CHICAGO, Aug. 15,
2022 /PRNewswire/ -- GoHealth, Inc. (NASDAQ: GOCO), a
leading health insurance marketplace and Medicare-focused digital
health company, today announced financial results for the three and
six months ended June 30, 2022.
- Second quarter 2022 Medicare Submitted Policies of 177,911
increased 9% compared to the prior year period. YTD 2022 Medicare
Submitted Policies of 478,554 increased 38% compared to the prior
year period.
- Second quarter 2022 net revenue of $158.7 million decreased 19% compared to the
prior year period. YTD 2022 net revenue of $429.2 million increased 7% compared to the prior
year period.
- Second quarter 2022 net loss of $113.8
million compared to a net loss of $39.2 million in the prior year period. YTD 2022
net loss of $151.0 million compared
to a net loss of $46.5 million in the
prior year period.
- Second quarter 2022 Adjusted EBITDA1 of negative
$31.7 million compared to Adjusted
EBITDA1 of $14.3 million
in the prior year period. YTD 2022 Adjusted EBITDA1 of
negative $20.7 million compared to
Adjusted EBITDA1 of $46.4
million in the prior year period.
- YTD 2022 positive cash flow from operations of $6.4 million compared to cash flow used in
operations of $32.3 million in the
prior year period.
"GoHealth has established itself as the volume leader in the
Medicare Advantage e-broker space with a strong technology
backbone, differentiated carrier relationships, and an innovative
product portfolio. Our industry is facing a natural inflection
point as competitive dynamics amongst our carrier partners and the
needs of Medicare beneficiaries evolve. With that as our backdrop,
we have embarked on a meaningful transformation for the
organization with a renewed focus on high-quality customer
experience, efficiency, and cash flow," said Vijay Kotte, GoHealth's Chief Executive
Officer.
"I am confident in our team as we reposition the Company for
success, and do not believe this quarter's results represent the
financial performance we are capable of achieving," said Kotte."We
are happy to report that the initial positive interest we received
in our new Encompass Connect and Engage modules has resulted in
contracts with each of our major carrier partners. We're ramping up
these programs and expect to be fully deployed for this upcoming
AEP. The expanded Encompass platform provides better carrier
alignment, predictability, transparency, and unit economics, while
also driving more cash into the business," said Kotte.
Mr. Kotte continued, "We expect our strategic moves, including
the cost actions recently taken and the future ramp-up of our
Encompass programs, to materially strengthen our ability to achieve
cash flow breakeven on a trailing twelve-month basis by the middle
of next year. While I believe we are now well positioned to
execute on our goals, we have made the prudent decision to suspend
the Company's previously issued quantitative guidance for the
remainder of 2022. We expect to provide more color regarding full
year 2022 on our third quarter earnings later this fall."
"We have a great deal of opportunity ahead of us as we transform
our unique services and our differentiated Encompass platform with
an eye toward quality and customer experience. We are eager to dig
in and look forward to sharing updates on our progress over the
coming quarters," concluded Mr. Kotte.
Additional Second Quarter 2022 Items of Note
- On August 9, 2022, the Company
eliminated 835 full-time positions, representing approximately
23.7% of our workforce, primarily within our customer care and
enrollment group. Total expected severance and employee-related
charges are projected to be approximately $7.0 - $9.0 million
and are primarily related to termination and employee-related
benefits. These charges will be settled in cash.
- The Company also announced it reached an agreement with its
lenders to amend the Company's term debt facility to better align
the debt covenants with the Company's trajectory of turnaround and
growth. Details of the amended credit facilities are set forth on a
Form 8-K filed with the SEC.
Conference Call Details
The Company will host a conference call today, Monday,
August 15, 2022 at 5:00 p.m.
(ET) to discuss its financial results. Participants can
pre-register for the conference call at the following link:
https://register.vevent.com/register/BI000b356a45c24452aea2f52ec20378bd.
A live audio webcast of the conference call will be available via
GoHealth's Investor Relations website,
https://investors.gohealth.com/. A replay of the call will be
available via webcast for on-demand listening shortly after the
completion of the call.
About GoHealth, Inc.:
As a leading health insurance marketplace and Medicare-focused
digital health company, GoHealth's mission is to improve access to
healthcare in America. Enrolling in a health insurance plan can be
confusing for customers, and the seemingly small differences
between plans can lead to significant out-of-pocket costs or lack
of access to critical medicines and even providers. GoHealth
combines cutting-edge technology, data science and deep industry
expertise to match customers with the healthcare policy and carrier
that is right for them. GoHealth has enrolled millions of people in
Medicare plans and individual and family plans. For more
information, visit https://www.gohealth.com.
Investor Relations:
IR@gohealth.com
Media Relations:
Pressinquiries@gohealth.com
(1)
|
Adjusted EBITDA is a
non-GAAP measure. For a definition of Adjusted EBITDA and a
reconciliation to the most comparable GAAP measure, please see
below.
|
Forward-Looking Statements
This release contains forward-looking statements. We
intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in
this press release may be forward-looking statements. Statements
regarding our future results of operations and financial position,
business strategy and plans and objectives of management for future
operations, including, among others, statements regarding our
expected growth, level of cash flow, future capital expenditures
and debt service obligations are forward-looking
statements.
In some cases, you can identify forward-looking statements by
terms, such as "may," "will," "should," "expects," "plans,"
"anticipates," "could," "intends," "targets," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar
expressions. Accordingly, we caution you that any such
forward-looking statements are not guarantees of future performance
and are subject to risks, assumptions and uncertainties that are
difficult to predict. Although the we believe that the expectations
reflected in these forward-looking statements are reasonable as of
the date made, actual results may prove to be materially different
from the results expressed or implied by the forward-looking
statements.
These forward-looking statements speak only as of the date of
this release and are subject to a number of important factors that
could cause actual results to differ materially from those in the
forward-looking statements, including, but are not limited to, the
following: the marketing and sale of Medicare plans are
subject to numerous, complex and frequently changing laws,
regulations and guidelines; our business may be harmed if we lose
our relationships with carriers or if our relationships with
carriers change; our failure to grow our customer base or retain
our existing customers; carriers may reduce the commissions paid to
us and change their underwriting practices in ways that reduce the
number of, or impact the renewal or approval rates of, insurance
policies sold through our platform; factors that impact our
estimate of LTV (as defined below) may be adversely impacted; our
management and independent auditors have identified a material
weakness in our internal controls over financial reporting, and we
may be unable to develop, implement and maintain appropriate
controls in future periods, which may lead to errors or omissions
in our financial statements; the potential delisting of our common
stock from the Nasdaq Global Market; volatility in general economic
conditions, including inflation, interest rates, and other
commodity prices and exchange rates may impact our financial
position and performance; our ability to borrow under the Credit
Agreement is subject to ongoing compliance with a number of
financial covenants, affirmative covenants, and other restrictions,
which may limit our operations and our ability to take certain
actions; we currently depend on a small group of carriers for a
substantial portion of our revenue; information technology system
failures could interrupt our operations; our ability to sell
Medicare-related health insurance plans is largely dependent on our
licensed health insurance agents; operating and growing our
business may require additional capital; our strategic focus on
cash flow optimization may lead to decreased revenue or otherwise
adversely affect our business; we may lose key employees or fail to
attract qualified employees; our operations may be adversely
impacted by a reduction in employee headcount or other similar
actions; the Founders (as defined in our Annual Report on Form 10-K
for the year ended December 31, 2021
(the "2021 Form 10-K")) and Centerbridge (as defined in the 2021
Form 10-K) have significant influence over us, including control
over decisions that require the approval of stockholders; and other
important factors described in the section titled "Risk Factors" in
our 2021 Form 10-K, and the section titled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
our Quarterly Report on Form 10-Q for the quarter ended
June 30, 2022, and in our other
filings with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and
should be read together with the other cautionary statements
included in this press release, as well as the cautionary
statements and other risk factors set forth in the 2021 Form 10-K,
Quarterly Report on Form 10-Q for the first quarter ended
March 31, 2022 and other SEC filings.
If one or more events related to these or other risks or
uncertainties materialize, or our underlying assumptions prove to
be incorrect, actual results may differ materially from what we
anticipate. Many of the important factors that will determine these
results are beyond our ability to control or predict. Accordingly,
you should not place undue reliance on any such forward-looking
statements. Any forward-looking statement speaks only as of the
date on which it is made, and, except as otherwise required by law,
we do not undertake any obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise. New factors emerge from time to
time, and it is not possible for us to predict which will arise. In
addition, we cannot assess the impact of each factor on our
business 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.
Use of Non-GAAP Financial Measures and Key Performance
Indicators
In this press release, we use supplemental measures of our
performance that are derived from our consolidated financial
information, but which are not presented in our Consolidated
Financial Statements prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP financial measures
include net income (loss) before interest expense, income tax
expense (benefit) and depreciation and amortization expense
("EBITDA"); Adjusted EBITDA and Adjusted EBITDA margin. Adjusted
EBITDA is the primary financial performance measure used by
management to evaluate its business and monitor its results of
operations.
Adjusted EBITDA represents, as applicable for the period, EBITDA
as further adjusted for certain items summarized below in this
press release. Adjusted EBITDA margin represents Adjusted
EBITDA divided by net revenues.
We use non-GAAP financial measures to supplement financial
information presented on a GAAP basis. We believe that excluding
certain items from our GAAP results allows management to better
understand our consolidated financial performance from period to
period and better project our future consolidated financial
performance as forecasts are developed at a level of detail
different from that used to prepare GAAP-based financial measures.
Moreover, we believe these non-GAAP financial measures provide our
stakeholders with useful information to help them evaluate our
operating results by facilitating an enhanced understanding of our
operating performance and enabling them to make more meaningful
period to period comparisons. There are limitations to the use of
the non-GAAP financial measures presented in this press release.
For example, our non-GAAP financial measures may not be comparable
to similarly titled measures of other companies. Other companies,
including companies in our industry, may calculate non-GAAP
financial measures differently than we do, limiting the usefulness
of those measures for comparative purposes.
The non-GAAP financial measures are not meant to be considered
as indicators of performance in isolation from or as a substitute
for net income (loss) prepared in accordance with GAAP, and should
be read only in conjunction with financial information presented on
a GAAP basis. Reconciliations of each of EBITDA and Adjusted EBITDA
to its most directly comparable GAAP financial measure, net income
(loss), are presented in the tables below in this press release. We
encourage you to review the reconciliations in conjunction with the
presentation of the non-GAAP financial measures for each of the
periods presented. In future periods, we may exclude similar items,
may incur income and expenses similar to these excluded items and
include other expenses, costs and non-recurring items.
Glossary
"Adjusted EBITDA" represents, as applicable for the
period, EBITDA as further adjusted for certain items summarized
below in this press release.
"Adjusted EBITDA Margin" refers to Adjusted EBITDA
divided by net revenues.
"Approved Submissions" refer to Submitted Policies
approved by carriers for the identified product during the
indicated period.
"LTV Per Approved Submission" refers to the Lifetime
Value of Commissions per Approved Submission, which we define as
(i) aggregate commissions estimated to be collected over the
estimated life of all commissionable Approved Submissions for the
relevant period based on multiple factors, including but not
limited to, contracted commission rates, carrier mix and expected
policy persistency with applied constraints, excluding revenue
adjustments recorded in the period, but relating to performance
obligations satisfied in prior periods, divided by (ii) the number
of commissionable Approved Submissions for such period.
"Submitted Policies" refer to completed applications
that, with respect to each such application, the consumer has
authorized us to submit to the carrier.
The following tables set forth the components of our results of
operations for the periods indicated (unaudited):
(in thousands, except
percentages and per share amounts)
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission
|
|
$
118,038
|
|
74.4 %
|
|
$
147,508
|
|
74.9 %
|
|
$
(29,470)
|
|
(20.0) %
|
Enterprise
|
|
40,616
|
|
25.6 %
|
|
49,394
|
|
25.1 %
|
|
(8,778)
|
|
(17.8) %
|
Net revenues
|
|
158,654
|
|
100.0 %
|
|
196,902
|
|
100.0 %
|
|
(38,248)
|
|
(19.4) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
51,074
|
|
32.2 %
|
|
37,442
|
|
19.0 %
|
|
13,632
|
|
36.4 %
|
Marketing and
advertising
|
|
44,714
|
|
28.2 %
|
|
55,735
|
|
28.3 %
|
|
(11,021)
|
|
(19.8) %
|
Customer care and
enrollment
|
|
66,542
|
|
41.9 %
|
|
61,927
|
|
31.5 %
|
|
4,615
|
|
7.5 %
|
Technology
|
|
10,749
|
|
6.8 %
|
|
11,983
|
|
6.1 %
|
|
(1,234)
|
|
(10.3) %
|
General and
administrative
|
|
38,106
|
|
24.0 %
|
|
25,297
|
|
12.8 %
|
|
12,809
|
|
50.6 %
|
Amortization of
intangible assets
|
|
23,515
|
|
14.8 %
|
|
23,515
|
|
11.9 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
24,995
|
|
15.8 %
|
|
—
|
|
— %
|
|
24,995
|
|
NM
|
Total operating
expenses
|
|
259,695
|
|
163.7 %
|
|
215,899
|
|
109.6 %
|
|
43,796
|
|
20.3 %
|
Income (loss) from
operations
|
|
(101,041)
|
|
(63.7) %
|
|
(18,997)
|
|
(9.6) %
|
|
(82,044)
|
|
431.9 %
|
Interest
expense
|
|
12,724
|
|
8.0 %
|
|
8,277
|
|
4.2 %
|
|
4,447
|
|
53.7 %
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
6.1 %
|
|
(11,935)
|
|
N/M
|
Other (income)
expense
|
|
(13)
|
|
— %
|
|
44
|
|
— %
|
|
(57)
|
|
N/M
|
Income (loss) before
income taxes
|
|
(113,752)
|
|
(71.7) %
|
|
(39,253)
|
|
(19.9) %
|
|
(74,499)
|
|
189.8 %
|
Income tax expense
(benefit)
|
|
—
|
|
— %
|
|
(32)
|
|
— %
|
|
32
|
|
N/M
|
Net income
(loss)
|
|
$
(113,752)
|
|
(71.7) %
|
|
$ (39,221)
|
|
(19.9) %
|
|
$
(74,531)
|
|
190.0 %
|
Net income (loss)
attributable to noncontrolling interests
|
|
(69,933)
|
|
(44.1) %
|
|
(27,217)
|
|
(13.8) %
|
|
(42,716)
|
|
156.9 %
|
Net income (loss)
attributable to GoHealth, Inc.
|
|
$ (43,819)
|
|
(27.6) %
|
|
$ (12,004)
|
|
(6.1) %
|
|
$
(31,815)
|
|
265.0 %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock — basic and diluted
|
|
$
(0.35)
|
|
|
|
$
(0.12)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock outstanding — basic and diluted
|
|
124,440
|
|
|
|
102,300
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$ (74,617)
|
|
|
|
$
(5,238)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ (31,741)
|
|
|
|
$ 14,296
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
(20.0) %
|
|
|
|
7.3 %
|
|
|
|
|
|
|
_________________________
(in thousands, except
percentages and per share amounts)
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission
|
|
$
327,677
|
|
76.3 %
|
|
$
321,489
|
|
80.2 %
|
|
$
6,188
|
|
1.9 %
|
Enterprise
|
|
101,570
|
|
23.7 %
|
|
79,592
|
|
19.8 %
|
|
21,978
|
|
27.6 %
|
Net revenues
|
|
429,247
|
|
100.0 %
|
|
401,081
|
|
100.0 %
|
|
28,166
|
|
7.0 %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
118,997
|
|
27.7 %
|
|
85,817
|
|
21.4 %
|
|
33,180
|
|
38.7 %
|
Marketing and
advertising
|
|
128,747
|
|
30.0 %
|
|
110,219
|
|
27.5 %
|
|
18,528
|
|
16.8 %
|
Customer care and
enrollment
|
|
144,997
|
|
33.8 %
|
|
109,021
|
|
27.2 %
|
|
35,976
|
|
33.0 %
|
Technology
|
|
23,508
|
|
5.5 %
|
|
21,600
|
|
5.4 %
|
|
1,908
|
|
8.8 %
|
General and
administrative
|
|
67,323
|
|
15.7 %
|
|
44,982
|
|
11.2 %
|
|
22,341
|
|
49.7 %
|
Amortization of
intangible assets
|
|
47,029
|
|
11.0 %
|
|
47,029
|
|
11.7 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
24,995
|
|
5.8 %
|
|
—
|
|
— %
|
|
24,995
|
|
NM
|
Total operating
expenses
|
|
555,596
|
|
129.4 %
|
|
418,668
|
|
104.4 %
|
|
136,928
|
|
32.7 %
|
Income (loss) from
operations
|
|
(126,349)
|
|
(29.4) %
|
|
(17,587)
|
|
(4.4) %
|
|
(108,762)
|
|
618.4 %
|
Interest
expense
|
|
24,122
|
|
5.6 %
|
|
16,965
|
|
4.2 %
|
|
7,157
|
|
42.2 %
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
3.0 %
|
|
(11,935)
|
|
N/M
|
Other (income)
expense
|
|
50
|
|
— %
|
|
57
|
|
— %
|
|
(7)
|
|
(12.3) %
|
Income (loss) before
income taxes
|
|
(150,521)
|
|
(35.1) %
|
|
(46,544)
|
|
(11.6) %
|
|
(103,977)
|
|
223.4 %
|
Income tax expense
(benefit)
|
|
472
|
|
0.1 %
|
|
(63)
|
|
— %
|
|
535
|
|
N/M
|
Net income
(loss)
|
|
$
(150,993)
|
|
(35.2) %
|
|
$ (46,481)
|
|
(11.6) %
|
|
$ (104,512)
|
|
224.8 %
|
Net loss attributable
to noncontrolling interests
|
|
(93,691)
|
|
(21.8) %
|
|
(32,390)
|
|
(8.1) %
|
|
$
(61,301)
|
|
189.3 %
|
Net loss
attributable to GoHealth, Inc.
|
|
$ (57,302)
|
|
(13.3) %
|
|
$ (14,091)
|
|
(3.5) %
|
|
$
(43,211)
|
|
306.7 %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock — basic and diluted
|
|
$
(0.48)
|
|
|
|
$
(0.14)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock outstanding — basic and diluted
|
|
120,346
|
|
|
|
97,349
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$ (74,040)
|
|
|
|
$ 21,526
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ (20,668)
|
|
|
|
$ 46,352
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
(4.8) %
|
|
|
|
11.6 %
|
|
|
|
|
|
|
_________________________
The following tables set forth the reconciliations of GAAP net
income (loss) to EBITDA and Adjusted EBITDA for the periods
indicated (unaudited):
(in
thousands)
|
|
Three months
ended Jun. 30, 2022
|
|
Three months
ended Jun. 30, 2021
|
Net revenues
|
|
$
158,654
|
|
$
196,902
|
Net income
(loss)
|
|
(113,752)
|
|
(39,221)
|
Interest
expense
|
|
12,724
|
|
8,277
|
Income tax expense
(benefit)
|
|
—
|
|
(32)
|
Depreciation and
amortization expense
|
|
26,411
|
|
25,738
|
EBITDA
|
|
(74,617)
|
|
(5,238)
|
Operating lease
impairment charges (1)
|
|
24,995
|
|
—
|
Share-based
compensation expense (2)
|
|
14,257
|
|
7,599
|
Severance costs
(3)
|
|
3,624
|
|
—
|
Loss on extinguishment
of debt (4)
|
|
—
|
|
11,935
|
Adjusted
EBITDA
|
|
$ (31,741)
|
|
$
14,296
|
Adjusted EBITDA
margin
|
|
(20.0) %
|
|
7.3 %
|
_________________________
(1)
|
Represents the
operating lease impairment charge for the three and six months
ended June 30, 2022, reducing the carrying value of the associated
ROU assets and leasehold improvements to the estimated fair
values.
|
(2)
|
Represents non-cash
share-based compensation expense relating to equity awards, as well
share-based compensation expense relating to liability classified
awards that will be settled in cash.
|
(3)
|
Represents costs
associated with the termination of employment and associated
fees.
|
(4)
|
Represents the loss
on debt extinguishment related to the Initial Term Loan
Facility.
|
(in
thousands)
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Net revenues
|
|
$
429,247
|
|
$
401,081
|
Net income
(loss)
|
|
(150,993)
|
|
(46,481)
|
Interest
expense
|
|
24,122
|
|
16,965
|
Income tax expense
(benefit)
|
|
472
|
|
(63)
|
Depreciation and
amortization expense
|
|
52,359
|
|
51,105
|
EBITDA
|
|
(74,040)
|
|
21,526
|
Operating lease
impairment charges (1)
|
|
24,995
|
|
—
|
Share-based
compensation expense (2)
|
|
19,412
|
|
12,711
|
Severance costs
(3)
|
|
5,015
|
|
—
|
Loss on extinguishment
of debt (4)
|
|
—
|
|
11,935
|
Professional services
(5)
|
|
3,950
|
|
—
|
Legal fees
(6)
|
|
—
|
|
180
|
Adjusted
EBITDA
|
|
$ (20,668)
|
|
$
46,352
|
Adjusted EBITDA
margin
|
|
(4.8) %
|
|
11.6 %
|
_________________________
(1)
|
Represents the
operating lease impairment charge for the three and six months
ended June 30, 2022, reducing the carrying value of the associated
ROU assets and leasehold improvements to the estimated fair
values.
|
(2)
|
Represents non-cash
share-based compensation expense relating to equity awards, as well
share-based compensation expense relating to liability classified
awards that will be settled in cash.
|
(3)
|
Represents costs
associated with the termination of employment and associated
fees.
|
(4)
|
Represents the loss
on debt extinguishment related to the Initial Term Loan
Facility.
|
(5)
|
Represents costs
associated with non-recurring consulting fees.
|
(6)
|
Represents
non-recurring legal fees unrelated to our core
operations.
|
The following table summarizes share-based compensation expense
by operating function for the periods indicated (unaudited):
(in
thousands)
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Marketing and
advertising
|
|
$
215
|
|
$
426
|
|
$
656
|
|
$
764
|
Customer care and
enrollment
|
|
624
|
|
1,043
|
|
1,255
|
|
1,839
|
Technology
|
|
627
|
|
1,133
|
|
1,609
|
|
1,880
|
General and
administrative
|
|
12,791
|
|
4,997
|
|
15,892
|
|
8,228
|
Total share-based
compensation expense
|
|
$
14,257
|
|
$
7,599
|
|
$
19,412
|
|
$
12,711
|
The following table sets forth our balance sheets for the
periods indicated (unaudited):
(in thousands, except
per share amounts)
|
|
Jun. 30,
2022
|
|
Dec. 31,
2021
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
76,156
|
|
$
84,361
|
Accounts receivable,
net of allowance for doubtful accounts of $972 in 2022 and $558 in
2021
|
|
38,250
|
|
17,276
|
Commissions receivable
- current
|
|
198,647
|
|
268,663
|
Prepaid expense and
other current assets
|
|
19,955
|
|
58,695
|
Total current
assets
|
|
333,008
|
|
428,995
|
Commissions receivable
- non-current
|
|
961,999
|
|
993,844
|
Operating lease ROU
asset
|
|
22,987
|
|
23,462
|
Other long-term
assets
|
|
2,437
|
|
3,608
|
Property, equipment,
and capitalized software, net
|
|
29,986
|
|
24,273
|
Intangible assets,
net
|
|
547,640
|
|
594,669
|
Total
assets
|
|
$
1,898,057
|
|
$
2,068,851
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
14,641
|
|
$
39,843
|
Accrued
liabilities
|
|
33,234
|
|
52,788
|
Commissions payable -
current
|
|
60,294
|
|
104,160
|
Short-term operating
lease liability
|
|
9,998
|
|
6,126
|
Deferred
revenue
|
|
2,691
|
|
536
|
Current portion of
long-term debt
|
|
5,270
|
|
5,270
|
Other current
liabilities
|
|
15,764
|
|
8,344
|
Total current
liabilities
|
|
141,892
|
|
217,067
|
Non-current
liabilities:
|
|
|
|
|
Commissions payable -
non-current
|
|
291,990
|
|
274,403
|
Long-term operating
lease liability
|
|
40,947
|
|
19,776
|
Long-term debt, net of
current portion
|
|
662,018
|
|
665,115
|
Other non-current
liabilities
|
|
2,889
|
|
—
|
Total non-current
liabilities
|
|
997,844
|
|
959,294
|
Stockholders'
equity:
|
|
|
|
|
Class A common stock –
$0.0001 par value; 1,100,000 shares authorized; 131,965 and 115,487
shares issued;
131,776 and 115,487 shares outstanding at June 30, 2022 and
December 31, 2021, respectively.
|
|
13
|
|
11
|
Class B common stock –
$0.0001 par value; 579,555 and 587,360 shares authorized; 197,547
and 205,352 shares
issued and outstanding at June 30, 2022 and December 31, 2021,
respectively.
|
|
20
|
|
21
|
Preferred stock –
$0.0001 par value; 20,000 shares authorized; no shares issued and
outstanding at June 30, 2022
and December 31, 2021.
|
|
—
|
|
—
|
Treasury stock – at
cost; 189 shares of Class A common stock at June 30,
2022
|
|
(344)
|
|
—
|
Additional paid-in
capital
|
|
612,627
|
|
561,447
|
Accumulated other
comprehensive income (loss)
|
|
(234)
|
|
(59)
|
Accumulated
deficit
|
|
(265,619)
|
|
(208,317)
|
Total stockholders'
equity attributable to GoHealth, Inc.
|
|
346,463
|
|
353,103
|
Non-controlling
interests
|
|
411,858
|
|
539,387
|
Total stockholders'
equity
|
|
758,321
|
|
892,490
|
Total liabilities
and stockholders' equity
|
|
$
1,898,057
|
|
$
2,068,851
|
The following table sets forth our statements of cash flows for
the periods indicated (unaudited):
|
|
Six months
ended
Jun.
30,
|
(in
thousands)
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net income
(loss)
|
|
$ (150,993)
|
|
$
(46,481)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
Share-based
compensation
|
|
17,293
|
|
12,711
|
Depreciation and
amortization
|
|
5,330
|
|
4,076
|
Amortization of
intangible assets
|
|
47,029
|
|
47,029
|
Amortization of debt
discount and issuance costs
|
|
1,381
|
|
1,262
|
Operating lease
impairment charges
|
|
24,995
|
|
—
|
Loss on extinguishment
of debt
|
|
—
|
|
11,935
|
Non-cash lease
expense
|
|
2,862
|
|
2,451
|
Other non-cash
items
|
|
29
|
|
(846)
|
Changes in assets
and liabilities, net of acquisition:
|
|
|
|
|
Accounts
receivable
|
|
(21,119)
|
|
(2,702)
|
Commissions
receivable
|
|
101,928
|
|
(63,675)
|
Prepaid expenses and
other assets
|
|
39,795
|
|
(11,778)
|
Accounts
payable
|
|
(25,885)
|
|
6,114
|
Accrued
liabilities
|
|
(19,898)
|
|
3,993
|
Deferred
revenue
|
|
2,155
|
|
(36)
|
Commissions
payable
|
|
(26,279)
|
|
4,742
|
Operating lease
liabilities
|
|
(2,993)
|
|
(2,406)
|
Other
liabilities
|
|
10,747
|
|
1,361
|
Net cash provided by
(used in) operating activities
|
|
6,377
|
|
(32,250)
|
Investing
Activities
|
|
|
|
|
Purchases of property,
equipment and software
|
|
(9,658)
|
|
(7,909)
|
Net cash used in
investing activities
|
|
(9,658)
|
|
(7,909)
|
Financing
Activities
|
|
|
|
|
Borrowings under term
loans
|
|
—
|
|
310,000
|
Repayment of
borrowings
|
|
(2,635)
|
|
(296,835)
|
Call premium paid for
debt extinguishment
|
|
—
|
|
(5,910)
|
Debt issuance cost
payments
|
|
(1,725)
|
|
(1,608)
|
Principal payments
under finance lease obligations
|
|
(103)
|
|
(154)
|
Cash received on
advancement to NVX Holdings, Inc.
|
|
—
|
|
3,395
|
Net cash (used in)
provided by financing activities
|
|
(4,463)
|
|
8,888
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(461)
|
|
(100)
|
Increase in cash and
cash equivalents
|
|
(8,205)
|
|
(31,371)
|
Cash and cash
equivalents at beginning of period
|
|
84,361
|
|
144,234
|
Cash and cash
equivalents at end of period
|
|
$
76,156
|
|
$
112,863
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
Purchases of property,
equipment and software included in accounts payable
|
|
$
683
|
|
$
2,233
|
The following tables set forth operating segment results for the
periods indicated (unaudited):
(in thousands, except
percentages)
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
$
103,685
|
|
65.4 %
|
|
$
160,433
|
|
81.6 %
|
|
$
(56,748)
|
|
(35.4) %
|
Medicare -
External
|
|
50,103
|
|
31.6 %
|
|
31,379
|
|
15.9 %
|
|
18,724
|
|
59.7 %
|
IFP and Other -
Internal
|
|
4,245
|
|
2.7 %
|
|
3,788
|
|
1.9 %
|
|
457
|
|
12.1 %
|
IFP and Other -
External
|
|
621
|
|
0.4 %
|
|
1,302
|
|
0.7 %
|
|
(681)
|
|
(52.3) %
|
Net revenues
|
|
158,654
|
|
100.0 %
|
|
196,902
|
|
100.0 %
|
|
(38,248)
|
|
(19.4) %
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
(11,040)
|
|
(7.0) %
|
|
31,257
|
|
15.9 %
|
|
(42,297)
|
|
(135.3) %
|
Medicare -
External
|
|
(5,635)
|
|
(3.6) %
|
|
(1,688)
|
|
(0.9) %
|
|
(3,947)
|
|
233.8 %
|
IFP and Other -
Internal
|
|
1,582
|
|
1.0 %
|
|
(800)
|
|
(0.4) %
|
|
2,382
|
|
(297.8) %
|
IFP and Other -
External
|
|
(411)
|
|
(0.3) %
|
|
(57)
|
|
— %
|
|
(354)
|
|
621.1 %
|
Segment profit
(loss)
|
|
(15,504)
|
|
(9.8) %
|
|
28,712
|
|
14.6 %
|
|
(44,216)
|
|
(154.0) %
|
Corporate
expense
|
|
37,027
|
|
23.3 %
|
|
24,194
|
|
12.3 %
|
|
12,833
|
|
53.0 %
|
Amortization of
intangible assets
|
|
23,515
|
|
14.8 %
|
|
23,515
|
|
11.9 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
24,995
|
|
15.8 %
|
|
—
|
|
— %
|
|
24,995
|
|
N/M
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
6.1 %
|
|
(11,935)
|
|
N/M
|
Interest
expense
|
|
12,724
|
|
8.0 %
|
|
8,277
|
|
4.2 %
|
|
4,447
|
|
53.7 %
|
Other (income)
expense
|
|
(13)
|
|
— %
|
|
44
|
|
— %
|
|
(57)
|
|
N/M
|
Income (loss) before
income taxes
|
|
$
(113,752)
|
|
(71.7) %
|
|
$
(39,253)
|
|
(19.9) %
|
|
$
(74,499)
|
|
189.8 %
|
_________________________
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
|
|
|
|
(in thousands, except
percentages)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
$
307,530
|
|
71.6 %
|
|
$
317,786
|
|
79.2 %
|
|
$
(10,256)
|
|
(3.2) %
|
Medicare -
External
|
|
111,589
|
|
26.0 %
|
|
70,879
|
|
17.7 %
|
|
40,710
|
|
57.4 %
|
IFP and Other -
Internal
|
|
8,445
|
|
2.0 %
|
|
7,763
|
|
1.9 %
|
|
682
|
|
8.8 %
|
IFP and Other -
External
|
|
1,683
|
|
0.4 %
|
|
4,653
|
|
1.2 %
|
|
(2,970)
|
|
(63.8) %
|
Net revenues
|
|
429,247
|
|
100.0 %
|
|
401,081
|
|
100.0 %
|
|
28,166
|
|
7.0 %
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
23,799
|
|
5.5 %
|
|
77,700
|
|
19.4 %
|
|
(53,901)
|
|
(69.4) %
|
Medicare -
External
|
|
(13,428)
|
|
(3.1) %
|
|
(2,319)
|
|
(0.6) %
|
|
(11,109)
|
|
479.0 %
|
IFP and Other -
Internal
|
|
2,172
|
|
0.5 %
|
|
(1,529)
|
|
(0.4) %
|
|
3,701
|
|
(242.1) %
|
IFP and Other -
External
|
|
(669)
|
|
(0.2) %
|
|
103
|
|
— %
|
|
(772)
|
|
(749.5) %
|
Segment profit
(loss)
|
|
11,874
|
|
2.8 %
|
|
73,955
|
|
18.4 %
|
|
(62,081)
|
|
(83.9) %
|
Corporate
expense
|
|
66,199
|
|
15.4 %
|
|
44,513
|
|
11.1 %
|
|
21,686
|
|
48.7 %
|
Amortization of
intangible assets
|
|
47,029
|
|
11.0 %
|
|
47,029
|
|
11.7 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
24,995
|
|
5.8 %
|
|
—
|
|
— %
|
|
24,995
|
|
N/M
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
3.0 %
|
|
(11,935)
|
|
N/M
|
Interest
expense
|
|
24,122
|
|
5.6 %
|
|
16,965
|
|
4.2 %
|
|
7,157
|
|
42.2 %
|
Other (income)
expense
|
|
50
|
|
— %
|
|
57
|
|
— %
|
|
(7)
|
|
(12.3) %
|
Income (loss) before
income taxes
|
|
$
(150,521)
|
|
(35.1) %
|
|
$
(46,544)
|
|
(11.6) %
|
|
$
(103,977)
|
|
223.4 %
|
_________________________
The following table presents the number of Submitted Policies by
product for the Medicare segments for the three and six months
ended June 30, 2022 and 2021, for
those submissions that are commissionable (compensated through
commissions received from carriers):
Medicare - Total
Commissionable Submitted Policies
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Medicare
Advantage
|
|
167,507
|
|
153,163
|
|
453,616
|
|
326,037
|
Medicare
Supplement
|
|
194
|
|
1,022
|
|
696
|
|
2,126
|
Prescription Drug
Plans
|
|
4,935
|
|
2,374
|
|
11,460
|
|
4,967
|
Total
Medicare
|
|
172,636
|
|
156,559
|
|
465,772
|
|
333,130
|
The following tables present the number of Approved Submissions
by product relating to commissionable policies for the Medicare
segments for three and six months ended June
30, 2022 and 2021. Only commissionable policies are used to
calculate LTV.
Medicare -
Internal Commissionable Approved Submissions
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Medicare
Advantage
|
|
93,585
|
|
121,299
|
|
282,513
|
|
250,185
|
Medicare
Supplement
|
|
64
|
|
268
|
|
218
|
|
519
|
Prescription Drug
Plans
|
|
1,874
|
|
2,033
|
|
4,873
|
|
4,317
|
Total
Medicare
|
|
95,523
|
|
123,600
|
|
287,604
|
|
255,021
|
Medicare -
External Commissionable Approved Submissions
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Medicare
Advantage
|
|
67,495
|
|
31,450
|
|
155,443
|
|
73,691
|
Medicare
Supplement
|
|
49
|
|
665
|
|
265
|
|
1,396
|
Prescription Drug
Plans
|
|
2,939
|
|
236
|
|
6,113
|
|
525
|
Total
Medicare
|
|
70,483
|
|
32,351
|
|
161,821
|
|
75,612
|
The following table presents the LTV per Approved Submission by
product for the Medicare segments for the three and six months
ended June 30, 2022 and 2021:
LTV per Approved
Submission
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Medicare
Advantage
|
|
$
739
|
|
$
850
|
|
$
750
|
|
$
853
|
Medicare
Supplement
|
|
$
805
|
|
$
846
|
|
$
834
|
|
$
821
|
Prescription Drug
Plans
|
|
$
203
|
|
$
215
|
|
$
203
|
|
$
215
|
The following table presents the number of Submitted Policies by
product for the Medicare segments for the three and six months
ended June 30, 2022 and 2021, for
those submissions that are non-commissionable (compensated via
hourly fees and enrollment fees) and do not result in commission
revenue:
Medicare - Total
Non-Commissionable Submitted Policies
|
|
Three months
ended
Jun. 30, 2022
|
|
Three months
ended
Jun. 30, 2021
|
|
Six months ended
Jun. 30, 2022
|
|
Six months ended
Jun. 30, 2021
|
Medicare
Advantage
|
|
2,750
|
|
3,232
|
|
7,237
|
|
9,171
|
Medicare
Supplement
|
|
1,794
|
|
2,042
|
|
3,985
|
|
3,692
|
Prescription Drug
Plans
|
|
731
|
|
791
|
|
1,560
|
|
1,676
|
Total
Medicare
|
|
5,275
|
|
6,065
|
|
12,782
|
|
14,539
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/gohealth-reports-second-quarter-2022-results-301605959.html
SOURCE GoHealth, Inc.