Bright Health Group(US:BHG)2023-08-08 16:00Business Performance - As of June 30, 2023, Bright Health Group serves approximately 371,000 consumers through value-based arrangements, a significant increase from 118,000 in the same period of 2022, representing a year-over-year growth of approximately 215%[94] - The Care Delivery segment operates 71 owned primary care clinics and serves around 340,000 consumers, providing both virtual and in-person clinical care[84] - The company achieved its first quarter of Adjusted EBITDA profitability, with an Adjusted EBITDA of $6.4 million for the three months ended June 30, 2023, compared to a loss of $23.3 million in the same period of 2022[104] - Bright Health Group's ongoing business is positioned as one of the largest providers of value-based care delivery, with substantial long-term growth opportunities[92] - Total revenues increased by $148.6 million, or 99.5%, for the three months ended June 30, 2023, primarily driven by an increase of approximately 16,000 beneficiaries aligned to the REACH ACOs[121] - Capitated revenue increased by $32.1 million for the three months ended June 30, 2023, due to increased membership through third-party payor contracts[121] - Total revenues increased by $268.4 million, or 81.3%, for the six months ended June 30, 2023, also driven by an increase of approximately 16,000 beneficiaries aligned to the REACH ACOs[123] - Premium revenue increased by $53.0 million for the six months ended June 30, 2023, resulting from increased membership through third-party payor contracts[123] - Net loss for the three months ended June 30, 2023, was $88.6 million, compared to a net loss of $251.3 million for the same period in 2022[120] - Medical costs for the three months ended June 30, 2023, were $245.2 million, up from $130.8 million in the same period in 2022[120] - Operating cost ratio improved to 23.6% for the three months ended June 30, 2023, compared to 52.9% in the same period in 2022[120] Financial Position - The company signed an agreement with Molina to acquire its California Medicare Advantage business for $600 million, bolstering its capital position[91] - As of June 30, 2023, Bright Health Group was out of compliance with minimum risk-based capital and surplus levels for certain regulated insurance entities[102] - The company entered a $60 million credit facility with NEA on August 4, 2023, to support its ongoing operations and transformation efforts[91] - As of June 30, 2023, the company had $1.36 billion in cash and cash equivalents, $995.6 million in short-term investments, and $0.3 million in long-term investments[138] - The Series B Preferred Stock had accrued compounded dividends of $6.2 million as of June 30, 2023, compared to $1.8 million as of December 31, 2022[127] - Net cash used in operating activities for the six months ended June 30, 2023, was $(724,026) thousand, a decrease of $1.5 billion compared to the same period in 2022[140] - Net cash provided by investing activities was $157,127 thousand for the six months ended June 30, 2023, an increase of $1.1 billion compared to the same period in 2022[141] - Net cash provided by financing activities decreased by $596.2 million for the six months ended June 30, 2023, compared to the same period in 2022[143] - The company had non-regulated cash and cash equivalents of $107.7 million as of June 30, 2023[138] Business Strategy - Bright Health Group's exit from the ACA insurance business has allowed it to focus solely on value-driven care delivery, enhancing its partnerships with major payors[86][87] - The runout of the ACA Marketplace business is progressing, with approximately 95% claims completion as of June 30, 2023, indicating a narrowing of risks associated with this business[90] Costs and Expenses - Interest expense for the three months ended June 30, 2023, was $9.2 million, compared to $0.3 million in the same period in 2022[120] - The company held no equity securities during the three months ended June 30, 2023, resulting in no investment loss compared to a loss of $16.2 million in the same period in 2022[121] - The company may redeem all of the Series A Preferred Stock at a price equal to 105% of the liquidation preference prior to January 3, 2029[125] - The company issued 750,000 shares of Series A Preferred Stock for an aggregate purchase price of $750.0 million on January 3, 2022[136] - The Series B Preferred Stock was issued for an aggregate purchase price of $175.0 million on October 17, 2022[126] - As of June 30, 2023, the company had $30.7 million of outstanding, undrawn letters of credit under the Credit Agreement[135]