ORANGE, Calif., May 17, 2021 (GLOBE NEWSWIRE) -- Alignment Healthcare, Inc. (“Alignment Healthcare” or the “Company”) (Nasdaq: ALHC), a mission-based, tech-enabled Medicare Advantage company, today reported financial results for its first quarter ended March 31, 2021.
“I’m incredibly proud of all Alignment Healthcare has accomplished in the first quarter of 2021, from successfully completing our initial public offering, to exceeding our expectations across each and every key performance metric, including health plan membership, revenue, adjusted gross profit, and adjusted EBITDA,” said John Kao, founder and CEO. “Our founding mission -- to improve health care one senior at a time -- drives our distinct model in this category, one that uses direct engagement and purposeful technology to deliver care that is personalized, holistic and coordinated to our growing family of senior members nationwide. The result is improved care experiences and clinical outcomes that we are built to uphold with a level of scalability, repeatability and consistency as we continue to grow.”
“Our success in the quarter was driven by continued execution on our near-term strategy of growing our membership, expanding into new markets, and establishing new beachhead markets in new states,” Kao added. “Our high-tech, high-touch clinical model is working and our product innovation continues to meet the needs of our members. We’ve made great progress so far this year and we believe our proven model will drive growth throughout 2021 and beyond.”
First Quarter 2021 Financial Highlights
All comparisons, unless otherwise noted, are to the three months ended March 31, 2020.
- Health plan membership at the end of the quarter was approximately 83,100, up 32% year over year
- Total revenue was $267.1 million, up 19% year over year
- Health plan premium revenue of $264.7 million represented 30% growth year over year; total revenue was offset by a reduction in third party payor capitation revenue
- Medical benefit ratio was 91.5%
- Adjusted gross profit was $22.6 million
- Adjusted EBITDA was $(14.0) million
- As of March 31, 2021, total cash was $528.4 million. Debt was $150.9 million; debt net of debt issuance cost amortization was $145.7 million
Outlook for Second Quarter and Fiscal Year 2021
| |
Three Months Ending
June 30, 2021 |
Twelve Months Ending
December 31, 2021 |
| $ Millions |
Low |
High |
Low |
High |
| Health Plan Membership |
|
83,300 |
|
|
83,700 |
|
|
83,500 |
|
|
84,500 |
|
| Revenue |
$ |
265 |
|
$ |
270 |
|
$ |
1,040 |
|
$ |
1,055 |
|
| Adjusted Gross Profit |
$ |
32 |
|
$ |
34 |
|
$ |
116 |
|
$ |
122 |
|
| Adjusted EBITDA |
$ |
(9 |
) |
$ |
(10 |
) |
$ |
(56 |
) |
$ |
(51 |
) |
Conference Call Details
The company will host a conference call at 5 p.m. E.T. to discuss these results and management’s outlook for future financial and operational performance. The conference call can be accessed by dialing (833) 607-1669 for U.S. participants, or (914) 987-7881 for international participants, and referencing participant code 5475534. A live audio webcast will be available online at https://ir.alignmenthealthcare.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 12 months.
About Alignment Healthcare
Alignment Healthcare is a consumer-centric platform delivering customized health care in the United States to seniors and those who need it most, the chronically ill and frail, through its Medicare Advantage plans. Alignment Healthcare provides partners and patients with customized care and service where they need it and when they need it, including clinical coordination, risk management and technology facilitation. Alignment Healthcare offers health plan options through Alignment Health Plan, and also partners with select health plans to help deliver better benefits at lower costs.
Forward Looking Statements
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth and our financial outlook for the second quarter ended June 30, 2021 and year ended December 31, 2021. Forward-looking statements are subject to risks and uncertainties and are based on assumptions that may prove to be inaccurate, which could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including our amended registration statement relating to our initial public offering, filed with the Securities and Exchange Commission (the “SEC”) on March 23, 2021 and our quarterly report on Form 10-Q for the quarter ended March 31, 2021, filed with the SEC on May 17, 2021. All information provided in this release and in the attachments is as of the date hereof, and we undertake no duty to update or revise this information unless required by law.
Condensed Consolidated Balance Sheets
(in thousands, except par value and share amounts)
(Unaudited)
| |
March 31,
2021 |
|
December 31,
2020 (1) |
| Assets |
|
|
|
| Current Assets: |
|
|
|
| Cash |
$ |
528,417 |
|
|
$ |
207,311 |
|
Accounts receivable (less allowance for credit losses of $8 at March 31, 2021
and $0 at December 31, 2020, respectively) |
|
49,458 |
|
|
|
40,140 |
|
| Prepaid expenses and other current assets |
|
26,773 |
|
|
|
17,225 |
|
| Total current assets |
|
604,648 |
|
|
|
264,676 |
|
| Property and equipment, net |
|
28,403 |
|
|
|
27,145 |
|
| Right of use asset, net |
|
9,577 |
|
|
|
9,888 |
|
| Goodwill and intangible assets, net |
|
34,563 |
|
|
|
34,645 |
|
| Restricted and other assets |
|
2,153 |
|
|
|
2,148 |
|
| Total assets |
$ |
679,344 |
|
|
$ |
338,502 |
|
| Liabilities and Stockholders' Equity |
|
|
|
| Current Liabilities: |
|
|
|
| Medical expenses payable |
$ |
128,673 |
|
|
$ |
112,605 |
|
| Accounts payable and accrued expenses |
|
19,639 |
|
|
|
15,675 |
|
| Accrued compensation |
|
21,481 |
|
|
|
25,172 |
|
| Total current liabilities |
|
169,793 |
|
|
|
153,452 |
|
| Long-term debt, net of debt issuance costs |
|
145,734 |
|
|
|
144,168 |
|
| Long-term portion of lease liabilities |
|
9,565 |
|
|
|
10,271 |
|
| Total liabilities |
|
325,092 |
|
|
|
307,891 |
|
| Commitments and Contingencies (Note 12) |
|
|
|
| Stockholders' Equity: |
|
|
|
Preferred stock, $.001 par value; 100,000,000 and 0 shares authorized as of
March 31, 2021 and December 31, 2020 respectively; no shares issued and
outstanding as of March 31, 2021 and December 31, 2020 |
|
- |
|
|
|
- |
|
Common stock, $.001 par value; 1,000,000,000 and 164,063,787 shares
authorized as of March 31, 2021 and December 31, 2020 respectively; 187,273,782 and
164,063,787 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively |
|
188 |
|
|
|
164 |
|
| Additional paid-in capital |
|
790,509 |
|
|
|
410,018 |
|
| Accumulated deficit |
|
(436,445 |
) |
|
|
(379,571 |
) |
| Total stockholders' equity |
|
354,252 |
|
|
|
30,611 |
|
| Total liabilities and stockholders' equity |
$ |
679,344 |
|
|
$ |
338,502 |
|
| |
|
|
|
| (1) |
|
The condensed consolidated balance sheet as of December 31, 2020 is derived from the audited consolidated financial statements as of that date and was retroactively adjusted, including shares and per share amounts, as a result of the Reorganization. See Form 10-Q for additional details. |
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
| |
For the Three Months Ended March 31, |
| |
|
2021 |
|
|
|
2020 |
|
| Revenues: |
|
|
|
| Earned premiums |
$ |
267,000 |
|
|
$ |
224,266 |
|
| Other |
|
82 |
|
|
|
367 |
|
| Total revenues |
|
267,082 |
|
|
|
224,633 |
|
| Expenses: |
|
|
|
| Medical expenses |
|
251,095 |
|
|
|
193,396 |
|
| Selling, general, and administrative expenses |
|
64,914 |
|
|
|
32,787 |
|
| Depreciation and amortization |
|
3,737 |
|
|
|
3,565 |
|
| Total expenses |
|
319,746 |
|
|
|
229,748 |
|
| Loss from operations |
|
(52,664 |
) |
|
|
(5,115 |
) |
| Other expenses: |
|
|
|
| Interest expense |
|
4,248 |
|
|
|
4,160 |
|
| Other (income) expenses |
|
(38 |
) |
|
|
797 |
|
| Total other expenses |
|
4,210 |
|
|
|
4,957 |
|
| Loss before income taxes |
|
(56,874 |
) |
|
|
(10,072 |
) |
| Provision for income taxes |
|
- |
|
|
|
- |
|
| Net loss |
$ |
(56,874 |
) |
|
$ |
(10,072 |
) |
| |
|
|
|
| Total weighted-average common shares outstanding - basic and diluted(1) |
|
154,432,027 |
|
|
|
140,764,196 |
|
| Net loss per share - basic and diluted |
$ |
(0.37 |
) |
|
$ |
(0.07 |
) |
| |
|
|
|
| (1) |
|
The weighted-average shares used in computing net loss per share, basic and diluted were retroactively adjusted as a result of the Reorganization. See Form 10-Q for additional details. |
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| |
For the Three Months Ended March 31, |
| |
|
2021 |
|
|
|
2020 |
|
| Operating Activities: |
|
|
|
| Net loss |
$ |
(56,874 |
) |
|
$ |
(10,072 |
) |
| Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
| Provision for doubtful accounts |
|
8 |
|
|
|
10 |
|
| Depreciation and amortization |
|
3,789 |
|
|
|
3,670 |
|
| Amortization-debt issuance costs and investment discount |
|
550 |
|
|
|
540 |
|
| Payment-in-kind interest |
|
1,015 |
|
|
|
982 |
|
| Loss on disposal of property and equipment |
|
- |
|
|
|
860 |
|
| Equity-based compensation and common stock payments |
|
20,388 |
|
|
|
326 |
|
| Non-cash lease expense |
|
648 |
|
|
|
573 |
|
| Changes in operating assets and liabilities: |
|
|
|
| Accounts receivable |
|
(9,326 |
) |
|
|
(9,671 |
) |
| Prepaid expenses and other current assets |
|
(9,547 |
) |
|
|
(8,908 |
) |
| Other assets |
|
(6 |
) |
|
|
2 |
|
| Medical expenses payable |
|
16,069 |
|
|
|
(5,516 |
) |
| Accounts payable and accrued expenses |
|
(298 |
) |
|
|
6,544 |
|
| Accrued compensation |
|
(3,691 |
) |
|
|
(1,101 |
) |
| Lease liabilities |
|
(832 |
) |
|
|
3,883 |
|
| Noncurrent liabilities |
|
- |
|
|
|
(3,941 |
) |
| Net cash used in operating activities |
|
(38,107 |
) |
|
|
(21,819 |
) |
| Investing Activities: |
|
|
|
| Purchase of investments |
|
(750 |
) |
|
|
(1,000 |
) |
| Sale of investments |
|
750 |
|
|
|
250 |
|
| Acquisition of property and equipment |
|
(4,446 |
) |
|
|
(3,085 |
) |
| Proceeds from the sale of property and equipment |
|
- |
|
|
|
100 |
|
| Net cash used in investing activities |
|
(4,446 |
) |
|
|
(3,735 |
) |
| Financing Activities: |
|
|
|
| Equity repurchase |
|
(1,474 |
) |
|
|
(516 |
) |
| Issuance of common stock |
|
390,600 |
|
|
|
135,000 |
|
| Common stock issuance costs |
|
(25,467 |
) |
|
|
(3,000 |
) |
| Net cash provided by financing activities |
|
363,659 |
|
|
|
131,484 |
|
| Net increase in cash |
|
321,106 |
|
|
|
105,930 |
|
| Cash and restricted cash at beginning of period |
|
207,811 |
|
|
|
86,484 |
|
| Cash and restricted cash at end of period |
$ |
528,917 |
|
|
$ |
192,414 |
|
| Supplemental disclosure of cash flow information: |
|
|
|
| Cash paid for interest |
$ |
2,682 |
|
|
$ |
2,637 |
|
| Supplemental non-cash investing and financing activities: |
|
|
|
| Acquisition of property in accounts payable |
$ |
474 |
|
|
$ |
93 |
|
| Common stock issuance costs included in accounts payable and accrued expenses |
$ |
3,532 |
|
|
$ |
700 |
|
The following table provides a reconciliation of cash and restricted cash reported
within the consolidated balance sheets to the total above |
|
|
|
| Cash |
$ |
528,417 |
|
|
$ |
192,414 |
|
| Restricted cash in restricted and other assets |
|
500 |
|
|
|
- |
|
| Total |
$ |
528,917 |
|
|
$ |
192,414 |
|
| |
|
|
|
Non-GAAP Financial Measures
Certain of these financial measures are considered “non-GAAP” financial measures within the meaning of Item 10 of Regulation S-K promulgated by the SEC. We believe that non-GAAP financial measures provide an additional way of viewing aspects of our operations that, when viewed with the GAAP results, provide a more complete understanding of our results of operations and the factors and trends affecting our business. These non-GAAP financial measures are also used by our management to evaluate financial results and to plan and forecast future periods. However, non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Non-GAAP financial measures used by us may differ from the non-GAAP measures used by other companies, including our competitors. To supplement our consolidated financial statements presented on a GAAP basis, we disclose the following Non-GAAP measures: Medical Benefits Ratio, Adjusted EBITDA and Adjusted Gross Profit as these are performance measures that our management uses to assess our operating performance. Because these measures facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes and in evaluating acquisition opportunities.
Adjusted EBITDA Reconciliation
Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before interest expense, income taxes, depreciation and amortization expense, reorganization and transaction-related expenses and equity-based compensation expense.
Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA in lieu of net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP.
Our use of the term Adjusted EBITDA may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA is reconciled as follows:
| |
Three Months Ended March 31, |
| |
|
2021 |
|
|
|
2020 |
|
| (dollars in thousands) |
|
|
|
| Net loss |
$ |
(56,874 |
) |
|
$ |
(10,072 |
) |
| Add back: |
|
|
|
| Interest expense |
$ |
4,248 |
|
|
$ |
4,160 |
|
| Depreciation and amortization |
|
3,789 |
|
|
|
3,670 |
|
| EBITDA |
|
(48,837 |
) |
|
|
(2,242 |
) |
| Equity-based compensation |
|
31,787 |
|
|
|
326 |
|
| Reorganization and transaction-related expenses |
|
3,008 |
|
|
|
- |
|
| Adjusted EBITDA |
$ |
(14,042 |
) |
|
$ |
(1,916 |
) |
| |
|
|
|
Medical Benefits Ratio (MBR)
We calculate our MBR by dividing total medical expenses excluding depreciation and equity-based compensation by total revenues in a given period.
Adjusted Gross Profit Reconciliation
Adjusted Gross Profit is a non-GAAP financial measure that we define as revenue less medical expenses before depreciation and amortization and equity-based compensation expense.
Adjusted Gross Profit should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted Gross Profit in lieu of gross profit, which is the most directly comparable financial measure calculated in accordance with GAAP.
Our use of the term Adjusted Gross Profit may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.
Adjusted Gross Profit is reconciled as follows:
| |
Three Months Ended March 31, |
| |
|
2021 |
|
|
|
2020 |
|
| (dollars in thousands) |
|
|
|
| Revenues |
$ |
267,082 |
|
|
$ |
224,633 |
|
| Medical expenses |
|
251,095 |
|
|
|
193,396 |
|
| Gross profit |
|
15,987 |
|
|
|
31,237 |
|
| Gross profit % |
|
6.0 |
% |
|
|
13.9 |
% |
| Add back: |
|
|
|
| Equity-based compensation (medical expenses) |
$ |
6,566 |
|
|
$ |
- |
|
| Depreciation (medical expenses) |
|
52 |
|
|
|
105 |
|
| Total add back |
|
6,618 |
|
|
|
105 |
|
| Adjusted gross profit |
$ |
22,605 |
|
|
$ |
31,342 |
|
| Adjusted gross profit % |
|
8.5 |
% |
|
|
14.0 |
% |
| Medical benefits ratio |
|
91.5 |
% |
|
|
86.0 |
% |
Investor Contact
Bob East
ICR Westwicke for Alignment Healthcare
[email protected]
(443) 213-0500
Media Contact
Maggie Habib
mPR, Inc. for Alignment Healthcare
[email protected]
(310) 916-6934