WASHINGTON, May 12, 2016 /PRNewswire/ -- Evolent Health,
Inc. (NYSE: EVH), a company providing an integrated value-based
care platform to the nation's leading health systems and physician
organizations, today announced financial results for the quarter
ended March 31, 2016.
Highlights from the first quarter of 2016 announcement include
(all comparisons are to the quarter ended March 31, 2015):
- GAAP revenue of $49.4 million;
Adjusted Revenue of $49.5 million,
which is an increase of 33.7%
- Lives on platform of more than 1.2 million as of March 31, 2016, an increase of 160%, inclusive of
approximately 300,000 lives from the Passport Health Plan
partnership
- New partnership agreement established with Georgia Physicians
for Accountable Care
Frank Williams, Chief Executive
Officer of Evolent Health, Inc., commented, "We are quite pleased
with our results for the first quarter of 2016, as we delivered
strong financial performance and made significant progress
operationally and strategically. In the first quarter, we crossed
the one million mark in terms of lives on our platform and are
excited to see concrete outcomes data that demonstrate the positive
impact of our clinical model in delivering higher quality, lower
cost care."
"We're also delighted to announce that we have added a new
provider system to our customer network: Georgia Physicians for
Accountable Care, known as GPAC, with a presence throughout the
state of Georgia," Williams added.
"Through our partnership, GPAC will be able to leverage our
clinical and financial expertise, as well as the
IdentifiSM technology platform, to provide the ACO with
the tools it needs to effectively manage care across a network of
over 630 physicians."
"Our collaboration with GPAC will initially focus on 70,000
patients currently under value-based arrangements, with a
significant growth opportunity across the state as additional lives
move to risk-based contracts," Williams said. "We are excited about
opening up a direct-to-physician channel in markets where large
physician groups are pursuing risk-based arrangements and need
support in navigating the operational complexity that is critical
for financial success."
Financial Results of Evolent Health, Inc.
Evolent Health, Inc. completed a reorganization of its corporate
structure on June 4, 2015 (the
"Reorganization"), in connection with the initial public offering
of its Class A common stock ("IPO"). Prior to the Reorganization,
Evolent Health, Inc. had no operations. As a result, the financial
statements of Evolent Health, Inc. for the three months ended
March 31, 2015, do not reflect a
complete view of the operational results for the period. In order
to provide consistent and comparable metrics for the periods before
and after June 4, 2015, the adjusted
results of Evolent Health, Inc. presented and discussed in this
release reflect the Reorganization as if it had occurred on
January 1, 2015. The adjusted results
include the operations of Evolent Health LLC for the period from
January 1, 2015, through March 31, 2015, as well as certain other
adjustments. See "Financial Statement Presentation" and "Non-GAAP
Financial Measures" for more information.
Reported Results
Evolent Health, Inc. reported United
States of America generally accepted accounting principles
("GAAP") revenue of $49.4 million for
the three months ended March 31,
2016, compared to zero for the same period in 2015, which
does not reflect the operating results of Evolent Health LLC as
noted above.
Cost of revenue was $28.6 million
for the three months ended March 31,
2016, compared to zero for the same period in 2015.
Operating income (loss) was $(175.2)
million for the three months ended March 31, 2016, compared to zero for the same
period in 2015.
Net income (loss) attributable to Evolent Health, Inc. was
$(122.8) million for the three months
ended March 31, 2016, which included
a non-cash impairment charge to goodwill of $160.6. Net income (loss) attributable to Evolent
Health, Inc. was $(11.3) million for
the three months ended March 31,
2015. Earnings (loss) available for common shareholders was
$(122.8) million and $(12.6) million for the three months ended
March 31, 2016 and 2015,
respectively. Earnings (loss) per share available for common
shareholders was $(2.91) and
$(4.22) per basic and diluted share
for the three months ended March 31,
2016 and 2015, respectively.
Total cash, cash equivalents and investments as of March 31, 2016, were $165.3 million.
Adjusted Results
- Adjusted Revenue for the three months ended March 31, 2016 increased 33.7% to $49.5 million, compared to $37.0 million for the three months ended
March 31, 2015.
- Adjusted Cost of Revenue was $28.2
million or 56.8% of Adjusted Revenue for the three months
ended March 31, 2016, compared to
$26.0 million or 70.2% of Adjusted
Revenue for the three months ended March 31,
2015.
- Adjusted EBITDA for the three months ended March 31, 2016, was $(6.6)
million, compared to $(8.8)
million for the three months ended March 31, 2015.
- Adjusted Loss Available for Common Shareholders for the three
months ended March 31, 2016, and 2015
was $(9.7) million and $(11.6) million, respectively.
- Adjusted Loss per Share Available for Common Shareholders for
the three months ended March 31,
2016, and 2015 was $(0.16) and
$(0.43), respectively.
Business Outlook
For the full year 2016, Adjusted Revenue is expected to be in
the range of $212.0 million to $220.0
million and Adjusted EBITDA is expected to be in the range
of $(28.0) million to $(24.0)
million. For the three months ended June 30, 2016, Adjusted Revenue is expected to be
in the range of $51.0 million to $52.0
million and Adjusted EBITDA is expected to be in the range
of $(7.0) million to $(6.0)
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 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 performance this
evening, May 12, 2016, 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 and ask to join to 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 90 days and will be available
beginning later this evening. Evolent Health invites all interested
parties to attend the conference call.
About Evolent Health
Evolent Health partners with leading health systems to drive
value-based care transformation. By providing clinical, analytical
and financial capabilities, Evolent Health helps physicians and
health systems achieve superior quality and cost results. Evolent
Health's approach breaks down barriers, aligns incentives and
powers a new model of care delivery resulting in meaningful
alignment between providers, payers, physicians and patients. Learn
more at: www.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. Prior to the Reorganization on June 4, 2015, the predecessor of Evolent Health,
Inc. accounted for Evolent Health LLC as an equity method
investment. The financial results of Evolent Health LLC have been
consolidated in the financial statements of Evolent Health, Inc.
following the Reorganization. As a result, the financial statements
of Evolent Health, Inc. for the three months ended March 31, 2015, do not reflect a complete view of
the operational results for the period. In order to provide a
consistent presentation for the periods before and after
June 4, 2015 and effectively provide
comparative results, the adjusted results of Evolent Health, Inc.
presented and discussed in this release reflect the Reorganization
as if it had occurred on January 1,
2015, and therefore include the operations of Evolent Health
LLC for the period from January 1,
2015 through March 31, 2015.
Including Evolent Health LLC's results for this period is not
consistent with GAAP and should not be considered as an alternative
to comparable GAAP measures. The details in the tabular
presentation below reflect certain income statement line items as
adjusted to reflect results from operations for the three month
period as if the Reorganization had occurred on January 1, 2015. The presentation also reflects
other adjustments described in "Non-GAAP Financial Measures."
Non-GAAP Financial Measures
In addition to disclosing financial results that are determined
in accordance with GAAP, we present and discuss Adjusted Revenue,
Adjusted Transformation Revenue, Adjusted Platform and Operations
Revenue, Adjusted Cost of Revenue, Adjusted Selling, General and
Administrative Expenses, Adjusted Depreciation and Amortization,
Adjusted Operating Income (Loss), Adjusted EBITDA, Adjusted
Earnings (Loss) Available for Common Shareholders, Adjusted
Earnings (Loss) per Share Available for 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. In
addition to the adjustments described below, each of the adjusted
measures are also adjusted to reflect the Reorganization as if it
had occurred on the first day of the relevant period as described
in "Financial Statement Presentation" and are adjusted to exclude
an impairment to goodwill we incurred this quarter, the impact of
purchase accounting adjustments, stock-based compensation expenses
and transaction costs related to the Reorganization, IPO and
business combinations.
Adjusted EBITDA is also adjusted to exclude depreciation and
amortization expense, other income (expense), interest (income)
expense, net income (loss) attributable to non-controlling
interests, provision (benefit) for income taxes and income (loss)
from affiliate.
Adjusted Earnings (Loss) per Share Available for Common
Shareholders is also adjusted to exclude net income (loss)
attributable to non-controlling interests, provision (benefit) for
income taxes and income (loss) from affiliate.
Adjusted Weighted-Average Common Shares is adjusted to include
items that would be considered anti-dilutive under GAAP during
periods of loss including the dilutive effects of options and
restricted stock and the assumed conversion of preferred or
exchangeable securities. For periods of income, Adjusted
Weighted-Average Common Shares is equivalent to the GAAP diluted
weighted-average common shares including the assumed conversion of
preferred or exchangeable securities
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 the comparable GAAP financial measures is
presented in the attached tables. We believe these measures are
useful across time in evaluating our fundamental core operating
performance. Management also uses certain of these measures to
manage our business, including in preparing its annual operating
budget, financial projections and compensation plans. We believe
that certain of these measures are also useful to investors because
similar measures are frequently used by securities analysts,
investors and other interested parties in their evaluation of
companies in similar industries.
Evolent Health,
Inc.
|
Adjusted
Results
|
For the Three
Months Ended March 31, 2016 and 2015
|
|
(in
thousands)
|
For the Three
Months Ended March 31, 2016
|
|
For the Three
Months Ended March 31, 2015
|
|
|
|
|
|
Evolent
|
|
|
|
Evolent
|
|
Evolent
|
|
Add:
|
|
|
|
|
Evolent
|
|
|
|
|
|
Health,
Inc.
|
|
|
|
Health,
Inc.
|
|
Health,
Inc.
|
|
Evolent
|
|
|
|
|
Health,
Inc.
|
|
|
|
|
|
as
|
|
|
|
as
|
|
as
|
|
Health
LLC
|
|
|
|
|
as
|
|
Change Over Prior
Period
|
|
Reported
|
Adjustments
(1)
|
Adjusted
|
|
Reported
|
Operations
(2)
|
Adjustments
(1)
|
Adjusted
|
|
$
|
|
%
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transformation
|
$
8,114
|
|
$
87
|
|
$
8,201
|
|
$
-
|
|
$
10,376
|
|
|
$
-
|
|
$
10,376
|
|
$
(2,175)
|
|
(21.0)%
|
Platform and
operations
|
41,335
|
|
-
|
|
41,335
|
|
-
|
|
26,665
|
|
|
-
|
|
26,665
|
|
14,670
|
|
55.0 %
|
Total
revenue
|
49,449
|
|
87
|
|
49,536
|
|
-
|
|
37,041
|
|
|
-
|
|
37,041
|
|
12,495
|
|
33.7 %
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
presented separately
below)
|
28,562
|
|
(406)
|
|
28,156
|
|
-
|
|
26,454
|
|
|
(439)
|
|
26,015
|
|
2,141
|
|
8.2 %
|
Selling, general
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
32,095
|
|
(4,086)
|
|
28,009
|
|
-
|
|
28,451
|
|
|
(8,577)
|
|
19,874
|
|
8,135
|
|
40.9 %
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
expenses
|
3,371
|
|
-
|
|
3,371
|
|
-
|
|
1,483
|
|
|
-
|
|
1,483
|
|
1,888
|
|
127.3 %
|
Goodwill
impairment
|
160,600
|
|
(160,600)
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
—%
|
Total operating
expenses
|
224,628
|
|
(165,092)
|
|
59,536
|
|
-
|
|
56,388
|
|
|
(9,016)
|
|
47,372
|
|
12,164
|
|
25.7 %
|
Operating income
(loss)
|
$ (175,179)
|
|
$ 165,179
|
|
$ (10,000)
|
|
$
-
|
|
$ (19,347)
|
|
|
$
9,016
|
|
$ (10,331)
|
|
$
331
|
|
(3.2)%
|
(1)
|
Represents
adjustments to remove the results of purchase accounting,
stock-based compensation, transaction expenses and goodwill
impairment
|
(2)
|
Represents the
operational results of Evolent Health LLC for the period from
January 1, 2015 through March 31, 2015
|
Evolent Health,
Inc.
|
Reconciliation of
Adjusted EBITDA to Net Income (Loss)
|
|
(in
thousands)
|
For the
Three
|
|
|
Months
Ended
|
|
|
March
31,
|
|
|
2016
|
|
2015
|
|
Net Income (Loss)
Attributable to
|
|
|
|
|
Evolent Health,
Inc.
|
$ (122,812)
|
|
$ (11,319)
|
|
|
|
|
|
|
Add:
|
|
|
|
|
Net income (loss) of
Evolent Health LLC
|
-
|
|
(19,315)
|
(1)
|
Less:
|
|
|
|
|
Goodwill
impairment
|
(160,600)
|
|
-
|
|
Income (loss) from
affiliate
|
-
|
|
(11,319)
|
|
(Provision) benefit
for income taxes
|
988
|
|
-
|
|
Net (income) loss
attributable to
|
|
|
|
|
non-controlling
interests
|
51,100
|
|
-
|
|
Purchase accounting
adjustments
|
(87)
|
|
-
|
|
Stock-based
compensation
|
(4,436)
|
|
(8,019)
|
|
Transaction
costs
|
(56)
|
|
(997)
|
|
Interest income
(expense), net
|
279
|
|
32
|
|
Depreciation and
amortization expense
|
(3,371)
|
|
(1,483)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
(6,629)
|
|
$
(8,848)
|
|
(1)
|
Represents the net
income (loss) for the period from January 1, 2015 through March 31,
2015
|
Evolent Health,
Inc.
|
Reconciliation of
Adjusted Earnings (Loss) per Share Available for Common
Shareholders to Earnings (Loss) per share Available for Common
Shareholders
|
|
|
(in thousands, except
per share data)
|
For the
Three
|
|
|
Months
Ended
|
|
|
March
31,
|
|
|
2016
|
|
2015
|
|
Earnings (Loss)
Available for
|
|
|
|
|
Common
Shareholders - Basic and Diluted (a)
|
$ (122,812)
|
|
$ (12,609)
|
|
Add:
|
|
|
|
|
Net income (loss) of
Evolent Health LLC
|
-
|
|
(19,315)
|
(1)
|
Less:
|
|
|
|
|
Goodwill
impairment
|
(160,600)
|
|
-
|
|
Income (loss) from
affiliate
|
-
|
|
(11,319)
|
|
(Provision) benefit
for income taxes
|
988
|
|
-
|
|
Net (income) loss
attributable to
|
|
|
|
|
non-controlling
interests
|
51,100
|
|
-
|
|
Purchase accounting
adjustments
|
(87)
|
|
-
|
|
Stock-based
compensation
|
(4,436)
|
|
(8,019)
|
|
Transaction
costs
|
(56)
|
|
(997)
|
|
Adjusted Earnings
(Loss) Available
|
|
|
|
|
for Common
Shareholders (b) (2)
|
$
(9,721)
|
|
$ (11,589)
|
|
|
|
|
|
|
Earnings (Loss)
per Share Available
|
|
|
|
|
for Common
Shareholders - Basic and Diluted (a) (2)
|
$
(2.91)
|
|
$
(4.22)
|
|
|
|
|
|
|
Adjusted Earnings
(Loss) per Share Available
|
|
|
|
|
for Common
Shareholders (b) (3)
|
$
(0.16)
|
|
$
(0.43)
|
|
|
|
|
|
|
Weighted-average
common shares - basic
|
42,185
|
|
2,988
|
|
Weighted-average
common shares - diluted
|
42,185
|
|
2,988
|
|
Weighted-average
common shares - adjusted (4)
|
60,179
|
|
26,880
|
|
(1)
|
Represents the net
income (loss) for the period from January 1, 2015 through March 31,
2015
|
(2)
|
For periods of net
loss, shares used in the earnings per share calculation represent
basic shares as using diluted shares would be
anti-dilutive
|
(3)
|
Represents Adjusted
Earnings (Loss) Available for Common Shareholders divided by
Adjusted Weighted-Average Common Shares as described in Note 4
below
|
(4)
|
Represents the
weighted-average shares of all dilutive or potentially dilutive
shares over the respective periods including in periods of
loss. See the reconciliation of Adjusted Weighted-Average
Common Shares to GAAP diluted weighted-average common shares on the
following page.
|
Evolent Health,
Inc.
|
Reconciliation of
Adjusted Weighted-Average Common
|
Shares to Diluted
Weighted-Average Common Shares
|
|
(in
thousands)
|
For the
Three
|
|
Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Weighted-average
common shares - diluted
|
42,185
|
|
2,988
|
Dilutive effect of
restricted stock and
|
|
|
|
restricted stock
units
|
12
|
|
605
|
Dilutive effect of
options
|
457
|
|
1,159
|
Assumed conversion of
convertible preferred
|
|
|
|
stock at
beginning-of-period
|
-
|
|
22,128
|
Assumed conversion of
Class B common
|
|
|
|
shares to Class A
common shares
|
17,525
|
|
-
|
Weighted-average
common shares - adjusted
|
60,179
|
|
26,880
|
Evolent Health,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(unaudited)
|
|
(in
thousands)
|
As
of
|
|
As
of
|
|
March
31,
|
|
December
31,
|
|
2016
|
|
2015
|
Cash and cash
equivalents
|
$
111,292
|
|
$ 145,726
|
Investments, at
amortized cost
|
20,096
|
|
9,445
|
Total current
assets
|
167,566
|
|
184,463
|
Investments, at
amortized cost
|
33,879
|
|
44,618
|
Goodwill
|
459,703
|
|
608,903
|
Intangible assets,
net
|
171,672
|
|
163,152
|
Total
assets
|
860,063
|
|
1,015,514
|
Total
liabilities
|
84,401
|
|
80,935
|
Total shareholders'
equity (deficit) attributable to Evolent Health, Inc.
|
541,524
|
|
649,341
|
Non-controlling
interests
|
234,138
|
|
285,238
|
Total liabilities and
shareholders' equity (deficit)
|
860,063
|
|
1,015,514
|
Evolent Health,
Inc.
|
Consolidated
Statements of Operations
|
(unaudited)
|
|
(in
thousands)
|
For the
Three
|
|
Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
Transformation
|
$ 8,114
|
|
$
-
|
Platform and
operations
|
41,335
|
|
-
|
Total
revenue
|
49,449
|
|
-
|
|
|
|
|
Expenses
|
|
|
|
Cost of revenue
(exclusive of depreciation
|
|
|
|
and amortization
presented separately below)
|
28,562
|
|
-
|
Selling, general and
administrative expenses
|
32,095
|
|
-
|
Depreciation and
amortization expenses
|
3,371
|
|
-
|
Goodwill
impairment
|
160,600
|
|
-
|
Total operating
expenses
|
224,628
|
|
-
|
Operating income
(loss)
|
(175,179)
|
|
-
|
Interest income
(expense), net
|
279
|
|
-
|
Income (loss) from
affiliate
|
-
|
|
(11,319)
|
Income (loss) before
income taxes
|
|
|
|
and non-controlling
interests
|
(174,900)
|
|
(11,319)
|
Provision (benefit)
for income taxes
|
(988)
|
|
-
|
Net income
(loss)
|
(173,912)
|
|
(11,319)
|
Net income (loss)
attributable to
|
|
|
|
non-controlling
interests
|
(51,100)
|
|
-
|
Net income (loss)
attributable to
|
|
|
|
Evolent Health,
Inc.
|
$ (122,812)
|
|
$ (11,319)
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Available to Common Shareholders
|
|
|
|
Basic
|
$ (122,812)
|
|
$ (12,609)
|
Diluted
|
(122,812)
|
|
(12,609)
|
|
|
|
|
Earnings (Loss)
per Common Share
|
|
|
|
Basic
|
$
(2.91)
|
|
$
(4.22)
|
Diluted
|
(2.91)
|
|
(4.22)
|
|
|
|
|
Weighted-Average
Common Shares Outstanding
|
|
|
|
Basic
|
42,185
|
|
2,988
|
Diluted
|
42,185
|
|
2,988
|
Evolent Health,
Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(unaudited)
|
|
(in
thousands)
|
For the
Three
|
|
Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Net cash provided by
(used in) operating activities
|
$ (18,408)
|
|
$
-
|
Net cash provided by
(used in) investing activities
|
(16,051)
|
|
-
|
Net cash provided by
(used in) financing activities
|
25
|
|
-
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
(34,434)
|
|
-
|
Cash and cash
equivalents as of beginning-of-period
|
145,726
|
|
-
|
Cash and cash
equivalents as of end-of-period
|
$ 111,292
|
|
$
-
|
FORWARD-LOOKING STATEMENTS - CAUTIONARY
LANGUAGE
Certain statements made in this release 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 structural change in the market for healthcare in
the United States;
- Our ability to effectively manage our growth;
- The significant portion of revenue we derive from our largest
partners;
- Our ability to offer new and innovative products and
services;
- The growth and success of our partners, which is difficult to
predict and is subject to factors outside of our control;
- Our ability to attract new partners;
- Our ability to recover the significant upfront costs in our
partner relationships;
- Our ability to estimate the size of our target market;
- Our ability to maintain and enhance our reputation and brand
recognition;
- Consolidation in the healthcare industry;
- Competition which could limit our ability to maintain or expand
market share within our industry;
- Our ability to partner with providers due to exclusivity
provisions in our contracts;
- Uncertainty in the healthcare regulatory framework;
- Restrictions and penalties as a result of privacy and data
protection laws;
- Adequate protection of our intellectual property;
- Any alleged infringement, misappropriation or violation of
third-party proprietary rights;
- Our use of "open source" software;
- Our ability to protect the confidentiality of our trade
secrets, know-how and other proprietary information;
- Our reliance on third parties;
- Our ability to use, disclose, de-identify or license data and
to integrate third-party technologies;
- Data loss or corruption due to failures or errors in our
systems and service disruptions at our data centers;
- Breaches or failures of our security measures;
- Our reliance on Internet infrastructure, bandwidth providers,
data center providers, other third parties and our own systems for
providing services to our users;
- Our dependency on our key personnel, and our ability to
attract, hire, integrate and retain key personnel;
- Risks related to future acquisition opportunities;
- The risk of potential future goodwill impairment on our results
of operations;
- Our future indebtedness and our ability to obtain additional
financing;
- Our ability to achieve profitability in the future;
- The requirements of being a public company;
- Our adjusted results may not be representative of our future
performance;
- The risk of potential future litigation;
- Our ability to remediate the material weakness in our internal
control over financial reporting;
- Our holding company structure and dependence on distributions
from Evolent Health LLC;
- Our obligations to make payments to certain of our pre-IPO
investors for certain tax benefits we may claim in the future;
- Our ability to utilize benefits under the TRA;
- Our ability to realize all or a portion of the tax benefits
that we currently expect to result from future exchanges of Class B
common units for our Class A common stock, and to utilize certain
tax attributes of Evolent Health Holdings and an affiliate of
TPG;
- Distributions that Evolent Health LLC will be required to make
to us and to the other members of Evolent Health LLC;
- Our obligations to make payments under the TRA that may be
accelerated or may exceed the tax benefits we realize;
- Different interests among our pre-IPO investors, or between us
and our pre-IPO investors;
- The terms of agreements between us and certain of our pre-IPO
investors;
- Our exemption from certain corporate governance requirements
due to our status as a "controlled company" within the meaning of
New York Stock Exchange rules;
- The potential volatility of our Class A common stock
price;
- The potential decline of our Class A common stock price if a
substantial number of shares become available for sale or if a
large number of Class B common units is exchanged for shares of
Class A common stock;
- Provisions in our certificate of incorporation and bylaws and
provisions of Delaware law that
discourage or prevent strategic transactions, including a takeover
of us;
- The ability of certain of our investors to compete with us
without restrictions;
- Provisions in our certificate of incorporation which could
limit our stockholders' ability to obtain a favorable judicial
forum for disputes with us or our directors, officers or
employees;
- Our intention not to pay cash dividends on our Class A common
stock; and
- Our status as an "emerging growth company."
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 2015 Form
10-K 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
report.
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SOURCE Evolent Health, Inc.