NeueHealth(NEUE) - 2024 Q3 - Quarterly Report

Consumer Base and Services - As of September 30, 2024, NeueCare served approximately 404,000 consumers, including 347,000 value-based consumers and 57,000 fee-for-service consumers[198] - NeueSolutions had approximately 43,000 value-based care consumers attributed to its REACH ACOs and 119,000 enablement services lives as of September 30, 2024[199] - Year-over-year, value-based care consumers increased by approximately 35,000, driven by a rise of 55,000 through third-party payor relationships[208] - Enablement services lives grew to approximately 119,000, up from 31,000 in the previous year, indicating a substantial expansion in this segment[207] - NeueHealth aims to diversify and grow its consumer base across all product categories, including ACA Marketplace, Medicare, and Medicaid[202] Financial Performance - The company reported an Adjusted EBITDA of $9.396 million for the three months ended September 30, 2024, compared to$3.431 million for the same period in 2023, marking a significant increase[210] - As of September 30, 2024, the net loss was $40.365 million, a significant improvement from a net loss of$547.148 million for the same period in 2023[214] - Total revenue decreased by $36.5 million, or 13.5$163.9 million, or 18.9%, for the nine months ended September 30, 2024, compared to the same periods in 2023[219] - ACO REACH revenue decreased by $50.6 million and$205.8 million for the three and nine months ended September 30, 2024, respectively, primarily due to a decrease of approximately 20,000 beneficiaries aligned to the REACH ACOs[219] - Capitated revenue increased by $11.0 million, or 18.2$37.1 million, or 23.2%, for the nine months ended September 30, 2024, driven by increased membership through third-party payor contracts[230] Costs and Expenses - Medical costs decreased by $43.7 million, or 19.3$174.5 million, or 23.8%, for the nine months ended September 30, 2024, primarily due to a decrease in beneficiaries aligned to the REACH ACOs[220] - Operating costs decreased by $8.5 million, or 11.7$20.6 million, or 9.3%, for the nine months ended September 30, 2024, primarily due to a reduction in professional fees[221] - The operating cost ratio increased to 27.5% and 28.6% for the three and nine months ended September 30, 2024, respectively, reflecting a 60 and 310 basis points increase compared to the same periods in 2023[222] - Interest expense decreased by $4.6 million and$14.5 million for the three and nine months ended September 30, 2024, respectively, due to the payoff of the 2021 Credit Agreement in January 2024[225] - Loss from discontinued operations decreased by $53.5 million and$197.7 million for the three and nine months ended September 30, 2024, primarily due to the sale of the California Medicare Advantage business[229] Asset Management and Financing - The company recognized $11.4 million in impairments of intangible assets for the nine months ended September 30, 2024, related to classifying AMD as held-for-sale[223] - The company declared$28.2 million in dividends from regulated insurance entities during the nine months ended September 30, 2024, compared to no dividends in the same period of 2023[249] - As of September 30, 2024, the company was out of compliance with minimum risk-based capital and surplus levels for certain regulated insurance entities[250] - The company had $86.4 million in long-term borrowings under the Amended 2023 Credit Agreement as of September 30, 2024[260] - The Company has a term loan Tranche 2 of up to$25,000,000 available from November 10 to December 31, 2024, contingent on achieving specific funding milestones[263] Cash Flow and Investments - As of September 30, 2024, the Company had $226.4 million in cash and cash equivalents and$15.8 million in short-term investments[273] - The net cash used in operating activities for the nine months ended September 30, 2024, was $(98,823) thousand, a decrease of$2.3 billion compared to the same period in 2023[278] - Net cash provided by investing activities for the nine months ended September 30, 2024, was $189,230 thousand, a decrease of$956.2 million compared to the prior year[279] - The Company had net cash used in financing activities of $(239,274) thousand for the nine months ended September 30, 2024, an increase of$280.3 million compared to the same period in 2023[280] - As of September 30, 2024, the Company had letters of credit of $16.5 million and surety bonds of$19.7 million, with $33.7 million of cash and cash equivalents restricted as collateral[269] Shareholder Equity - The Centrum Promissory Note issued on October 29, 2024, has a principal of$64.0 million, due on October 29, 2028, with a cash interest rate of 6% per annum[270] - The Company issued 750,000 shares of Series A Preferred Stock for $750.0 million and 175,000 shares of Series B Preferred Stock for$175.0 million in previous financing rounds[271] - As of September 30, 2024, the Company had non-regulated cash and cash equivalents of $110.3 million, with$33.7 million restricted as collateral[274]