Exhibit 99.1
P3 Health Partners Announces
Fourth Quarter and Full-Year 2022 Results
Affirming 2023 guidance – introducing year-end medical margin guidance
Anticipates reaching Adjusted EBITDA positive in early 2024
Management to Host Conference Call and Webcast March 31, 2023 at 8:30 AM ET
Henderson, NV, March 31, 2023 (Business Wire) -- P3 Health Partners Inc. (“P3” or the “Company”) (NASDAQ: PIII), a patient-centered and physician-led population health management company, today announced its financial results for the fourth quarter and full year ended December 31, 2022.
“Results for 2022 are a testament to the strength of the P3 team and its commitment to improving clinical outcomes,” said Dr. Sherif Abdou, CEO of P3 Health Partners. “We achieved revenue growth and a network contribution improvement of 65% versus 2021. 2023 is an inflection point for P3, as we shift to a higher percentage of persistent lives than new, reduce operating expenses, and provide a clear path to reach Adjusted EBITDA positive results in early 2024.”
Fourth Quarter 2022 Financial Results
| · | Capitated revenue was $254.0 million, an increase of 40% compared to $181.4 million in the fourth quarter of the prior year |
| · | Net loss was $532.3 million compared to a net loss of $118.2 million in the fourth quarter of the prior year, primarily due to a goodwill impairment charge of $463.5 million in the fourth quarter of 2022 |
| · | Net loss PMPM was $1,766, compared to a net loss PMPM of $587.1 in the prior year, due to a goodwill impairment charge of $463.5 million in the fourth quarter of 2022 |
| · | Adjusted EBITDA loss(1) was $40.1 million compared to an Adjusted EBITDA loss of $35.6 million in the fourth quarter of the prior year |
| · | Adjusted EBITDA PMPM(1) loss was $133, an improvement of $44 PMPM compared to the fourth quarter of the prior year |
In order to provide a greater level of insight into our model and comparability with other companies in our industry, we are introducing two additional non-GAAP financial metrics, medical margin and network contribution. For more information regarding the Company’s use of non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures.”
Full-Year 2022 Financial Results
| · | At-risk Medicare Advantage membership at December 31, 2022 of 100,400, an increase of approximately 50% compared to 67,000 in the prior year(2) |
| · | Capitated revenue was $1.0 billion, an increase of 66% compared to $625.0 million in the prior year |
| · | Operating loss for full-year 2022 was $1.6 billion compared to $187.9 million in the prior year(1) |
| · | Full-year 2022 medical margin was $62.1 million, an improvement of 428% compared to the prior year(1) |
| · | Full-year network contribution of ($7.8) million improved by 65% compared to the prior year(1) |
| · | Net loss was $1.6 billion compared to a net loss of $204.3 million in the prior year, primarily due to a goodwill impairment charge of $1.3 billion in 2022 |
| · | Net loss PMPM was $1,296.1, an increased loss of $1,041.9 primarily due to a goodwill impairment charge |
| · | Adjusted EBITDA loss was $127.9 million compared to an Adjusted EBITDA loss of $95.5 million in the prior year (1) |
| · | Adjusted EBITDA loss PMPM was $106, a significant improvement compared to $119 PMPM in the prior year(1) |
“We announced today that we have secured financing of approximately $90.0 million and believe this provides a solid path to profitability,” said Dr. Sherif Abdou, CEO of P3. “The new financing, along with our expected shift to a higher percentage of persistent lives, a focused reduction in operating expenses, and measured and disciplined growth in 2023 make us confident that we will have the resources necessary to reach Adjusted EBITDA profitability in early 2024.”
Mary Tolan, Founder and Managing Partner of Chicago Pacific Founders said, “The values and mission of P3 closely align with those of Chicago Pacific. We believe that value-based-care is the future of healthcare and that P3 has the right model to bring high-quality services to patients while lowering the overall cost of care. We are proud to partner with them on this journey.”
| Fiscal 2023 Guidance | ||||||||
| Year Ended December 31, 2023 |
||||||||
| Low | High | |||||||
| Medicare Advantage Members | 115,000 | 120,000 | ||||||
| Total Revenues (in millions) | $ | 1,200 | $ | 1,250 | ||||
| Medical Margin(3) (in millions) | $ | 155 | $ | 175 | ||||
| Medical Margin(3)PMPM | $ | 120 | $ | 130 | ||||
| Adjusted EBITDA(3) Loss (in millions) | $ | (60 | ) | $ | (40 | ) | ||
(3)We have not reconciled guidance for Adjusted EBITDA to net income (loss), the most comparable GAAP measure, and have not provided forward-looking guidance for net income (loss) because of the uncertainty around certain items that may impact net income (loss)
The foregoing 2023 Outlook statement represents management's current estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the Cautionary Note Regarding Forward-Looking Statements included in this release. Management does not assume any obligation to update these estimates.
Conference Call and Webcast
Management will host a conference call and webcast at 8:30 AM ET on March 31st to provide a corporate and financial update.
| Title & Webcast | P3 Health Fourth-Quarter and Full-Year 2022 Earnings Conference Call |
| Date & Time | March 31, 2023, 8:30 a.m. Eastern Time |
| Conference Call Details |
Toll-Free 1-877-270-2148 (US) International 1-412-902-6510 Ask to be joined into the P3 Health Partners call |
|
The conference call will also be webcast live in the "Events & Presentations" section of the Investor page of the P3 website (ir.p3hp.org). The Company’s press release will be available on the Investor page of P3’s website in advance of the conference call. An archived recording of the webcast will be available on the Investor page of P3’s website for a period of 90 days following the conference call. | |
(1) Adjusted EBITDA, Adjusted EBITDA per member, per month (“PMPM”), medical margin and network contribution are non-GAAP financial measures. For reconciliations of these measures to the most directly comparable GAAP measures and more information regarding the Company’s use of non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures.”
(2) See “Key Performance Metrics” for additional information on how the Company defines “at-risk Medicare Advantage members.”
(3)The Company is not able to provide a quantitative reconciliation of guidance for Adjusted EBITDA loss and medical margin to net income (loss) and operating loss the most directly comparable GAAP measures, respectively, and has not provided forward-looking guidance for net income (loss) or operating loss because of the uncertainty around certain items that may impact net income (loss) or operating loss that are not within our control or cannot be reasonably predicted without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this press release, please see “Non-GAAP Financial Measures” below.
About P3 Health Partners (NASDAQ: PIII):
P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,800 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 15 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system. For more information, visit www.p3hp.org and follow us on @p3healthpartners and Facebook.com/p3healthpartners.
Presentation
of Financial Results
As a result of the business combination consummated on December 3, 2021, the Company was deemed to be the acquirer and successor for accounting
purposes, and P3 Health Group Holdings, LLC, which is the business conducted prior to the closing of the business combination, was deemed
to be the acquiree and accounting predecessor. The Company’s financial results are distinguished between two distinct periods, the
period prior to the business combination closing date (the “Predecessor” period) and the period after the closing date through
December 31, 2022 (the “Successor” period), which reflects a new basis of accounting that is based on the fair value of net
assets acquired. The financial results for the quarter and year ended December 31, 2021, presented in this release combine these two periods.
Non-GAAP Financial Measures
In addition to the financial results prepared in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"), this press release contains certain non-GAAP financial measures as defined by the SEC rules, including Adjusted EBITDA and Adjusted EBITDA PMPM, medical margin and network contribution. EBITDA is defined as GAAP net income (loss) before (i) interest, (ii) income taxes and (iii) depreciation and amortization. Adjusted EBITDA is defined as EBITDA, further Adjusted to exclude the effect of certain expenses, such as (i) mark-to-market warrant gain/loss, (ii) premium deficiency reserves, (ii) equity-based compensation expense and (vi) certain other items that we believe are not indicative of our core operating performances. Adjusted EBITDA PMPM is defined as Adjusted EBITDA divided by the number of at-risk Medicare Advantage members each month divided by the number of months in the period. We believe these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other similar companies. Medical margin represents the amount earned from capitation revenue after medical claims expenses are deducted. Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. Furthermore, in light of COVID-19, we continue to evaluate the ultimate impact of the pandemic on medical margin. We define network contribution as total operating revenue less the sum of: (i) medical claims expenses and (ii) other medical expenses including physician compensation expense related to surplus sharing and bonuses and other direct medical expenses incurred to improve care for our members. We believe this metric provides insight into the economics of the P3 Care Model, as it includes all medical claims expense associated with our members’ care as well as partner compensation and additional medical costs we incur as part of our aligned partnership model. Other medical expenses are largely variable and proportionate to the level of surplus in each respective market, among other cost factors. We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In addition, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. The tables at the end of this press release present a reconciliation of Adjusted EBITDA to net income (loss) and Adjusted EBITDA PMPM to net income (loss) PMPM, and medical margin and network contribution to operating income (loss) which are the most directly comparable financial measures calculated in accordance with GAAP.
Key Performance Metrics
In addition to our GAAP and non-GAAP financial information, the Company also monitors “at-risk members” to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. At-risk membership represents the approximate number of Medicare Advantage members for whom we receive a fixed PMPM fee under capitation arrangements as of the end of a particular period.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. 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, Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro-forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements address various matters, including the Company’s future expected growth strategy and operating performance; current expectations regarding the Company’s liquidity condition, outlook as to revenue, at-risk Medicare Advantage membership and Adjusted EBITDA loss for the full year 2023; and our expectation to achieve Adjusted EBITDA profitability in 2024, all of which reflect the Company’s expectations based upon currently available information and data. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected or estimated and you are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.
Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to fund our growth and expand our operations; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payers; the impact of COVID-19, including the impact of new variants of the virus, or another pandemic, epidemic or outbreak of infectious disease on our business and results of operation; increased labor costs; our ability to recruit and retain qualified team members and independent physicians; and other factors discussed in Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023, and in the Company’s other filings with the SEC. All information in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. You are cautioned not to place undue reliance on any forward-looking statements contained in this press release.
Contacts
Investor Relations
Karen Blomquist
Vice President, Investor Relations
P3 Health Partners
kblomquist@p3hp.org
Kassi Belz
Executive Vice President, Communications
P3 Health Partners
(904) 415-2744
kbelz@p3hp.org
P3 HEALTH PARTNERS INC and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
| December 31, | ||||||||
| 2022 | 2021 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 17,537 | $ | 140,478 | ||||
| Restricted cash | 920 | 356 | ||||||
| Health plan receivable | 72,092 | 50,251 | ||||||
| Clinic fees and insurance receivable, net | 822 | 1,090 | ||||||
| Other receivable | 6,678 | 727 | ||||||
| Prepaid expenses and other current assets | 2,643 | 6,959 | ||||||
| TOTAL CURRENT ASSETS | 100,692 | 199,861 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Property and equipment, net | 8,839 | 8,048 | ||||||
| Goodwill | — | 1,309,750 | ||||||
| Intangible assets, net | 751,050 | 835,839 | ||||||
| Other long-term assets | 15,990 | 10,611 | ||||||
| TOTAL LONG-TERM ASSETS | 775,879 | 2,164,248 | ||||||
| TOTAL ASSETS (1) | $ | 876,571 | $ | 2,364,109 | ||||
| LIABILITIES, MEZZANINE EQUITY, and STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 11,542 | $ | 5,469 | ||||
| Accrued expenses and other current liabilities | 16,647 | 12,261 | ||||||
| Accrued payroll | 8,224 | 6,304 | ||||||
| Health plan settlements payable | 13,608 | 22,549 | ||||||
| Claims payable | 151,207 | 101,958 | ||||||
| Premium deficiency reserve | 26,375 | 37,836 | ||||||
| Accrued interest | 14,061 | 8,771 | ||||||
| Current portion of long-term debt | — | 46 | ||||||
| Short-term debt | — | 3,579 | ||||||
| TOTAL CURRENT LIABILITIES | 241,664 | 198,773 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Operating lease liability | 11,516 | 6,297 | ||||||
| Warrant liabilities | 1,517 | 11,383 | ||||||
| Contingent consideration | 4,794 | 3,487 | ||||||
| Long-term debt, net | 94,421 | 80,000 | ||||||
| TOTAL LONG-TERM LIABILITIES | 112,248 | 101,167 | ||||||
| TOTAL LIABILITIES (1) | 353,912 | 299,940 | ||||||
| COMMITMENTS AND CONTINGENCIES (NOTE 17 AND NOTE 21) | ||||||||
| MEZZANINE EQUITY | ||||||||
| Redeemable non-controlling interest | 516,805 | 1,790,617 | ||||||
| STOCKHOLDERS' EQUITY: | ||||||||
| Class A common stock, $0.0001 par value; 800,000,000 shares authorized; 41,578,890 shares issued and outstanding as of December 31, 2022 and 2021 | 4 | 4 | ||||||
| Class V common stock, $0.0001 par value; 205,000,000 shares authorized; 201,592,012 and 196,553,523 shares issued and outstanding as of December 31, 2022 and 2021, respectively | 20 | 20 | ||||||
| Additional paid in capital | 315,375 | 312,946 | ||||||
| Accumulated deficit | -309,545 | -39,418 | ||||||
| TOTAL STOCKHOLDERS’ EQUITY | 5,854 | 273,552 | ||||||
| TOTAL LIABILITIES, MEZZANINE EQUITY, and STOCKHOLDERS' EQUITY | $ | 876,571 | $ | 2,364,109 | ||||
Unaudited Consolidated Statements of Operations
(in millions, except per share amounts)
| Successor | Predecessor | |||||||||||||||||||||||
| Successor | Successor | Successor | December 3, 2021 | January 1, 2021 | Combined | |||||||||||||||||||
| Three Months Ended | Three Months Ended | Year Ended | through | through | Year Ended | |||||||||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | December 2, 2021 | December 31, 2021 | |||||||||||||||||||
| Operating Revenue: | ||||||||||||||||||||||||
| Capitated Revenue | $ | 254.0 | $ | 181.4 | $ | 1,034.8 | $ | 57.2 | $ | 567.7 | $ | 625.0 | ||||||||||||
| Other Patient Service Revenue | 4.2 | 3.9 | 14.7 | 1.5 | 10.9 | 12.4 | ||||||||||||||||||
| Total Operating Revenue | 258.2 | 185.3 | 1,049.5 | 58.8 | 578.6 | 637.4 | ||||||||||||||||||
| Operating Expenses (Income): | ||||||||||||||||||||||||
| Medical Expenses | 269.2 | 201.0 | 1,057.2 | 66.9 | 592.5 | 659.3 | ||||||||||||||||||
| Premium Deficiency Reserve | (1.3 | ) | 33.2 | (11.5 | ) | 26.3 | 11.6 | 37.8 | ||||||||||||||||
| Corporate, General and Administrative Expenses | 39.7 | 63.3 | 157.3 | 17.0 | 100.2 | 117.2 | ||||||||||||||||||
| Sales and Marketing Expenses | 1.7 | 1.1 | 5.1 | 0.4 | 1.8 | 2.2 | ||||||||||||||||||
| Goodwill Impairment | 463.5 | 7.1 | 1,315.0 | 7.1 | - | 7.1 | ||||||||||||||||||
| Depreciation and Amortization | 22.0 | 0.4 | 87.3 | - | 1.6 | 1.6 | ||||||||||||||||||
| Total Operating Expenses | 794.8 | 306.2 | 2,610.4 | 117.7 | 707.7 | 825.3 | ||||||||||||||||||
| Operating Loss | (536.5 | ) | (120.9 | ) | (1,560.9 | ) | (58.9 | ) | (129.1 | ) | (187.9 | ) | ||||||||||||
| Other Income (Expenses): | ||||||||||||||||||||||||
| Interest Expense, Net | (3.2 | ) | (3.7 | ) | (11.4 | ) | (0.9 | ) | (9.8 | ) | (10.7 | ) | ||||||||||||
| Mark-To-Market Adjustment For Stock Warrants | 6.5 | 6.7 | 9.9 | 2.3 | (7.7 | ) | (5.4 | ) | ||||||||||||||||
| Other Expense, Net | 2.8 | (0.3 | ) | 2.8 | (0.5 | ) | 0.1 | (0.3 | ) | |||||||||||||||
| Total Other Income (Expenses) | 6.1 | 2.7 | 1.2 | 1.0 | (17.3 | ) | (16.4 | ) | ||||||||||||||||
| Loss Before Income Taxes | (530.5 | ) | (118.2 | ) | (1,559.7 | ) | (57.9 | ) | (146.4 | ) | (204.3 | ) | ||||||||||||
| Provision For Income Taxes | (1.9 | ) | - | (1.9 | ) | - | - | - | ||||||||||||||||
| Net Loss | (532.3 | ) | (118.2 | ) | (1,561.6 | ) | (57.9 | ) | (146.4 | ) | (204.3 | ) | ||||||||||||
| Net Loss Attributable To Non-Controlling Interests | (438.3 | ) | (47.9 | ) | (1,291.4 | ) | (47.9 | ) | - | (47.9 | ) | |||||||||||||
| Net Loss Attributable To Controlling Interests | $ | (94.0 | ) | $ | (70.3 | ) | $ | (270.1 | ) | $ | (10.1 | ) | $ | (146.4 | ) | $ | (156.5 | ) | ||||||
| NET LOSS PER SHARE (BASIC) | $ | (2.26 | ) | $ | (1.69 | ) | $ | (6.5 | ) | $ | (0.24 | ) | NA | (1) | NA | (1) | ||||||||
| NET LOSS PER SHARE (DILUTED) | $ | (2,260.23 | ) | $ | (1,690.16 | ) | $ | (6.5 | ) | $ | (0.24 | ) | NA | (1) | NA | (1) | ||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (BASIC) | 41.6 | 41.6 | 41.6 | 41.6 | NA | (1) | NA | (1) | ||||||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (DILUTED) | 41.6 | 41.6 | 41.6 | 41.6 | NA | (1) | NA | (1) | ||||||||||||||||
(1) The Company analyzed the calculation of net loss per member unit for predecessor periods prior to the Business Combinations
| Successor | Predecessor | |||||||||||
| Year Ended | December 3, 2021 | January 1, 2021 | ||||||||||
| December 31, | through December 31, | through December 2, | ||||||||||
| 2022 | 2021 | 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net loss | -1,561,557 | -57,938 | $ | -146,400 | ||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
| Depreciation and amortization | 87,289 | 7,150 | 1,575 | |||||||||
| Equity-based compensation | 19,404 | 4,635 | 3,701 | |||||||||
| Goodwill impairment | 1,314,952 | — | — | |||||||||
| Amortization of original issue discount and debt issuance costs | — | — | 1,798 | |||||||||
| Accretion of contingent consideration | 400 | — | — | |||||||||
| Mark-to-market of stock warrants | -9,865 | -2,272 | 7,665 | |||||||||
| Premium deficiency reserve | -11,461 | 26,277 | 11,559 | |||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Health plan receivable | -21,841 | 3,236 | -2,770 | |||||||||
| Clinic fees, insurance, and other receivables | -5,338 | 1,467 | -1,485 | |||||||||
| Prepaid expenses and other current assets | 4,266 | -4,704 | 4,254 | |||||||||
| Other long-term assets | 100 | — | — | |||||||||
| Accounts payable, accrued expenses, and other current liabilities | 6,082 | 7,732 | 34,224 | |||||||||
| Accrued payroll | 1,920 | 3,158 | -1,134 | |||||||||
| Health plan settlements payable | -8,941 | -2,592 | 11,265 | |||||||||
| Claims payable | 49,249 | -971 | 19,097 | |||||||||
| Accrued interest | 5,290 | -498 | 5,216 | |||||||||
| Operating lease liability | 4,032 | -22 | 306 | |||||||||
| Net cash used in operating activities | -126,019 | -15,342 | -51,129 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Purchases of property and equipment | -2,233 | -120 | -3,290 | |||||||||
| Acquisitions, net of cash acquired | -5,500 | -47,879 | -4,989 | |||||||||
| Notes receivable | — | 143 | 70 | |||||||||
| Net cash used in investing activities | -7,733 | -47,856 | -8,209 | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from PIPE, net of issuance costs | — | 195,308 | — | |||||||||
| Proceeds from long-term debt, net of original issue discount | 15,000 | — | 25,000 | |||||||||
| Proceeds from short-term debt | — | 3,377 | 351 | |||||||||
| Payment of long-term debt | -46 | -8 | -186 | |||||||||
| Payment of debt issuance costs | — | — | -375 | |||||||||
| Payment of short-term debt | -3,579 | — | — | |||||||||
| Net cash provided by financing activities | 11,375 | 198,677 | 24,790 | |||||||||
| Net change in cash and restricted cash | -122,377 | 135,479 | -34,548 | |||||||||
| Cash and restricted cash at beginning of period | 140,834 | 5,355 | 39,903 | |||||||||
| Cash and restricted cash at end of period | 18,457 | 140,834 | $ | 5,355 | ||||||||
Reconciliation of Non-GAAP Adjusted EBITDA
(in millions)
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | |||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||
| Net Loss | $ | (532 | ) | $ | (118 | ) | (1,561.6 | ) | $ | (204 | ) | |||||
| Interest Expense, Net | 3 | 4 | 11.4 | 11 | ||||||||||||
| Depreciation and Amortization Expense | 22 | 8 | 87.3 | 9 | ||||||||||||
| Provision for Income Taxes | 2 | - | 1.9 | - | ||||||||||||
| Goodwill Impairment | 464 | - | 1,315.0 | - | ||||||||||||
| Mark-To-Market Adjustment of Stock Warrants | (7 | ) | (7 | ) | (9.9 | ) | 5 | |||||||||
| Premium Deficiency Reserve | (1 | ) | 33 | (11.5 | ) | 38 | ||||||||||
| Transaction and Other Related Costs | 3 | 38 | 14.1 | 38 | ||||||||||||
| Equity-Based Compensation | 2 | 7 | 19.4 | 8 | ||||||||||||
| Other | 4 | 0 | 6.0 | 0 | ||||||||||||
| EBITDA, Adjusted | $ | (40.1 | ) | $ | (35.6 | ) | $ | (127.9 | ) | $ | (95.5 | ) | ||||
Reconciliation of non-GAAP adjusted EBITDA / PMPM
(in PMPM $)
| Three Months Ended | Three Months Ended | Year Ended | Year Ended | |||||||||||||
| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 | |||||||||||||
| Net Loss | $ | (532 | ) | $ | (118 | ) | $ | (1,562 | ) | $ | (204 | ) | ||||
| Interest Expense, Net | 3 | 4 | 11 | 11 | ||||||||||||
| Depreciation and Amortization Expense | 22 | 8 | 87 | 9 | ||||||||||||
| Provision for Income Taxes | 2 | - | 2 | - | ||||||||||||
| Goodwill Impairment | 464 | - | 1,315 | - | ||||||||||||
| Mark-To-Market Adjustment of Stock Warrants | (7 | ) | (7 | ) | (10 | ) | 5 | |||||||||
| Premium Deficiency Reserve | (1 | ) | 33 | (12 | ) | 38 | ||||||||||
| Transaction and Other Related Costs | 3 | 38 | 14 | 38 | ||||||||||||
| Stock-Based Compensation | 2 | 7 | 19 | 8 | ||||||||||||
| Other | 4 | 0 | 6 | 0 | ||||||||||||
| EBITDA, Adjusted | $ | (40.1 | ) | $ | (35.6 | ) | $ | (127.9 | ) | $ | (95.5 | ) | ||||
| PMPM | $ | (133 | ) | $ | (177 | ) | $ | (106 | ) | $ | (119 | ) | ||||
| Successor | Predecessor | |||||||||||
| Year Ended | December 3, 2021 | January 1, 2021 | ||||||||||
| December 31, | through December | through December | ||||||||||
| 2022 | 31, 2021 | 2, 2021 | ||||||||||
| Capitated revenue | $ | 1,034,800 | $ | 57,224 | $ | 567,735 | ||||||
| Less: medical claims expenses | -972,725 | -62,344 | -550,869 | |||||||||
| Medical margin | $ | 62,075 | $ | -5,120 | $ | 16,866 | ||||||
The following table sets forth a reconciliation of our operating loss, the most directly comparable GAAP metric, to medical margin (in thousands):
| Successor | Predecessor | Combined | ||||||||||||||
| Year Ended | December 3, 2021 | January 1, 2021 | January 1, 2021 | |||||||||||||
| December 31, | through December | through December | through December | |||||||||||||
| 2022 | 31, 2021 | 2, 2021 | 31, 2021 | |||||||||||||
| Operating loss | $ | -1,560,913 | $ | -58,888 | $ | -129,058 | $ | -187,946 | ||||||||
| Other patient service revenue | -14,671 | -1,538 | -10,867 | -12,405 | ||||||||||||
| Other medical expenses | 84,499 | 4,533 | 41,596 | 46,128 | ||||||||||||
| Premium deficiency reserve | -11,461 | 26,277 | 11,559 | 37,836 | ||||||||||||
| Corporate, general and administrative expenses | 157,284 | 16,983 | 100,243 | 117,226 | ||||||||||||
| Sales and marketing expenses | 5,096 | 364 | 1,818 | 2,182 | ||||||||||||
| Depreciation and amortization | 87,289 | 7,149 | 1,575 | 8,724 | ||||||||||||
| Goodwill impairment | 1,314,952 | — | — | |||||||||||||
| Medical margin | $ | 62,075 | $ | -5,120 | $ | 16,866 | $ | 11,745 | ||||||||
| Successor | Predecessor | |||||||||||
| Year Ended | December 3, 2021 | January 1, 2021 | ||||||||||
| December 31, | through December | through December | ||||||||||
| 2022 | 31, 2021 | 2, 2021 | ||||||||||
| Total operating revenue | $ | 1,049,471 | $ | 58,762 | $ | 578,602 | ||||||
| Less: medical claims expenses | -972,725 | -62,345 | -550,869 | |||||||||
| Less: other medical expenses | -84,499 | -4,532 | -41,596 | |||||||||
| Network contribution | $ | -7,753 | $ | -8,115 | $ | -13,863 | ||||||
| The following table presents our network contribution (dollars in thousands): | ||||||||||||||||
| Successor | Predecessor | Combined | ||||||||||||||
| Year Ended | December 3, 2021 | January 1, 2021 | January 1, 2021 | |||||||||||||
| December 31, | through December | through December | through December | |||||||||||||
| 2022 | 31, 2021 | 2, 2021 | 31, 2021 | |||||||||||||
| Operating loss | -1,560,913 | $ | -58,888 | $ | -129,058 | $ | -187,946 | |||||||||
| Premium deficiency reserve | -11,461 | 26,277 | 11,559 | 37,836 | ||||||||||||
| Corporate, general and administrative expenses | 157,284 | 16,983 | 100,243 | 117,226 | ||||||||||||
| Sales and marketing expenses | 5,096 | 364 | 1,818 | 2,182 | ||||||||||||
| Depreciation and amortization | 87,289 | 7,149 | 1,575 | 8,724 | ||||||||||||
| Goodwill impairment | 1,314,952 | — | — | |||||||||||||
| Network contribution | -7,753 | $ | -8,115 | $ | -13,863 | $ | -21,978 | |||||||||