8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 8, 2022
MultiPlan Corporation
(Exact name of registrant as specified in its charter)
| Delaware | 001-39228 | 84-3536151 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
115 Fifth Avenue
New York, New York 10003
(212) 780-2000
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
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 (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Shares of Class A Common Stock,<br><br>$0.0001 par value per share | MPLN | New York Stock Exchange |
| Warrants | MPLN.W | New York Stock Exchange |
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. ☐
Unless the context otherwise requires, “we,” “us,” “our,” “MultiPlan” and the “Company” refer to MultiPlan Corporation, a Delaware corporation, and its consolidated subsidiaries.
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2022, the Company issued a press release announcing its financial results for the third quarter ended September 30, 2022.
A copy of the press release is included as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”) and is incorporated herein by reference.
The information in this Item 2.02, including Exhibit 99.1, is furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under that section, nor shall it be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filings.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are included in this Form 8-K:
| 99.1 | Press Release, dated November 8, 2022, reporting the Company’s financial results for the third quarter ended September 30, 2022. |
|---|---|
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). |
Forward-Looking Statements
This Report includes statements that express our and our subsidiaries’ opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “forecasts,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Report, including the discussion of 2022 outlook, guidance and impact of The No Surprises Act and these forward-looking statements reflect management’s expectations regarding our future growth, results of operations, operational and financial performance and business prospects and opportunities. Such forward-looking statements are based on available current market material and management’s expectations, beliefs and forecasts concerning future events impacting the business. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results, including: the impact from the COVID-19 pandemic and its related effects on our projected results of operations, financial performance or other financial metrics; loss of our customers, particularly our largest customers; decreases in our existing market share or the size of our Preferred Provider Organization networks; effects of competition; effects of pricing pressure; the inability of our customers to pay for our services; decreases in discounts from providers; the loss of our existing relationships with providers; the loss of key members of our management team; pressure to limit access to preferred provider networks; the ability to achieve the goals of our strategic plans and recognize the anticipated strategic, operational, growth and efficiency benefits when expected; our ability to identify, complete and successfully integrate acquisitions; changes in our industry; interruptions or security breaches of our information technology systems and other cyber security attacks; our ability to protect proprietary applications; our inability to expand our network infrastructure; our ability to maintain effective internal controls over financial reporting; our ability to
continue to attract, motivate and retain a large number of skilled employees, and adapt to the effects of inflationary pressure on wages; changes in our regulatory environment, including healthcare law and regulations; the expansion of privacy and security laws; heightened enforcement activity by government agencies; our ability to pay interest and principal on our notes and other indebtedness; the possibility that we may be adversely affected by other political, economic, business, and/or competitive factors; changes in healthcare utilization patterns of plan members; other factors disclosed in our Securities and Exchange Commission (“SEC”) filings; and other factors beyond our control.
The forward-looking statements contained in this Report are based on our current expectations and beliefs concerning future developments and potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022, including those under “Risk Factors” therein, and other documents filed or to be filed with the SEC by us. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Forward-looking statements speak only as of the date made. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
EXHIBIT INDEX
| Exhibit | |
|---|---|
| Number | Description |
| 99.1 | Press Release, dated November 8, 2022, reporting the Company’s financial results for the third quarter ended September 30, 2022. |
| 104 | Cover Page Interactive Data File (the cover page XBRL tags are embedded in 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.
Dated: November 8, 2022
MultiPlan Corporation
By: /s/ James M. Head
Name: James M. Head
Title: Executive Vice President and Chief Financial
Officer
Document
Exhibit 99.1
RELEASE
MultiPlan Reports Third Quarter 2022 Results and Updates 2022 Guidance
–Q3 2022 Revenues of $250.5 million, Net Income of $19.7 million, and Adjusted EBITDA of $172.2 million
–Decrease in Revenues of 13.1% over Q3 2021, driven by lower volumes and unfavorable mix of identified potential medical cost savings, predominantly the result of softer patient utilization of healthcare services
NEW YORK, NY — November 8, 2022 — MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE: MPLN), a leading value-added provider of data analytics and technology-enabled end-to-end cost management, payment and revenue integrity solutions to the U.S. healthcare industry, today reported financial results for the third quarter ended September 30, 2022.
“Third quarter 2022 was a challenging quarter for MultiPlan.” said Dale White, CEO of MultiPlan. “While the predominant driver of the shortfall was a decline in patient utilization of healthcare services, our results nevertheless fell short of our expectations. Despite the quarter’s results, our confidence in our business remains high. We continue to deliver best-in-class Adjusted EBITDA margins and generate significant cash flow. And even as we adjust to more difficult market conditions, we continue to drive meaningful progress on all fronts, by selling new business, building our pipeline, investing in our people and solutions to drive growth, managing our costs, and delivering high levels of value and service to our customers.”
The Company remains focused on its mission of delivering fairness, efficiency and affordability to the U.S. healthcare system and on driving sustained long-term growth by enhancing its product offerings to payors, extending into new payor customer segments, and expanding its platform to serve MultiPlan’s 1.3 million providers, its more than 700 payor customers, and 60 plus million consumers.
Business and Financial Highlights
•Revenues of $250.5 million for Q3 2022, a decrease of 13.1%, compared to Q3 2021 revenues of $288.2 million.
•Net income of $19.7 million for Q3 2022, a decrease of 74.8%, compared to net income of $78.2 million for Q3 2021.
•Adjusted EBITDA of $172.2 million for Q3 2022, a decrease of 21.2%, compared to Q3 2021 Adjusted EBITDA of $218.4 million.
•Net cash provided by operating activities of $109.0 million for Q3 2022, compared to $167.0 million for Q3 2021.
•Free Cash Flow of $88.2 million for Q3 2022, compared to $146.6 million for Q3 2021.
•The Company processed approximately $31.4 billion in claim charges during the third quarter of 2022, identifying potential medical cost savings of approximately $5.3 billion.
The third quarter 2022 results reflect an estimated COVID-related revenue impact of $4-6 million and an estimated COVID-related Adjusted EBITDA impact of $3-5 million, as compared to an estimated COVID-related
Exhibit 99.1
revenue impact of $8-10 million and an estimated COVID-related Adjusted EBITDA impact of $6-8 million in Q3 2021.
2022 Financial Guidance
The Company is updating its Full Year 2022 guidance, detailed in the table below:
| Financial Metric | Prior FY 2022 Guidance | Updated FY 2022 Guidance |
|---|---|---|
| Revenues | $1,160 million to $1,200 million | $1,075 million to $1,090 million |
| Adjusted EBITDA | $850 million to $875 million | $765 million to $780 million |
| Cash flow from operations | $380 million to $420 million | $360 million to $380 million |
| Capital expenditures | $90 million to $100 million | $90 million to $100 million |
| Interest expense | $280 million to $290 million | $295 million to $305 million |
| Depreciation | $65 million to $70 million | $65 million to $70 million |
| Amortization of intangible assets | $335 million to $345 million | $335 million to $345 million |
| Effective tax rate | 25% to 28% | 26% to 29% |
The Company’s annual guidance assumes an estimated COVID-related revenue impact of approximately $15-20 million, and an estimated COVID-related Adjusted EBITDA impact of approximately $12-15 million.
The Company anticipates Q4 2022 revenues between $235 million and $250 million and Adjusted EBITDA between $155 million and $170 million.
Conference Call Information
The Company will host a conference call today, Tuesday, November 8, 2022 at 8:00 a.m. U.S. Eastern Time (ET) to discuss its financial results. Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will receive access details via email. Pre-registration may be completed at any time up to and following the call start time.
To pre-register, go to: https://www.netroadshow.com/events/login?show=c4404ef1&confId=42446
A live webcast of the conference call can be accessed through the Investor Relations section of the Company’s website at investors.multiplan.com/events-and-presentations. Participants should join the webcast ten minutes prior to the start of the conference call. The earnings press release and supplemental slide deck will also be available on this section of the Company’s website.
For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the Investor Relations section of the Company’s website or by dialing (866) 813-9403 or (929) 458-6194. The replay access code is 004428.
About MultiPlan
MultiPlan is committed to helping healthcare payors manage the cost of care, improve their competitiveness and inspire positive change. Leveraging sophisticated technology, data analytics and a team rich with industry experience, MultiPlan interprets clients' needs and customizes innovative solutions that combine its payment and revenue integrity, network-based and analytics-based services. MultiPlan is a trusted partner to over 700 healthcare payors in the commercial health, government and property and casualty markets. For more information, visit it www.multiplan.com.
Exhibit 99.1
Contacts
Investor Relations
Luke Montgomery, CFA
SVP, Finance & Investor Relations
MultiPlan
866-909-7427
investor@multiplan.com
Shawna Gasik
AVP, Investor Relations
MultiPlan
866-909-7427
investor@multiplan.com
Media Relations
Pamela Walker
AVP, Marketing & Communications
MultiPlan
781-895-3118
press@multiplan.com
Exhibit 99.1
Forward Looking Statements
This press release includes statements that express our management’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “forecasts,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release, including the discussion of 2022 outlook and guidance and the long-term prospects of the Company. Such forward-looking statements are based on available current market material and are management’s current expectations, beliefs and forecasts concerning future events impacting the business. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that these forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These factors include: the impact from the COVID-19 pandemic and its related effects on our projected results of operations, financial performance or other financial metrics; loss of our customers, particularly our largest customers; decreases in our existing market share or the size of our Preferred Provider Organization networks; effects of competition; effects of pricing pressure; the inability of our customers to pay for our services; decreases in discounts from providers; the loss of our existing relationships with providers; the loss of key members of our management team; pressure to limit access to preferred provider networks; the ability to achieve the goals of our strategic plans and recognize the anticipated strategic, operational, growth and efficiency benefits when expected; our ability to identify, complete and successfully integrate acquisitions; changes in our industry; interruptions or security breaches of our information technology systems and other cyber security attacks; our ability to protect proprietary applications; our inability to expand our network infrastructure; our ability to maintain effective internal controls over financial reporting; our ability to continue to attract, motivate and retain a large number of skilled employees, and adapt to the effects of inflationary pressure on wages; changes in our regulatory environment, including healthcare law and regulations; the expansion of privacy and security laws; heightened enforcement activity by government agencies; our ability to pay interest and principal on our notes and other indebtedness; the possibility that we may be adversely affected by other political, economic, business, and/or competitive factors; changes in healthcare utilization patterns of plan members; other factors disclosed in our Securities and Exchange Commission (“SEC”) filings from time to time, including, without limitation, those factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022; and other factors beyond our control. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
There can be no assurance that future developments affecting our business will be those that we have anticipated. Forward-looking statements speak only as of the date made. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash Flow and Adjusted cash conversion ratio. A non-GAAP financial measure is generally defined as a numerical measure of a company’s financial or operating performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP.
EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash Flow and Adjusted cash conversion ratio are supplemental measures of MultiPlan’s performance that are not required by or presented in accordance with GAAP. These measures are not measurements of our financial or operating performance under GAAP, have limitations as analytical tools and should not be considered in isolation or as an alternative to net income, cash flows or any other measures of performance prepared in accordance with GAAP.
Exhibit 99.1
EBITDA represents net income before interest expense, interest income, income tax provision, depreciation, amortization of intangible assets, and non-income taxes. Adjusted EBITDA is EBITDA as further adjusted by certain items as described in the table below.
In addition, in evaluating EBITDA and Adjusted EBITDA you should be aware that in the future, we may incur expenses similar to the adjustments in the presentation of EBITDA and Adjusted EBITDA. The presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The calculations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Based on our industry and debt financing experience, we believe that EBITDA and Adjusted EBITDA are customarily used by investors, analysts and other interested parties to provide useful information regarding a company’s ability to service and/or incur indebtedness.
We also believe that Adjusted EBITDA is useful to investors and analysts in assessing our operating performance during the periods these charges were incurred on a consistent basis with the periods during which these charges were not incurred. Both EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:
•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and
•Although depreciation and amortization are non-cash charges, the tangible assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.
MultiPlan’s presentation of Adjusted EBITDA should not be construed as an inference that our future results and financial position will be unaffected by unusual items.
Free Cash Flow is defined as net cash provided by operating activities less capital expenditures, all as disclosed in the Statements of Cash Flows. Unlevered Free Cash Flow is defined as net cash provided by operating activities less capital expenditures, plus cash interest paid, all as disclosed in the Statements of Cash Flows. Free Cash Flow and Unlevered Free Cash Flow are measures of our operational performance used by management to evaluate our business after purchases of property and equipment and, in the case of Unlevered Free Cash Flow, prior to the impact of our capital structure. Free Cash Flow and Unlevered Free Cash Flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, MultiPlan’s definitions of Free Cash Flow and Unlevered Free Cash Flow are limited, in that they do not represent residual cash flows available for discretionary expenditures, due to the fact that the measures do not deduct the payments required for debt service, in the case of Unlevered Free Cash Flow, and other contractual obligations or payments made for business acquisitions.
Adjusted cash conversion ratio is defined as Unlevered Free Cash Flow divided by Adjusted EBITDA. MultiPlan believes that the presentation of the Adjusted cash conversion ratio provides useful information to investors because it is a financial performance measure that shows how much of its Adjusted EBITDA MultiPlan converts into Unlevered Free Cash Flow.
Exhibit 99.1
We have not reconciled the forward-looking Adjusted EBITDA guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction-related expenses (including expenses relating to the business combination through which we became a public company and litigation related thereto, as well as those related to any acquisitions, whether consummated or not), certain fair value measurements and costs related to the uncertainties caused by the global COVID-19 pandemic, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
Exhibit 99.1
MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
| September 30,<br>2022 | December 31,<br>2021 | |||
|---|---|---|---|---|
| Assets | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ | 439,123 | $ | 185,328 |
| Restricted cash | 2,697 | 3,051 | ||
| Trade accounts receivable, net | 72,317 | 99,905 | ||
| Prepaid expenses | 12,830 | 24,910 | ||
| Prepaid taxes | — | 5,064 | ||
| Other current assets, net | 1,889 | 999 | ||
| Total current assets | 528,856 | 319,257 | ||
| Property and equipment, net | 224,869 | 213,238 | ||
| Operating lease right-of-use assets | 23,837 | 30,104 | ||
| Goodwill | 4,363,121 | 4,363,070 | ||
| Other intangibles, net | 3,029,629 | 3,285,037 | ||
| Other assets, net | 22,127 | 9,701 | ||
| Total assets | $ | 8,192,439 | $ | 8,220,407 |
| Liabilities and Shareholders’ Equity | ||||
| Current liabilities: | ||||
| Accounts payable | $ | 13,559 | $ | 13,005 |
| Accrued interest | 80,622 | 55,685 | ||
| Accrued taxes | 39,782 | — | ||
| Operating lease obligation, short-term | 6,827 | 6,883 | ||
| Current portion of long-term debt | 13,250 | 13,250 | ||
| Accrued compensation | 28,898 | 25,419 | ||
| Other accrued expenses | 47,027 | 27,666 | ||
| Total current liabilities | 229,965 | 141,908 | ||
| Long-term debt | 4,877,011 | 4,879,144 | ||
| Operating lease obligation, long-term | 20,374 | 26,725 | ||
| Private Placement Warrants and Unvested Founder Shares | 13,049 | 74,000 | ||
| Deferred income taxes | 615,003 | 753,825 | ||
| Other liabilities | 55 | 135 | ||
| Total liabilities | 5,755,457 | 5,875,737 | ||
| Commitments and contingencies (Note 6) | ||||
| Shareholders’ equity: | ||||
| Shareholder interests | ||||
| Preferred stock, $0.0001 par value — 10,000,000 shares authorized; no shares issued | — | — | ||
| Common stock, $0.0001 par value — 1,500,000,000 shares authorized; 666,226,067 and 665,456,180 issued; 639,108,661 and 638,338,774 shares outstanding | 67 | 67 | ||
| Additional paid-in capital | 2,326,746 | 2,311,660 | ||
| Retained earnings | 302,338 | 225,112 | ||
| Treasury stock — 27,117,406 and 27,117,406 shares | (192,169) | (192,169) | ||
| Total shareholders’ equity | 2,436,982 | 2,344,670 | ||
| Total liabilities and shareholders’ equity | $ | 8,192,439 | $ | 8,220,407 |
Exhibit 99.1
MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income
(in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| Revenues | $ | 250,453 | $ | 288,212 | $ | 838,627 | $ | 819,348 |
| Costs of services (exclusive of depreciation and amortization of intangible assets shown below) | 53,012 | 44,588 | 150,061 | 128,686 | ||||
| General and administrative expenses | 58,434 | 38,221 | 131,107 | 110,144 | ||||
| Depreciation | 17,481 | 15,783 | 51,248 | 48,956 | ||||
| Amortization of intangible assets | 85,127 | 85,167 | 255,408 | 255,042 | ||||
| Total expenses | 214,054 | 183,759 | 587,824 | 542,828 | ||||
| Operating income | 36,399 | 104,453 | 250,803 | 276,520 | ||||
| Interest expense | 77,087 | 67,512 | 221,228 | 195,233 | ||||
| Interest income | (886) | (8) | (944) | (19) | ||||
| Loss on extinguishment of debt | — | 15,823 | — | 15,823 | ||||
| Gain on investments | — | — | (289) | (25) | ||||
| Gain on change in fair value of Private Placement Warrants and Unvested Founder Shares | (48,851) | (76,636) | (56,443) | (35,451) | ||||
| Net income before taxes | 9,049 | 97,762 | 87,251 | 100,959 | ||||
| (Benefit) provision for income taxes | (10,687) | 19,565 | 10,025 | 23,817 | ||||
| Net income | $ | 19,736 | $ | 78,197 | $ | 77,226 | $ | 77,142 |
| Weighted average shares outstanding – Basic | 639,073,949 | 652,520,691 | 638,859,792 | 654,414,644 | ||||
| Weighted average shares outstanding – Diluted | 639,850,455 | 652,882,405 | 639,590,184 | 654,816,495 | ||||
| Net income per share – Basic | $ | 0.03 | $ | 0.12 | $ | 0.12 | $ | 0.12 |
| Net income per share – Diluted | $ | 0.03 | $ | 0.12 | $ | 0.12 | $ | 0.12 |
| Comprehensive income | $ | 19,736 | $ | 78,197 | $ | 77,226 | $ | 77,142 |
Exhibit 99.1
MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
| Nine Months Ended September 30, | ||||
|---|---|---|---|---|
| 2022 | 2021 | |||
| Operating activities: | ||||
| Net income | $ | 77,226 | $ | 77,142 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||
| Depreciation | 51,248 | 48,956 | ||
| Amortization of intangible assets | 255,408 | 255,042 | ||
| Amortization of the right-of-use asset | 4,924 | 5,306 | ||
| Stock-based compensation | 11,298 | 13,194 | ||
| Deferred income taxes | (138,873) | (66,930) | ||
| Non-cash interest costs | 7,841 | 9,500 | ||
| Loss on extinguishment of debt | — | 15,823 | ||
| Gain on equity investments | (289) | — | ||
| Loss on disposal of property and equipment | 1,110 | 2,366 | ||
| Gain on change in fair value of Private Placement Warrants and Unvested Founder Shares | (56,443) | (35,451) | ||
| Changes in assets and liabilities, net of assets acquired and liabilities assumed from acquisitions: | ||||
| Accounts receivable, net | 27,588 | (480) | ||
| Prepaid expenses and other assets | 13,764 | 4,655 | ||
| Prepaid taxes | 5,064 | (38) | ||
| Operating lease obligation | (4,844) | (4,962) | ||
| Accounts payable and accrued expenses and other | 89,653 | 47,303 | ||
| Net cash provided by operating activities | 344,675 | 371,426 | ||
| Investing activities: | ||||
| Purchases of property and equipment | (64,209) | (57,198) | ||
| Proceeds from sale of investment | 289 | 5,641 | ||
| Purchase of equity investments | (15,000) | — | ||
| HST Acquisition, net of cash acquired | — | 36 | ||
| DHP Acquisition, net of cash acquired | — | (149,676) | ||
| Net cash used in investing activities | (78,920) | (201,197) | ||
| Financing activities: | ||||
| Repayments of Term Loan G | — | (2,341,000) | ||
| Repayments of Term Loan B | (9,938) | — | ||
| Issuance of Term Loan B | — | 1,298,951 | ||
| Issuance of 5.500% Senior Secured Notes | — | 1,034,597 | ||
| Taxes paid on settlement of vested share awards | (2,376) | (3,312) | ||
| Purchase of treasury stock | — | (61,080) | ||
| Net cash used in financing activities | (12,314) | (71,844) | ||
| Net increase in cash, cash equivalents and restricted cash | 253,441 | 98,385 | ||
| Cash, cash equivalents and restricted cash at beginning of period | 188,379 | 126,755 | ||
| Cash, cash equivalents and restricted cash at end of period | $ | 441,820 | $ | 225,140 |
| Cash and cash equivalents | $ | 439,123 | $ | 225,140 |
| Restricted cash | 2,697 | — | ||
| Cash, cash equivalents and restricted cash at end of period | $ | 441,820 | $ | 225,140 |
| Noncash investing and financing activities: | ||||
| Purchases of property and equipment not yet paid | $ | 6,315 | $ | 6,160 |
| Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ | 2,258 | $ | 795 |
| Supplemental disclosure of cash flow information: | ||||
| Cash paid during the period for: | ||||
| Interest | $ | (187,834) | $ | (136,951) |
| Income taxes, net of refunds | $ | (104,693) | $ | (101,635) |
Exhibit 99.1
MULTIPLAN CORPORATION
Calculation of EBITDA and Adjusted EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||
| Net income | $ | 19,736 | $ | 78,197 | $ | 77,226 | $ | 77,142 |
| Adjustments: | ||||||||
| Interest expense | 77,087 | 67,512 | 221,228 | 195,233 | ||||
| Interest income | (886) | (8) | (944) | (19) | ||||
| (Benefit) provision for income taxes | (10,687) | 19,565 | 10,025 | 23,817 | ||||
| Depreciation | 17,481 | 15,783 | 51,248 | 48,956 | ||||
| Amortization of intangible assets | 85,127 | 85,167 | 255,408 | 255,042 | ||||
| Non-income taxes | 76 | 105 | 1,069 | 1,107 | ||||
| EBITDA | $ | 187,934 | $ | 266,321 | $ | 615,260 | $ | 601,278 |
| Adjustments: | ||||||||
| Other expenses, net | 553 | 3,569 | 2,206 | 4,280 | ||||
| Integration expenses | 1,066 | 2,991 | 3,762 | 7,679 | ||||
| Gain on change in fair value of Private Placement Warrants and Unvested Founder Shares | (48,851) | (76,636) | (56,443) | (35,451) | ||||
| Transaction-related expenses | 27,408 | 1,541 | 31,420 | 7,972 | ||||
| Gain on investments | — | — | (289) | (25) | ||||
| Loss on extinguishment of debt | — | 15,823 | — | 15,823 | ||||
| Stock-based compensation | 4,064 | 4,752 | 11,298 | 13,194 | ||||
| Adjusted EBITDA | $ | 172,174 | $ | 218,361 | $ | 607,214 | $ | 614,750 |
Calculation of Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||
| Net cash provided by operating activities | $ | 109,036 | $ | 167,037 | $ | 344,675 | $ | 371,426 | ||||
| Purchases of property and equipment | (20,810) | (20,411) | (64,209) | (57,198) | ||||||||
| Free Cash Flow | 88,226 | 146,626 | 280,466 | 314,228 | ||||||||
| Interest paid | 48,821 | 13,836 | 187,834 | 136,951 | ||||||||
| Unlevered Free Cash Flow | $ | 137,047 | $ | 160,462 | $ | 468,300 | $ | 451,179 | ||||
| Adjusted EBITDA | $ | 172,174 | $ | 218,361 | $ | 607,214 | $ | 614,750 | ||||
| Adjusted Cash Conversion Ratio | 80 | % | 73 | % | 77 | % | 73 | % | ||||
| Net cash used in investing activities | $ | (20,810) | $ | (20,347) | $ | (78,920) | $ | (201,197) | ||||
| Net cash used in financing activities | $ | (3,493) | $ | (69,521) | $ | (12,314) | $ | (71,844) |