UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
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(Address of Principal Executive Offices) |
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 7.01 Regulation FD Disclosure.
Effective January 1, 2023, the Company realigned its three reportable segments, formerly known as Employer Solutions, Professional Services and Hosted into two reportable segments, Employer Solutions and Professional Services. There is no change in composition among the Employer Solutions and Professional Services segments and the former Hosted business revenues and gross margin are reported in Other as the business is no longer core to the Company’s operations.
Additionally, the Company changed its measure of segment profit and loss that is reported to the chief operating decision maker for purposes of making decisions about allocating resources to the Company’s segments and assessing business performance.
Prior to January 1, 2023, the Company reported its measure of segment profit as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance. Effective January 1, 2023, the Company's measure of segment profit is gross profit, which is defined as Revenue less Cost of services.
For informational purposes only, to assist in understanding these unaudited changes, Exhibit 99.1 to this Current Report on Form 8-K presents retrospectively segment gross profit for each quarter of fiscal year 2022 and for the years ended December 31, 2022 and 2021. The changes to the Company's segment reporting will be reflected in the financial statements reported in the Quarterly Report on Form 10-Q to be filed on or about May 9, 2023.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed subject to the requirements of amended Item 10 of Regulation S-K, nor shall it be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in such filing. The furnishing of this information hereby shall not be deemed an admission as to the materiality of any such information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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99.1 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Alight, Inc. |
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Date: |
April 20, 2023 |
By: |
/s/ Katie J. Rooney |
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Katie J. Rooney, Chief Financial Officer |
Exhibit 99.1
Alight, Inc.
Recast of Segment Information
For the quarters of fiscal 2022 and for the years ended
December 31, 2022 and 2021
Financial Statement Presentation
As a result of the Business Combination, this exhibit includes certain historical consolidated financial and other data for Alight Holding Company, LLC (formerly known as Tempo Holding Company, LLC) (“Alight Holdings”) and its subsidiaries. Specifically the tables in this exhibit include selected financial data for the Company Successor six months ended December 31, 2021, and Alight Holdings as the Predecessor for the six months ended June 30, 2021.
Non-GAAP Financial Measures
Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this exhibit to the most directly comparable GAAP financial measure in the tables below. The presentation of non-GAAP financial measures is used to enhance our investors’ and lenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Adjusted Gross Profit and Adjusted Gross Margin Percent. Adjusted gross profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation. Adjusted gross margin percent is defined as adjusted gross profit divided by revenue. Management uses gross profit and gross margin percent as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting adjusted gross profit and adjusted gross margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.
1
Alight, Inc. |
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Recast of Segment Revenues |
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As Previously Reported |
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($ in millions) |
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Q1'22 |
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Q2'22 |
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Q3'22 |
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Q4'22 |
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FY'22 |
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Segment Revenues |
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Employer Solutions |
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Recurring |
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$ |
570 |
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$ |
559 |
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$ |
583 |
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$ |
755 |
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$ |
2,467 |
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Project |
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53 |
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55 |
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62 |
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81 |
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251 |
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Total Employer Solutions |
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623 |
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614 |
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645 |
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836 |
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2,718 |
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Professional Services |
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Recurring |
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30 |
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32 |
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32 |
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34 |
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128 |
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Project |
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60 |
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59 |
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63 |
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61 |
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243 |
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Total Professional Services |
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90 |
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91 |
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95 |
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95 |
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371 |
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Hosted Business |
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12 |
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10 |
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10 |
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11 |
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43 |
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Total |
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$ |
725 |
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$ |
715 |
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$ |
750 |
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942 |
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$ |
3,132 |
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As Reported Herein |
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($ in millions) |
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Q1'22 |
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Q2'22 |
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Q3'22 |
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Q4'22 |
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FY'22 |
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Segment Revenues |
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Employer Solutions: |
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Recurring |
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$ |
570 |
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$ |
559 |
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$ |
583 |
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$ |
755 |
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$ |
2,467 |
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Project |
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53 |
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55 |
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62 |
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81 |
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251 |
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Total Employer Solutions |
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623 |
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614 |
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645 |
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836 |
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2,718 |
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Professional Services: |
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Recurring |
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30 |
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32 |
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32 |
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34 |
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128 |
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Project |
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60 |
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59 |
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63 |
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61 |
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243 |
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Total Professional Services |
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90 |
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91 |
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95 |
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95 |
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371 |
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Total Reportable Segments |
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713 |
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705 |
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740 |
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931 |
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3,089 |
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Other |
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12 |
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10 |
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10 |
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11 |
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43 |
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Total |
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$ |
725 |
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$ |
715 |
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$ |
750 |
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$ |
942 |
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$ |
3,132 |
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2
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As Previously Reported |
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Successor |
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Predecessor |
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Six Months Ended |
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Six Months Ended |
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($ in millions) |
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December 31, 2021 |
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June 30, 2021 |
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Segment Revenues |
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Employer Solutions |
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Recurring |
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$ |
1,213 |
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$ |
1,049 |
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Project |
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134 |
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107 |
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Total Employer Solutions |
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1,347 |
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1,156 |
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Professional Services |
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Recurring |
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65 |
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60 |
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Project |
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121 |
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124 |
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Total Professional Services |
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186 |
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184 |
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Hosted Business |
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21 |
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21 |
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Total |
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$ |
1,554 |
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$ |
1,361 |
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As Reported Herein |
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Successor |
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Predecessor |
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Six Months Ended |
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Six Months Ended |
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($ in millions) |
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December 31, 2021 |
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June 30, 2021 |
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Segment Revenues |
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Employer Solutions: |
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Recurring |
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$ |
1,213 |
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$ |
1,049 |
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Project |
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134 |
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107 |
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Total Employer Solutions |
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1,347 |
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1,156 |
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Professional Services: |
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Recurring |
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65 |
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60 |
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Project |
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121 |
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124 |
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Total Professional Services |
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186 |
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184 |
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Total Reportable Segments |
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1,533 |
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1,340 |
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Other |
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21 |
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21 |
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Total |
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$ |
1,554 |
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$ |
1,361 |
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3
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Recast of Segment Profit |
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(Unaudited) |
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As Previously Reported |
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(in millions) |
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Q1'22 |
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Q2'22 |
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Q3'22 |
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Q4'22 |
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FY'22 |
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Employer Solutions |
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$ |
142 |
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$ |
147 |
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$ |
130 |
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$ |
240 |
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$ |
659 |
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Professional Services |
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- |
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(3 |
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3 |
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1 |
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1 |
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Hosted Business |
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- |
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(2 |
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- |
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1 |
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(1 |
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Total of all reportable segments (1) |
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142 |
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142 |
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133 |
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242 |
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659 |
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Share-based compensation |
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33 |
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42 |
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54 |
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52 |
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181 |
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Transaction and integration expenses (2) |
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6 |
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3 |
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2 |
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8 |
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19 |
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Restructuring |
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6 |
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14 |
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23 |
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20 |
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63 |
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Other (3) |
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3 |
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8 |
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5 |
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(1 |
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15 |
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Depreciation |
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17 |
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18 |
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21 |
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23 |
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79 |
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Intangible amortization |
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79 |
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80 |
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78 |
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79 |
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|
316 |
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Operating Income (Loss) |
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(2 |
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(23 |
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(50 |
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61 |
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(14 |
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(Gain) Loss from change in fair value of financial instruments |
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(13 |
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(50 |
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10 |
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15 |
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(38 |
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(Gain) Loss from change in fair value of tax receivable agreement |
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(5 |
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(38 |
) |
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(20 |
) |
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22 |
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(41 |
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Interest expense |
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29 |
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29 |
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31 |
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33 |
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|
122 |
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Other (income) expense, net |
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(1 |
) |
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(7 |
) |
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(6 |
) |
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(2 |
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(16 |
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Income (Loss) Before Income Tax Expense (Benefit) |
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$ |
(12 |
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$ |
43 |
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$ |
(65 |
) |
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$ |
(7 |
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$ |
(41 |
) |
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As Reported Herein |
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(in millions) |
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Q1'22 |
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Q2'22 |
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Q3'22 |
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Q4'22 |
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FY'22 |
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Employer Solutions |
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$ |
204 |
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$ |
200 |
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$ |
189 |
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$ |
318 |
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$ |
911 |
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Professional Services |
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19 |
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20 |
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23 |
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24 |
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|
86 |
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Other (4) |
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- |
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(1 |
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- |
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- |
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(1 |
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Total Gross Profit |
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223 |
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|
219 |
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|
212 |
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|
342 |
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996 |
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Selling, general and administrative |
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140 |
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|
157 |
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|
178 |
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|
196 |
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|
671 |
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Depreciation and intangible amortization |
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|
85 |
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|
85 |
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|
84 |
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|
85 |
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|
339 |
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Operating Income (Loss) |
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(2 |
) |
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(23 |
) |
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(50 |
) |
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|
61 |
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(14 |
) |
(Gain) Loss from change in fair value of financial instruments |
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(13 |
) |
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(50 |
) |
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|
10 |
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|
15 |
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(38 |
) |
(Gain) Loss from change in fair value of tax receivable agreement |
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(5 |
) |
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(38 |
) |
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(20 |
) |
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22 |
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(41 |
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Interest expense |
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29 |
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|
29 |
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|
31 |
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|
33 |
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|
122 |
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Other (income) expense, net |
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(1 |
) |
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(7 |
) |
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(6 |
) |
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(2 |
) |
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(16 |
) |
Income (Loss) Before Income Tax Expense (Benefit) |
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$ |
(12 |
) |
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$ |
43 |
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$ |
(65 |
) |
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$ |
(7 |
) |
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$ |
(41 |
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(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance. |
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(2) Transaction and integration expenses related to acquisition activity. |
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(3) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net. |
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(4) Includes activity related to the former Hosted segment. |
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4
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As Previously Reported |
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Successor |
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Predecessor |
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Six Months Ended |
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Six Months Ended |
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(in millions) |
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December 31, 2021 |
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June 30, 2021 |
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||
Employer Solutions |
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$ |
344 |
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$ |
274 |
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Professional Services |
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|
1 |
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|
7 |
|
Hosted Business |
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(2 |
) |
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|
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(3 |
) |
Total of all reportable segments (1) |
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|
343 |
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|
|
|
278 |
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|
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Share-based compensation |
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|
67 |
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|
|
5 |
|
Transaction and integration expenses (2) |
|
|
13 |
|
|
|
|
- |
|
Non-recurring professional expenses (3) |
|
|
19 |
|
|
|
|
18 |
|
Restructuring |
|
|
5 |
|
|
|
|
9 |
|
Other (4) |
|
|
(10 |
) |
|
|
|
(5 |
) |
Depreciation |
|
|
31 |
|
|
|
|
49 |
|
Intangible amortization |
|
|
153 |
|
|
|
|
100 |
|
Operating Income (Loss) |
|
|
65 |
|
|
|
|
102 |
|
(Gain) Loss from change in fair value of financial instruments |
|
|
65 |
|
|
|
|
- |
|
(Gain) Loss from change in fair value of tax receivable agreement |
|
|
(37 |
) |
|
|
|
- |
|
Interest expense |
|
|
57 |
|
|
|
|
123 |
|
Other (income) expense, net |
|
|
3 |
|
|
|
|
9 |
|
Income (Loss) Before Income Tax Expense (Benefit) |
|
$ |
(23 |
) |
|
|
$ |
(30 |
) |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
As Reported Herein |
|
||||||
|
|
Successor |
|
|
|
Predecessor |
|
||
|
|
Six Months Ended |
|
|
|
Six Months Ended |
|
||
(in millions) |
|
December 31, 2021 |
|
|
|
June 30, 2021 |
|
||
Employer Solutions |
|
$ |
489 |
|
|
|
$ |
392 |
|
Professional Services |
|
|
44 |
|
|
|
|
46 |
|
Other (5) |
|
|
(1 |
) |
|
|
|
(3 |
) |
Total Gross Profit |
|
|
532 |
|
|
|
|
435 |
|
|
|
|
|
|
|
|
|
||
Selling, general and administrative |
|
|
304 |
|
|
|
|
222 |
|
Depreciation and intangible amortization |
|
|
163 |
|
|
|
|
111 |
|
Operating Income (Loss) |
|
|
65 |
|
|
|
|
102 |
|
(Gain) Loss from change in fair value of financial instruments |
|
|
65 |
|
|
|
|
- |
|
(Gain) Loss from change in fair value of tax receivable agreement |
|
|
(37 |
) |
|
|
|
- |
|
Interest expense |
|
|
57 |
|
|
|
|
123 |
|
Other (income) expense, net |
|
|
3 |
|
|
|
|
9 |
|
Income (Loss) Before Income Tax Expense (Benefit) |
|
$ |
(23 |
) |
|
|
$ |
(30 |
) |
|
|
|
|
|
|
|
|
||
(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance. |
|
||||||||
(2) Transaction and integration expenses related to acquisition activity. |
|
||||||||
(3) Non-recurring professional expenses includes external advisor and legal costs related to the Company’s Business Combination. |
|
||||||||
(4) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net. |
|
||||||||
(5) Includes activity related to the former Hosted segment. |
|
||||||||
5
Gross Profit GAAP to Non-GAAP Reconciliation by Segment |
|
||||||||||||
(Unaudited) |
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
||||||||||
|
|
Q1'22 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
204 |
|
$ |
19 |
|
$ |
- |
|
$ |
223 |
|
Add: stock-based compensation |
|
|
7 |
|
|
- |
|
|
- |
|
|
7 |
|
Add: depreciation and amortization |
|
|
10 |
|
|
- |
|
|
1 |
|
|
11 |
|
Adjusted Gross Profit |
|
$ |
221 |
|
$ |
19 |
|
$ |
1 |
|
$ |
241 |
|
Gross Margin |
|
|
33 |
% |
|
21 |
% |
|
0 |
% |
|
31 |
% |
Adjusted Gross Margin |
|
|
35 |
% |
|
21 |
% |
|
8 |
% |
|
33 |
% |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
||||||||||
|
|
Q2'22 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
200 |
|
$ |
20 |
|
$ |
(1 |
) |
$ |
219 |
|
Add: stock-based compensation |
|
|
9 |
|
|
1 |
|
|
- |
|
|
10 |
|
Add: depreciation and amortization |
|
|
12 |
|
|
- |
|
|
1 |
|
|
13 |
|
Adjusted Gross Profit |
|
$ |
221 |
|
$ |
21 |
|
$ |
- |
|
$ |
242 |
|
Gross Margin |
|
|
33 |
% |
|
22 |
% |
|
-10 |
% |
|
31 |
% |
Adjusted Gross Margin |
|
|
36 |
% |
|
23 |
% |
|
0 |
% |
|
34 |
% |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
Q3'22 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
189 |
|
$ |
23 |
|
$ |
- |
|
$ |
212 |
|
Add: stock-based compensation |
|
|
11 |
|
|
1 |
|
|
- |
|
|
12 |
|
Add: depreciation and amortization |
|
|
14 |
|
|
1 |
|
|
- |
|
|
15 |
|
Adjusted Gross Profit |
|
$ |
214 |
|
$ |
25 |
|
$ |
- |
|
$ |
239 |
|
Gross Margin |
|
|
29 |
% |
|
24 |
% |
|
0 |
% |
|
28 |
% |
Adjusted Gross Margin |
|
|
33 |
% |
|
26 |
% |
|
0 |
% |
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
||||||||||
|
|
Q4'22 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
318 |
|
$ |
24 |
|
$ |
- |
|
$ |
342 |
|
Add: stock-based compensation |
|
|
10 |
|
|
1 |
|
|
- |
|
|
11 |
|
Add: depreciation and amortization |
|
|
17 |
|
|
- |
|
|
- |
|
|
17 |
|
Adjusted Gross Profit |
|
$ |
345 |
|
$ |
25 |
|
$ |
- |
|
$ |
370 |
|
Gross Margin |
|
|
38 |
% |
|
25 |
% |
|
0 |
% |
|
36 |
% |
Adjusted Gross Margin |
|
|
41 |
% |
|
26 |
% |
|
0 |
% |
|
39 |
% |
6
|
|
FY'22 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
911 |
|
$ |
86 |
|
$ |
(1 |
) |
$ |
996 |
|
Add: stock-based compensation |
|
|
37 |
|
|
3 |
|
|
- |
|
|
40 |
|
Add: depreciation and amortization |
|
|
53 |
|
|
1 |
|
|
2 |
|
|
56 |
|
Adjusted Gross Profit |
|
$ |
1,001 |
|
$ |
90 |
|
$ |
1 |
|
$ |
1,092 |
|
Gross Margin |
|
|
34 |
% |
|
23 |
% |
|
-2 |
% |
|
32 |
% |
Adjusted Gross Margin |
|
|
37 |
% |
|
24 |
% |
|
2 |
% |
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||
|
|
Successor |
|
||||||||||
|
|
Six Months Ended |
|
||||||||||
|
|
December 31, 2021 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
489 |
|
$ |
44 |
|
$ |
(1 |
) |
$ |
532 |
|
Add: stock-based compensation |
|
|
18 |
|
|
1 |
|
|
- |
|
|
19 |
|
Add: depreciation and amortization |
|
|
20 |
|
|
- |
|
|
1 |
|
|
21 |
|
Adjusted Gross Profit |
|
$ |
527 |
|
$ |
45 |
|
$ |
- |
|
$ |
572 |
|
Gross Margin |
|
|
36 |
% |
|
24 |
% |
|
-5 |
% |
|
34 |
% |
Adjusted Gross Margin |
|
|
39 |
% |
|
24 |
% |
|
0 |
% |
|
37 |
% |
|
|
|
|
|
|
|
|
|
|
||||
|
|
Predecessor |
|
||||||||||
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, 2021 |
|
||||||||||
($ in millions) |
|
Employer Solutions |
|
Professional Services |
|
Other |
|
Total |
|
||||
Gross Profit |
|
$ |
392 |
|
$ |
46 |
|
$ |
(3 |
) |
$ |
435 |
|
Add: stock-based compensation |
|
|
1 |
|
|
- |
|
|
- |
|
|
1 |
|
Add: depreciation and amortization |
|
|
36 |
|
|
1 |
|
|
1 |
|
|
38 |
|
Adjusted Gross Profit |
|
$ |
429 |
|
$ |
47 |
|
$ |
(2 |
) |
$ |
474 |
|
Gross Margin |
|
|
34 |
% |
|
25 |
% |
|
-14 |
% |
|
32 |
% |
Adjusted Gross Margin |
|
|
37 |
% |
|
26 |
% |
|
-10 |
% |
|
35 |
% |
7