CHICAGO, Aug. 10,
2023 /PRNewswire/ -- GoHealth, Inc. (NASDAQ:
GOCO) ("GoHealth" or the "Company"), a leading health insurance
marketplace and Medicare-focused digital health company, today
announced financial results for the three and six months ended
June 30, 2023.
- Second quarter 2023 net revenues of $142.8 million, a decrease of $15.9 million compared to $158.7 million in the prior year period. YTD 2023
net revenues of $325.9 million, a
decrease of $103.3 million compared
to $429.2 million in the prior year
period.
- Second quarter 2023 Submissions of 162,837, a 5% improvement
compared to 154,893 Submissions in the prior year period. Demand
for our services remains robust, and we continue to invest in
technology to enhance our value proposition.
- Second quarter 2023 net loss of $70.2
million, an improvement of $43.5
million compared to $113.8
million in the prior year period. YTD 2023 net loss of
$92.8 million, an improvement of
$58.2 million compared to
$151.0 million in the prior year
period.
- Second quarter 2023 Adjusted EBITDA1 of $0.8 million, an improvement of $32.5 million compared to negative $31.7 million in the prior year period. YTD 2023
Adjusted EBITDA1 of $29.6
million, an improvement of $50.2
million compared to negative $20.7
million in the prior year period.
- Second quarter 2023 Trailing Twelve Months positive cash flow
from operations of $85.9 million, an
improvement of $346.2 million
compared to a use of cash of $260.4
million in the prior year period.
Special Committee
Rejects $20.00 per share Unsolicited Non-Binding
Proposal
|
|
After careful review
and consideration with its independent financial and legal
advisors, the Special Committee of the GoHealth Board of Directors
(the "Special Committee") has informed the Company that it has
rejected the previously announced $20.00 per share unsolicited,
non-binding proposal received on May 18, 2023 (the "Proposal") from
its two largest stockholders to acquire all of the outstanding
Class A Common Stock and LLC interests that these stockholders do
not already own. The Special Committee unanimously concluded
that the Proposal significantly undervalues the Company and is not
in the best interests of GoHealth or its stockholders.
|
|
The Special Committee
provided the following statement: "We believe the Proposal
undervalues GoHealth and fails to recognize the strength of our
business today as well as our compelling future prospects. We have
confidence in the leadership team's ability to execute the
Company's long range strategic plan."
|
|
Vijay Kotte, CEO,
GoHealth, added, "Building off a strong finish to 2022 and first
half of 2023, we continue to successfully execute our overall
strategy and launched several key initiatives early this year that
are already delivering results and support our overall objectives
to manage the business efficiently and effectively, and drive cash
flow, increased revenue, and profitability. We are pleased with the
significant progress we have made on our Encompass strategy thus
far and anticipate accelerated improvement through the remainder of
the year."
|
|
Updating Full Year
2023 Guidance
|
|
The Company updates its
full year 2023 outlook and expects total net revenue3 of
$800 - $850 million and Adjusted EBITDA1 of $120 - $140
million, both excluding non-Encompass BPO Services.2
These guidance updates reflect increases to the lower bounds
previously communicated for total net revenue and Adjusted
EBITDA1 ranges. The Company also expects positive cash
flow from operations of $75 - $115 million.
|
|
"At GoHealth, we remain
steadfastly committed to enhancing the consumer experience, which
has been a driving force behind our shift to Encompass," stated
Vijay Kotte, CEO of GoHealth. "Encompass offers a standardized
workflow, driving a consistent consumer experience that results in
a higher quality and greater cost efficiency for us. As we embark
on our next stage of growth, I am proud to share that GoHealth has
been making continuous strides by harnessing the power of our
enhanced technology tools, which have yielded early efficiency
returns and an unparalleled consumer experience."
|
|
"As we report our
latest financial results, I am pleased to announce that we are
raising the floor on our guidance, reflecting the robust
performance and confidence in our future prospects. Our revised
expectations for total net revenue and adjusted EBITDA signify our
commitment to sustained growth and our dedication to delivering
value to our shareholders. We remain focused on driving innovation,
operational excellence, and market leadership, and we look forward
to building on this momentum in the coming quarters," stated Jason
Schulz, CFO of GoHealth.
|
The Company made the strategic decision to exit its
non-Encompass BPO Services2 to focus on its core
business. The exit was completed in the second quarter of 2023. For
the three and six months ended June 30,
2023, non-Encompass BPO Services2
contributed $2.5 million and $9.3
million of net revenue with a gross margin of $0.3
million and $1.7 million,
respectively. For the three and six months ended June 30, 2023, net revenue excluding
non-Encompass BPO Services2 revenue of $2.5 million and $9.3
million was $140.3 million and
$316.6 million, respectively, and
Adjusted EBITDA1 excluding non-Encompass BPO
Services3 gross margin of $0.3
million and $1.7 million was
$0.5 million and $27.9 million, respectively.3
During the first quarter of 2023, the Company reorganized its
operations from four operating and reportable segments to one
operating and reportable segment. The change reflects how the
Company's chief operating decision maker ("CODM") evaluates the
Company's operating and financial performance on a consolidated
basis and is consistent with changes made to the Company's internal
reporting structure. Additionally, the single operating segment
aligns with the Company's shift in focus towards Medicare products.
Operating segments are identified as components of an enterprise
about which separate discrete financial information is available
and reviewed regularly by the CODM. The Company's CODM is its chief
executive officer who reviews financial information together with
certain operating metrics principally to make decisions about how
to allocate resources and to measure the Company's performance. All
prior period comparative segment information was recast to reflect
the current single operating segment in accordance with Accounting
Standards Codification 280, Segment Reporting.
Conference Call Details
The Company will host a conference call today, Thursday,
August 10, 2023 at 8:00 a.m.
(ET) to discuss its financial results. Participants
can pre-register for the conference call at the following link:
https://edge.media-server.com/mmc/p/2iudd3hc. A live audio webcast
of the conference call will be available via GoHealth's Investor
Relations website. A replay of the call will be available via
webcast on GoHealth's Investor Relations website 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 consumers, 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 health
plan partner 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:
John
Shave
JShave@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.
|
(2)
|
Non-Encompass BPO
Services are those services in which we dedicate certain agents to
specific health plan partners and agencies, outside of the
Encompass Solution.
|
(3)
|
Net revenue
excluding non-Encompass BPO Services revenue and Adjusted EBITDA
excluding non-Encompass BPO Services gross margin are non-GAAP
measures. For a reconciliation to the most comparable GAAP measure,
please see table provided below.
|
Forward-Looking Statements
This press 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 ("the
Securities Act"), and Section 21E of the Securities Exchange Act of
1934, as amended ("the Exchange Act"). 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," "aim," "expects," "plans,"
"anticipates," "could," "intends," "targets," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential,"
"likely," "future," 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 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 press 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 operating results have been, and may continue to
be, adversely impacted by factors that impact our estimate of LTV;
our gradual expansion of the Encompass Solution may not be as
successful as we expect; our business may be harmed if we lose our
relationships with health plans or if our relationships with health
plans change; health plans 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; our management 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; we currently depend on a
small group of health plans for a substantial portion of our
revenue; information technology system failures could interrupt our
operations; factors that impact our estimate of LTV (as defined
below); we may lose key employees or fail to attract qualified
employees; our failure to grow our customer base or retain our
existing customers; we may not realize the benefits we expect from
our strategic cash flow optimization and other cash management
initiatives; 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;
and the Founders and Centerbridge have significant influence over
us, including control over decisions that require the approval of
stockholders.
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 our 2022 Annual
Report on Form 10-K, our Quarterly Report on Form 10-Q for the
first fiscal quarter ended March 31,
2023, our forthcoming Quarterly Report on Form 10-Q for the
second quarter ended June 30, 2023,
and our other filings with the Securities and Exchange Commission.
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
(benefit) expense and depreciation and amortization expense, or
EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; Sales per
Submission; Cost per Submission and Adjusted Gross Margin per
Submission. Adjusted EBITDA is the primary financial performance
measure used by management to evaluate the business and monitor its
results of operations. Sales per Submission, Cost per Submission
and Adjusted Gross Margin per Submission are key operating metrics
used by management to understand the Company's underlying financial
performance and trends.
Additional non-GAAP financial measures, including net revenue
excluding the Lookback Adjustments, Adjusted EBITDA excluding the
Lookback Adjustments, net revenue excluding both the non-Encompass
BPO Services revenue and the Lookback Adjustments and Adjusted
EBITDA excluding both the non-Encompass BPO Services gross margin
and the Lookback Adjustments, are also discussed in this press
release. The Lookback Adjustments are revenue adjustments that
represent changes in estimates relating to performance obligations
satisfied in prior periods and relate to the fiscal years 2021 and
prior.
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. Sales per Submission represents Medicare
Revenue per Submission as further adjusted for certain items
summarized below in this press release. Cost per Submission
represents Operating Expense per Submission as further adjusted for
certain items summarized below in this press release. Adjusted
Gross Margin represents Sales per Submission less Cost per
Submission.
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. Adjusted EBITDA is used as a basis
for certain compensation programs sponsored by the Company. 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, Adjusted EBITDA,
net revenue excluding the Lookback Adjustments, Adjusted EBITDA
excluding the Lookback Adjustments, net revenue excluding both the
non-Encompass BPO Services revenue and the Lookback Adjustments,
Adjusted EBITDA excluding both the non-Encompass BPO Services gross
margin and the Lookback Adjustments, Sales per Submission, Cost per
Submission and Adjusted Gross Margin per Submission to its most
directly comparable GAAP financial measure, 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.
The Company is unable to provide a full reconciliation of
guidance for Adjusted EBITDA without unreasonable effort because it
is not possible to predict certain adjustment items with a
reasonable degree of certainty since they are not yet known or
quantifiable, and do not relate to the Company's routine
activities. This information is dependent upon future events, which
may be outside of the Company's control and could have a
significant impact on its GAAP financial results for fiscal
2023.
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.
- "Adjusted Gross Margin per Submission" refers to Sales
per Submission less Cost per Submission.
- "Cost of Submission" refers to the aggregate cost to
convert prospects into Submissions during a particular period. Cost
of Submission is comprised of revenue share, marketing and
advertising expenses, and customer care and enrollment expenses,
excluding share-based compensation expense and such expenses
related to non-Encompass BPO Services.
- "Cost per Submission" refers to (x) the aggregate cost
to convert prospects into Submissions for a particular period
(comprised of revenue share, marketing and advertising expenses,
and customer care and enrollment expenses, excluding share-based
compensation expense and such expenses related to non-Encompass BPO
Services) divided by (y) either (i) a completed application with
our licensed agent that is submitted to the insurance health plan
partner and subsequently approved by the health plan partner during
the indicated period, excluding applications through our
non-Encompass BPO Services or (ii) a transfer by our agent to the
health plan partner through the Encompass marketplace during the
indicated period.
- "EBITDA" represents net income (loss) before interest
expense, income tax expense (benefit) and depreciation and
amortization expense.
- "Gross margin" refers to net revenue divided by revenue
share, marketing and advertising expenses and customer care and
enrollment expenses.
- "LTV" refers to the Lifetime Value of Commissions, which
we define as aggregate commissions estimated to be collected over
the estimated life of all commissionable Submissions for the
relevant period based on multiple factors, including but not
limited to, contracted commission rates, health plan mix and
expected policy persistency with applied constraints.
- "Non-Encompass BPO Services" refer to programs in which
GoHealth-employed agents are dedicated to certain health plans and
agencies we partner with outside of the Encompass model.
- "Sales per Submission" refers to (x) the combination sum
of (i) aggregate commissions estimated to be collected over the
estimated life of all commissionable Submissions for the relevant
period based on multiple factors, including but not limited to,
contracted commission rates, health plan mix and expected policy
persistency with applied constraints, excluding revenue adjustments
recorded in the period, but relating to performance obligations
satisfied in prior periods, (ii) Encompass revenue, and (iii)
partner marketing and enrollment services, divided by (y) the
number of Submissions for such period.
- "Sales/Cost of Submission" refers to (x) the sum of (i)
aggregate commissions estimated to be collected over the estimated
life of all commissionable Submissions for the relevant period
based on multiple factors, including but not limited to, contracted
commission rates, health plan partner mix and expected policy
persistency with applied constraints, excluding revenue adjustments
recorded in the period, but relating to performance obligations
satisfied in prior periods, (ii) Encompass revenue, and (iii)
partner marketing and enrollment services, divided by (y) the
aggregate cost to convert prospects into Submissions (comprised of
revenue share, marketing and advertising expenses, and customer
care and enrollment expenses, excluding share-based compensation
expense) for such period. Sales and Cost of Submission exclude
amounts related to non-Encompass BPO Services.
- "Submission" refers to either (i) a completed
application with our licensed agent that is submitted to the
insurance health plan partner and subsequently approved by the
health plan partner during the indicated period, excluding
applications through our non-Encompass BPO Services or (ii) a
transfer by our agent to the health plan partner through the
Encompass marketplace during the indicated period.
The following tables set forth the components of our results of
operations for the periods indicated (unaudited):
|
|
Three months ended
Jun. 30, 2023
|
|
Three months ended
Jun. 30, 2022
|
|
|
|
|
(in thousands, except
percentages and per share amounts)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$ Change
|
|
% Change
|
Net revenues
|
|
$
142,779
|
|
100.0 %
|
|
$
158,654
|
|
100.0 %
|
|
$
(15,875)
|
|
(10.0) %
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
share
|
|
36,422
|
|
25.5 %
|
|
51,074
|
|
32.2 %
|
|
(14,652)
|
|
(28.7) %
|
Marketing and
advertising
|
|
39,269
|
|
27.5 %
|
|
44,714
|
|
28.2 %
|
|
(5,445)
|
|
(12.2) %
|
Customer care and
enrollment
|
|
45,536
|
|
31.9 %
|
|
66,542
|
|
41.9 %
|
|
(21,006)
|
|
(31.6) %
|
Technology
|
|
10,511
|
|
7.4 %
|
|
10,749
|
|
6.8 %
|
|
(238)
|
|
(2.2) %
|
General and
administrative
|
|
37,855
|
|
26.5 %
|
|
38,106
|
|
24.0 %
|
|
(251)
|
|
(0.7) %
|
Amortization of
intangible assets
|
|
23,515
|
|
16.5 %
|
|
23,515
|
|
14.8 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
2,687
|
|
1.9 %
|
|
24,995
|
|
15.8 %
|
|
(22,308)
|
|
(89.2) %
|
Total operating
expenses
|
|
195,795
|
|
137.1 %
|
|
259,695
|
|
163.7 %
|
|
(63,900)
|
|
(24.6) %
|
Income (loss) from
operations
|
|
(53,016)
|
|
(37.1) %
|
|
(101,041)
|
|
(63.7) %
|
|
48,025
|
|
(47.5) %
|
Interest
expense
|
|
17,265
|
|
12.1 %
|
|
12,724
|
|
8.0 %
|
|
4,541
|
|
35.7 %
|
Other (income) expense,
net
|
|
21
|
|
— %
|
|
(13)
|
|
— %
|
|
34
|
|
(261.5) %
|
Income (loss) before
income taxes
|
|
(70,302)
|
|
(49.2) %
|
|
(113,752)
|
|
(71.7) %
|
|
43,450
|
|
(38.2) %
|
Income tax (benefit)
expense
|
|
(73)
|
|
(0.1) %
|
|
—
|
|
— %
|
|
(73)
|
|
N/M
|
Net income
(loss)
|
|
$
(70,229)
|
|
(49.2) %
|
|
$
(113,752)
|
|
(71.7) %
|
|
$
43,523
|
|
(38.3) %
|
Net income (loss)
attributable to non-controlling interests
|
|
(41,287)
|
|
(28.9) %
|
|
(69,933)
|
|
(44.1) %
|
|
28,646
|
|
(41.0) %
|
Net income (loss) attributable to GoHealth,
Inc.
|
|
$
(28,942)
|
|
(20.3) %
|
|
$
(43,819)
|
|
(27.6) %
|
|
$
14,877
|
|
(34.0) %
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock —
basic and diluted
|
|
$
(3.27)
|
|
|
|
$
(5.28)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock
outstanding — basic and diluted
|
|
9,122
|
|
|
|
8,296
|
|
|
|
|
|
|
Non-GAAP financial measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(26,669)
|
|
|
|
$
(74,617)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
788
|
|
|
|
$
(31,741)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
0.6 %
|
|
|
|
(20.0) %
|
|
|
|
|
|
|
_________________________
|
N/M = Not meaningful
|
|
|
Six months ended
Jun. 30, 2023
|
|
Six months ended
Jun. 30, 2022
|
|
|
|
|
(in thousands, except
percentages and per share amounts)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$ Change
|
|
% Change
|
Net revenues
|
|
$
325,937
|
|
100.0 %
|
|
$
429,247
|
|
100.0 %
|
|
$ (103,310)
|
|
(24.1) %
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
share
|
|
81,884
|
|
25.1 %
|
|
118,997
|
|
27.7 %
|
|
(37,113)
|
|
(31.2) %
|
Marketing and
advertising
|
|
85,012
|
|
26.1 %
|
|
128,747
|
|
30.0 %
|
|
(43,735)
|
|
(34.0) %
|
Customer care and
enrollment
|
|
87,563
|
|
26.9 %
|
|
144,997
|
|
33.8 %
|
|
(57,434)
|
|
(39.6) %
|
Technology
|
|
20,054
|
|
6.2 %
|
|
23,508
|
|
5.5 %
|
|
(3,454)
|
|
(14.7) %
|
General and
administrative
|
|
60,473
|
|
18.6 %
|
|
67,323
|
|
15.7 %
|
|
(6,850)
|
|
(10.2) %
|
Amortization of
intangible assets
|
|
47,029
|
|
14.4 %
|
|
47,029
|
|
11.0 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
2,687
|
|
0.8 %
|
|
24,995
|
|
5.8 %
|
|
(22,308)
|
|
(89.2) %
|
Total operating
expenses
|
|
384,702
|
|
118.0 %
|
|
555,596
|
|
129.4 %
|
|
(170,894)
|
|
(30.8) %
|
Income (loss) from
operations
|
|
(58,765)
|
|
(18.0) %
|
|
(126,349)
|
|
(29.4) %
|
|
67,584
|
|
(53.5) %
|
Interest
expense
|
|
34,156
|
|
10.5 %
|
|
24,122
|
|
5.6 %
|
|
10,034
|
|
41.6 %
|
Other (income) expense,
net
|
|
(32)
|
|
— %
|
|
50
|
|
— %
|
|
(82)
|
|
(164.0) %
|
Income (loss) before
income taxes
|
|
(92,889)
|
|
(28.5) %
|
|
(150,521)
|
|
(35.1) %
|
|
57,632
|
|
(38.3) %
|
Income tax (benefit)
expense
|
|
(117)
|
|
— %
|
|
472
|
|
0.1 %
|
|
(589)
|
|
(124.8) %
|
Net income
(loss)
|
|
$
(92,772)
|
|
(28.5) %
|
|
$
(150,993)
|
|
(35.2) %
|
|
$
58,221
|
|
(38.6) %
|
Net income (loss)
attributable to non-controlling interests
|
|
(54,651)
|
|
(16.8) %
|
|
(93,691)
|
|
(21.8) %
|
|
39,040
|
|
(41.7) %
|
Net income (loss) attributable to GoHealth,
Inc.
|
|
$
(38,121)
|
|
(11.7) %
|
|
$
(57,302)
|
|
(13.3) %
|
|
$
19,181
|
|
(33.5) %
|
Net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock —
basic and diluted
|
|
$
(4.41)
|
|
|
|
$
(7.14)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock
outstanding — basic and diluted
|
|
9,044
|
|
|
|
8,023
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(6,098)
|
|
|
|
$
(74,040)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
29,566
|
|
|
|
$
(20,668)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
9.1 %
|
|
|
|
(4.8) %
|
|
|
|
|
|
|
_________________________
|
NM = Not meaningful
|
The following tables set forth the reconciliations of GAAP net
income (loss) to EBITDA and Adjusted EBITDA for the periods
indicated (unaudited):
|
|
Three months ended Jun. 30,
|
|
Six months ended Jun. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net revenues
|
|
$
142,779
|
|
$
158,654
|
|
$
325,937
|
|
$
429,247
|
Net income
(loss)
|
|
(70,229)
|
|
(113,752)
|
|
(92,772)
|
|
(150,993)
|
Interest
expense
|
|
17,265
|
|
12,724
|
|
34,156
|
|
24,122
|
Income tax expense
(benefit)
|
|
(73)
|
|
—
|
|
(117)
|
|
472
|
Depreciation and
amortization expense
|
|
26,368
|
|
26,411
|
|
52,635
|
|
52,359
|
EBITDA
|
|
(26,669)
|
|
(74,617)
|
|
(6,098)
|
|
(74,040)
|
Share-based
compensation expense1
|
|
10,120
|
|
14,257
|
|
16,704
|
|
19,412
|
Legal
fees2
|
|
12,730
|
|
—
|
|
14,353
|
|
—
|
Operating lease
impairment charges3
|
|
2,687
|
|
24,995
|
|
2,687
|
|
24,995
|
Severance
costs4
|
|
1,920
|
|
3,624
|
|
1,920
|
|
5,015
|
Professional
services5
|
|
—
|
|
—
|
|
—
|
|
3,950
|
Adjusted EBITDA
|
|
$
788
|
|
$
(31,741)
|
|
$
29,566
|
|
$
(20,668)
|
Adjusted EBITDA
margin
|
|
0.6 %
|
|
(20.0) %
|
|
9.1 %
|
|
(4.8) %
|
_________________________
|
(1)
|
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
|
(2)
|
Represents non-routine legal fees and accruals
unrelated to our core operations.
|
(3)
|
Represents operating lease impairment charges,
reducing the carrying value of the associated ROU assets and
leasehold improvements to the estimated fair
values.
|
(4)
|
Represents costs associated with the termination of
executive employment and associated fees unrelated to restructuring
activities.
|
(5)
|
Represents costs associated with non-recurring
consulting fees and other professional
services.
|
The following table summarizes net revenues and Adjusted EBITDA
excluding the Lookback Adjustments and non-Encompass BPO
Services for the periods indicated (unaudited):
|
|
Three months ended Jun. 30,
|
|
Six months ended Jun. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net revenues
|
|
$
142,779
|
|
$
158,654
|
|
$
325,937
|
|
$
429,247
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
3,162
|
|
—
|
|
5,480
|
Net revenue excluding
Lookback Adjustments
|
|
142,779
|
|
161,816
|
|
325,937
|
|
434,727
|
Exit of non-Encompass
BPO Services
|
|
(2,528)
|
|
(23,119)
|
|
(9,322)
|
|
(58,056)
|
Net revenues excluding Lookback Adjustments and
non-
Encompass BPO Services
|
|
140,251
|
|
138,697
|
|
316,615
|
|
376,671
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
788
|
|
$
(31,741)
|
|
$
29,566
|
|
$
(20,668)
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
2,300
|
|
—
|
|
3,961
|
Adjusted EBITDA
excluding Lookback Adjustments
|
|
788
|
|
(29,441)
|
|
29,566
|
|
(16,707)
|
Exit of non-Encompass
BPO Services
|
|
(265)
|
|
(3,619)
|
|
(1,667)
|
|
(10,809)
|
Adjusted EBITDA excluding Lookback Adjustments and
non-
Encompass BPO Services
|
|
$
523
|
|
$
(33,060)
|
|
$
27,899
|
|
$
(27,516)
|
Adjusted EBITDA
margin excluding Lookback Adjustments and
non-Encompass BPO Services
|
|
0.4 %
|
|
(23.8) %
|
|
8.8 %
|
|
(7.3) %
|
_________________________
|
(1)
|
Excludes the impact of Lookback Adjustments on
non-Encompass BPO Services
|
|
|
|
|
|
|
|
|
|
|
The table below depicts the disaggregation of revenue and
is consistent with how the Company evaluates its financial
performance (unaudited):
|
|
Three months ended Jun. 30,
|
|
Six months ended Jun. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Medicare
Revenue
|
|
|
|
|
|
|
|
|
Agency
Revenue
|
|
|
|
|
|
|
|
|
Commission
Revenue1
|
|
$
87,403
|
|
$
109,027
|
|
$
184,934
|
|
$
300,720
|
Partner Marketing and
Other Revenue
|
|
23,195
|
|
21,379
|
|
50,319
|
|
55,406
|
Total Agency
Revenue
|
|
110,598
|
|
130,406
|
|
235,253
|
|
356,126
|
Non-Agency
Revenue
|
|
28,104
|
|
3,548
|
|
73,076
|
|
9,300
|
Total Medicare Revenue
|
|
138,702
|
|
133,954
|
|
308,329
|
|
365,426
|
Other
Revenue
|
|
|
|
|
|
|
|
|
Non-Encompass BPO
Services Revenue
|
|
2,528
|
|
23,119
|
|
9,322
|
|
58,056
|
Other
Revenue
|
|
1,549
|
|
1,581
|
|
8,286
|
|
5,765
|
Total Other
Revenue
|
|
4,077
|
|
24,700
|
|
17,608
|
|
63,821
|
Total Net Revenue
|
|
$
142,779
|
|
$
158,654
|
|
$
325,937
|
|
$
429,247
|
|
|
(1)
|
Commissions revenue excludes commissions generated
through the Company's non-Encompass BPO Services as well as from
the sale of individual and family plan insurance
products.
|
The following table summarizes share-based compensation expense
by operating function for the periods indicated (unaudited):
|
|
Three months ended Jun. 30,
|
|
Six months ended Jun. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Marketing and
advertising
|
|
$
164
|
|
$
215
|
|
$
230
|
|
$
656
|
Customer care and
enrollment
|
|
725
|
|
624
|
|
1,329
|
|
1,255
|
Technology
|
|
921
|
|
627
|
|
1,688
|
|
1,609
|
General and
administrative
|
|
8,310
|
|
12,791
|
|
13,457
|
|
15,892
|
Total share-based compensation
expense
|
|
$
10,120
|
|
$
14,257
|
|
$
16,704
|
|
$
19,412
|
The following table sets forth our balance sheets for the
periods indicated (unaudited):
(in thousands, except
per share amounts)
|
|
Jun. 30, 2023
|
|
Dec. 31, 2022
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
25,364
|
|
$
16,464
|
Accounts receivable,
net of allowance for doubtful accounts of $734 in 2023 and $89 in
2022
|
|
35,984
|
|
4,703
|
Commissions receivable
- current
|
|
294,319
|
|
335,796
|
Prepaid expense and
other current assets
|
|
12,431
|
|
57,593
|
Total current
assets
|
|
368,098
|
|
414,556
|
Commissions receivable
- non-current
|
|
617,243
|
|
695,637
|
Operating lease ROU
asset
|
|
17,215
|
|
21,483
|
Other long-term
assets
|
|
2,243
|
|
1,721
|
Property, equipment,
and capitalized software, net
|
|
23,870
|
|
25,282
|
Intangible assets,
net
|
|
453,583
|
|
500,611
|
Total assets
|
|
$
1,482,252
|
|
$
1,659,290
|
Liabilities, Redeemable Convertible Preferred Stock
and Stockholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
8,704
|
|
$
15,148
|
Accrued
liabilities
|
|
49,802
|
|
53,334
|
Commissions payable -
current
|
|
103,953
|
|
122,023
|
Short-term operating
lease liability
|
|
6,765
|
|
8,974
|
Deferred
revenue
|
|
27,721
|
|
50,594
|
Current portion of
long-term debt
|
|
—
|
|
5,270
|
Other current
liabilities
|
|
13,313
|
|
10,112
|
Total current
liabilities
|
|
210,258
|
|
265,455
|
Non-current liabilities:
|
|
|
|
|
Commissions payable -
non-current
|
|
220,652
|
|
253,118
|
Long-term operating
lease liability
|
|
35,234
|
|
38,367
|
Long-term debt, net of
current portion
|
|
496,224
|
|
504,810
|
Other non-current
liabilities
|
|
9,823
|
|
5,839
|
Total non-current
liabilities
|
|
761,933
|
|
802,134
|
Commitments and
Contingencies
|
|
|
|
|
Series A redeemable
convertible preferred stock — $0.0001 par value; 50 shares
authorized; 50 shares
issued and outstanding at June 30, 2023 and December 31, 2022.
Liquidation preference of $50.9 million at
June 30, 2023 and December 31, 2022.
|
|
49,302
|
|
49,302
|
Stockholders' equity:
|
|
|
|
|
Class A common stock –
$0.0001 par value; 1,100,000 shares authorized; 9,499 and 8,963
shares
issued; 9,418 and 8,950 shares outstanding at June 30, 2023 and
December 31, 2022, respectively.
|
|
1
|
|
1
|
Class B common stock –
$0.0001 par value; 616,022 and 616,259 shares authorized; 12,818
and
13,054 shares issued and outstanding at June 30, 2023 and December
31, 2022, respectively.
|
|
1
|
|
1
|
Preferred stock –
$0.0001 par value; 20,000 shares authorized (including 50 shares of
Series A
redeemable convertible preferred stock authorized and 200 shares of
Series A-1 convertible preferred
stock authorized); 50 shares issued and outstanding at June 30,
2023 and December 31, 2022.
|
|
—
|
|
—
|
Series A-1 convertible
preferred stock— $0.0001 par value; 200 shares authorized; no
shares issued
and outstanding at June 30, 2023 and December 31, 2022.
|
|
—
|
|
—
|
Treasury stock – at
cost; 81 and 13 shares of Class A common stock at June 30, 2023 and
December
31, 2022, respectively.
|
|
(1,051)
|
|
(345)
|
Additional paid-in
capital
|
|
646,232
|
|
626,269
|
Accumulated other
comprehensive income (loss)
|
|
(125)
|
|
(144)
|
Accumulated
deficit
|
|
(395,144)
|
|
(357,023)
|
Total stockholders'
equity attributable to GoHealth, Inc.
|
|
249,914
|
|
268,759
|
Non-controlling
interests
|
|
210,845
|
|
273,640
|
Total stockholders'
equity
|
|
460,759
|
|
542,399
|
Total liabilities, redeemable convertible preferred
stock and stockholders' equity
|
|
$
1,482,252
|
|
$
1,659,290
|
The following table sets forth the net cash provided by (used
in) operating activities for the periods presented (unaudited):
Net cash provided by (used in) operating
activities
|
|
Six months ended Jun.
30,
|
|
Trailing Twelve
Months ended Jun. 30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
$
31,340
|
|
$
6,377
|
|
$
85,867
|
|
$
(260,379)
|
In addition to traditional financial metrics, we rely upon
certain business and operating metrics to evaluate our business
performance and facilitate our operations. Below are the most
relevant business and operating metrics, besides EBITDA and
Adjusted EBITDA, for our single operating and reportable
segment.
The following tables set forth the reconciliations of Medicare
Revenue per Submission, Operating Expense per Submission, and Gross
Margin per Submission to Sales per Submission, Cost Per Submission,
and Adjusted Gross Margin per Submission for the periods indicated
(unaudited):
|
|
Three months ended Jun. 30,
|
|
Six months ended Jun. 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales per Submission
|
|
|
|
|
|
|
|
|
Medicare Revenue per
Submission
|
|
$
852
|
|
$
865
|
|
$
819
|
|
$
879
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
20
|
|
—
|
|
14
|
Sales per
Submission
|
|
$
852
|
|
$
885
|
|
$
819
|
|
$
893
|
|
|
|
|
|
|
|
|
|
Cost per Submission
|
|
|
|
|
|
|
|
|
Operating Expense per
Submission
|
|
$
1,202
|
|
$
1,677
|
|
$
1,022
|
|
$
1,337
|
Indirect operating
expenses2
|
|
(458)
|
|
(629)
|
|
(346)
|
|
(392)
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
6
|
|
—
|
|
4
|
Exit of non-Encompass
BPO Services
|
|
(14)
|
|
(127)
|
|
(21)
|
|
(114)
|
Share-based
compensation expense
|
|
(5)
|
|
(5)
|
|
(4)
|
|
(5)
|
Cost per
Submission
|
|
$
725
|
|
$
922
|
|
$
651
|
|
$
830
|
|
|
|
|
|
|
|
|
|
Gross Margin per
Submission3
|
|
$
(350)
|
|
$
(812)
|
|
$
(203)
|
|
$
(458)
|
Adjusted Gross Margin
per Submission4
|
|
$
127
|
|
$
(37)
|
|
$
168
|
|
$
63
|
|
|
(1)
|
Excludes the impact of Lookback Adjustments on
non-Encompass BPO Services.
|
(2)
|
Indirect operating expenses include technology,
general and administrative, amortization of intangible assets and
operating lease impairment charges.
|
(3)
|
Medicare Revenue per Submission less Operating
Expense per Submission.
|
(4)
|
Sales per Submission less Cost per
Submission.
|
The following table presents the number of Submissions for the
periods presented (unaudited):
Submissions
|
|
Three months ended
Jun. 30,
|
|
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
% Change
|
|
$
162,837
|
|
154,893
|
|
$
7,944
|
|
5.1 %
|
|
|
|
|
|
|
|
|
|
Six months ended Jun.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
% Change
|
|
$
376,482
|
|
415,559
|
|
$
(39,077)
|
|
(9.4) %
|
The following table presents the Sales per Submission for the
period presented (unaudited):
Sales Per Submission
|
|
Three months ended
Jun. 30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
$
852
|
|
$
885
|
|
$
(33)
|
|
(3.7) %
|
|
|
|
|
|
|
|
|
|
Six months ended Jun.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
$
819
|
|
$
893
|
|
$
(74)
|
|
(8.3) %
|
The following are our Sales/Cost of Submission, Cost of
Submission (in thousands) and Cost Per Submission for the three and
six months ended June 30, 2023 and
2022 (unaudited):
|
|
Three months ended
Jun. 30,
|
|
Six months ended Jun.
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales/Cost of
Submission
|
|
1.2
|
|
1.0
|
|
1.3
|
|
1.1
|
Cost of
Submission
|
|
$
118,080
|
|
$
142,853
|
|
$
245,250
|
|
$
345,103
|
Cost per
Submission
|
|
$
725
|
|
$
922
|
|
$
651
|
|
$
830
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/gohealth-reports-second-quarter-2023-results-301897536.html
SOURCE GoHealth, Inc.