1,082,700)

 

 

(1,042,691)

Total stockholders' equity

 

 

3,244,166

 

 

3,252,228

Total liabilities and stockholders' equity

 

$

9,849,728

 

$

10,112,616

 
 

Consolidated Statements of Cash Flows

(unaudited and amounts in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

(40,009)

 

$

(101,316)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

331,681

 

 

285,409

Amortization of capitalized software developed for sale

 

 

1,576

 

 

89

Accretion and changes in estimate, net

 

 

9,087

 

 

11,188

Equity compensation

 

 

49,911

 

 

23,914

Deferred income tax expense (benefit)

 

 

(26,560)

 

 

(28,590)

Amortization of debt discount and issuance costs

 

 

15,820

 

 

16,551

Loss on extinguishment of debt

 

 

2,232

 

 

1,489

Non-cash lease expense

 

 

13,958

 

 

14,629

Gain on sale of businesses

 

 

 

 

(28,270)

Other, net

 

 

7,405

 

 

4,530

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

27,860

 

 

114,052

Contract assets, net

 

 

4,154

 

 

(3,786)

Prepaid expenses and other assets

 

 

(37,833)

 

 

(48,382)

Accounts payable

 

 

7,644

 

 

(28,666)

Accrued expenses and other liabilities

 

 

(43,743)

 

 

27,687

Deferred revenue

 

 

(61,832)

 

 

36,029

Net cash provided by (used in) operating activities

 

 

261,351

 

 

296,557

Cash flows from investing activities:

 

 

 

 

 

 

Capitalized expenditures

 

 

(126,828)

 

 

(126,432)

Acquisitions, net of cash acquired

 

 

 

 

(439,483)

Proceeds from sale of businesses

 

 

 

 

54,369

Other, net

 

 

(1,000)

 

 

1,100

Net cash provided by (used in) investing activities

 

 

(127,828)

 

 

(510,446)

Cash flows from financing activities:

 

 

 

 

 

 

Payments on Term Loan Facility

 

 

(100,000)

 

 

(50,000)

Payments under tax receivable agreements

 

 

(21,537)

 

 

(20,691)

Receipts (payments) on derivative instruments

 

 

(14,810)

 

 

(14,810)

Employee tax withholding on vesting of equity compensation awards

 

 

(18,681)

 

 

(3,131)

Payments on deferred financing obligations

 

 

(8,981)

 

 

(6,547)

Payment of senior amortizing notes

 

 

(8,048)

 

 

(7,680)

Proceeds from exercise of equity awards

 

 

5,985

 

 

2,584

Payments on Revolving Facility

 

 

 

 

(250,000)

Proceeds from issuance of Senior Notes

 

 

 

 

325,000

Other, net

 

 

(253)

 

 

(6,454)

Net cash provided by (used in) financing activities

 

 

(166,325)

 

 

(31,729)

Effect of exchange rate changes on cash and cash equivalents

 

 

115

 

 

2,690

Net increase (decrease) in cash and cash equivalents

 

 

(32,687)

 

 

(242,928)

Cash and cash equivalents at beginning of period

 

 

113,101

 

 

410,405

Cash and cash equivalents at end of period

 

$

80,414

 

$

167,477

 
 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(unaudited and amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2021

 

2020

Net income (loss)

 

$

(36,404)

 

$

(42,622)

Income tax provision (benefit)

 

 

(16,749)

 

 

(13,388)

Income (loss) before income tax provision (benefit)

 

 

(53,153)

 

 

(56,010)

Amortization of capitalized software developed for sale

 

 

859

 

 

12

Depreciation and amortization

 

 

163,469

 

 

146,869

Interest expense, net

 

 

59,466

 

 

61,627

Equity compensation

 

 

23,745

 

 

14,331

Acquisition accounting adjustments

 

 

(1,653)

 

 

34,686

Acquisition and divestiture-related costs

 

 

13,765

 

 

2,337

Integration and related costs

 

 

5,933

 

 

7,536

Strategic initiatives, duplicative and transition costs

 

 

14,644

 

 

3,765

Severance costs

 

 

7,303

 

 

3,172

Accretion and changes in estimate, net

 

 

4,355

 

 

5,293

Impairment of long-lived assets and other

 

 

81

 

 

7,447

Loss on extinguishment of debt

 

 

2,232

 

 

1,489

Gain on sale of business

 

 

 

 

(176)

Contingent consideration

 

 

 

 

(550)

Other non-routine, net

 

 

5,416

 

 

13

Adjusted EBITDA

 

$

246,462

 

 

231,841

 
 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(unaudited and amounts in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Net income (loss)

 

$

(40,009)

 

$

(101,316)

Income tax provision (benefit)

 

 

(25,198)

 

 

(26,849)

Income (loss) before income tax provision (benefit)

 

 

(65,207)

 

 

(128,165)

Amortization of capitalized software developed for sale

 

 

1,576

 

 

89

Depreciation and amortization

 

 

331,681

 

 

285,409

Interest expense, net

 

 

118,852

 

 

124,294

Equity compensation

 

 

49,911

 

 

23,914

Acquisition accounting adjustments

 

 

(2,212)

 

 

83,225

Acquisition and divestiture-related costs

 

 

20,159

 

 

7,458

Integration and related costs

 

 

17,301

 

 

17,894

Strategic initiatives, duplicative and transition costs

 

 

24,572

 

 

8,845

Severance costs

 

 

12,023

 

 

7,876

Accretion and changes in estimate, net

 

 

9,087

 

 

11,188

Impairment of long-lived assets and other

 

 

1,692

 

 

13,760

Loss on extinguishment of debt

 

 

2,232

 

 

1,489

Gain on sale of business

 

 

 

 

(28,270)

Contingent consideration

 

 

 

 

(3,000)

Other non-routine, net

 

 

7,523

 

 

2,690

Adjusted EBITDA

 

$

529,190

 

 

428,696

 
 

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss)

(unaudited and amounts in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2021

 

2020

Net income (loss)

 

$

(36,404)

 

$

(42,622)

Amortization expense resulting from acquisition method adjustments

 

 

124,465

 

 

115,873

EBITDA adjustments

 

 

75,821

 

 

79,343

Tax effect of EBITDA adjustments and amortization expense

 

 

(49,590)

 

 

(49,107)

Adjusted net income (loss)

 

$

114,292

 

 

103,487

 

 

 

 

 

 

 

Adjusted net income (loss) per diluted share

 

$

0.35

 

 

0.32

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Net income (loss)

 

$

(40,009)

 

$

(101,316)

Amortization expense resulting from acquisition method adjustments

 

 

248,779

 

 

228,898

EBITDA adjustments

 

 

142,288

 

 

147,069

Tax effect of EBITDA adjustments and amortization expense

 

 

(103,811)

 

 

(89,966)

Adjusted net income (loss)

 

$

247,247

 

 

184,685

 

 

 

 

 

 

 

Adjusted net income (loss) per diluted share

 

$

0.76

 

 

0.58

 
 

Segment Results

(unaudited and amounts in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2021

 

2020

Segment revenue

 

 

 

 

 

 

Software and Analytics

 

$

363,423

 

 

354,860

Network Solutions

 

 

215,600

 

 

184,095

Technology-Enabled Services

 

 

231,928

 

 

231,817

Postage and Eliminations (1)

 

 

19,091

 

 

24,073

Purchase Accounting Adjustment (2)

 

 

(3,278)

 

 

(38,909)

Net revenue

 

$

826,764

 

 

755,936

 

 

 

 

 

 

 

Segment adjusted EBITDA

 

 

 

 

 

 

Software and Analytics

 

$

112,318

 

 

117,393

Network Solutions

 

 

112,986

 

 

94,508

Technology-Enabled Services

 

 

21,158

 

 

19,940

Postage and Eliminations

 

 

 

 

Total adjusted EBITDA

 

$

246,462

 

 

231,841

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Segment revenue

 

 

 

 

 

 

Software and Analytics

 

$

783,740

 

 

746,449

Network Solutions

 

 

425,061

 

 

326,921

Technology-Enabled Services

 

 

457,450

 

 

419,523

Postage and Eliminations (1)

 

 

36,109

 

 

51,136

Purchase Accounting Adjustment (2)

 

 

(7,740)

 

 

(93,909)

Net revenue

 

$

1,694,620

 

 

1,450,120

 

 

 

 

 

 

 

Segment adjusted EBITDA

 

 

 

 

 

 

Software and Analytics

 

$

272,683

 

 

261,325

Network Solutions

 

 

222,474

 

 

165,011

Technology-Enabled Services

 

 

34,033

 

 

2,360

Postage and Eliminations

 

 

 

 

Total adjusted EBITDA

 

$

529,190

 

 

428,696

(1)

Revenue for Postage and Eliminations includes postage revenue of $52.6 million for the three months ended September 30, 2021 and $50.0 million for the three months ended September 30, 2020. Revenue for Postage and Eliminations includes postage revenue of $103.8 million for the six months ended September 30, 2021 and $95.8 million for the six months ended September 30, 2020.

(2)

Amount reflects the impact to deferred revenue resulting from the McKesson exit which reduced revenue recognized during the three months ended September 30, 2021 and September 30, 2020.

 

 

Reconciliation of Cash Provided by (Used in) Operating Activities to Free Cash Flow and Adjusted Free Cash Flow

(unaudited and amounts in thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended September 30,

 

 

2021

 

2020

Cash provided by (used in) operating activities (1)

 

$

261,351

 

$

296,557

Capital expenditures

 

 

(126,828)

 

 

(126,432)

Free cash flow

 

 

134,523

 

 

170,125

Adjustments to free cash flow (2):

 

 

 

 

 

 

Integration and related costs

 

 

17,301

 

 

17,894

Strategic initiatives, duplicative and transition costs

 

 

24,572

 

 

8,845

Severance costs

 

 

12,023

 

 

7,876

Integration and strategic capital expenditures

 

 

13,483

 

 

5,938

Adjusted free cash flow

 

$

201,902

 

$

210,678

(1)

Includes cash provided by pass-thru funds of $4.4 million for the six months ended September 30, 2021 and cash used by pass-thru funds of $1.4 million for the six months ended September 30, 2020.

(2)

All operating costs and integration and strategic capital expenditures are presented on an as-incurred basis.

 

Contacts

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 SanRafael.com & California Media Partners, LLC. All rights reserved.