- Q2 2022 Revenues of $290.1 million, Net Income of $13.5
million, and Adjusted EBITDA of $209.6 million
- Growth in revenues of 5.0% over Q2 2021, driven by an increase
in identified potential medical cost savings to approximately $5.5
billion in Q2 2022
MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE:
MPLN), a leading value-added provider of data analytics and
technology-enabled end-to-end cost management, payment and revenue
integrity solutions to the U.S. healthcare industry, today reported
financial results for the second quarter ended June 30, 2022.
“Once again, MultiPlan delivered strong operating results in
second quarter 2022,” said Dale White, CEO of MultiPlan. “Moreover,
we achieved several new milestones in the quarter, including
continued expansion of our No Surprises Act services footprint and
activity, investment in a leading data management and
interoperability platform that offers a number of opportunities to
enhance our technology, and developments with key customers that
enhance our operational and financial visibility. As I look
forward, I remain confident that the unique value we provide to the
U.S. healthcare system, together with the investments we are making
in our platform, will drive long-term growth and deepen our
industry-leading position with our payor customers.”
The Company remains focused on its mission of delivering
fairness, efficiency and affordability to the U.S. healthcare
system and on driving sustained long-term growth by enhancing its
product offerings to payors, extending into new payor customer
segments, and expanding its platform to serve MultiPlan’s 1.3
million providers, its more than 700 payor customers, and 60 plus
million consumers.
Business and Financial Highlights
- Revenues of $290.1 million for Q2 2022, an increase of 5.0%
over Q2 2021 revenues of $276.3 million.
- Net income of $13.5 million for Q2 2022, compared to a net loss
of $46.9 million for Q2 2021.
- Adjusted EBITDA of $209.6 million for Q2 2022, an increase of
2.1% over Q2 2021 Adjusted EBITDA of $205.3 million.
- Net Cash provided by operating activities of $40.7 million for
Q2 2022, compared to $33.5 million for Q2 2021.
- Free Cash Flow of $21.8 million for Q2 2022, compared to $14.8
million for Q2 2021.
- The Company processed approximately $32.0 billion in claim
charges during the second quarter of 2022, identifying potential
medical cost savings of approximately $5.5 billion.
The second quarter 2022 results reflect an estimated
COVID-related revenue impact of $4-6 million and an estimated
COVID-related Adjusted EBITDA impact of $3-5 million, as compared
to an estimated COVID-related revenue impact of $9-11 million and
an estimated COVID-related Adjusted EBITDA impact of $7-9 million
in Q2 2021.
2022 Financial Guidance
The Company is maintaining its Full Year 2022 guidance, detailed
in the table below:
Financial Metric
Full Year 2022 Guidance
Revenues
$1,160 million to $1,200 million
Adjusted. EBITDA
$850 million to $875 million
Cash flow from operations
$380 million to $420 million
Capital expenditures
$90 million to $100 million
Interest expense
$280 million to $290 million
Depreciation
$65 million to $70 million
Amortization of intangible assets
$335 million to $345 million
Effective tax rate
25% to 28%
The Company’s annual guidance assumes an estimated COVID-related
revenue impact of approximately $15-20 million, and an estimated
COVID-related Adjusted EBITDA impact of approximately $12-16
million.
The Company anticipates Q3 2022 revenues between $280 million
and $290 million and Adjusted EBITDA between $200 million and $210
million.
Conference Call Information
The Company will host a conference call today, Thursday, August
4, 2022 at 10:00 a.m. U.S. Eastern Daylight Time (ET) to discuss
its financial results. Investors and analysts are encouraged to
pre-register for the conference call by using the link below.
Participants who pre-register will receive access details via
email. Pre-registration may be completed at any time up to and
following the call start time.
To pre-register, go to:
https://ige.netroadshow.com/registration/q4inc/11353/multiplan-corporation-second-quarter-2022-earnings-conference-call/
A live webcast of the conference call can be accessed through
the Investor Relations section of the Company’s website at
investors.multiplan.com/events-and-presentations. Participants
should join the webcast ten minutes prior to the start of the
conference call. The earnings press release and supplemental slide
deck will also be available on this section of the Company’s
website.
For those unable to listen to the live conference call, a replay
will be available approximately two hours after the call through
the archived webcast on the Investor Relations section of the
Company’s website or by dialing (866) 813-9403 or (929) 458-6194.
The replay access code is 132537.
About MultiPlan
MultiPlan is committed to helping healthcare payors manage the
cost of care, improve their competitiveness and inspire positive
change. Leveraging sophisticated technology, data analytics and a
team rich with industry experience, MultiPlan interprets clients'
needs and customizes innovative solutions that combine its payment
and revenue integrity, network-based and analytics-based services.
MultiPlan is a trusted partner to over 700 healthcare payors in the
commercial health, government and property and casualty markets.
For more information, visit it www.multiplan.com.
Forward Looking Statements
This press release includes statements that express our and our
subsidiaries’ opinions, expectations, beliefs, plans, objectives,
assumptions or projections regarding future events or future
results and therefore are, or may be deemed to be, “forward-looking
statements”. These forward-looking statements can generally be
identified by the use of forward-looking terminology, including the
terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,”
“projects,” “forecasts,” “intends,” “plans,” “may,” “will” or
“should” or, in each case, their negative or other variations or
comparable terminology. These forward-looking statements include
all matters that are not historical facts. They appear in a number
of places throughout this press release, including the discussion
of 2022 outlook, guidance and the impact of The No Surprises Act
and COVID-19, and these forward-looking statements reflect
management’s expectations regarding our future growth, results of
operations, operational and financial performance and business
prospects and opportunities. Such forward-looking statements are
based on available current market material and management’s
expectations, beliefs and forecasts concerning future events
impacting the business. Although we believe that these
forward-looking statements are based on reasonable assumptions at
the time they are made, you should be aware that many factors could
affect our actual financial results, including: the impact from the
COVID-19 pandemic and its related effects on our projected results
of operations, financial performance or other financial metrics;
loss of our customers, particularly our largest customers;
decreases in our existing market share or the size of our Preferred
Provider Organization networks; effects of competition; effects of
pricing pressure; the inability of our customers to pay for our
services; decreases in discounts from providers; the loss of our
existing relationships with providers; the loss of key members of
our management team; pressure to limit access to preferred provider
networks; the ability to achieve the goals of our strategic plans
and recognize the anticipated strategic, operational, growth and
efficiency benefits when expected; our ability to identify,
complete and successfully integrate acquisitions; changes in our
industry; interruptions or security breaches of our information
technology systems and other cyber security attacks; our ability to
protect proprietary applications; our inability to expand our
network infrastructure; our ability to maintain effective internal
controls over financial reporting; our ability to continue to
attract, motivate and retain a large number of skilled employees,
and adapt to the effects of inflationary pressure on wages; changes
in our regulatory environment, including healthcare law and
regulations; the expansion of privacy and security laws; heightened
enforcement activity by government agencies; our ability to pay
interest and principal on our notes and other indebtedness; the
possibility that we may be adversely affected by other political,
economic, business, and/or competitive factors; other factors
disclosed in our Securities and Exchange Commission (“SEC”)
filings; and other factors beyond our control.
The forward-looking statements contained in this press release
are based on our current expectations and beliefs concerning future
developments and potential effects on our business. There can be no
assurance that future developments affecting our business will be
those that we have anticipated. These forward-looking statements
involve a number of risks, uncertainties (some of which are beyond
our control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. These risks and
uncertainties include, but are not limited to, those factors
described in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2021 and our Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 2022, including those under
“Risk Factors” therein, and other documents filed or to be filed
with the SEC by us. Should one or more of these risks or
uncertainties materialize, or should any of the assumptions prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. Forward-looking
statements speak only as of the date made. We do not undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles in the United States
(“GAAP”), this press release contains certain non-GAAP financial
measures, including EBITDA, Adjusted EBITDA, Free Cash Flow,
Unlevered Free Cash Flow and Adjusted cash conversion ratio. A
non-GAAP financial measure is generally defined as a numerical
measure of a company’s financial or operating performance that
excludes or includes amounts so as to be different than the most
directly comparable measure calculated and presented in accordance
with GAAP.
EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash
Flow and Adjusted cash conversion ratio are supplemental measures
of MultiPlan’s performance that are not required by or presented in
accordance with GAAP. These measures are not measurements of our
financial or operating performance under GAAP, have limitations as
analytical tools and should not be considered in isolation or as an
alternative to net income (loss), cash flows or any other measures
of performance prepared in accordance with GAAP.
EBITDA represents net income before interest expense, interest
income, income tax provision, depreciation, amortization of
intangible assets, and non-income taxes. Adjusted EBITDA is EBITDA
as further adjusted by certain items as described in the table
below.
In addition, in evaluating EBITDA and Adjusted EBITDA you should
be aware that in the future, we may incur expenses similar to the
adjustments in the presentation of EBITDA and Adjusted EBITDA. The
presentation of EBITDA and Adjusted EBITDA should not be construed
as an inference that our future results will be unaffected by
unusual or non-recurring items. The calculations of EBITDA and
Adjusted EBITDA may not be comparable to similarly titled measures
reported by other companies. Based on our industry and debt
financing experience, we believe that EBITDA and Adjusted EBITDA
are customarily used by investors, analysts and other interested
parties to provide useful information regarding a company’s ability
to service and/or incur indebtedness.
We also believe that Adjusted EBITDA is useful to investors and
analysts in assessing our operating performance during the periods
these charges were incurred on a consistent basis with the periods
during which these charges were not incurred. Both EBITDA and
Adjusted EBITDA have limitations as analytical tools, and you
should not consider either in isolation, or as a substitute for
analysis of our results as reported under GAAP. Some of the
limitations are:
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
requirements for, our working capital needs;
- EBITDA and Adjusted EBITDA do not reflect interest expense, or
the cash requirements necessary to service interest or principal
payments on our debt;
- EBITDA and Adjusted EBITDA do not reflect our tax expense or
the cash requirements to pay our taxes; and
- Although depreciation and amortization are non-cash charges,
the tangible assets being depreciated will often have to be
replaced in the future, and EBITDA and Adjusted EBITDA do not
reflect any cash requirements for such replacements.
MultiPlan’s presentation of Adjusted EBITDA should not be
construed as an inference that our future results and financial
position will be unaffected by unusual items.
Free Cash Flow is defined as net cash provided by operating
activities less capital expenditures, all as disclosed in the
Statements of Cash Flows. Unlevered Free Cash Flow is defined as
net cash provided by operating activities less capital
expenditures, plus cash interest paid, all as disclosed in the
Statements of Cash Flows. Free Cash Flow and Unlevered Free Cash
Flow are measures of our operational performance used by management
to evaluate our business after purchases of property and equipment
and, in the case of Unlevered Free Cash Flow, prior to the impact
of our capital structure. Free Cash Flow and Unlevered Free Cash
Flow should be considered in addition to, rather than as a
substitute for, consolidated net income as a measure of our
performance and net cash provided by operating activities as a
measure of our liquidity. Additionally, MultiPlan’s definitions of
Free Cash Flow and Unlevered Free Cash Flow are limited, in that
they do not represent residual cash flows available for
discretionary expenditures, due to the fact that the measures do
not deduct the payments required for debt service, in the case of
Unlevered Free Cash Flow, and other contractual obligations or
payments made for business acquisitions.
Adjusted cash conversion ratio is defined as Unlevered Free Cash
Flow divided by Adjusted EBITDA. MultiPlan believes that the
presentation of the Adjusted cash conversion ratio provides useful
information to investors because it is a financial performance
measure that shows how much of its Adjusted EBITDA MultiPlan
converts into Unlevered Free Cash Flow.
We have not reconciled the forward-looking Adjusted EBITDA
guidance included above to the most directly comparable GAAP
measure because this cannot be done without unreasonable effort due
to the variability and low visibility with respect to certain
costs, the most significant of which are incentive compensation
(including stock-based compensation), transaction-related expenses
(including expenses relating to the business combination through
which we became a public company), certain fair value measurements
and costs related to the uncertainties caused by the global
COVID-19 pandemic, which are potential adjustments to future
earnings. We expect the variability of these items to have a
potentially unpredictable, and a potentially significant, impact on
our future GAAP financial results.
MULTIPLAN CORPORATION
Unaudited Condensed
Consolidated Balance Sheets
(in thousands, except share and
per share data)
June 30, 2022
December 31,
2021
Assets
Current assets:
Cash and cash equivalents
$
354,310
$
185,328
Restricted cash
2,777
3,051
Trade accounts receivable, net
94,005
99,905
Prepaid expenses
17,078
24,910
Prepaid taxes
—
5,064
Other current assets, net
1,139
999
Total current assets
469,309
319,257
Property and equipment, net
222,022
213,238
Operating lease right-of-use assets
24,108
30,104
Goodwill
4,363,121
4,363,070
Other intangibles, net
3,114,756
3,285,037
Other assets, net
22,505
9,701
Total assets
$
8,215,821
$
8,220,407
Liabilities and Shareholders’
Equity
Current liabilities:
Accounts payable
$
12,137
$
13,005
Accrued interest
55,199
55,685
Accrued taxes
3,066
—
Operating lease obligation, short-term
7,072
6,883
Current portion of long-term debt
13,250
13,250
Accrued compensation
30,689
25,419
Other accrued expenses
26,585
27,666
Total current liabilities
147,998
141,908
Long-term debt
4,877,670
4,879,144
Operating lease obligation, long-term
20,414
26,725
Private Placement Warrants and Unvested
Founder Shares
66,408
74,000
Deferred income taxes
694,395
753,825
Other liabilities
83
135
Total liabilities
5,806,968
5,875,737
Commitments and contingencies (Note 6)
Shareholders’ equity:
Shareholder interests
Preferred stock, $0.0001 par value —
10,000,000 shares authorized; no shares issued
—
—
Common stock, $0.0001 par value —
1,500,000,000 shares authorized; 666,176,911 and 665,456,180
issued; 639,059,505 and 638,338,774 shares outstanding
67
67
Additional paid-in capital
2,318,353
2,311,660
Retained earnings
282,602
225,112
Treasury stock — 27,117,406 and 27,117,406
shares
(192,169
)
(192,169
)
Total shareholders’ equity
2,408,853
2,344,670
Total liabilities and shareholders’
equity
$
8,215,821
$
8,220,407
MULTIPLAN CORPORATION
Unaudited Condensed
Consolidated Statements of Income (Loss) and Comprehensive Income
(Loss)
(in thousands, except share and
per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenues
$
290,128
$
276,272
$
588,174
$
531,136
Costs of services (exclusive of
depreciation and amortization of intangible assets shown below)
49,977
44,368
97,049
84,098
General and administrative expenses
40,085
39,927
72,673
71,923
Depreciation
17,171
17,008
33,767
33,173
Amortization of intangible assets
85,127
85,167
170,281
169,875
Total expenses
192,360
186,470
373,770
359,069
Operating income
97,768
89,802
214,404
172,067
Interest expense
72,696
64,004
144,141
127,721
Interest income
(46
)
(7
)
(58
)
(11
)
Gain on investments
—
(25
)
(289
)
(25
)
Loss (gain) on change in fair value of
Private Placement Warrants and Unvested Founder Shares
5,149
81,560
(7,592
)
41,185
Net income (loss) before taxes
19,969
(55,730
)
78,202
3,197
Provision (benefit) for income taxes
6,457
(8,798
)
20,712
4,252
Net income (loss)
$
13,512
$
(46,932
)
$
57,490
$
(1,055
)
Weighted average shares outstanding –
Basic
639,001,506
655,609,718
638,750,938
655,361,621
Weighted average shares outstanding –
Diluted
640,097,349
655,609,718
639,709,247
655,361,621
Net income (loss) per share – Basic
$
0.02
$
(0.07
)
$
0.09
$
(0.00
)
Net income (loss) per share – Diluted
$
0.02
$
(0.07
)
$
0.09
$
(0.00
)
Comprehensive income (loss)
$
13,512
$
(46,932
)
$
57,490
$
(1,055
)
MULTIPLAN CORPORATION
Unaudited Condensed
Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended June
30,
2022
2021
Operating activities:
Net income (loss)
$
57,490
$
(1,055
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation
33,767
33,173
Amortization of intangible assets
170,281
169,875
Amortization of the right-of-use asset
3,339
3,525
Stock-based compensation
7,234
8,442
Deferred income taxes
(59,481
)
303
Non-cash interest costs
5,192
5,805
Gain on equity investments
(289
)
—
Loss on disposal of property and
equipment
2,785
685
(Gain) loss on change in fair value of
Private Placement Warrants and Unvested Founder Shares
(7,592
)
41,185
Changes in assets and liabilities, net of
assets acquired and liabilities assumed from acquisitions:
Accounts receivable, net
5,900
4,952
Prepaid expenses and other assets
9,888
2,468
Prepaid taxes
5,064
(54,148
)
Operating lease obligation
(5,403
)
(3,417
)
Accounts payable and accrued expenses and
other
7,464
(7,404
)
Net cash provided by operating
activities
235,639
204,389
Investing activities:
Purchases of property and equipment
(43,399
)
(36,787
)
Proceeds from sale of investment
289
5,641
Purchase of equity investments
(15,000
)
—
HST Acquisition, net of cash acquired
—
(28
)
DHP Acquisition, net of cash acquired
—
(149,676
)
Net cash used in investing activities
(58,110
)
(180,850
)
Financing activities:
Repayments of Term Loan B
(6,625
)
—
Taxes paid on settlement of vested share
awards
(2,196
)
(2,323
)
Net cash used in financing activities
(8,821
)
(2,323
)
Net increase in cash, cash equivalents and
restricted cash
168,708
21,216
Cash, cash equivalents and restricted cash
at beginning of period
188,379
126,755
Cash, cash equivalents and restricted cash
at end of period
$
357,087
$
147,971
Cash and cash equivalents
$
354,310
$
147,971
Restricted cash
2,777
—
Cash, cash equivalents and restricted cash
at end of period
$
357,087
$
147,971
Noncash investing and financing
activities:
Purchases of property and equipment not
yet paid
$
4,589
$
3,913
Operating lease right-of-use assets
obtained in exchange for operating lease liabilities
$
40
$
1,025
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest
$
(139,013
)
$
(123,115
)
Income taxes, net of refunds
$
(72,452
)
$
(68,766
)
MULTIPLAN CORPORATION
Calculation of EBITDA and
Adjusted EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2022
2021
2022
2021
Net income (loss)
$
13,512
$
(46,932
)
$
57,490
$
(1,055
)
Adjustments:
Interest expense
72,696
64,004
144,141
127,721
Interest income
(46
)
(7
)
(58
)
(11
)
Income tax provision
6,457
(8,798
)
20,712
4,252
Depreciation
17,171
17,008
33,767
33,173
Amortization of intangible assets
85,127
85,167
170,281
169,875
Non-income taxes
440
489
993
1,002
EBITDA
$
195,357
$
110,931
$
427,326
$
334,957
Adjustments:
Other expenses, net
2,543
53
1,653
711
Integration expenses
1,024
4,129
2,696
4,688
Loss (gain) on change in fair value of
Private Placement Warrants and Unvested Founder Shares
5,149
81,560
(7,592
)
41,185
Transaction-related expenses
1,457
1,206
4,012
6,431
Gain on investments
—
(25
)
(289
)
(25
)
Stock-based compensation
4,104
7,474
7,234
8,442
Adjusted EBITDA
$
209,634
$
205,328
$
435,040
$
396,389
Calculation of Unlevered Free
Cash Flow and Adjusted Cash Conversion Ratio
Three Months Ended June
30,
Six Months Ended June
30,
(in thousands)
2022
2021
2022
2021
Net cash provided by operating
activities
$
40,702
$
33,482
$
235,639
$
204,389
Purchases of property and equipment
(18,945
)
(18,674
)
(43,399
)
(36,787
)
Free Cash Flow
21,757
14,808
192,240
167,602
Interest paid
92,816
100,836
139,013
123,115
Unlevered Free Cash Flow
$
114,573
$
115,644
$
331,253
$
290,717
Adjusted EBITDA
$
209,634
$
205,328
$
435,040
$
396,389
Adjusted Cash Conversion Ratio
55
%
56
%
76
%
73
%
Net cash used in investing activities
$
(33,945
)
$
(18,452
)
$
(58,110
)
$
(180,850
)
Net cash used in financing activities
$
(3,551
)
$
(2,091
)
$
(8,821
)
$
(2,323
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220804005304/en/
Investor Relations Luke Montgomery, CFA SVP, Finance
& Investor Relations MultiPlan 866-909-7427
investor@multiplan.com
Shawna Gasik AVP, Investor Relations MultiPlan 866-909-7427
investor@multiplan.com
Media Relations Pamela Walker AVP, Marketing &
Communications MultiPlan 781-895-3118 press@multiplan.com
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