NASHVILLE, Tenn., May 5, 2022 /PRNewswire/ -- Tivity Health, Inc.
(Nasdaq: TVTY) (the "Company"), a leading provider of healthy
life-changing solutions, including SilverSneakers®, today announced
financial results for the first quarter ended March 31, 2022.
Richard Ashworth, President and
Chief Executive Officer, commented, "Tivity Health's first quarter
results were driven by our continued growth in physical and virtual
visits and highlight the important and growing role our brands play
in the lives of our members."
First Quarter Highlights
- Revenue from continuing operations increased 18.0% to
$127.5 million during the first
quarter of 2022, compared to $108.1
million for the first quarter of 2021;
- Income from continuing operations was $0.6 million, which included a non-cash
unrealized net loss of $22.4 million
related to the Company's equity ownership in Sharecare and a
non-cash unrealized net gain of $4.3
million on de-designated interest rate swaps;
- Adjusted EBITDA from continuing operations was $37.4 million, compared to $41.2 million in the first quarter of 2021;
- In-person SilverSneakers visits totaled 16.9 million for the
first quarter of 2022, compared to 11.2 million in the prior year,
and 16.5 million for the fourth quarter of 2021;
- Virtual visits were 1.1 million in the first quarter of 2022,
an increase of 67% compared to the fourth quarter of 2021.
First Quarter 2022
Financial Information
Dollars in
millions, except per-share data
See pages 10-12
for a reconciliation of non-GAAP financial measures
|
|
|
Three Months
Ended
March 31,
|
|
|
2022
|
2021
|
|
|
|
|
|
Revenues from
Continuing Operations
|
$127.5
|
$108.1
|
|
Income from
Continuing Operations (1)
|
$0.6
|
$19.9
|
|
Income from
Continuing Operations Margin (1)
|
0.5%
|
18.5%
|
|
Adjusted EBITDA from
Continuing Operations (2)
|
$37.4
|
$41.2
|
|
Adjusted EBITDA from
Continuing Operations Margin (2)
|
29.3%
|
38.1%
|
|
Diluted Earnings Per
Share from Continuing Operations (1)
|
$0.01
|
$0.40
|
|
Adjusted Diluted
Earnings Per Share from Continuing Operations
(2)
|
$0.40
|
$0.40
|
|
Cash Flows from
Operating Activities
|
$37.0
|
$22.6
|
|
Free Cash Flow
(2)
|
$32.9
|
$19.4
|
|
|
|
(1)
|
Results for the three
months ended March 31, 2022 include an unrealized pretax loss of
$22.4 million related to the Company's equity ownership in
Sharecare and an unrealized pretax gain of $5.7 million on
de-designated interest rate swaps. There is no net tax impact on
the loss related to the Company's equity ownership in Sharecare due
to the existence of valuation allowances for deferred tax assets
related to capital loss carryforwards.
|
(2)
|
Adjusted EBITDA from
continuing operations, adjusted EBITDA from continuing operations
margin, adjusted earnings per diluted share from continuing
operations, and free cash flow are non-GAAP financial measures. See
pages 10-12 for a reconciliation of non-GAAP financial
measures.
|
Revenues in the first quarter of 2022 of $127.5 million increased by $19.4 million, or approximately 18%, compared to
the first quarter of 2021, primarily due to continued recovery from
the COVID-19 pandemic. SilverSneakers revenue of $96.1 million increased by $16.3 million primarily due to an increase in
revenue-generating visits, and Prime Fitness revenue of
$25.0 million increased by
$2.4 million primarily due to higher
average monthly subscribers.
Income from continuing operations for the first quarter of 2022
was $0.6 million, a decrease of
$19.3 million compared to the first
quarter of 2021. The results for the first quarter of 2022
reflect a non-cash unrealized net loss of $22.4 million related to the Company's equity
ownership in Sharecare, based on fluctuations in Sharecare's stock
price, and a non-cash unrealized net gain of $4.3 million on de-designated interest rate
swaps.
Adjusted EBITDA from continuing operations was $37.4 million for the first quarter of 2022, or
29.3% of revenues, compared to $41.2
million for the first quarter of 2021, or 38.1% of
revenues. The decrease in adjusted EBITDA as a percentage of
revenues is primarily due to a lower mix of revenues from
per-member-per-month fees for SilverSneakers coupled with an
increase in fitness location visit costs for SilverSneakers and
Prime Fitness due to an increase in participation levels.
Transaction with Stone Point Capital
On April 5, 2022, the Company
entered into a definitive agreement to be acquired by funds managed
by Stone Point Capital. Under the terms of the agreement, Tivity
Health stockholders will receive $32.50 in cash per share at closing. The
transaction with Stone Point Capital creates immediate and
substantial value for shareholders while ensuring the Company
continues to help SilverSneakers members live healthier, happier
and more connected lives as a leading senior fitness and health
improvement platform. This transaction is the culmination of
an extensive review of strategic alternatives. The
transaction is scheduled to close in or prior to the third quarter
of 2022, subject to the receipt of stockholder approval, regulatory
approval and other customary closing conditions. Following
completion of the transaction, Tivity Health will become a
privately held company, and its common stock will no longer be
traded on Nasdaq.
In light of this pending transaction, the Company will not be
hosting an earnings conference call to discuss its results for the
quarter and will not be providing or updating previously issued
financial guidance.
About Tivity Health
Tivity Health® Inc. (Nasdaq: TVTY) is a leading
provider of healthy life-changing solutions, including
SilverSneakers®, Prime® Fitness and
WholeHealth Living®. We help adults improve their health
and support them on life's journey by providing access to in-person
and virtual physical activity, social, and mental enrichment
programs, as well as a full suite of physical medicine and
integrative health services. We continue to enhance the way we
direct members along their journey to better health by delivering
an insights-driven, personalized, interactive experience. Our suite
of services support health plans nationwide as they seek to reduce
costs and improve health outcomes. At Tivity Health, we deliver the
resources members need to live healthier, happier, more
connected lives. 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 10-12.
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: the
risk that the proposed acquisition of the Company (the "Merger")
may not be completed in a timely manner or at all, which may
adversely affect the Company's business and the price of the
Company common stock; the failure to satisfy any of the conditions
to the consummation of the proposed transaction, including the
adoption of the Merger Agreement by the Company's stockholders and
the receipt of certain regulatory approvals; the occurrence of any
event, change or other circumstance or condition that could give
rise to the termination of the Merger Agreement, including in
circumstances requiring the Company to pay a termination fee; the
effect of the announcement or pendency of the proposed transaction
on the Company's business relationships, operating results and
business generally; risks that the proposed transaction disrupts
the Company's current plans and operations; the Company's ability
to retain and hire key personnel in light of the proposed
transaction; risks related to diverting management's attention from
the Company's ongoing business operations; unexpected costs,
charges or expenses resulting from the proposed transaction; the
ability of Stone Point to obtain the necessary financing
arrangements set forth in the commitment letters received in
connection with the Merger; potential litigation relating to the
Merger that could be instituted against Stone Point, the Company or their respective
directors, managers or officers, including the effects of any
outcomes related thereto; continued availability of capital and
financing; certain restrictions during the pendency of the
Merger that may impact the Company's ability to pursue certain
business opportunities or strategic transactions; impacts from the
COVID-19 pandemic (including the response of governmental
authorities to combat and contain the pandemic; the development,
availability, distribution, and effectiveness of vaccines and
treatments, and public confidence in such vaccines and treatments;
the closure of fitness centers in the Company's national network
(or operational restrictions imposed on such fitness centers),
reclosures, and potential additional reclosures or restrictions 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 its industry and/or business, as well as to
accurately forecast the related impact on its 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 equity ownership in Sharecare and the expected
timing and amount of cash proceeds from any potential disposition
of this holding; 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 Company's ability to effectively
compete against other entities, whose financial, research, staff,
and marketing resources may exceed the Company's 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 the
Company; 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 the Company deriving
a significant concentration of its revenues from a limited number
of our 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 its programs in a manner and within the timeframe
it anticipates; the Company's ability to sign, renew and/or
maintain contracts with its customers and/or its 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 increased focus from
investors and other stakeholders regarding ESG practices, which
could result in additional costs, regulation, or risks and
adversely impact the Company's reputation, employee recruiting and
retention, and willingness of customers and suppliers to do
business with the Company; 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
our 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 its ability to adapt to
changes in the economy or market conditions, expose it 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.
Additional Information and Where to Find It
In connection with the Merger, the Company intends to file a
preliminary proxy statement on Schedule 14A with the SEC.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, COMPANY
STOCKHOLDERS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND
ANY OTHER RELEVANT DOCUMENTS, INCLUDING THE DEFINITIVE PROXY
STATEMENT (IF AND WHEN IT BECOMES AVAILABLE), THAT ARE FILED
OR WILL BE FILED WITH THE SEC (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) CAREFULLY AND IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE MERGER. The definitive proxy
statement (if and when it becomes available) will be mailed to
stockholders of the Company. Stockholders will be able to obtain
the documents (if and when they become available) free of
charge at the SEC's website, http://www.sec.gov. In
addition, stockholders may obtain free copies of the documents
(if and when they become available) on the
Company's website, www.tivityhealth.com, under the heading
"Investors."
Participants in the Solicitation
The Company and certain of its directors, executive officers and
other employees, under the SEC's rules, may be deemed to be
participants in the solicitation of proxies of the Company's
stockholders in connection with the Merger. Additional
information regarding the interests of those participants and other
persons who may be deemed participants in the Merger and their
respective direct and indirect interests in the Merger,
by security holdings or otherwise, will be included in the
definitive proxy statement and other materials to be filed
with the SEC in connection with the Merger (if and when they
become available). Free copies of these documents may be
obtained as described in the preceding paragraph.
Investor Relations Contact:
Matt Milanovich, VP, Investor
Relations and FP&A; (602) 562-2595;
matt.milanovich@tivityhealth.com
TIVITY HEALTH,
INC.
CONSOLIDATED
BALANCE SHEETS
(In thousands,
except share and per share data)
(Unaudited)
|
|
|
|
March 31, 2022
|
|
|
December 31,
2021
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
92,076
|
|
|
$
|
60,132
|
|
Accounts
receivable
|
|
|
58,011
|
|
|
|
62,730
|
|
Prepaid
expenses
|
|
|
5,420
|
|
|
|
6,465
|
|
Income taxes
receivable
|
|
|
—
|
|
|
|
3,095
|
|
Investment in equity
securities
|
|
|
27,366
|
|
|
|
49,746
|
|
Other current
assets
|
|
|
8,308
|
|
|
|
13,733
|
|
Total current
assets
|
|
|
191,181
|
|
|
|
195,901
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net of accumulated depreciation of
$47,280
and $44,229, respectively
|
|
|
25,721
|
|
|
|
25,247
|
|
Right-of-use
assets
|
|
|
8,811
|
|
|
|
10,695
|
|
Intangible assets,
net
|
|
|
29,049
|
|
|
|
29,049
|
|
Goodwill,
net
|
|
|
334,680
|
|
|
|
334,680
|
|
Other
assets
|
|
|
5,723
|
|
|
|
2,969
|
|
Total
assets
|
|
$
|
595,165
|
|
|
$
|
598,541
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
25,376
|
|
|
$
|
25,325
|
|
Accrued salaries and
benefits
|
|
|
4,065
|
|
|
|
11,825
|
|
Accrued
liabilities
|
|
|
31,624
|
|
|
|
28,270
|
|
Deferred
revenue
|
|
|
3,201
|
|
|
|
3,371
|
|
Income taxes
payable
|
|
|
2,774
|
|
|
|
—
|
|
Current portion of
lease liabilities
|
|
|
7,388
|
|
|
|
8,007
|
|
Current portion of
other long-term liabilities
|
|
|
2,832
|
|
|
|
10,625
|
|
Total current
liabilities
|
|
|
77,260
|
|
|
|
87,423
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
379,960
|
|
|
|
380,504
|
|
Long-term lease
liabilities
|
|
|
2,072
|
|
|
|
3,487
|
|
Long-term deferred
tax liability
|
|
|
7,789
|
|
|
|
3,183
|
|
Other long-term
liabilities
|
|
|
137
|
|
|
|
5,037
|
|
|
|
|
|
|
|
|
|
|
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,
49,854,631 and 49,800,756 shares outstanding,
respectively
|
|
|
50
|
|
|
|
50
|
|
Additional paid-in
capital
|
|
|
516,113
|
|
|
|
514,461
|
|
Accumulated
deficit
|
|
|
(358,590)
|
|
|
|
(359,171)
|
|
Treasury stock, at
cost, 2,254,953 shares in treasury
|
|
|
(28,182)
|
|
|
|
(28,182)
|
|
Accumulated other
comprehensive loss
|
|
|
(1,444)
|
|
|
|
(8,251)
|
|
Total stockholders'
equity
|
|
|
127,947
|
|
|
|
118,907
|
|
Total liabilities and
stockholders' equity
|
|
$
|
595,165
|
|
|
$
|
598,541
|
|
TIVITY HEALTH,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands,
except earnings per share data)
(Unaudited)
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
2022
|
|
|
2021
|
|
|
Revenues
|
|
$
|
127,513
|
|
|
$
|
108,085
|
|
|
Cost of revenue
(exclusive of depreciation of $3,065 and $2,531,
respectively included below)
|
|
|
78,415
|
|
|
|
57,285
|
|
|
Marketing
expense
|
|
|
2,784
|
|
|
|
1,231
|
|
|
Selling, general and
administrative expenses
|
|
|
10,700
|
|
|
|
9,696
|
|
|
Depreciation
expense
|
|
|
3,206
|
|
|
|
2,683
|
|
|
Operating
income
|
|
|
32,408
|
|
|
|
37,190
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
6,993
|
|
|
|
10,756
|
|
|
Other (income)
expense, net
|
|
|
16,685
|
|
|
|
(1,130)
|
|
|
Total non-operating
expense, net
|
|
|
23,678
|
|
|
|
9,626
|
|
|
Income before income
taxes
|
|
|
8,730
|
|
|
|
27,564
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
8,086
|
|
|
|
7,620
|
|
|
Income from continuing
operations
|
|
$
|
644
|
|
|
$
|
19,944
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
discontinued operations, net of income tax benefit of
$21
and
$277, respectively
|
|
|
(63)
|
|
|
|
(808)
|
|
|
Net income
|
|
$
|
581
|
|
|
$
|
19,136
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.01
|
|
|
$
|
0.41
|
|
|
Discontinued
operations
|
|
$
|
(0.00)
|
|
|
$
|
(0.02)
|
|
|
Net income
|
|
$
|
0.01
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - diluted:
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
|
0.01
|
|
|
$
|
0.40
|
|
|
Discontinued
operations
|
|
$
|
(0.00)
|
|
|
$
|
(0.02)
|
|
|
Net income
|
|
$
|
0.01
|
|
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income
|
|
$
|
7,388
|
|
|
$
|
21,938
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and equivalents:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
49,838
|
|
|
|
49,222
|
|
|
Diluted
|
|
|
50,557
|
|
|
|
50,340
|
|
|
TIVITY HEALTH,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
March 31,
|
|
|
|
2022
|
|
|
2021
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
644
|
|
|
$
|
19,944
|
|
Loss from discontinued
operations
|
|
|
(63)
|
|
|
|
(808)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
3,206
|
|
|
|
2,683
|
|
Amortization and
write-off of deferred loan costs
|
|
|
492
|
|
|
|
1,183
|
|
Amortization and
write-off of debt discount
|
|
|
63
|
|
|
|
1,077
|
|
Share-based employee
compensation expense
|
|
|
1,919
|
|
|
|
2,998
|
|
Unrealized gain on
derivatives
|
|
|
(5,695)
|
|
|
|
(1,130)
|
|
Unrealized loss on
investments in equity securities
|
|
|
22,380
|
|
|
|
—
|
|
Deferred income
taxes
|
|
|
2,272
|
|
|
|
1,454
|
|
Decrease (increase) in
accounts receivable
|
|
|
4,719
|
|
|
|
(18,978)
|
|
Changes in income
taxes receivable and payable
|
|
|
5,869
|
|
|
|
10,217
|
|
Decrease in other
current assets
|
|
|
1,992
|
|
|
|
529
|
|
Decrease in accounts
payable
|
|
|
(945)
|
|
|
|
(42)
|
|
Decrease in accrued
salaries and benefits
|
|
|
(7,760)
|
|
|
|
(3,685)
|
|
Increase in other
current liabilities
|
|
|
7,553
|
|
|
|
5,594
|
|
Other
|
|
|
369
|
|
|
|
1,582
|
|
Net cash flows
provided by operating activities
|
|
$
|
37,015
|
|
|
$
|
22,618
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
$
|
(2,715)
|
|
|
$
|
(1,561)
|
|
Settlement on
derivatives not designated as hedges
|
|
|
(1,390)
|
|
|
|
(1,633)
|
|
Net cash flows used in
investing activities
|
|
$
|
(4,105)
|
|
|
$
|
(3,194)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Payments of long-term
debt
|
|
|
(1,000)
|
|
|
|
(63,600)
|
|
Payments related to
tax withholding for share-based compensation
|
|
|
(472)
|
|
|
|
(2,502)
|
|
Exercise of stock
options
|
|
|
205
|
|
|
|
164
|
|
Change in cash
overdraft and other
|
|
|
301
|
|
|
|
(1,443)
|
|
Net cash flows used in
financing activities
|
|
$
|
(966)
|
|
|
$
|
(67,381)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
$
|
31,944
|
|
|
$
|
(47,957)
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
$
|
60,132
|
|
|
$
|
100,385
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
92,076
|
|
|
$
|
52,428
|
|
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
Ended
March 31,
2022
|
|
% of
Revenue
|
|
|
Three
Months
Ended
March 31,
2021
|
|
|
% of
Revenue
|
|
Income from
continuing operations, GAAP basis
|
|
$
|
644
|
|
0.5%
|
|
|
19,944
|
|
|
18.5%
|
|
Income tax
expense
|
|
|
8,086
|
|
|
|
|
7,620
|
|
|
|
|
Interest
expense
|
|
|
6,993
|
|
|
|
|
10,756
|
|
|
|
|
Depreciation
expense
|
|
|
3,206
|
|
|
|
|
2,683
|
|
|
|
|
EBITDA from
continuing operations, non-GAAP
basis (1)
|
|
$
|
18,929
|
|
|
|
$
|
41,003
|
|
|
|
|
Integration, project,
and CEO transition costs (2)
|
|
|
1,737
|
|
|
|
|
1,321
|
|
|
|
|
Other (income)
expense, net (3)
|
|
|
16,685
|
|
|
|
|
(1,130)
|
|
|
|
|
Adjusted EBITDA from
continuing operations, non-
GAAP basis (4)
|
|
$
|
37,351
|
|
29.3%
|
|
$
|
41,194
|
|
|
38.1%
|
|
|
|
(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 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)
|
Integration, project,
and CEO transition costs consist of pre-tax charges of $1,737 and
$1,321 for the three months ended March 31, 2022 and 2021,
respectively, primarily incurred in connection with strategic
projects (including the potential Merger) and with the termination
of the Company's former CEO in February 2020 and the hiring of its
new CEO in June 2020.
|
(3)
|
Other (income)
expense consists of pre-tax expense of $16,685 and pre-tax income
of ($1,130) for the three months ended March 31, 2022 and 2021,
respectively, related to (i) unrealized losses on the Company's
equity ownership in Sharecare during the first quarter of 2022, and
(ii) unrealized gains on certain interest rate swap agreements that
no longer qualify for hedge accounting treatment ("de-designated
swaps") and require changes in fair value to be recognized each
period in current earnings.
|
(4)
|
Adjusted EBITDA from
continuing operations is a non-GAAP financial measure. The
Company excludes integration, project, and CEO transition costs
and other (income) expense 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 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
Net Cash Flows Provided by Operating Activities, GAAP Basis
to
Free Cash Flow,
Non-GAAP Basis (in thousands)
|
|
|
|
|
|
Three
Months
Ended
March
31,
2022
|
|
|
|
Three
Months
Ended
March
31,
2021
|
|
Net cash flows
provided by operating activities, GAAP basis
|
|
|
$
|
37,015
|
|
|
$
|
22,618
|
|
Acquisition of
property and equipment
|
|
|
|
(2,715)
|
|
|
|
(1,561)
|
|
Settlement on
derivatives not designated as hedges
|
|
|
|
(1,390)
|
|
|
|
(1,633)
|
|
Free cash flow,
non-GAAP basis (5)
|
|
|
$
|
32,910
|
|
|
$
|
19,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
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 believes free cash flow is a useful
measure of performance, an indication of the strength of the
Company and its ability to generate cash, and the amount of cash
that is available to repay debt or make other
investments. 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
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
March
31,
2022
|
|
|
Three
Months
Ended
March
31,
2021
|
|
|
|
EPS from continuing
operations, GAAP basis
|
|
$
|
0.01
|
|
$
|
0.40
|
|
|
|
Net loss
attributable to integration, project, and CEO transition costs
(6)
|
|
|
0.03
|
|
|
0.02
|
|
|
|
Net
income per share attributable to other (income) expense, net
(7)
|
|
|
0.36
|
|
|
(0.02)
|
|
|
|
Adjusted EPS from
continuing operations, GAAP basis (8)
|
|
$
|
0.40
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
Net loss attributable
to integration, project, and CEO transition costs consists of
pre-tax charges of $1,737 and $1,321 for the three months ended
March 31, 2022 and 2021, respectively, primarily incurred in
connection with strategic projects (including the potential Merger)
and with the termination of the Company's former CEO in February
2020 and the hiring of its new CEO in June 2020. The tax rate
applied to these charges was 25%, which represented the combined
estimated U.S. federal and state statutory tax rate.
|
(7)
|
Net income
attributable to other (income) expense consists of pre-tax expense
of $16,685 and pre-tax income of ($1,130) for the three months
ended March 31, 2022 and 2021, respectively, related to the
Company's equity ownership in Sharecare and unrealized gains on the
Company's de-designated swaps, as described in Note 3 above.
The tax rate applied to the income related to the de-designated
swaps was 25%, which represented the combined estimated U.S.
federal and state statutory tax rate. There is no net tax impact on
the loss related to the Company's equity ownership in Sharecare due
to the existence of valuation allowances for deferred tax assets
related to capital loss carryforwards.
|
(8)
|
Adjusted EPS from
continuing operations is a non-GAAP financial measure.
The Company excludes net (income) loss per share attributable to
integration, project, and CEO transition costs and other (income)
expense 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 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.
|
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SOURCE Tivity Health, Inc.