UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
WASHINGTON, D.C. 20549 |
Delaware | 001-37415 | 32-0454912 |
(State or other jurisdiction of incorporation or organization) | Commission File Number: | (I.R.S. Employer Identification No.) |
800 N. Glebe Road, Suite 500, Arlington, Virginia 22203 | ||
(Address of principal executive offices)(zip code) |
Exhibit | ||
Number | Description | |
99.1 | Press release dated August 6, 2015, announcing Evolent Health, Inc.'s financial results for the quarter | |
ended June 30, 2015 |
/s/ Cynthia Cann | |
Cynthia Cann | |
Chief Accounting Officer |
Exhibit | ||
Number | Description | |
99.1 | Press release dated August 6, 2015, announcing Evolent Health, Inc.'s financial results for the quarter | |
ended June 30, 2015 |
Evolent Health, Inc. | ||
800 North Glebe Road, # 500 | ||
Arlington, Virginia 22203 |
• | Adjusted Revenue for the three months ended June 30, 2015 increased 50.7% to $36.5 million, compared to $24.2 million for the three months ended June 30, 2014. Adjusted Revenue for the six months ended June 30, 2015 increased 66.1% to $73.5 million, compared to $44.3 million for the six months ended June 30, 2014. |
• | Adjusted Cost of Revenue was $24.9 million or 68.4% of Adjusted Revenue for the three months ended June 30, 2015, compared to $17.8 million or 73.7% of Adjusted Revenue for the three months ended June 30, 2014. Adjusted Cost of Revenue was $50.9 million or 69.3% of Adjusted Revenue for the six months ended June 30, 2015 compared to $32.5 million or 73.5% of Adjusted Revenue for the six months ended June 30, 2014. |
• | Adjusted EBITDA for the three months ended June 30, 2015 was $(10.2) million, compared to $(9.4) million for the three months ended June 30, 2014. Adjusted EBITDA for the six months ended June 30, 2015 was $(19.1) million, compared to $(18.9) million for the six months ended June 30, 2014. |
• | Adjusted Loss Available for Common Shareholders for the three months ended June 30, 2015 and 2014 was $(13.3) million and $(11.2) million, respectively. Adjusted Loss Available for Common Shareholders for the six months ended June 30, 2015 and 2014 was $(24.8) million and $(22.7) million, respectively. |
Bob East | Robin Glass |
(443) 213-0500 | (571) 389-6005 |
Investor Relations | Media Relations |
InvestorRelations@evolenthealth.com | RGlass@evolenthealth.com |
(in thousands) | For the Three Months Ended June 30, 2015 | For the Three Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||
Add: | Add: | ||||||||||||||||||||||||||||||||||||||||||||||||
Evolent | Evolent | Less: | Less: | Less: | Evolent | Evolent | Evolent | Less: | Evolent | ||||||||||||||||||||||||||||||||||||||||
Health, Inc. | Health LLC | Purchase | Stock-based | Transaction | Health, Inc. | Health, Inc. | Health LLC | Stock-based | Health, Inc. | Change Over Prior Period | |||||||||||||||||||||||||||||||||||||||
as Reported | Operations (1) | Accounting (2) | Compensation | Costs | as Adjusted | as Reported | Operations (3) | Compensation | Adjusted | $ | % | ||||||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||
Transformation | $ | 2,703 | $ | 5,380 | $ | 364 | $ | — | $ | — | $ | 8,447 | $ | — | $ | 8,532 | $ | — | $ | 8,532 | $ | (85 | ) | (1.0 | )% | ||||||||||||||||||||||||
Platform and operations | 7,711 | 19,394 | 911 | — | — | 28,016 | — | 15,657 | — | 15,657 | 12,359 | 78.9 | % | ||||||||||||||||||||||||||||||||||||
Total revenue | 10,414 | 24,774 | 1,275 | — | — | 36,463 | — | 24,189 | — | 24,189 | 12,274 | 50.7 | % | ||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive | |||||||||||||||||||||||||||||||||||||||||||||||||
of depreciation and | |||||||||||||||||||||||||||||||||||||||||||||||||
amortization presented | |||||||||||||||||||||||||||||||||||||||||||||||||
separately below) | 7,887 | 18,385 | — | 1,343 | — | 24,929 | — | 18,045 | 225 | 17,820 | 7,109 | 39.9 | % | ||||||||||||||||||||||||||||||||||||
Selling, general and | |||||||||||||||||||||||||||||||||||||||||||||||||
administrative expenses | 13,082 | 30,006 | — | 18,529 | 2,777 | 21,782 | — | 18,477 | 2,744 | 15,733 | 6,049 | 38.4 | % | ||||||||||||||||||||||||||||||||||||
Depreciation and | |||||||||||||||||||||||||||||||||||||||||||||||||
amortization expenses | 984 | 1,154 | — | — | — | 2,138 | — | 641 | — | 641 | 1,497 | N/A | |||||||||||||||||||||||||||||||||||||
Total operating | |||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 21,953 | 49,545 | — | 19,872 | 2,777 | 48,849 | — | 37,163 | 2,969 | 34,194 | 14,655 | 42.9 | % | ||||||||||||||||||||||||||||||||||||
Operating income | |||||||||||||||||||||||||||||||||||||||||||||||||
(loss) | $ | (11,539 | ) | $ | (24,771 | ) | $ | 1,275 | $ | (19,872 | ) | $ | (2,777 | ) | $ | (12,386 | ) | $ | — | $ | (12,974 | ) | $ | (2,969 | ) | $ | (10,005 | ) | $ | (2,381 | ) | 23.8 | % |
(1) | Represents the operational results of Evolent Health LLC for the period April 1, 2015, through June 3, 2015, prior to consolidation. |
(2) | Represents adjustments to remove the results of purchase accounting. |
(3) | Represents the operational results of Evolent Health LLC for the period April 1, 2014, through June 30, 2014. |
(in thousands) | For the Six Months Ended June 30, 2015 | For the Six Months Ended June 30, 2014 | |||||||||||||||||||||||||||||||||||||||||||||||
Add: | Add: | ||||||||||||||||||||||||||||||||||||||||||||||||
Evolent | Evolent | Less: | Less: | Less: | Evolent | Evolent | Evolent | Less: | Evolent | ||||||||||||||||||||||||||||||||||||||||
Health, Inc. | Health LLC | Purchase | Stock-based | Transaction | Health, Inc. | Health, Inc. | Health LLC | Stock-based | Health, Inc. | Change Over Prior Period | |||||||||||||||||||||||||||||||||||||||
as Reported | Operations (1) | Accounting (2) | Compensation | Costs | as Adjusted | as Reported | Operations (3) | Compensation | Adjusted | $ | % | ||||||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||
Transformation | $ | 2,703 | $ | 15,755 | $ | 364 | $ | — | $ | — | $ | 18,822 | $ | — | $ | 15,951 | $ | — | $ | 15,951 | $ | 2,871 | 18.0 | % | |||||||||||||||||||||||||
Platform and operations | 7,711 | 46,059 | 911 | — | — | 54,681 | — | 28,314 | — | 28,314 | 26,367 | 93.1 | % | ||||||||||||||||||||||||||||||||||||
Total revenue | 10,414 | 61,814 | 1,275 | — | — | 73,503 | — | 44,265 | — | 44,265 | 29,238 | 66.1 | % | ||||||||||||||||||||||||||||||||||||
Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of revenue (exclusive | |||||||||||||||||||||||||||||||||||||||||||||||||
of depreciation and | |||||||||||||||||||||||||||||||||||||||||||||||||
amortization presented | |||||||||||||||||||||||||||||||||||||||||||||||||
separately below) | 7,887 | 44,839 | — | 1,783 | — | 50,943 | — | 32,867 | 323 | 32,544 | 18,399 | 56.5 | % | ||||||||||||||||||||||||||||||||||||
Selling, general and | |||||||||||||||||||||||||||||||||||||||||||||||||
administrative expenses | 13,082 | 58,457 | — | 26,109 | 3,775 | 41,655 | — | 34,719 | 4,074 | 30,645 | 11,010 | 35.9 | % | ||||||||||||||||||||||||||||||||||||
Depreciation and | |||||||||||||||||||||||||||||||||||||||||||||||||
amortization expenses | 984 | 2,637 | — | — | — | 12,068 | — | 1,297 | — | 1,297 | 10,771 | 830.5 | % | ||||||||||||||||||||||||||||||||||||
Total operating | |||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 21,953 | 105,933 | — | 27,892 | 3,775 | 96,219 | — | 68,883 | 4,397 | 64,486 | 40,180 | 62.3 | % | ||||||||||||||||||||||||||||||||||||
Operating income | |||||||||||||||||||||||||||||||||||||||||||||||||
(loss) | $ | (11,539 | ) | $ | (44,119 | ) | $ | 1,275 | $ | (27,892 | ) | $ | (3,775 | ) | $ | (22,716 | ) | $ | — | $ | (24,618 | ) | $ | (4,397 | ) | $ | (20,221 | ) | $ | (10,942 | ) | 54.1 | % |
(1) | Represents the operational results of Evolent Health LLC for the period January 1, 2015, through June 3, 2015, prior to consolidation. |
(2) | Represents adjustments to remove the results of purchase accounting. |
(3) | Represents the operational results of Evolent Health LLC for the period January 1, 2014, through June 30, 2014. |
(in thousands) | For the Three | For the Six | |||||||||||||
Months Ended | Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Net Income (Loss) Attributable to | |||||||||||||||
Evolent Health, Inc. | $ | 359,912 | $ | (5,939 | ) | $ | 348,593 | $ | (11,381 | ) | |||||
Add: | |||||||||||||||
Net income (loss) of Evolent Health LLC (1) | (24,764 | ) | (12,916 | ) | (44,079 | ) | (24,542 | ) | |||||||
Less: | |||||||||||||||
Purchase accounting adjustments | (1,275 | ) | — | (1,275 | ) | — | |||||||||
Gain on consolidation | 414,133 | — | 414,133 | — | |||||||||||
Income (loss) from affiliate | (16,846 | ) | (5,939 | ) | (28,165 | ) | (11,381 | ) | |||||||
(Provision) benefit for income taxes | (29,273 | ) | — | (29,273 | ) | — | |||||||||
Net (income) loss attributable to | — | ||||||||||||||
non-controlling interests | 3,424 | — | 3,424 | — | |||||||||||
Stock-based compensation | (19,872 | ) | (2,969 | ) | (27,892 | ) | (4,397 | ) | |||||||
Transaction costs | (2,777 | ) | — | (3,775 | ) | — | |||||||||
Interest (income) expense, net | 20 | 58 | 51 | 85 | |||||||||||
Other income (expense), net | — | — | 2 | (9 | ) | ||||||||||
Depreciation and amortization expense | (2,138 | ) | (641 | ) | (3,621 | ) | (1,297 | ) | |||||||
Adjusted EBITDA | $ | (10,248 | ) | $ | (9,364 | ) | $ | (19,095 | ) | $ | (18,924 | ) |
(1) | Represents the net income (loss) for the beginning-of-period through June 3, 2015, or for the three or six months ended June 30, 2014, for the respective periods |
(in thousands, except per share data) | For the Three | For the Six | |||||||||||||
Months Ended | Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Earnings (Loss) Available for | |||||||||||||||
Common Shareholders - Diluted (a) | $ | 356,488 | $ | (7,210 | ) | $ | 345,169 | $ | (13,947 | ) | |||||
Less: | |||||||||||||||
Net income (loss) attributable to | |||||||||||||||
non-controlling interests | (3,424 | ) | — | (3,424 | ) | — | |||||||||
Undeclared cumulative preferred dividends | 894 | — | 2,184 | — | |||||||||||
Earnings (Loss) Available for | |||||||||||||||
Common Shareholders - Basic (b) | 359,018 | (7,210 | ) | 346,409 | (13,947 | ) | |||||||||
Add: | |||||||||||||||
Net income (loss) of Evolent Health LLC (1) | (24,764 | ) | (12,916 | ) | (44,079 | ) | (24,542 | ) | |||||||
Less: | |||||||||||||||
Purchase accounting adjustments | (1,275 | ) | — | (1,275 | ) | — | |||||||||
Gain on consolidation | 414,133 | — | 414,133 | — | |||||||||||
Income (loss) from affiliate | (16,846 | ) | (5,939 | ) | (28,165 | ) | (11,381 | ) | |||||||
(Provision) benefit for income taxes | (29,273 | ) | — | (29,273 | ) | — | |||||||||
Net (income) loss attributable to | |||||||||||||||
non-controlling interests | 3,424 | — | 3,424 | — | |||||||||||
Stock-based compensation | (19,872 | ) | (2,969 | ) | (27,892 | ) | (4,397 | ) | |||||||
Transaction costs | (2,777 | ) | — | (3,775 | ) | — | |||||||||
Adjusted Earnings (Loss) Available | |||||||||||||||
for Common Shareholders (c) (2) | $ | (13,260 | ) | $ | (11,218 | ) | $ | (24,847 | ) | $ | (22,711 | ) | |||
Earnings (Loss) per Share Available | |||||||||||||||
for Common Shareholders - Diluted (a) (2) | $ | 9.73 | $ | (3.17 | ) | $ | 10.96 | $ | (6.51 | ) | |||||
Earnings (Loss) per Share Available | |||||||||||||||
for Common Shareholders - Basic (b) (2) | $ | 25.69 | $ | (3.17 | ) | $ | 40.69 | $ | (6.51 | ) | |||||
Adjusted Earnings (Loss) per Share Available | |||||||||||||||
for Common Shareholders - Basic (c) (1) | $ | (0.95 | ) | $ | (4.94 | ) | $ | (2.92 | ) | $ | (10.61 | ) | |||
Weighted-average common shares - basic | 13,976 | 2,272 | 8,513 | 2,141 | |||||||||||
Weighted-average common shares - diluted | 36,643 | 2,272 | 31,488 | 2,141 |
(1) | Represents the net income (loss) for the beginning-of-period through June 3, 2015, or for the three or six months ended June 30, 2014, for the respective periods |
(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 |
(in thousands) | As of | As of | |||||
June 30, | December 31, | ||||||
2015 | 2014 | ||||||
Cash and cash equivalents | $ | 219,367 | — | ||||
Total current assets | 251,640 | 1,074 | |||||
Goodwill | 608,903 | — | |||||
Intangible assets, net | 168,170 | — | |||||
Total assets | 1,039,837 | 38,277 | |||||
Total liabilities | 91,133 | 1,074 | |||||
Total redeemable preferred stock | — | 39,273 | |||||
Total shareholders' equity (deficit) attributable to Evolent Health, Inc. | 654,210 | (2,070 | ) | ||||
Non-controlling interests | 294,494 | — | |||||
Total liabilities, redeemable preferred stock and shareholders' equity (deficit) | 1,039,837 | 38,277 |
(in thousands) | For the Three | For the Six | |||||||||||||
Months Ended | Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue | |||||||||||||||
Transformation | $ | 2,703 | — | $ | 2,703 | — | |||||||||
Platform and operations | 7,711 | — | 7,711 | — | |||||||||||
Total revenue | 10,414 | — | 10,414 | — | |||||||||||
Expenses | |||||||||||||||
Cost of revenue (exclusive of depreciation | |||||||||||||||
and amortization presented below) | 7,887 | — | 7,887 | — | |||||||||||
Selling, general and administrative expenses | 13,082 | — | 13,082 | — | |||||||||||
Depreciation and amortization expenses | 984 | — | 984 | — | |||||||||||
Total operating expenses | 21,953 | — | 21,953 | — | |||||||||||
Operating income (loss) | (11,539 | ) | — | (11,539 | ) | — | |||||||||
Interest income (expense), net | 13 | — | 13 | — | |||||||||||
Gain on consolidation | 414,133 | — | 414,133 | — | |||||||||||
Income (loss) from affiliate | (16,846 | ) | (5,939 | ) | (28,165 | ) | (11,381 | ) | |||||||
Income (loss) before income taxes | |||||||||||||||
and non-controlling interests | 385,761 | (5,939 | ) | 374,442 | (11,381 | ) | |||||||||
Provision (benefit) for income taxes | 29,273 | — | 29,273 | — | |||||||||||
Net income (loss) | 356,488 | (5,939 | ) | 345,169 | (11,381 | ) | |||||||||
Net income (loss) attributable to | |||||||||||||||
non-controlling interests | (3,424 | ) | — | (3,424 | ) | — | |||||||||
Net income (loss) attributable to | |||||||||||||||
Evolent Health, Inc. | $ | 359,912 | $ | (5,939 | ) | $ | 348,593 | $ | (11,381 | ) | |||||
Earnings (Loss) Available to Common Shareholders | |||||||||||||||
Basic | $ | 359,018 | $ | (7,210 | ) | $ | 346,409 | $ | (13,947 | ) | |||||
Diluted | 356,488 | (7,210 | ) | 345,169 | (13,947 | ) | |||||||||
Earnings (Loss) per Common Share | |||||||||||||||
Basic | $ | 25.69 | $ | (3.17 | ) | $ | 40.69 | $ | (6.51 | ) | |||||
Diluted | 9.73 | (3.17 | ) | 10.96 | (6.51 | ) | |||||||||
Weighted-Average Common Shares Outstanding | |||||||||||||||
Basic | 13,976 | 2,272 | 8,513 | 2,141 | |||||||||||
Diluted | 36,643 | 2,272 | 31,488 | 2,141 |
(in thousands) | For the Six | |||||
Months Ended | ||||||
June 30, | ||||||
2015 | 2014 | |||||
Net cash provided by (used in) operating activities | $ | (5,808 | ) | — | ||
Net cash provided by (used in) investing activities | 16,050 | — | ||||
Net cash provided by (used in) financing activities | 209,125 | — | ||||
Net increase (decrease) in cash and cash equivalents | 219,367 | — | ||||
Cash and cash equivalents as of beginning-of-period | — | — | ||||
Cash and cash equivalents as of end-of-period | $ | 219,367 | — |
• | the structural change in the market for health care 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 health care 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 health care 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 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; |
• | 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; |
• | the risk of potential future litigation; and |
• | our ability to remediate the material weakness in our internal control over financial reporting. |