Bright Health Group(US:BHG)2024-05-10 20:07Financial Performance - Total revenues decreased by $55.5 million, or 18.5%, for the three months ended March 31, 2024, primarily due to a decrease of approximately 23,000 beneficiaries aligned to REACH ACOs [251]. - Net income from continuing operations for the first quarter of 2024 was $5.7 million, a significant improvement from a loss of $53.9 million in the same period of 2023 [245]. - Adjusted EBITDA for the first quarter of 2024 was $2.5 million, compared to a loss of $5.7 million in the same period in 2023 [248]. - Operating loss improved to $(23.1) million for the three months ended March 31, 2024, compared to $(44.9) million in the same period in 2023 [281]. - The company experienced a net loss of $4.2 million for the quarter ended March 31, 2024, and a net loss of $1.3 billion for the year ended December 31, 2023 [41]. - The net loss attributable to common shareholders for the three months ended March 31, 2024, was $28.5 million, compared to a net loss of $186.9 million for the same period in 2023 [109]. - The basic and diluted loss per share attributable to common shareholders for continuing operations was $(2.31) for the three months ended March 31, 2024, compared to $(9.04) for the same period in 2023 [109]. Revenue and Costs - Total revenue decreased by $55.5 million, or 18.5%, to $245.1 million for the three months ended March 31, 2024, compared to $300.6 million in the same period in 2023 [281]. - Capitated revenue increased by $11.9 million, or 24.1%, to $61.5 million for the three months ended March 31, 2024, compared to the same period in 2023 [287]. - Medical costs decreased by $63.2 million, or 24.3%, to $196.9 million for the three months ended March 31, 2024, compared to the same period in 2023 [313]. - Medical costs payable as of March 31, 2024, were $157.6 million, slightly down from $157.9 million as of December 31, 2023 [53]. - The company incurred $196.9 million in total medical costs during the three months ended March 31, 2024, compared to $257.6 million in the same period of 2023, reflecting a decrease of approximately 23% [53]. Operational Changes - Operating costs decreased by $12.7 million, or 16.0%, for the three months ended March 31, 2024, primarily due to a reduction in share-based compensation [252]. - Total operating costs for the three months ended March 31, 2024, were $66.8 million, a decrease of 16% from $79.5 million in the same period of 2023 [45]. - Operating cost ratio increased to 27.3% for the three months ended March 31, 2024, up 800 basis points from 19.3% in the same period in 2023 [283]. - The company recorded employee termination benefits of $58,000 for the three months ended March 31, 2024, down from $766,000 in the same period of 2023 [49]. Consumer Metrics - Value-Based Consumers served decreased to 360,000 as of March 31, 2024, down from 373,000 in the same period of 2023 [244]. - Enablement Services Lives increased significantly to 109,000 as of March 31, 2024, compared to 27,000 in the same period of 2023 [244]. - The company continues to advance its provider enablement business, serving approximately 109,000 consumers in the first quarter of 2024 [271]. Debt and Liabilities - The risk adjustment payable liability was $279.9 million as of March 31, 2024, down from $291.1 million as of December 31, 2023 [260]. - The remaining risk adjustment liability as of March 31, 2024, was $279.9 million after paying down $11.2 million of principal in the first quarter [41]. - As of March 31, 2024, the company had $66.4 million of long-term borrowings under the 2023 Credit Agreement [298]. - The company entered into a $350.0 million revolving credit agreement in March 2021, with no outstanding borrowings as of January 2, 2024 [325]. - As of March 31, 2024, the Company had $66.4 million borrowed under the 2023 Credit Agreement at a weighted-average effective interest rate of 15.00% [114]. Strategic Initiatives - The company expanded operations in Central Florida to serve additional ACA Marketplace consumers, demonstrating a capital-efficient growth strategy [270]. - The company is focused on long-term, sustainable growth of its value-driven, consumer-centric care model, which is seen as a strong alternative to traditional healthcare approaches [238]. - The company completed the sale of its California Medicare Advantage business for an aggregate purchase price of $500.0 million, effective January 1, 2024 [36]. Shareholder Information - The company declared $13.2 million in dividends from regulated insurance entities to the parent company during the three months ended March 31, 2024, compared to no dividends in the same period of 2023 [324]. - As of March 31, 2024, there were 2.1 million shares of common stock authorized for issuance under the 2021 Incentive Plan, with 1.0 million shares available for future issuance [90]. - The company issued 750,000 shares of Series A Preferred Stock for an aggregate purchase price of $750.0 million on January 3, 2022 [101]. - The company issued 175,000 shares of Series B Preferred Stock for an aggregate purchase price of $175.0 million on October 17, 2022 [105]. Warrant and Compensation - The company recognized warrant expense of $2.1 million for the three months ended March 31, 2024, compared to none in the same period in 2023 [284]. - The company recognized share-based compensation expense related to stock options of $6.8 million, with $20.4 million of unrecognized compensation expense expected to be recognized over 0.9 years [93]. - The company recognized share-based compensation expense related to Performance-based Restricted Stock Units (PSUs) of $6.3 million for the three months ended March 31, 2024, with $5.4 million of unrecognized compensation expense expected to be recognized over 0.2 years [99]. - The company reported a warrant liability of $11.9 million as of March 31, 2024, down from $13.9 million at the beginning of the year [61]. - For the three months ended March 31, 2024, warrant income was $2.1 million, with no equivalent liability or activity for the same period in 2023 [117].