8-K
LifeStance Health Group, Inc. (LFST)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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): August 11, 2021 |
|---|
LifeStance Health Group, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-40478 | 86-1832801 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 4800 N. Scottsdale Road<br><br>Suite 6000 | ||
| Scottsdale, Arizona | 85251 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 425 279-8500 | ||
| --- |
(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:
☐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 |
|---|---|---|
| Common Stock, par value $0.01 per share | LFST | The NASDAQ Stock Market LLC |
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 2.02 Results of Operations and Financial Condition.
On August 11, 2021, LifeStance Health Group, Inc. (“LifeStance Health Group”) issued a press release announcing its results of operations for the second quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1. The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference into LifeStance Health Group's filings with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
A slide presentation, which includes supplemental information related to LifeStance Health Group, is furnished as Exhibit 99.2. The information furnished under Item 7.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into LifeStance Health Group's filings with the SEC under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
A copy of the press release is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit | Description |
|---|---|
| 99.1 | Press Release dated August 11, 2021. |
| 99.2 | Slide presentation providing supplemental information. |
| 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 thereunto duly authorized.
| LifeStance Health Group, Inc. | |||
|---|---|---|---|
| Date: | August 11, 2021 | By: | /s/ J. Michael Bruff |
| J. Michael Bruff<br>Chief Financial Officer<br>(principal financial and accounting officer) |
EX-99.1
Exhibit 99.1
Investor Relations Contact
Monica Prokocki
VP of Investor Relations
425-279-8500
investorrelations@lifestance.com
LifeStance Health Reports Second Quarter 2021 Results
Second Quarter 2021 Highlights
Revenue of $160.5 million increased $76.5 million or 91%1 compared to revenue of $38.6 million for the period from April 1, 2020 to May 14, 2020 (Predecessor) and $45.4 million for the period from April 13, 2020 to June 30, 2020 (Successor)
Total clinicians of 3,975 up 94% year over year, including 674 net clinician adds in the second quarter
Net loss was $70.0 million compared to net loss of $27.6 million for the period from April 1, 2020 to May 14, 2020 (Predecessor) and $4.3 million for the period from April 13, 2020 to June 30, 2020 (Successor)
Adjusted EBITDA of $14.5 million increased $4.1 million or 39%1 compared to Adjusted EBITDA of $4.4 million for the period from April 1, 2020 to May 14, 2020 (Predecessor) and $6.0 million for the period from April 13, 2020 to June 30, 2020 (Successor)
Successfully completed initial public offering (IPO) on the Nasdaq Global Select Market on June 10, 2021; net proceeds of $548.9 million used to retire debt and for general corporate purposes
Established the LifeStance Health Foundation with initial endowment of $10.0 million; announced partnership with The Mental Health Coalition to help end the stigma around mental health conditions and committed $30,000 to the U.S. Olympic & Paralympic Foundation in support of athletes' mental health
Initiating 2021 guidance: Revenue of $668 million to $678 million; Center Margin of $198 million to $208 million; Adjusted EBITDA of $47 million to $53 million
SCOTTSDALE, Ariz. - August 11, 2021 – LifeStance Health Group, Inc. (NASDAQ: LFST), one of the nation’s largest providers of outpatient mental health care, today announced financial results for the second quarter ended June 30, 2021.
“LifeStance delivered strong performance in our inaugural quarter as a public company, achieving year over year revenue growth of 91%1,” said Michael Lester, CEO, LifeStance Health. “Increasing access to mental health care services is more important than ever. We are well positioned to continue to grow as we help address our nation’s mental health needs every day and deliver personalized care, one patient at a time, both virtually and in-person. I am extremely proud of the efforts of our purpose-led organization to reimagine mental health through a tech-enabled care delivery model built to expand access, tackle affordability, improve outcomes and lower overall health care costs.”
| Financial Highlights | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Successor | Predecessor | ||||||||
| Three months ended<br>June 30, 2021 | April 13 to<br>June 30, 2020 | April 1 to<br>May 14, 2020 | |||||||
| (in thousands) | |||||||||
| Total revenue | $ | 160.5 | $ | 45.4 | $ | 38.6 | |||
| (Loss) income from operations | (47.0 | ) | 0.1 | 3.1 | |||||
| Center Margin | 51.2 | 14.2 | 11.4 | ||||||
| Net loss | (70.0 | ) | (4.3 | ) | (27.6 | ) | |||
| Adjusted EBITDA | 14.5 | 6.0 | 4.4 | ||||||
| As % of Total Revenue: | |||||||||
| (Loss) income from operations | (29.3 | %) | 0.2 | % | 7.9 | % | |||
| Center Margin | 31.9 | % | 31.2 | % | 29.6 | % | |||
| Net loss | (43.6 | %) | (9.6 | %) | (71.6 | %) | |||
| Adjusted EBITDA | 9.1 | % | 13.2 | % | 11.5 | % |
Second Quarter 2021 Results
Total revenue was $160.5 million, up 91%1 year over year primarily driven by a 94% increase in clinicians through both organic hiring and acquisitions.
Trailing twelve-month2 revenue was $523.8 million. This represents an increase of 88% year over year.
Loss from operations3 was $47.0 million, driven by stock and unit-based compensation of $29.5 million, a $10.0 million endowment to the LifeStance Health Foundation, and $8.1 million in Director and Officer insurance expense incurred in connection with the IPO. Net loss was $70.0 million.
Center Margin was $51.2 million, up 100%1 year over year, and 31.9% of total revenue, primarily driven by the continued clinician ramp in prior year de novo centers.
Adjusted EBITDA was $14.5 million, up 39%1 year over year. Strong Center Margin growth was partially offset by an increase in general and administrative costs driven by investments in growth initiatives and public company infrastructure.
Strategy and Key Developments
During the second quarter, LifeStance took several actions in support of its strategy:
Added a net of 674 clinicians who are empowered to improve the lives of their patients
Opened 35 de novo Centers, building upon our first-mover advantage
Entered 5 new states, expanding our geographic footprint
Completed 10 acquisitions, supporting both organic and inorganic growth priorities
These actions are consistent with the Company’s strategy to expand into new markets, build market density, and offer a technology enabled experience for our patients and clinicians.
Balance Sheet, Cash Flow and Capital Allocation
LifeStance listed its shares on the Nasdaq Global Select Market on June 10, 2021, in conjunction with the Company’s initial public offering. In total, 46.0 million shares of its common stock were sold consisting of 32.8 million shares sold by LifeStance and 13.2 million shares sold by certain existing stockholders, including the full exercise by the underwriters of their option to purchase up to 6.0 million additional shares.
The Company received net proceeds of $548.9 million from the IPO after deducting customary offering expenses. The Company used $294.0 million of proceeds for debt principal repayment, with the remaining proceeds retained for general corporate purposes. For the six months ended June 30, 2021, cash flow used in operations was $7.0 million, which included an $8.8 million charge in connection with the voluntary prepayment of outstanding debt.
LifeStance ended the second quarter with cash of $276.2 million, long-term debt of $158.7 million, and full availability of a $20 million undrawn revolving credit facility.
2021 Guidance
The Company is establishing financial guidance for 2021:
| Full Year | |
|---|---|
| Total revenue | $668 million – $678 million |
| Center Margin | $198 million – $208 million |
| Adjusted EBITDA | $47 million – $53 million |
For Q3 and Q4 2021 we expect the following:
| Q3 | Q4 | |
|---|---|---|
| Total revenue | $168 million – $173 million | $196 million – $201 million |
| Center Margin | $47 million – $52 million | $56 million – $61 million |
| Adjusted EBITDA | $8 million – $11 million | $12 million – $15 million |
Our guidance reflects revenue and clinician base growth that is higher than company expectations from earlier this year driven by continued strength in new clinician hiring and new center additions, partially offset by a recent change in clinician retention levels that is consistent with the broader healthcare industry for 2021. Additionally, it includes increased investments in infrastructure and operations to support and sustain our long-term growth opportunities.
Full-year guidance does not assume any material changes in the current environment as it pertains to the COVID-19 pandemic and the state of variants, as well as the current labor market conditions.
Footnotes:
(1) Reflects a year over year comparison to the same period in the prior year which includes the summation of the Predecessor Period April 1 to May 14, 2020 and Successor Period of April 13 to June 30, 2020. This is not intended to be a substitute for financial reporting periods presented in accordance with GAAP. For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the "TPG Acquisition"), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
(2) Trailing twelve-month growth is calculated as the difference in revenue between July 1, 2020 – June 30, 2021 compared to July 1, 2019 – June 30, 20201.
(3) Includes stock and unit-based compensation of $29.5 million, a $10.0 million endowment to the LifeStance Health Foundation, and $8.1 million in Director and Officer insurance incurred in connection with the IPO. The increase in stock and unit-based compensation was primarily due to the modification of vesting terms of equity awards in connection with the IPO.
Conference Call, Webcast Information, and Presentations
LifeStance Health will hold a conference call today, August 11, at 5:00 p.m. Eastern Time to discuss second quarter 2021 results. Investors who wish to participate in the call should dial 1-888-660-0230, domestically, or 1-409-217-8218, internationally approximately 10 minutes before the call begins and provide conference ID number 4165046 or ask to be joined into the LifeStance Health call. A real-time audio webcast can be accessed via the Events and Presentations section of the LifeStance Health Investor Relations website (https://investor.lifestance.com), where related materials will be posted prior to the conference call.
About LifeStance Health Group, Inc.
Founded in 2017, LifeStance Health (NASDAQ: LFST) is reimagining mental health. We are one of the nation’s largest providers of virtual and in-person outpatient mental health care for children, adolescents and adults experiencing a variety of mental health conditions. Our mission is to help people lead healthier, more fulfilling lives by improving access to trusted, affordable and personalized mental healthcare. LifeStance Health employs nearly 4,000 psychiatrists, advanced practice nurses, psychologists and therapists and operates across 31 states and 468 centers. To learn more, please visit www.LifeStance.com.
Forward-Looking Statements
Statements in this press release and on the related teleconference that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements. These statements include, but are not limited to, statements about the Company’s financial position; business plans and objectives; general economic and industry trends; operating results; and working capital and liquidity and other statements contained in this presentation that are not historical facts. When used in this press release and on the related teleconference, words such as “may,” “will,” “should,” “could,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “seek” and similar expressions as they relate to us are intended to identify forward-looking statements. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to, we may not grow at the rates we historically have achieved or at all, even if our key metrics may imply future growth, including if we are unable to successfully execute on our growth initiatives and business strategies; if we fail to manage our growth effectively, our expenses could increase more than expected, our revenue may not increase proportionally or at all, and we may be unable to execute on our business strategy; if reimbursement rates paid by third-party payors are reduced or if third-party payors otherwise restrain our ability to obtain or deliver care to patients, our business could be harmed; we conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, results of operations and financial condition; we are dependent on our relationships with affiliated practices, which we do not own, to provide health care services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities became subject to legal challenges; we operate in a competitive industry, and if we are not able to compete effectively, our business, results of operations and financial condition would be harmed; the impact of health care reform legislation and other changes in the healthcare industry and in health care spending on us is currently unknown, but may harm our business; if our or our vendors’ security measures fail or are breached and unauthorized access to our employees’, patients’ or partners’ data is obtained, our systems may be perceived as insecure, we may incur significant liabilities, including through private litigation or regulatory action, our reputation may be harmed, and we could lose patients and partners; our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems; our existing indebtedness could adversely affect our business and growth prospects; and other risks and uncertainties set forth under “Risk Factors” in the final prospectus, dated June 9, 2021, for the Company’s initial public offering. LifeStance does not undertake to update any forward-looking statements made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based, except as otherwise required by law.
Non-GAAP Financial Information
This press release contains certain non-GAAP financial measures, including Center Margin, Adjusted EBITDA, and Adjusted EBITDA margin. Tables showing the reconciliation of these non-GAAP financial measures to the comparable GAAP measures are included at the end of this release. Management believes these non-GAAP financial measures are useful in evaluating the Company’s operating performance, and may be helpful to securities analysts, institutional investors and other interested parties in understanding the Company’s operating performance and prospects. These non-GAAP financial measures, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. Therefore, the Company’s non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, such as net income (loss) or income (loss) from operations.
Center Margin and Adjusted EBITDA anticipated for 2021 are calculated in a manner consistent with the historical presentation of these measures at the end of this release. Reconciliations for our forward-looking Center Margin and Adjusted EBITDA guidance is not being provided, as LifeStance does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations. LifeStance management therefore cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.
Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results.
# #
Consolidated Financial Information and Reconciliations
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except for par value)
| December 31, 2020 | |||||
| CURRENT ASSETS | |||||
| Cash and cash equivalents | 276,187 | $ | 18,829 | ||
| Patient accounts receivable | 60,069 | 43,706 | |||
| Prepaid expenses and other current assets | 27,804 | 13,745 | |||
| Total current assets | 364,060 | 76,280 | |||
| NONCURRENT ASSETS | |||||
| Property and equipment, net | 91,799 | 59,349 | |||
| Intangible assets, net | 316,534 | 332,796 | |||
| Goodwill | 1,138,734 | 1,098,659 | |||
| Deposits | 3,300 | 2,647 | |||
| Total noncurrent assets | 1,550,367 | 1,493,451 | |||
| Total assets | 1,914,427 | $ | 1,569,731 | ||
| LIABILITIES, REDEEMABLE UNITS AND STOCKHOLDERS'/MEMBERS’ EQUITY | |||||
| CURRENT LIABILITIES | |||||
| Accounts payable | 9,958 | $ | 7,688 | ||
| Accrued payroll expenses | 50,380 | 38,024 | |||
| Other accrued expenses | 38,783 | 14,685 | |||
| Current portion of contingent consideration | 10,876 | 10,563 | |||
| Other current liabilities | 2,561 | 4,961 | |||
| Total current liabilities | 112,558 | 75,921 | |||
| NONCURRENT LIABILITIES | |||||
| Long-term debt, net | 157,067 | 362,534 | |||
| Other noncurrent liabilities | 15,704 | 11,363 | |||
| Contingent consideration, net of current portion | 3,247 | 5,851 | |||
| Deferred tax liability, net | 81,219 | 81,226 | |||
| Total noncurrent liabilities | 257,237 | 460,974 | |||
| Total liabilities | 369,795 | $ | 536,895 | ||
| COMMITMENT AND CONTINGENCIES (see Note 16) | |||||
| REDEEMABLE UNITS | |||||
| Redeemable Class A units – 0 and 35,000 units authorized, issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | — | 35,000 | |||
| STOCKHOLDERS’/MEMBERS’ EQUITY | |||||
| Common units A-1 – 0 and 959,563 units authorized, issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | — | 959,563 | |||
| Common units A-2 – 0 and 49,946 units authorized, issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | — | 49,946 | |||
| Common units B – 0 and 179,000 units authorized as of June 30, 2021 and December 31, 2020, respectively; no units issued and outstanding as of June 30, 2021 and December 31, 2020 | — | — | |||
| Preferred stock – par value 0.01 per share; 25,000 and 0 shares authorized as of June 30, 2021 and December 31, 2020, respectively; no shares issued and outstanding as of June 30, 2021 and December 31, 2020 | — | — | |||
| Common stock – par value 0.01 per share; 800,000 and 0 shares authorized as of June 30, 2021 and December 31, 2020, respectively; 374,149 and 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 3,742 | — | |||
| Additional paid-in capital | 1,669,480 | 1,452 | |||
| Accumulated deficit | (128,590 | ) | (13,125 | ) | |
| Total stockholders'/members’ equity | 1,544,632 | 997,836 | |||
| Total liabilities, redeemable units and stockholders’/members’ equity | 1,914,427 | $ | 1,569,731 |
All values are in US Dollars.
CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS)
(unaudited)
(In thousands, except for Net Loss per Share)
| Successor | Predecessor | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended<br>June 30, 2021 | Six months ended<br>June 30, 2021 | April 13 to<br>June 30, 2020* | April 1 to<br>May 14, 2020 | January 1 to <br>May 14, 2020 | |||||||||||
| TOTAL REVENUE | $ | 160,549 | $ | 303,681 | $ | 45,453 | $ | 38,555 | $ | 111,661 | |||||
| OPERATING EXPENSES | |||||||||||||||
| Center costs, excluding<br> depreciation and amortization<br> shown separately below | 109,341 | 208,475 | 31,275 | 27,143 | 78,777 | ||||||||||
| General and administrative<br> expenses | 85,479 | 118,130 | 8,642 | 7,192 | 20,854 | ||||||||||
| Depreciation and amortization | 12,774 | 25,002 | 5,432 | 1,160 | 3,335 | ||||||||||
| Total operating expenses | $ | 207,594 | $ | 351,607 | $ | 45,349 | $ | 35,495 | $ | 102,966 | |||||
| (LOSS) INCOME FROM<br> OPERATIONS | $ | (47,045 | ) | $ | (47,926 | ) | $ | 104 | $ | 3,060 | $ | 8,695 | |||
| OTHER INCOME (EXPENSE) | |||||||||||||||
| (Loss) gain on remeasurement<br> of contingent consideration | (250 | ) | (557 | ) | (51 | ) | (32 | ) | 322 | ||||||
| Transaction costs | (1,996 | ) | (3,530 | ) | (181 | ) | (32,294 | ) | (33,247 | ) | |||||
| Interest expense | (23,174 | ) | (31,806 | ) | (5,562 | ) | (1,340 | ) | (3,020 | ) | |||||
| Other expense | (1,356 | ) | (1,445 | ) | (22 | ) | (14 | ) | (14 | ) | |||||
| Total other expense | $ | (26,776 | ) | $ | (37,338 | ) | $ | (5,816 | ) | $ | (33,680 | ) | $ | (35,959 | ) |
| LOSS BEFORE INCOME<br> TAXES | (73,821 | ) | (85,264 | ) | (5,712 | ) | (30,620 | ) | (27,264 | ) | |||||
| INCOME TAX BENEFIT | 3,788 | 6,549 | 1,370 | 3,022 | 2,319 | ||||||||||
| NET LOSS AND<br> COMPREHENSIVE LOSS | $ | (70,033 | ) | $ | (78,715 | ) | $ | (4,342 | ) | $ | (27,598 | ) | $ | (24,945 | ) |
| Accretion of Redeemable Class<br> A units | — | (36,750 | ) | — | — | — | |||||||||
| Accretion of Series A-1<br> redeemable convertible<br> preferred units (Note 12) | — | — | — | (272,582 | ) | (272,582 | ) | ||||||||
| Cumulative dividend on Series<br> A redeemable convertible<br> preferred units (Note 12) | — | — | — | (217 | ) | (662 | ) | ||||||||
| NET LOSS AVAILABLE TO<br> COMMON<br> STOCKHOLDERS/MEMBERS | $ | (70,033 | ) | $ | (115,465 | ) | $ | (4,342 | ) | $ | (300,397 | ) | $ | (298,189 | ) |
| NET LOSS PER SHARE, BASIC<br> AND DILUTED | (0.22 | ) | (0.37 | ) | (0.01 | ) | |||||||||
| Weighted-average shares used to<br> compute basic and diluted net<br> loss per share | 313,536 | 309,559 | 297,237 |
* For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the TPG Acquisition, which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
| Successor | Predecessor | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Six months ended <br>June 30, 2021 | April 13 to<br>June 30, 2020* | January 1 to<br>May 14, 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net loss | $ | (78,715 | ) | $ | (4,342 | ) | $ | (24,945 | ) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating<br> activities: | |||||||||
| Depreciation and amortization | 25,002 | 5,432 | 3,335 | ||||||
| Stock and unit-based compensation | 30,120 | 292 | — | ||||||
| Deferred income taxes | — | 2,866 | (2,345 | ) | |||||
| Loss on debt extinguishment | 5,620 | 3,066 | — | ||||||
| Amortization of debt issue costs | 1,081 | 135 | 215 | ||||||
| Loss (gain) on remeasurement of contingent consideration | 557 | 51 | (322 | ) | |||||
| Endowment of shares to LifeStance Health Foundation | 9,000 | — | — | ||||||
| Change in operating assets and liabilities, net of businesses acquired: | |||||||||
| Patient accounts receivable | (11,831 | ) | (2,463 | ) | (5,122 | ) | |||
| Prepaid expenses and other current assets | (14,964 | ) | (4,394 | ) | (4,526 | ) | |||
| Accounts payable | 2,261 | 891 | (1,638 | ) | |||||
| Accrued payroll expenses | 9,580 | (3,844 | ) | 8,753 | |||||
| Other accrued expenses | 15,283 | (35,007 | ) | 40,031 | |||||
| Net cash (used in) provided by operating activities | (7,006 | ) | (37,317 | ) | 13,436 | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Purchases of property and equipment | (31,803 | ) | (5,120 | ) | (12,804 | ) | |||
| Acquisition of Predecessor, net of cash acquired | — | (643,717 | ) | — | |||||
| Acquisitions of businesses, net of cash acquired | (39,126 | ) | (22,376 | ) | (12,274 | ) | |||
| Net cash used in investing activities | (70,929 | ) | (671,213 | ) | (25,078 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Proceeds from initial public offering, net of underwriters discounts and<br> commissions and deferred offering costs | 554,169 | — | — | ||||||
| Issuance of common units to new investors | 1,000 | — | — | ||||||
| Contributions from Members related to acquisition of Predecessor | — | 633,585 | — | ||||||
| Repurchase of Series A redeemable convertible preferred units | — | — | (1,000 | ) | |||||
| Proceeds from long-term debt | 98,800 | 235,900 | 74,350 | ||||||
| Payments of debt issue costs | (2,360 | ) | (6,411 | ) | (650 | ) | |||
| Payments of long-term debt | (310,729 | ) | (138,540 | ) | (18,222 | ) | |||
| Payments of contingent consideration | (5,587 | ) | (2,200 | ) | (19,093 | ) | |||
| Net cash provided by financing activities | 335,293 | 722,334 | 35,385 | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 257,358 | 13,804 | 23,743 | ||||||
| Cash and Cash Equivalents - Beginning of period | 18,829 | — | 3,481 | ||||||
| CASH AND CASH EQUIVALENTS – END OF PERIOD | $ | 276,187 | $ | 13,804 | $ | 27,224 | |||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||
| Cash paid for interest and prepayment premium | $ | 24,889 | $ | 2,773 | $ | 2,857 | |||
| Cash paid for taxes | $ | 900 | $ | — | $ | 25 | |||
| SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND<br> FINANCING ACTIVITIES | |||||||||
| Unpaid deferred offering costs included in accounts payable and<br> other accrued expenses | $ | 5,264 | $ | — | $ | — | |||
| Equipment financed through capital leases | $ | 14 | $ | 1 | $ | 415 | |||
| Contingent consideration incurred in acquisitions of businesses | $ | 2,739 | $ | 3,191 | $ | 3,788 | |||
| Acquisition of property and equipment included in liabilities | $ | 10,233 | $ | 2,694 | $ | 2,718 | |||
| Issuance of common units for convertible promissory note conversion | $ | — | $ | 511 | $ | — | |||
| Issuance of common units for acquisitions of businesses | $ | 1,486 | $ | 4,500 | $ | — |
* For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the TPG Acquisition, which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
RECONCILATION OF (LOSS) INCOME FROM OPERATIONS TO CENTER MARGIN
| Successor | Predecessor | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended<br>June 30, 2021 | Six months ended<br>June 30, 2021 | April 13 to<br>June 30, 2020 | April 1 to<br>May 14, 2020 | January 1 to <br>May 14, 2020 | ||||||||
| (in thousands) | ||||||||||||
| (Loss) income from operations | $ | (47,045 | ) | $ | (47,926 | ) | $ | 104 | $ | 3,060 | $ | 8,695 |
| Adjusted for: | ||||||||||||
| Depreciation and amortization | 12,774 | 25,002 | 5,432 | 1,160 | 3,335 | |||||||
| General and administrative<br> expenses (1) | 85,479 | 118,130 | 8,642 | 7,192 | 20,854 | |||||||
| Center Margin | $ | 51,208 | $ | 95,206 | $ | 14,178 | $ | 11,412 | $ | 32,884 |
(1) Represents salaries, wages and employee benefits for our executive leadership, finance, human resources, marketing, billing and credentialing support and technology infrastructure.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
| Successor | Predecessor | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended<br>June 30, 2021 | Six months ended<br>June 30, 2021 | April 13 to<br>June 30, 2020 | April 1 to<br>May 14, 2020 | January 1 to <br>May 14, 2020 | |||||||||||
| (in thousands) | |||||||||||||||
| Net loss | $ | (70,033 | ) | $ | (78,715 | ) | $ | (4,342 | ) | $ | (27,598 | ) | $ | (24,945 | ) |
| Adjusted for: | |||||||||||||||
| Interest expense | 23,174 | 31,806 | 5,562 | 1,340 | 3,020 | ||||||||||
| Depreciation and amortization | 12,774 | 25,002 | 5,432 | 1,160 | 3,335 | ||||||||||
| Income tax benefit | (3,788 | ) | (6,549 | ) | (1,370 | ) | (3,022 | ) | (2,319 | ) | |||||
| Loss (gain) on remeasurement<br> of contingent consideration | 250 | 557 | 51 | 32 | (322 | ) | |||||||||
| Stock and unit-based<br> compensation | 29,515 | 30,120 | 292 | — | — | ||||||||||
| Management fees (1) | 1,356 | 1,445 | 16 | 14 | 14 | ||||||||||
| Loss on disposal of assets | — | — | 6 | — | — | ||||||||||
| Transaction costs (2) | 1,996 | 3,530 | 181 | 32,294 | 33,247 | ||||||||||
| Offering related costs (3) | 8,747 | 8,747 | — | — | — | ||||||||||
| Endowment to the LifeStance<br> Health Foundation | 10,000 | 10,000 | — | — | — | ||||||||||
| Other expenses (4) | 544 | 1,176 | 182 | 228 | 635 | ||||||||||
| Adjusted EBITDA | $ | 14,535 | $ | 27,119 | $ | 6,010 | $ | 4,448 | $ | 12,665 |
(1) Represents management fees paid to certain of our executive officers and affiliates of our principal stockholders pursuant to the management services agreement entered into in connection with the TPG Acquisition. The management services agreement terminated in connection with the IPO and Company were required to pay a one-time fee of $1.2 million to such parties.
(2) Primarily includes capital markets advisory, consulting, accounting and legal expenses related to our acquisitions and costs related to the TPG Acquisition. Of the transaction costs incurred in the period from January 1, 2020 to May 14, 2020 (Predecessor), $32.9 million relate to the TPG Acquisition.
(3) Primarily includes non-recurring incremental professional services, such as accounting and legal, and directors' and officers' insurance incurred in connection with the IPO.
(4) Primarily includes costs incurred to consummate or integrate acquired centers, certain of which are wholly-owned and certain of which are affiliated practices, in addition to the compensation paid to former owners of acquired centers and related expenses that are not reflective of the ongoing operating expenses of our centers. Acquired center integration, former owner fees, and other are components of general and administrative expenses included in our consolidated statement of income (loss). Impairment on loans is a component of center costs, excluding depreciation and amortization included in our consolidated statement of income (loss).
Q2 2021 Earnings Presentation August 11, 2021 Exhibit 99.2
Forward-Looking Statements DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements about LifeStance Health Group, Inc. and its subsidiaries (“LifeStance”) and the industry in which LifeStance operates, including statements regarding future results of operations and financial position of LifeStance, which are subject to known and unknown uncertainties and contingencies outside of LifeStance’s control and which are largely based on our current expectations and projections about future events and financial trends that we believe may affect LifeStance’s financial condition, results of operations, business strategy, and prospects. LifeStance’s actual results, events, or circumstances may differ materially from these statements. Forward-looking statements include all statements that are not historical facts. Words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties, factors and assumptions, including, among other things: we may not grow at the rates we historically have achieved or at all, even if our key metrics may imply future growth, including if we are unable to successfully execute on our growth initiatives and business strategies; if we fail to manage our growth effectively, our expenses could increase more than expected, our revenue may not increase proportionally or at all, and we may be unable to execute on our business strategy; if reimbursement rates paid by third-party payors are reduced or if third-party payors otherwise restrain our ability to obtain or deliver care to patients, our business could be harmed; we conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, results of operations and financial condition; we are dependent on our relationships with affiliated practices, which we do not own, to provide health care services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities became subject to legal challenges; we operate in a competitive industry, and if we are not able to compete effectively, our business, results of operations and financial condition would be harmed; the impact of health care reform legislation and other changes in the healthcare industry and in health care spending on us is currently unknown, but may harm our business; if our or our vendors’ security measures fail or are breached and unauthorized access to our employees’ patients’ or partners’ data is obtained, our systems may be perceived as insecure, we may incur significant liabilities, including through private litigation or regulatory action, our reputation may be harmed, and we could lose patients and partners; our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems; our existing indebtedness could adversely affect our business and growth prospects; and the other factors set forth in our filings with the Securities and Exchange Commission. The forward-looking statements, together with statements relating to our past performance, should not be regarded as a reliable indicator of our future performance. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, except as may be required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation includes certain non-GAAP financial measures, including Center Margin and Adjusted EBITDA. These non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The non-GAAP financial measures used by LifeStance may differ from the non-GAAP financial measures used by other companies. A reconciliation of these measures to the most directly comparable U.S. GAAP measure is included in the Appendix to these slides or as otherwise described in these slides. Market and Industry Data This presentation also contains information regarding our market and industry that is derived from third-party research and publications. This information involves a number of assumptions and limitations. While we believe the information in this presentation is generally reliable, forecasts, assumptions, expectations, beliefs, estimates and projections involve risk and uncertainties and are subject to change based on various factors.
Mike Lester President, Chief Executive Officer and Co-Founder
LifeStance Health – Successful IPO Trading Date June 10, 2021 Shares Offered 46M Offering Price (upsized from $15-$17) $18 NASDAQ Ticker LFST First Day Closing Price (up 22%) $22 First Day Closing Market Cap $8.2B
President, Chief Executive Officer and Co-Founder Danish Qureshi Chief Growth Officer and Co-Founder Mike Lester J. Michael Bruff Chief Financial Officer Today’s Presenters
Key Highlights 1. Adjusted EBITDA is a non-GAAP financial measure. See “Appendix” for a reconciliation to net income (loss). 2. Reflects a year over year comparison to the same period in the prior year which includes the summation of the Predecessor Period April 1 to May 14, 2020 and Successor Period of April 13 to June 30, 2020. This is not intended to be a substitute for financial reporting periods presented in accordance with GAAP. For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the “TPG Acquisition”), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period. Revenue of $160.5 million increased $76.5 million or 91%2 year over year Total clinicians of 3,975 up 94% year over year, including 674 net clinician adds in the second quarter Adjusted EBITDA1 of $14.5 million increased $4.1 million or 39%2 year over year Strong balance sheet with a cash position of $276 million Established the LifeStance Health Foundation with initial endowment of $10 million Q2 Overview
Company Snapshot NPS defined as “Net Promoter Score” refers to a measure of patient satisfaction widely used in the behavioral health care industry, calculated based on responses to patient surveys administered following a patient’s appointment from January 14, 2021 through March 31, 2021 As of December 31, 2020, measured on an annual basis. Adjusted EBITDA is a non-GAAP financial measures. See “Appendix” for reconciliation to net income (loss). Building the Nation’s Leading Outpatient Mental Health Platform Well-Positioned for Continued Market Share Gains in the $116B Mental Health Market Revenue (in $M) Adjusted EBITDA3 (in $M) CAGR: 179% Adj. EBITDA Margin CAGR: 94% National Platform with Unmatched Scale Operating 450+ centers in 31 states Employed Clinician Model 3,975 Clinicians Disruptive Tech-Enabled Platform 80 patient net promoter score1 and 80% digital engagement2 Patient-centered hybrid virtual and in-person care model In-Network Reimbursement ~90% revenue mix from commercial in-network reimbursement with over 200 commercial payors2 Founded in 2017 Headquarters Scottsdale, AZ TTM Revenue $524M
We are Mission-Driven Our Vision Our Mission Our Values A truly healthy society where mental and physical healthcare are unified to make lives better To help people lead healthier, more fulfilling lives by improving access to trusted, affordable, and personalized mental healthcare Delivering Compassion We care for people unconditionally and act with empathy always Building Relationships We are collaborative, building enduring relationships to achieve more together Celebrating Difference We respect the diversity of every individual’s lived experiences
We Remain Committed to Corporate Responsibility Note: Our efforts contribute to advancing several UN Sustainable Development Goals (SDGs), including SDG 3: Good Health and Well-Being; SDG 5: Gender Equality; SDG 8: Decent Work and Economic Growth; and SDG 10: Reduce Inequalities. Established National Diversity, Equity and Inclusion (DEI) Committee 50% of Executive Leadership Team diverse by gender or race/ethnicity Majority of our clinicians are female Diversity & Inclusion Reducing work days and $ lost due to mental illness Annual retention higher than industry benchmarks 97% of our clinicians feel they are helping patients Investing in clinician education Social Good & Economic Growth Established the LifeStance Health Foundation in furtherance of our mission to improve patient access, enhance outcomes and lower overall health care costs $10 million initial endowment Corporate Giving The work we do contributes to greater societal health and well-being, as well as reduced inequalities Increasing access to high-quality, affordable care Improving mental and physical outcomes Improving Health Care We are Reimagining Mental Health
LifeStance Health Foundation There are millions of faces We provide compassionate, comprehensive mental health care, personalized for each individual Depression | Anxiety | Bipolar Disorder | Schizophrenia | PTSD There is no one face to: Announced a partnership with The Mental Health Coalition to end the stigma around mental health conditions and support our shared vision of a truly healthy society. Complements “No Face” campaign; join the movement to destigmatize mental health by uploading a selfie on Instagram with the hashtag #Not1Face. Donated $30,000 to the U.S. Olympic & Paralympic Foundation in support of athletes demonstrating that mental health and physical health are equally important.
Danish Qureshi Chief Growth Officer and Co-Founder
Our Growth Strategy A Powerful Growth Engine to Enable Market Share Gains Multiple Growth Opportunities 1 Expand into New Markets 31 states in total, operating as a leading national provider 5 states added in Q2’21 2 Build Market Density 3,975 clinicians in total (674 added in Q2’21) 183 de novos opened since inception (35 in Q2’21) 64 acquisitions completed since inception (10 in Q2’21) 3 Digital Services 80% digital patient engagement1, with virtual care offered in all 31 states to the entire statewide population Industry Tailwinds: $116B TAM in 2020 going to $215B by 2025, representing a 14% CAGR Significant White Space: Less than 1% penetration of a 650K clinician market; Less than 1% penetration in patient demand (350K+ patients in a market of 51M) Next Growth Horizons: Confidence in our long-term growth is reinforced by our investment today in innovative programs with value-based models, employer-based pilot programs, and integrated care As of December 31, 2020, measured on an annual basis.
Continued Geographic Expansion – 31 States Total Operating in 31 states as a leading national provider 450+ centers nationwide National Platform with Unmatched Scale Through Q1’21 New in Q2’21 AZ CA CO DE FL GA ID IL ID KY TN TX VA PA OH NC OK NY MA NJ MD NH ME NV WA MO SC MN WI MI OR
Market Update
J. Michael Bruff Chief Financial Officer
Clinicians Revenue (in $M) Center Margin2 Adjusted EBITDA2 (in $M) Consistent quarterly growth driven by recruiting and hiring, as well as acquisitions Strong and differentiated clinician value proposition Less than 1% market penetration Primarily driven by growth in the clinician base and ramp of newer clinicians in de novo vintages Growth in clinicians combined with center-level economics generate growth in Adjusted EBITDA 2021 EBITDA performance reflects an increase in investments in growth drivers, infrastructure and a transition to public company operations Growing clinician base driving sustained revenue performance trend The immense TAM provides significant opportunity for future growth Quarterly Trends – Key Operating Metrics +39% +100% +91% +94% 1 1 1 Reflects a year over year comparison to the same period in the prior year which includes the summation of the predecessor period April 1 to May 14, 2020 and successor period of April 13 to June 30, 2020. This is not intended to be a substitute for financial reporting periods presented in accordance with GAAP. For the period from April 13, 2020 through May 14, 2020, the operations of successor were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC, which were not significant. Earnings from April 13 to May 14 are reflected in the predecessor 2020 period. Center Margin and Adjusted EBITDA are non-GAAP financial measures. See “Appendix” for reconciliations to income (loss) from operations and net income (loss), respectively. Clinicians, Revenue, and Center Margin all approximately doubled year over year
Balance Sheet Highlights and Operating Cash Flow Percentage description with ctetur ad ipisc ing elite 75% Cash and Cash Equivalents $276.2M Percentage description with ctetur ad ipisc ing elite 75% Long-term Debt $158.7M Percentage description with ctetur ad ipisc ing elite 75% Operating Cash Flow (YTD 1) ($7.0)M Percentage description with ctetur ad ipisc ing elite 75% Capital Expenditures (YTD 1) $31.8M YTD is January 1, 2021 to June 30, 2021.
Full Year 2020A 1st Half 2021A Q3 2021E Q4 2021E Full Year 2021E Revenue $377M $304M $168 - $173M $196 - $201M $668 - $678M Center Margin1 $119M $95M $47 - $52M $56 - $61M $198 - $208M Adj. EBITDA1 $50M $27M $8 - $11M $12 - $15M $47 - $53M Initiating 2021 Guidance Key Assumptions Net impact of lower clinician retention rates and higher clinician growth $7 – $9M Incremental investments in infrastructure and operations to support growth $8 – $10M Center Margin and Adjusted EBITDA anticipated in 2021 are calculated in a manner consistent with the historical presentation of these measures included in the Appendix. Reconciliations for our forward-looking Center Margin and Adjusted EBITDA guidance are not being provided, as LifeStance does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliations. LifeStance management therefore cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.
Closing Remarks
Appendix
Quarterly Income Statement (GAAP) 1. Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020. Note: For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the TPG Acquisition, which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period. Due to rounding, some figures may not foot in the schedule above. 2021 2020 ($M) Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Total Revenues $160.5 $143.1 $118.1 $102.0 $45.4 $38.6 $73.1 Operating expenses Center costs, excluding depreciation and amortization 109.3 99.1 79.1 68.8 31.3 27.1 51.6 General and administrative 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Depreciation and amortization 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income (loss) from operations (47.0) (0.9) 3.9 2.7 0.1 3.1 5.6 Other income (expense) Gain (loss) on remeasurement of contingent consideration (0.3) (0.3) (0.6) 0.1 - - 0.4 Transaction costs (2.0) (1.5) (3.1) (0.7) (0.2) (32.3) (1.0) Interest expense (23.2) (8.6) (7.1) (6.4) (5.6) (1.3) (1.7) Other expense (1.4) (0.1) (0.2) - - - - Total other expense (26.8) (10.6) (11.0) (7.1) (5.8) (33.7) (2.3) Loss (income) before taxes (73.8) (11.4) (7.1) (4.4) (5.7) (30.6) 3.4 Income tax benefit (provision) 3.8 2.8 1.6 1.1 1.4 3.0 (0.7) Net (loss) income and comprehensive (loss) income ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7
GAAP to Non-GAAP Reconciliations – Center Margin 1. Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020. Due to rounding, some figures may not foot in the schedule above. 2021 2020 ($M) Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Income (loss) from operations ($47.0) ($0.9) $3.9 $2.7 $0.1 $3.1 $5.6 Adjusted for: Depreciation and amortization 12.8 12.2 11.4 10.9 5.4 1.2 2.2 General and administrative 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Center Margin $51.2 $44.0 $39.0 $33.1 $14.1 $11.4 $21.5
GAAP to Non-GAAP Reconciliations – Adjusted EBITDA Represents management fees paid to certain of our executive officers and affiliates of our principal stockholders pursuant to the management services agreement entered into in connection with the acquisition of LifeStance by affiliates of TPG Global, LLC ( the “TPG Acquisition”). The management services agreement terminated in connection with the IPO and Company were required to pay a one-time fee of $1.2 million to such parties. Primarily includes capital markets advisory, consulting, accounting and legal expenses related to our acquisitions and costs related to the TPG Acquisition. Of the transaction costs incurred in the period from January 1, 2020 to May 14, 2020 (Predecessor), $32.9 million relate to the TPG Acquisition. Primarily includes non-recurring incremental professional services, such as accounting and legal, and directors' and officers' insurance incurred in connection with the IPO. Primarily includes costs incurred to consummate or integrate acquired centers, certain of which are wholly-owned and certain of which are affiliated practices, in addition to the compensation paid to former owners of acquired centers and related expenses that are not reflective of the ongoing operating expenses of our centers. Acquired center integration, former owner fees, and other are components of general and administrative expenses included in our consolidated statement of income (loss). Impairment on loans is a component of center costs, excluding depreciation and amortization included in our consolidated statement of income (loss). (5) Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020. (6) Successor Period is April 13 to December 31, 2020, Predecessor Period is January 1 to May 14, 2020. Due to rounding, some figures may not foot in the schedule above. 2021 2020 2020 2020 2019 2018 ($M) Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Successor² Predecessor² FY FY Net income (loss) ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7 ($13.1) ($24.9) $5.7 ($1.1) Adjusted for: Interest expense 23.2 8.6 7.1 6.4 5.6 1.3 1.7 19.1 3.0 5.4 0.5 Depreciation and amortization 12.8 12.2 11.4 10.9 5.4 1.2 2.2 27.7 3.3 6.1 2.7 Income tax (benefit) provision (3.8) (2.8) (1.6) (1.1) (1.4) (3.0) 0.7 (4.0) (2.3) 2.2 5.4 Loss (gain) on remeasurement of contingent consideration 0.3 0.3 0.6 (0.1) - - (0.4) 0.5 (0.3) (0.2) (2.5) Share/unit-based compensation 29.5 0.6 0.6 0.6 0.3 - - 1.5 - 0.1 0.2 Management fees (1) 1.4 0.1 0.1 - - - - 0.1 - - - Loss on disposal of assets - - 0.1 - - - - 0.1 - - - Transaction costs (2) 2.0 1.5 3.1 0.7 0.2 32.3 1.0 3.9 33.2 2.2 0.5 Offering related costs (3) 8.7 - - - - - - - - - - Endowment to the LifeStance Health Foundation 10.0 - - - - - - - - - - Other expenses (4) 0.5 0.6 0.6 0.8 0.2 0.2 0.4 1.6 0.6 3.0 0.7 Adjusted EBITDA $14.5 $12.6 $16.5 $15.0 $6.0 $4.4 $8.2 $37.4 $12.7 $24.4 $6.5
Quarterly Non-GAAP Financial Metrics 1. Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020. Due to rounding, some figures may not foot in the schedule above. 2021 2020 ($M) Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Key Metrics Clinicians 3,975 3,301 3,097 2,539 nq nq 1,734 Total Revenues $160.5 $143.1 $118.1 $102.0 $45.4 $38.6 $73.1 Center costs 109.3 99.1 79.1 68.8 31.3 27.1 51.6 Center Margin (Non-GAAP) $51.2 $44.0 $39.0 $33.1 $14.1 $11.4 $21.5 % Margin 31.9% 30.7% 33.0% 32.5% 31.1% 29.6% 29.4% General and administrative 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Depreciation and amortization 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income (loss) from operations (47.0) (0.9) 3.9 2.7 0.1 3.1 5.6 Other income (expenses) Other income (expenses) (23.0) (7.8) (9.4) (6.0) (4.4) (30.7) (3.0) Net (loss) income ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7 Adjusted EBITDA Build Net (loss) income (70.0) (8.7) (5.5) (3.3) (4.3) (27.6) 2.7 Interest expense 23.2 8.6 7.1 6.4 5.6 1.3 1.7 Depreciation and amortization 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income tax (benefit) provision (3.8) (2.8) (1.6) (1.1) (1.4) (3.0) 0.7 Loss (gain) on remeasurement of contingent consideration 0.3 0.3 0.6 (0.1) - - (0.4) Share/unit-based compensation 29.5 0.6 0.6 0.6 0.3 - - Management fees 1.4 0.1 0.1 - - - - Loss on disposal of assets - - 0.1 - - - - Transaction costs 2.0 1.5 3.1 0.7 0.2 32.3 1.0 Offering related costs 8.7 - - - - - - Endowment to the LifeStance Health Foundation 10.0 - - - - - - Other expenses 0.5 0.6 0.6 0.8 0.2 0.2 0.4 Adjusted EBITDA (Non-GAAP) $14.5 $12.6 $16.5 $15.0 $6.0 $4.4 $8.2 % Margin 9.1% 8.8% 13.9% 14.7% 13.1% 11.5% 11.2%
Quarterly Balance Sheet Due to rounding, some figures may not foot in the schedule above. 2021 2020 ($M) Q2 Q1 Q4 Q3 Q2 Q1 Cash and cash equivalents 276.2 39.5 18.8 25.1 13.8 20.3 Patient accounts receivable 60.1 47.8 43.7 34.3 31.0 25.2 Prepaid expenses and other current assets 27.8 22.3 13.7 16.1 14.0 9.0 Total current assets 364.1 109.6 76.3 75.4 58.8 54.5 Property and equipment, net 91.8 70.8 59.3 47.5 39.7 31.2 Intangible assets, net 316.5 323.3 332.8 334.0 342.8 15.8 Goodwill 1,138.7 1,099.7 1,098.7 963.0 951.3 224.3 Deposits 3.3 2.9 2.6 2.1 2.0 1.7 Total noncurrent assets 1,550.4 1,496.7 1,493.5 1,346.5 1,335.8 273.0 Total assets $1,914.4 $1,606.3 $1,569.7 $1,422.0 $1,394.6 $327.5 Accounts payable 10.0 5.9 7.7 4.4 4.3 3.5 Accrued payroll expenses 50.4 45.4 38.0 30.5 23.9 21.4 Other accrued expenses 38.8 25.7 14.7 12.5 12.4 13.5 Current portion of contingent consideration 10.9 14.9 10.6 8.1 7.1 23.5 Other current liabilities 2.6 4.9 5.0 2.8 2.8 1.0 Total current liabilities 112.6 96.8 75.9 58.2 50.5 62.9 Long-term debt, net 157.1 387.3 362.5 227.1 227.4 113.5 Other noncurrent liabilities 15.7 14.2 11.4 12.9 11.1 9.0 Contingent consideration, net of current portion 3.2 1.1 5.9 3.7 3.9 3.0 Deferred tax liability, net 81.2 81.2 81.2 85.4 85.4 0.9 Total noncurrent liabilities 257.2 483.8 461.0 329.1 327.8 126.4 Total liabilities $369.8 $580.5 $536.9 $387.3 $378.3 $189.3 Redeemable units - 71.8 35.0 35.0 35.0 - Stockholders' / Members' equity 3.7 1,010.5 1,009.5 1,006.4 985.4 302.4 Additional paid-in capital 1,669.5 2.1 1.5 0.9 0.3 - Accumulated deficit (128.6) (58.6) (13.1) (7.6) (4.3) (164.2) Total stockholders'/members’ equity 1,544.6 954.0 997.8 999.6 981.4 138.2 Total liabilities, redeemable units and stockholders’/members’ equity $1,914.4 $1,606.3 $1,569.7 $1,422.0 $1,394.6 $327.5
GAAP Statement of Cash Flows Due to rounding, some figures may not foot in the schedule above Successor Predecessor ($M) "Six months ended June 30, 2021" "April 13 to June 30, 2020" "January 1 to May 14, 2020" 2019 FY CASH FLOWS FROM OPERATING ACTIVITIES Net loss (78.7) (4.3) (24.9) 5.7 Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 25.0 5.4 3.3 6.1 Stock and unit-based compensation 30.1 0.3 - 0.1 Deferred income taxes - 2.9 (2.3) 1.8 Loss on debt extinguishment 5.6 3.1 - - Amortization of debt issue costs 1.1 0.1 0.2 0.7 Loss (gain) on remeasurement of contingent consideration 0.6 0.1 (0.3) (0.2) Endowment of shares to LifeStance Health Foundation 9.0 - - - Change in operating assets and liabilities, net of businesses acquired: Patient accounts receivable (11.8) (2.5) (5.1) (5.8) Prepaid expenses and other current assets (15.0) (4.4) (4.5) (2.2) Accounts payable 2.3 0.9 (1.6) 2.5 Accrued payroll expenses 9.6 (3.8) 8.8 5.2 Other accrued expenses 15.3 (35.0) 40.0 3.2 Net cash (used in) provided by operating activities ($7.0) ($37.3) $13.4 $17.0 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (31.8) (5.1) (12.8) (14.3) Acquisition of Predecessor, net of cash acquired - (643.7) - - Acquisitions of businesses, net of cash acquired (39.1) (22.4) (12.3) (59.1) Net cash used in investing activities ($70.9) ($671.2) ($25.1) ($73.4) CASH FLOWS FROM FINANCING ACTIVITIES "Proceeds from initial public offering, net of underwriters discounts and commissions and deferred offering costs" 554.2 - - - Issuance of common units to new investors 1.0 - - - Contributions from Members related to acquisition of Predecessor - 633.6 - - Repurchase of Series A redeemable convertible preferred units - - (1.0) - Proceeds from long-term debt 98.8 235.9 74.4 55.9 Payments of debt issue costs (2.4) (6.4) (0.7) (2.0) Payments of long-term debt (310.7) (138.5) (18.2) (0.5) Payments of contingent consideration (5.6) (2.2) (19.1) (5.0) Net cash provided by financing activities $335.3 $722.3 $35.4 $48.5 NET INCREASE IN CASH AND CASH EQUIVALENTS $257.4 $13.8 $23.7 ($7.9) Cash and Cash Equivalents - Beginning of period 18.8 - 3.5 11.3 CASH AND CASH EQUIVALENTS – END OF PERIOD $276.2 $13.8 $27.2 $3.5