EX-99.2 3 cotv_ex992.htm EX-99.2 cotv_Ex99_2

Exhibit 99.2

 

 

 

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2016 Third Quarter Financial Supplement Analytics. Insight. Value. As of September 30, 2016

 

 


 

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Cotiviti Holdings, Inc. 2016 Revenue by Segment 2016 2015 Change 2016 2015 Change $ 78,133 $ 62,369 25.3% $ 224,335 $ 178,818 25.5% 57,233 53,419 7.1% 169,632 147,335 15.1% 3,104 3,339 7.0% 9,676 10,530 8.1% Total Healthcare 138,470 119,127 16.2% 403,643 336,683 19.9% 17,039 17,292 1.5% 51,730 51,546 0.4% Other 732 517 41.6% 1,877 1,651 13.7% 17,771 17,809 0.2% 53,607 53,197 0.8% $156,241 $136,936 14.1% $457,250 $389,880 17.3% Total Global Retail and Other Consolidated Net Revenue Three Months Ended September 30, Nine Months Ended September 30, (unaudited, $ in thousands) Retrospective claims accuracy Prospective claims accuracy Transaction services Retrospective claims accuracy

 

 


 

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Cotiviti Holdings, Inc. 2016 Consolidated Statement of Operations (unaudited, $ in thousands) 2016 2015 Change 2016 2015 Change Net revenue $ 156,241 $ 136,936 14% $ 457,250 $ 389,880 17% Cost of revenue 65,175 52,070 25% 184,594 147,557 25% Selling, general and administrative expenses 46,474 33,348 39% 118,934 97,009 23% Depreciation and amortization of property and equipment 5,218 3,773 38% 14,864 9,270 60% Amortization of intangible assets 15,203 15,437 2% 45,618 46,256 1% Transaction-related expenses 16 354 95% 909 354 157% Impairment of intangible assets - 27,826 100% - 27,826 100% Total Operating Expenses 132,086 132,808 1% 364,919 328,272 11% Operating income 24,155 4,128 485% 92,331 61,608 50% Other expense (income) 18,861 15,993 18% 55,991 53,555 5% Income tax expense (benefit) 711 (4,571) 116% 12,780 3,932 225% Gain on discontinued operstions, net of tax - - NM - 559 100% Net Income (Loss) 4,583 $ (7,294) $ 163% 23,560 $ 4,680 $ 403% Earnings (loss) per share: Basic $ 0.05 $ (0.09) $ 0.28 $ 0.06 Diluted 0.05 (0.09) 0.27 0.06 Effective Tax Rate 13.4% 38.5% 35.2% 48.8% Cost of revenue $ 4,153 $ 193 NM $ 4,738 $ 584 NM Selling, general and administrative expenses 12,889 212 NM 16,806 1,040 NM Total Stock-Based Compensation $ 17,042 $ 405 NM $ 21,544 $ 1,624 NM Stock-based Compensation (included within the lines shown above) Three Months Ended September 30, Nine Months Ended September 30,

 

 


 

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Cotiviti Holdings, Inc. 2016 Adjusted EBITDA (Non-GAAP) Represents an impairment during the quarter ended September 30, 2015 as a result of our rebranding and the related impact to our tradenames. Represents other non-operating (income) expense that consists primarily of gains and losses on transactions settled in foreign currencies. Income received for certain sub-leases is included herein. Represents payment on a $900 note receivable ($559 net of taxes) related to a business that was disposed of in 2012. This note receivable had been reported in the loss on discontinued operations in 2012 upon the sale of that business. Since the date of sale, we had elected to fully reserve the note receivable as the collectability was determined to be uncertain. Represents transaction-related expenses that consist primarily of certain expenses associated with the preparation for our Initial Public Offering and certain corporate development activity. Represents expense related to stock‑based compensation awards granted to certain employees, officers and non‑employee directors as long‑term incentive compensation. We recognize the related expense for these awards ratably over the vesting period. During the three months ended September 30, 2016, performance awards vested resulting in stock compensation expense of $15.9 million. Represents loss on extinguishment of debt that consists primarily of fees paid and write-offs of unamortized debt issuance costs and original issue discount in connection with the repricing of our long-term debt in 2015, the early repayment of a portion of our long-term debt in 2016 and the refinancing of our long-term debt in 2016. 2016 2015 Change 2016 2015 Change Net Income (Loss) $ 4,583 $ (7,294) 163% $ 23,560 $ 4,680 403% Adjustments to net income (loss): Depreciation and amortization 20,421 19,210 6% 60,482 55,526 9% Impairment of intangible assets (1) - 27,826 100% - 27,826 100% Interest expense 9,625 16,180 41% 40,345 49,855 19% Other non-operating (income) expense (2) (113) (187) 40% (771) (384) 101% Income tax expense (benefit) 711 (4,571) 116% 12,780 3,932 225% Gain on discontinued operations, net of tax (3) - - - - (559) 100% Transaction-related expenses and other (4) 16 354 95% 909 354 157% Stock-based compensation (5) 17,042 405 NM 21,544 1,624 NM Loss on extinguishment of debt (6) 9,349 - NM 16,417 4,084 302% Adjusted EBITDA $ 61,634 $ 51,923 19% $ 175,266 $ 146,938 19% % of revenue 39.4% 37.9% 38.3% 37.7% Nine Months Ended September 30, (unaudited, $ in thousands) Three Months Ended September 30,

 

 


 

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Cotiviti Holdings, Inc. 2016 Adjusted Net Income (Loss) (Non-GAAP) Represents an impairment during the quarter ended September 30, 2015 as a result of our rebranding and the related impact to our tradenames. Represents expense related to stock‑based compensation awards granted to certain employees, officers and non‑employee directors as long‑term incentive compensation. We recognize the related expense for these awards ratably over the vesting period. During the three months ended September 30, 2016, performance awards vested resulting in stock compensation expense of $15.9 million. This line represents the tax impact of the amortization of acquired intangible assets - tax deductible, a portion of impairment of intangible assets, loss on extinguishment of debt, stock-based compensation and gain on discontinued operations assuming a 40% tax rate. 2016 2015 Change 2016 2015 Change Net Income (Loss) $ 4,583 $ (7,294) 163% $ 23,560 $ 4,680 403% Adjustments to net income (loss) : Amortization of Acquired Intangible Assets - Non Tax Deductible 10,402 10,591 2% 31,206 31,785 2% Amortization of Acquired Intangible Assets - Tax Deductible 4,801 4,846 1% 14,412 14,471 0% Impairment of intangible assets (1) - 27,826 100% - 27,826 100% Loss on extinguishment of debt 9,349 - NM 16,417 4,084 302% Transaction-related expenses and other 16 354 95% 909 354 157% Stock-based compensation (2) 17,042 405 NM 21,544 1,624 NM Gain on discontinued operations - - NM - (900) 100% Tax effect of above adjustments (3) (12,476) (10,220) 22% (20,949) (15,832) 32% Adjusted Net Income $ 33,717 $ 26,508 27% $ 87,099 $ 68,092 28% Weighted average shares of common stock - Diluted (000s) 93,954 77,224 86,858 77,715 Adjusted Net Income per Diluted Share $ 0.36 $ 0.34 $ 1.00 $ 0.88 (unaudited, $ in thousands) Three Months Ended September 30, Nine Months Ended September 30,

 

 


 

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(unaudited, $ in millions) Low High Net Income $38 $41 Adjustments to net income (1) 197 196 Adjusted EBITDA $235 $237 Cotiviti Holdings, Inc. 2016 Adjusted EBITDA Guidance (Non-GAAP) Adjustments to net income include depreciation and amortization, interest expense, other non-operating (income) expense, income tax expense, transaction-related expenses and other, stock-based compensation and loss on extinguishment of debt. A 40% tax rate is assumed to approximate the Company's effective tax rate.

 

 


 

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Cotiviti Holdings, Inc. Consolidated Balance Sheet Data September 30, 2016 (unaudited) Cash and cash equivalents $ 43,770 $ 149,365 Total assets 2,005,553 2,147,007 Total long-term debt 784,042 1,034,070 Total liabilities 1,097,112 1,359,411 Total stockholders’ equity 908,441 787,596 Net debt leverage 3.3x 4.5x Working capital 25,327 123,887 ($ in thousands) December 31, 2015

 

 


 

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Cotiviti Holdings, Inc. Cash Flow Data Year ended 2016 2015 December 31, 2015 Operating Cash Flow $ 108,345 $ 30,408 $ 63,154 Capex 22,578 11,022 22,982 Free Cash Flow $ 85,767 $ 19,386 $ 40,172 ($ in thousands) Nine months ended September 30, (unaudited)

 

 


 

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