Press Release: NeueHealth Reports Fourth Quarter and Full Year 2024 Results

Dow Jones
Mar 20

NeueHealth Reports Fourth Quarter and Full Year 2024 Results

   -- Delivered strongest financial performance to date in 2024, resulting from 
      continued success of value-driven, consumer-centric care model 
 
   -- Drove positive Adjusted EBITDA for the fourth consecutive quarter in 
      2024, establishing the foundation for continued strong performance in 
      2025 and beyond 
 
   -- Generated significant growth to start 2025, serving 717,000 consumers, an 
      increase of 48% compared to 2024 
DORAL, Fla.--(BUSINESS WIRE)--March 20, 2025-- 

NeueHealth, Inc. ("NeueHealth" or the "Company") $(NEUE)$, the value-driven healthcare company, today reported financial results for its fourth quarter and full year ended December 31, 2024.

"In 2024, we delivered our strongest financial performance to date, demonstrating the power of our value-driven, consumer-centric care model, " said Mike Mikan, President and CEO of NeueHealth. "We have established a strong foundation to drive strategic growth in 2025 with a focus on serving more consumers in new and existing markets and building on the relationships we have formed with payors and providers across the industry. I am excited for the future of our company and believe we are well-positioned to continue to bring a seamless, more coordinated care experience to all in 2025 and beyond."

Key Metrics

 
                                     As of December 31, 
                                    -------------------- 
                                      2024       2023 
                                    ---------  --------- 
Consumer and Patient Metrics 
     Value-Based Consumers served     360,000    355,000 
     Enablement Services Lives        123,000    106,000 
 
 
                    Three Months Ended           Years Ended 
($ in thousands)       December 31,              December 31, 
                   ---------------------  -------------------------- 
                     2024        2023        2024          2023 
                   ---------  ----------  ----------  -------------- 
Financial Metrics 
    Revenue        $232,638   $ 292,871   $ 936,657   $ 1,160,802 
    Net Income 
     (Loss)        $  2,523   $(460,572)  $ (99,717)  $(1,265,808) 
    Net Loss from 
     Continuing 
     Operations    $(42,480)  $ (62,827)  $(102,058)  $  (627,742) 
    Adjusted 
     EBITDA 
     (non-GAAP)    $  5,482   $ (10,356)  $  22,496   $    (8,480) 
 

See the table at the end of this release for additional information and a reconciliation of the non-GAAP measures used in the table above. See table at the end of this release for more detail.

Earnings Conference Call

As previously announced, NeueHealth will discuss the Company's results, strategy, and outlook on a conference call with investors at 8:00 a.m. Eastern Time today. NeueHealth will host a live webcast of this conference call which can be accessed from the Investor Relations page of the Company's website (investors.neuethealth.com). Following the call, a webcast replay will be available on the same site. This earnings release and the Form 8-K filed March 20, 2025 can be accessed on the Investor Relations page of the Company's website. We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investor Relations section of our website. Accordingly, investors should monitor this portion of our website, in addition to following our press releases, U.S. Securities and Exchange Commission ("SEC") filings and public conference calls and webcasts.

About NeueHealth

NeueHealth is a value-driven healthcare company grounded in the belief that all health consumers are entitled to high-quality, coordinated care. By uniquely aligning the interests of health consumers, providers, and payors, NeueHealth helps to make healthcare accessible and affordable to all populations across the ACA Marketplace, Medicare, and Medicaid. NeueHealth delivers high-quality clinical care to over 500,000 health consumers through owned clinics and unique partnerships with over 3,000 affiliated providers. We also enable independent providers and medical groups to thrive in performance-based arrangements through a suite of technology and services scaled centrally and deployed locally. We believe our value-driven, consumer-centric care model can transform the healthcare experience and maximize value across the healthcare system. For more information, visit: www.neuehealth.com.

Additional Information and Where to Find It

On December 23, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with NH Holdings 2025, Inc. ("Parent"), pursuant to which, if all applicable conditions are satisfied or waived, the Company will become a wholly owned subsidiary of Parent (the "Transaction"). Parent is indirectly controlled by private investment funds affiliated with New Enterprise Associates, Inc. ("NEA").

In connection with the Transaction, the Company has filed with the SEC a preliminary proxy statement on Schedule 14A (as amended, the "Proxy Statement"), the definitive version of which will be sent or provided to Company stockholders. The Company, affiliates of the Company and affiliates of NEA intend to jointly file a transaction statement on Schedule 13E-3 (the "Schedule 13E-3") with the SEC. The Company may also file other documents with the SEC regarding the transaction. This Current Report on Form 8-K is not a substitute for the Proxy Statement, the Schedule 13E-3 or any other document which the Company may file with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT, THE SCHEDULE 13E-3 AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE COMPANY OR THE TRANSACTION BECAUSE THESE DOCUMENTS CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the Proxy Statement, the Schedule 13E-3 and other documents that are filed or will be filed with the SEC by the Company, when such documents become available, through the website maintained by the SEC at www.sec.gov or through the Company's website at https://investors.neuehealth.com/home/default.aspx.

The Transaction will be implemented solely pursuant to the Merger Agreement, which contains the full terms and conditions of the transaction.

Participants in the Solicitation

The Company and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from stockholders of the Company in connection with the proposed transaction. Information regarding the Company's directors and executive officers is available in the definitive proxy statement for the 2024 annual meeting of stockholders of the Company, which was filed by the Company with the SEC on April 1, 2024 (the "Annual Meeting Proxy Statement"), and is available in the Proxy Statement. Please refer to the sections captioned "Executive Compensation," "Director Compensation, " and "Security Ownership of Certain Beneficial Owners and Management" in the Annual Meeting Proxy Statement and the section captioned "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement. Holdings of the Company's securities by certain of the Company's employees, and any changes in the holdings of the Company's securities by the Company's directors or executive officers from the amounts described in the Proxy Statement, have been reflected in the following Statements of Change in Ownership on Form 4 filed with the SEC: Form 4, filed by George Lawrence Mikan III on March 17, 2025; Form 4, filed by Jay Matushak on March 17, 2025; Form 4, filed by Tomas Orozco on March 17, 2025; Form 4, filed by Jeffery Michael Craig on March 17, 2025; and Form 4, filed by Jeffrey J. Scherman on March 17, 2025. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC in connection with the proposed Transaction when they become available. Free copies of the Proxy Statement and such other materials may be obtained as described in the preceding paragraph.

Forward-Looking Statements

Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as "anticipate," "expect," "plan," "believe," "intend," "project," "forecast," "estimates," "projections," "outlook," "ensure," and other similar expressions. These forward-looking statements include any statements regarding our plans and expectations. Such forward-looking statements are subject to various risks, uncertainties and assumptions. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Factors that might materially affect such forward-looking statements include: the failure to complete the Transaction on the anticipated terms and within the anticipated timeframe, including as a result of failure to obtain required stockholder or regulatory approvals or to satisfy other closing conditions; potential litigation relating to the Transaction that could be instituted against NEA, the Company or their respective affiliates,

directors, managers, officers or employees, and the effects of any outcomes related thereto; potential adverse reactions or changes to our business relationships or operating results resulting from the announcement, pendency or completion of the transaction; the risk that our stock price may decline significantly if the Transaction is not consummated; certain restrictions during the pendency of the Transaction that may impact our ability to pursue certain business opportunities or strategic transactions; costs associated with the Transaction, which may be significant; the occurrence of events, changes or other circumstances that could give rise to the termination of the Merger Agreement, including in circumstances requiring us to pay a termination fee; our ability to continue as a going concern; expectations and outcomes related to the NEA Merger Agreement; our ability to comply with the terms of our credit facilities or any credit facility into which we enter in the future; our ability to receive the remaining proceeds from the sale of our Medicare Advantage ("MA") business in California in a timely manner; our ability to obtain any short or long term debt or equity financing needed to operate our business; our ability to quickly and efficiently complete the wind down of our remaining Individual and Family Plan ("IFP") businesses and MA businesses outside of California, including by satisfying liabilities of those businesses when due and payable; potential disruptions to our business due to the Transaction or corporate restructuring and any resulting headcount reduction; our ability to accurately estimate and effectively manage the costs relating to changes in our business offerings and models; a delay or inability to withdraw regulated capital from our subsidiaries; a lack of acceptance or slow adoption of our business model; our ability to retain existing consumers and expand consumer enrollment; our and our Care Partner's abilities to obtain and accurately assess, code, and report risk adjustment factor scores; our ability to contract with care providers and arrange for the provision of quality care; our ability to accurately estimate medical expenses; our ability to obtain claims information timely and accurately; the impact of any pandemic or epidemic on our business and results of operations; the risks associated with our reliance on third-party providers to operate our business; the impact of modifications or changes to the U.S. health insurance markets; the impact of changes to federal funding for government healthcare programs; our ability to manage any growth of our business; our ability to operate, update or implement our technology platform and other information technology systems; our ability to retain key executives; our ability to successfully pursue acquisitions and integrate acquired businesses and divest businesses as needed; the occurrence of severe weather events, catastrophic health events, natural or man-made disasters, and social and political conditions or civil unrest; our ability to prevent and contain data security incidents and the impact of data security incidents on our members, patients, employees and financial results; our ability to comply with requirements to maintain effective internal controls; the outcome of threatened or pending litigation and risks of future legal disputes; the impacts resulting from new (or change to existing) laws, regulations and executive actions; our ability to mitigate risks associated with our ACO REACH and related businesses, including any unanticipated market, legislative or regulatory developments; and the other factors set forth under the heading "Risk Factors" in the Company's reports on Form 10-K, Form 10-Q, and Form 8-K (including all amendments to those reports) and our other filings with the SEC. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or changes in our expectations.

 
                    NeueHealth, Inc. and Subsidiaries 
                       Consolidated Balance Sheets 
             (in thousands, except share and per share data) 
                               (Unaudited) 
                                 December 31, 2024     December 31, 2023 
                                -------------------  --------------------- 
Assets 
Current assets: 
    Cash and cash equivalents    $          83,295    $          87,299 
    Short-term investments                   9,871                6,265 
    Accounts receivable, net 
     of allowance of $27 and 
     $14,023, respectively                  36,594               39,084 
    ACO REACH performance year 
     receivable                             95,075              115,878 
    Current assets of 
     discontinued operations               173,006              822,570 
    Prepaids and other current 
     assets                                 36,807               17,831 
                                    --------------       -------------- 
         Total current assets              434,648            1,088,927 
                                    --------------       -------------- 
Other assets: 
    Property, equipment and 
     capitalized software, 
     net                                    11,240               14,499 
    Intangible assets, net                  71,064               93,238 
    Other non-current assets                27,431               28,816 
                                    --------------       -------------- 
         Total other assets                109,735              136,553 
                                    --------------       -------------- 
         Total assets            $         544,383    $       1,225,480 
                                    ==============       ============== 
Liabilities, Redeemable 
Noncontrolling Interest, 
Redeemable Preferred Stock and 
Shareholders' Equity 
(Deficit) 
Current liabilities: 
    Medical costs payable        $         124,360    $         157,903 
    Accounts payable                         6,298               11,841 
    Short-term borrowings                    2,000              303,947 
    Current liabilities of 
     discontinued operations               344,651              699,758 
    Risk share payable to 
     deconsolidated entity                 123,981              123,981 
    Warrant liability                       29,738               13,971 
    Other current liabilities               79,200               79,856 
                                    --------------       -------------- 
         Total current 
          liabilities                      710,228            1,391,257 
Long-term borrowings                       202,614               66,400 
Other liabilities                           17,649               22,441 
                                    --------------       -------------- 
         Total liabilities                 930,491            1,480,098 
                                    --------------       -------------- 
Commitments and contingencies 
Redeemable noncontrolling 
 interests                                  48,580               88,908 
Redeemable Series A preferred 
 stock, 0.0001 par value; 
 750,000 shares authorized in 
 2024 and 2023; 750,000 shares 
 issued and outstanding in 
 2024 and 2023                             747,481              747,481 
Redeemable Series B preferred 
 stock, 0.0001 par value; 
 175,000 shares authorized in 
 2024 and 2023; 175,000 shares 
 issued and outstanding in 
 2024 and 2023                             172,936              172,936 
Shareholders' equity 
(deficit): 
     Common stock, 0.0001 par 
      value; 3,000,000,000 
      shares authorized in 
      2024 and 2023; 8,320,959 
      and 8,053,576 shares 
      issued and outstanding 
      in 2024 and 2023, 
      respectively                               1                    1 
     Additional paid-in 
      capital                            3,099,423            3,056,027 
     Accumulated deficit                (4,442,529)          (4,307,849) 
     Accumulated other 
      comprehensive loss                        --                 (122) 
     Treasury stock, at cost, 
      31,526 shares at 
      December 31, 2024 and 
      2023                                 (12,000)             (12,000) 
                                    --------------       -------------- 
         Total shareholders' 
          equity (deficit)              (1,355,105)          (1,263,943) 
                                    --------------       -------------- 
            Total liabilities, 
             redeemable 
             noncontrolling 
             interests, 
             redeemable 
             preferred stock 
             and shareholders' 
             equity (deficit)    $         544,383    $       1,225,480 
                                    ==============       ============== 
 
 
                   NeueHealth, Inc. and Subsidiaries 
               Consolidated Statements of Income (Loss) 
            (in thousands, except share and per share data) 
                              (Unaudited) 
                      Three Months Ended 
                         December 31,        Years Ended December 31, 
                     ---------------------  --------------------------- 
                       2024        2023        2024          2023 
                      -------    --------    ---------    ---------- 
Revenue: 
   Capitated 
    revenue          $ 63,076   $  60,091   $  259,881   $   219,774 
   ACO REACH 
    revenue           154,249     219,659      625,339       896,504 
   Service revenue     15,036      13,051       50,393        44,438 
   Investment 
    income (loss)         277          70        1,044            86 
                      -------    --------    ---------    ---------- 
     Total revenue    232,638     292,871      936,657     1,160,802 
                      -------    --------    ---------    ---------- 
Operating expenses: 
   Medical costs      184,892     264,864      742,140       996,582 
   Operating costs     72,786      65,441      273,900       287,138 
   Bad debt expense        --       4,353           14        27,407 
   Restructuring 
    charges               775         123          956         6,990 
   Goodwill 
    impairment             --          --           --       401,385 
   Intangible 
   assets 
   impairment              --          --       11,411            -- 
   Depreciation and 
    amortization        3,602       4,025       15,646        18,296 
                      -------    --------    ---------    ---------- 
      Total 
       operating 
       expenses       262,055     338,806    1,044,067     1,737,798 
                      -------    --------    ---------    ---------- 
      Operating 
       loss           (29,417)    (45,935)    (107,410)     (576,996) 
   Interest expense     6,248      11,205       18,701        38,203 
   Warrant expense      7,487       4,097        3,661        13,971 
   Gain on troubled 
    debt 
    restructuring          --          --      (30,311)           -- 
                      -------    --------    ---------    ---------- 
     Loss from 
      continuing 
      operations 
      before income 
      taxes           (43,152)    (61,237)     (99,461)     (629,170) 
Income tax 
 (benefit) expense       (672)      1,590        2,597        (1,428) 
                      -------    --------    ---------    ---------- 
   Net loss from 
    continuing 
    operations        (42,480)    (62,827)    (102,058)     (627,742) 
   Gain (Loss) from 
    discontinued 
    operations, net 
    of tax             45,003    (397,745)       2,341      (638,066) 
                      -------    --------    ---------    ---------- 
Net Income (Loss)       2,523    (460,572)     (99,717)   (1,265,808) 
   Net earnings 
    from continuing 
    operations 
    attributable to 
    noncontrolling 
    interests          (5,245)    230,856      (34,963)      114,354 
   Series A 
    preferred stock 
    dividend 
    accrued           (10,801)    (10,305)     (42,184)      (40,139) 
   Series B 
    preferred stock 
    dividend 
    accrued            (2,424)     (2,311)      (9,466)       (9,006) 
                      -------    --------    ---------    ---------- 
      Net loss 
       attributable 
       to 
       NeueHealth, 
       Inc. common 
       shareholders  $(15,947)  $(242,332)  $ (186,330)  $(1,200,599) 
                      =======    ========    =========    ========== 
 
Basic and diluted (loss) income per share attributable to NeueHealth, 
Inc. common shareholders 
   Continuing 
    operations       $  (7.41)  $   19.54   $   (22.93)  $    (70.72) 
   Discontinued 
    operations           5.47      (50.01)        0.28        (80.22) 
                      -------    --------    ---------    ---------- 
   Basic and 
    diluted loss 
    per share           (1.94)     (30.47)      (22.65)      (150.94) 
                      =======    ========    =========    ========== 
 
Basic and diluted 
 weighted-average 
 common shares 
 outstanding            8,226       7,954        8,226         7,954 
                      =======    ========    =========    ========== 
 
 
                   NeueHealth, Inc. and Subsidiaries 
                 Consolidated Statements of Cash Flows 
                             (in thousands) 
                              (Unaudited) 
                                             Years Ended December 31, 
                                          ------------------------------ 
                                                2024          2023 
                                              ---------    ---------- 
Cash flows from operating activities: 
   Net loss                                $    (99,717)  $(1,265,808) 
   Adjustments to reconcile net loss to 
   net cash provided by operating 
   activities: 
       Depreciation and amortization             15,646        24,167 
       Impairment of intangible assets           11,411            -- 
       Impairment of goodwill                        --       587,535 
       Share-based compensation                  70,207        83,692 
       Payment-In-Kind ("PIK") Interest          17,005            -- 
       Deferred income taxes                         --        (3,063) 
       Gain on troubled debt 
        restructuring                           (30,311)           -- 
       Net accretion of investments                (229)      (17,986) 
       Loss on disposal of property, 
        equipment, and capitalized 
        software                                    709         6,418 
       Gain on sale of California MA 
        business                                (65,210)           -- 
       Other, net                                 5,135         1,858 
       Changes in assets and 
       liabilities, net of acquired 
       assets and liabilities: 
           Accounts receivable                   (2,001)       (7,756) 
           ACO REACH performance year 
            receivable                           20,803       (16,697) 
           Other assets                         (10,162)      191,441 
           Medical cost payable                 (55,254)     (635,616) 
           Risk adjustment payable              (14,311)   (1,652,744) 
           Accounts payable and other 
            liabilities                          (3,941)     (149,325) 
           Unearned revenue                          79       (10,614) 
           Warrant liability                     16,924        13,971 
           Risk share payable to 
            deconsolidated entity                    --       123,981 
                                              ---------    ---------- 
               Net cash (used in) 
                provided by operating 
                activities                     (123,217)   (2,726,546) 
                                              ---------    ---------- 
Cash flows from investing activities: 
   Purchases of investments                     (14,963)     (837,074) 
   Proceeds from sales, paydown, and 
    maturities of investments                     7,069     1,960,283 
   Purchases of property and equipment           (2,333)       (2,897) 
   Proceeds from sale of business, net          197,121          (682) 
                                              ---------    ---------- 
               Net cash provided by 
                (used in) investing 
                activities                      186,894     1,119,630 
                                              ---------    ---------- 
Cash flows from financing activities: 
   Proceeds from long-term borrowings           119,804        66,400 
   Proceeds from short-term borrowings            2,000            -- 
   Repayments of short-term borrowings         (273,636)           -- 
   Purchase of non-controlling interests        (93,950)           -- 
   Distributions to noncontrolling 
    interest holders                             (7,770)      (16,494) 
                                              ---------    ---------- 
               Net cash (used in) 
                provided by financing 
                activities                     (253,552)       49,906 
               Net increase (decrease) 
                in cash and cash 
                equivalents                    (189,875)   (1,557,010) 
                                              ---------    ---------- 
Cash and cash equivalents -- beginning 
 of year                                   $    375,280   $ 1,932,290 
                                              =========    ========== 
Cash and cash equivalents -- end of 
 period                                    $    185,405   $   375,280 
                                              =========    ========== 
 
 
              NeueHealth, Inc. and Subsidiaries 
                     Segment Information 
                        (in thousands) 
                         (Unaudited) 
NeueCare 
                       Three Months 
                      Ended December         Years Ended 
($ in thousands)            31,              December 31, 
-------------------  -----------------  ---------------------- 
 
Statement of income 
(loss) and 
operating data:        2024     2023      2024       2023 
-------------------   ------   ------    -------   -------- 
 
Revenue: 
     Capitated 
      revenue        $63,076  $60,091   $259,881  $ 219,774 
     Service 
      revenue         12,213   11,848     40,646     41,559 
     Investment 
      income             225       --        711         -- 
                      ------   ------    -------   -------- 
     Total 
      unaffiliated 
      revenue         75,514   71,939    301,238    261,333 
                      ------   ------    -------   -------- 
     Affiliated 
      revenue          3,738     (611)    12,489      5,876 
                      ------   ------    -------   -------- 
         Total 
          segment 
          revenue     79,252   71,328    313,727    267,209 
                      ------   ------    -------   -------- 
Operating expenses 
     Medical Costs    38,706   33,158    131,541     97,483 
     Operating 
      Costs           28,536   26,896    128,672    119,922 
     Goodwill 
      impairment          --       --         --    401,385 
     Intangible 
     assets 
     impairment           --       --     11,411         -- 
     Bad debt 
      expense             --    4,345         --      4,984 
     Restructuring 
      charges             --       --         --        130 
     Depreciation 
      and 
      amortization     2,785    3,181     12,538     12,651 
         Total 
          operating 
          expenses    70,027   67,580    284,162    636,555 
                      ------   ------    -------   -------- 
         Operating 
          income 
          (loss)     $ 9,225  $ 3,748   $ 29,565  $(369,346) 
                      ======   ======    =======   ======== 
 
 
NeueSolutions 
                    Three Months Ended        Years Ended 
($ in thousands)        December 31,          December 31, 
------------------  -------------------  ---------------------- 
Statement of 
income (loss) and 
operating data:       2024      2023       2024       2023 
------------------   -------   -------    -------    ------- 
 
Revenue: 
    ACO REACH 
     revenue        $154,249  $219,659   $625,339    896,504 
    Service 
     revenue           2,823     1,203      9,747      2,879 
                     -------   -------    -------    ------- 
        Total 
         segment 
         revenue     157,072   220,862    635,086    899,383 
                     -------   -------    -------    ------- 
Operating expenses 
    Medical Costs    149,926   231,095    623,089    904,986 
    Operating 
     Costs             4,041     4,391     17,243     14,474 
    Bad debt 
     expense               1         8         17     22,423 
                     -------   -------    -------    ------- 
        Total 
         operating 
         expenses    153,968   235,494    640,349    941,883 
                     -------   -------    -------    ------- 
        Operating 
         income 
         (loss)     $  3,104  $(14,632)  $ (5,263)  $(42,500) 
                     =======   =======    =======    ======= 
 

Non-GAAP Financial Measures

We use the non-GAAP financial measures Adjusted EBITDA and Adjusted Operating Cost Ratio. We define Adjusted EBITDA as Net Loss excluding (income) loss from discontinued operations, interest expense, income taxes, transaction related costs, depreciation and amortization, share-based and long-term compensation expense, restructuring and contract termination costs, impairment of goodwill and intangible assets, losses related to the bankruptcy of one of our ACO REACH partners, changes in the fair value of equity securities and derivatives, changes in the fair value of contingent consideration. We define Adjusted Operating Cost Ratio as Operating Cost Ratio excluding share-based compensation expense. These non-GAAP measures have been presented in this quarterly Earnings Release or in the earnings conference call and related materials as supplemental measures of financial performance that are not required by or presented in accordance with GAAP because we believe they assist management and investors in comparing our operating performance across reporting periods on a consistent basis by excluding and including items that we do not believe are indicative of our core operating performance. Management believes these measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA and Adjusted Operating Cost Ratio to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.

Adjusted EBITDA is not a recognized term under GAAP and should not be considered as an alternative to Net Income (Loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management's discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentation of Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

Adjusted Operating Cost Ratio is not a recognized term under GAAP and should not be considered as an alternative to Operating Cost Ratio as a measure of financial performance or any other performance measure derived in accordance with GAAP. The presentation of Adjusted Operating Cost Ratio has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.

The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented:

 
                     Three Months Ended          Years Ended 
                         December 31,             December 31, 
                    ---------------------  ------------------------- 
($ in thousands)      2024        2023       2024         2023 
------------------   -------    --------    -------    ---------- 
Net Income (Loss)   $  2,523   $(460,572)  $(99,717)  $(1,265,808) 
    Loss from 
     Discontinued 
     Operations      (45,003)    397,745     (2,341)      638,066 
EBITDA adjustments 
from continuing 
operations 
    Interest 
     expense           6,248      11,206     18,701        38,203 
    Income tax 
     (benefit) 
     expense            (672)      1,591      2,597        (1,428) 
    Transaction 
     related costs 
     (a)              16,122       4,363     19,301        23,252 
    Depreciation 
     and 
     amortization 
     (h)               3,603       4,024     14,658        18,296 
    Share-based 
     compensation 
     and other 
     long-term 
     incentive 
     compensation 
     expense (b)      12,577      18,081     68,824        83,692 
    Restructuring 
     and contract 
     termination 
     costs (e)           775         122        956         6,990 
    Impairment of 
     goodwill and 
     long-lived 
     assets (h)        2,749         274      2,880       401,659 
    ACO REACH care 
     partner 
     bankruptcy 
     (g)                  --       8,713      3,475        36,454 
    Change in fair 
     value of 
     warrant 
     liability 
     (d)               7,486       4,097      3,661        13,971 
    Change in fair 
     value of 
     contingent 
     consideration 
     (i)                  --          --         --        (1,827) 
    Held-for-sale 
     operations 
     (f)                (926)         --     19,812            -- 
    Gain on 
     troubled debt 
     restructuring 
     (c)                  --          --    (30,311)           -- 
                     -------    --------    -------    ---------- 
EBITDA adjustments 
 from continuing 
 operations         $ 47,962   $  52,471   $124,554   $   619,262 
                     -------    --------    -------    ---------- 
Adjusted EBITDA     $  5,482   $ (10,356)  $ 22,496   $    (8,480) 
 
 
(a)  Transaction related costs include accounting, tax, valuation, consulting, 
     legal and investment banking fees directly relating to financing 
     initiatives and acquisitions or dispositions. These costs can vary from 
     period to period and impact comparability, and we do not believe such 
     transaction costs reflect the ongoing performance of our business. 
     Included within transaction costs is $14.2 million of compensation 
     expense that was recognized in relation to the purchase of the minority 
     interest in Centrum for the three and twelve months ended December 31, 
     2024. There was no compensation expense included within transaction costs 
     for the three and twelve months ended December 31, 2023. 
(b)  Represents non-cash compensation expense related to stock option and 
     restricted stock unit award grants, which can vary from period to period 
     based on several factors, including the timing, quantity and grant date 
     fair value of the awards. Also includes estimated compensation expense 
     that the Company has the option to pay in cash or shares of $1.0 million 
     and $6.4 million for the three and twelve months ended December 31, 2024, 
     which is a 2024-only deviation from the long-term incentive award 
     program. 
(c)  Beginning in the first quarter of 2024, Adjusted EBITDA excludes the 
     impact of gains on troubled debt restructuring. The comparable periods in 
     2023 have been recast to exclude these impacts. 
(d)  Represents the non-cash change in the fair value of the warrant liability 
     established for warrants included in our financing arrangements, which 
     are remeasured at fair value each reporting period. 
(e)  Restructuring and contract termination costs represent severance costs as 
     part of a workforce reduction, amounts paid for early termination of 
     leases, and impairment of certain long-lived assets primarily relating to 
     our decision to exit the Commercial business for the 2023 plan year. 
(f)  Beginning in the second quarter of 2024, Adjusted EBITDA excludes the 
     impact of our operations classified as held- for-sale. For the three and 
     twelve months ended December 31, 2024, no intangible asset impairment 
     expense and $11.4 million of intangible asset impairment expense was 
     incurred, respectively, as a result of classifying operations as 
     held-for-sale. The comparable periods in 2023 have been recast to exclude 
     these impacts. 
(g)  Represents the costs expected to be incurred as a result of one of our 
     ACO REACH care partners filing for bankruptcy; includes the full 
     allowance established for the outstanding receivable and ongoing costs 
     incurred to manage and provide service to members attributed to the care 
     partner that would have otherwise been reimbursed prior to the care 
     partner's bankruptcy. 
(h)  Adjustment has been updated to remove the impact of our held-for-sale 
     operations that are adjusted for in their entirety as described in (f). 
(i)  Represents the change in fair value of contingent consideration from 
     business combinations, which is remeasured at fair value each reporting 
     period. 
 

The following table provides a reconciliation of Adjusted Operating Cost Ratio for the periods presented:

 
                                   Three Months Ended     Years Ended 
                                       December 31,        December 31, 
                                  ---------------------  --------------- 
                                     2024       2023      2024     2023 
--------------------------------  ----------  ---------  -------  ------ 
Operating Cost Ratio                   31.3%      22.3%    29.2%   24.7% 
    Impact of share-based and 
     other long-term incentive 
     compensation expense (a)         (5.4)%     (6.2)%   (7.3)%  (7.2)% 
    Impact of held-for-sale 
     operations (b)                   (0.6)%     (3.5)%   (2.3)%  (2.4)% 
    Impact of transaction 
     related costs (c)                (6.9)%     (1.5)%   (2.1)%  (2.0)% 
                                  ----------  ---------  -------  ------ 
Adjusted Operating Cost Ratio          18.4%      11.1%    17.5%   13.1% 
 
 
(a)  Represents non-cash compensation expense related to stock option and 
     restricted stock unit award grants, which can vary from period to period 
     based on several factors, including the timing, quantity and grant date 
     fair value of the awards. Also includes estimated compensation expense 
     that the Company has the option to pay in cash or shares of $1.0 million 
     and $6.4 million for the three and twelve months ended December 31, 2024, 
     which is a 2024-only deviation from the long-term incentive award 
     program. 
(b)  Represents the impact of revenue and operating costs related to our 
     operations classified as held-for-sale during the year ended December 31, 
     2024. The comparable periods in 2023 have been recast to exclude these 
     impacts. 
(c)  Transaction related costs include accounting, tax, valuation, consulting, 
     legal and investment banking fees directly relating to financing 
     initiatives and acquisitions or dispositions. These costs can vary from 
     period to period and impact comparability, and we do not believe such 
     transaction costs reflect the ongoing performance of our business. 
     Included within transaction costs is $14.2 million of compensation 
     expense that was recognized in relation to the purchase of the minority 
     interest in Centrum for the three and twelve months ended December 31, 
     2024. There was no compensation expense included within transaction costs 
     for the year ended December 31, 2023. 
 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250320987714/en/

 
    CONTACT:    Investor Contact: 

IR@neuehealth.com

Media Contact:

media@neuehealth.com

 
 

(END) Dow Jones Newswires

March 20, 2025 06:45 ET (10:45 GMT)

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