Bright Health Group(US:BHG)2024-11-07 21:25Consumer Base - As of September 30, 2024, NeueCare maintained 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, the number of 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 increased to approximately 119,000 as of September 30, 2024, compared to 31,000 in the previous year[207] - The company 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 $9,396,000 for the three months ended September 30, 2024, compared to $3,431,000 for the same period in 2023, marking a significant increase[210] - The loss from continuing operations before income taxes for the three months ended September 30, 2024, was $23,214,000, a substantial improvement from $482,690,000 for the same period in 2023[210] - The net loss for the three months ended September 30, 2024, was $40,365,000, a significant reduction from $547,148,000 for the same period in 2023[214] - Total revenue decreased by $36.5 million, or 13.5%, for the three months ended September 30, 2024, and $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] Costs and Expenses - Medical costs decreased by $43.7 million, or 19.3%, for the three months ended September 30, 2024, and $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%, for the three months ended September 30, 2024, and $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 decline in revenue that outweighed the decrease in operating costs[222] - Interest expense decreased by $4.6 million and $14.5 million for the three and nine months ended September 30, 2024, respectively, primarily due to the payoff of the 2021 Credit Agreement[225] - Loss from discontinued operations decreased by $53.5 million and $197.7 million for the three and nine months ended September 30, 2024, respectively, due to the sale of the California Medicare Advantage business[229] Investments and Financing - The company acquired full ownership of Centrum Health on October 30, 2024, to streamline operations and enhance its value-driven care model[203] - 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, subject to achieving specific funding milestones[263] Cash Flow - 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[269] Stock and Assets - The Centrum Promissory Note issued on October 29, 2024, has a principal of $64.0 million and bears a cash interest rate of 6% per annum, due on October 29, 2028[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[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]