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EX-99.1 - EX-99.1 - Cotiviti Holdings, Inc.ex-99d1.htm
8-K - 8-K - Cotiviti Holdings, Inc.f8-k.htm

Exhibit 99.2

 

 

 

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2017 Third Quarter Financial Supplement Analytics. Insight. Value. As of September 30, 2017

 

 


 

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Cotiviti Holdings, Inc. 2017 Revenue by Segment Change Change Healthcare $ 88,396 $ 78,133 13 % $ 252,538 $ 224,335 13 % 62,628 57,233 9 % 184,365 169,632 9 % 5,195 3,104 67 % 10,678 9,676 10 % Total Healthcare 156,219 138,470 13 % 447,581 403,643 11 % Global Retail and Other 17,470 17,039 3 % 52,529 51,730 2 % Other 499 732 (32) % 1,822 1,877 (3) % Total Global Retail and Other 17,969 17,771 1 % 54,351 53,607 1 % $ 174,188 $ 156,241 11 % $ 501,932 $ 457,250 10 % Nine Months Ended September 30, 2017 2016 2016 2017 Three Months Ended September 30, Consolidated Net Revenue (unaudited, $ in thousands) Retrospective claims accuracy Prospective claims accuracy Transaction services Retrospective claims accuracy

 

 


 

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Cotiviti Holdings, Inc. 2017 Consolidated Statement of Operations (unaudited, $ in thousands) Change Change Net revenue $ 174,188 $ 156,241 11 % 501,932 457,250 10 % Cost of revenue 65,081 65,175 NM % 193,048 184,594 5 % Selling, general and administrative expenses 46,475 46,474 NM % 128,911 118,934 8 % Depreciation and amortization of property and equipment 6,070 5,218 16 % 17,541 14,864 18 % Amortization of intangible assets 14,747 15,203 (3) % 45,147 45,618 (1) % Transaction-related expenses 773 16 NM % 2,165 909 138 % Total Operating Expenses 133,146 132,086 1 % 386,812 364,919 6 % Operating income 41,042 24,155 70 % 115,120 92,331 25 % Other expense (income) 8,652 18,861 (54) % 27,785 55,991 (50) % Income tax expense 12,918 711 NM % 19,800 12,780 55 % Net Income $ 19,472 $ 4,583 325 % $ 67,535 $ 23,560 187 % Earnings per share: Basic $ 0.21 $ 0.05 $ 0.74 $ 0.28 Diluted 0.20 0.05 0.71 0.27 Effective Tax Rate 39.9 % 13.4 % 22.7% 35.2% Cost of revenue $ 638 $ 4,153 (85) % $ 1,598 $ 4,738 (66) % Selling, general and administrative expenses 5,114 12,889 (60) % 8,692 16,806 (48) % Total Stock-Based Compensation $ 5,752 $ 17,042 (66) % $ 10,290 $ 21,544 (52) % 2017 2016 Nine Months Ended September 30, Stock-based Compensation (included within the lines shown above) Three Months Ended September 30, 2017 2016

 

 


 

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Cotiviti Holdings, Inc. 2017 Adjusted EBITDA (Non-GAAP) Represents other non-operating (income) expense that consists primarily of interest income and gains and losses on transactions settled in foreign currencies. Income received for certain sub-leases is included herein. Represents transaction-related expenses that consist primarily of certain expenses associated with our secondary offerings and our Initial Public Offering and other offering costs in 2016 as well as certain corporate development activity, including the RowdMap Acquisition. Represents expense related to equity incentive awards granted to certain employees, officers and non‑employee directors as long‑term incentive compensation and restricted stock issued in connection with the RowdMap Acquisition. We recognize the related expense for these awards ratably over the vesting period or as achievement of performance criteria become probable. Represents loss on extinguishment of debt that consists primarily of fees paid and write-offs of unamortized debt issuance costs and original issue discount in connection with the 2017 repricing of our First Lien Term B Loan, the 2016 early repayment of a portion of our long-term debt and the 2016 refinancing of our long-term debt. Change Change Net Income $ 19,472 $ 4,583 325 % $ 67,535 $ 23,560 187 % Adjustments to net income: Depreciation and amortization 20,817 20,421 2 % 62,688 60,482 4 % Interest expense 9,101 9,625 (5) % 26,060 40,345 (35) % Other non-operating (income) expense (a) (449) (113) 299 % (1,458) (771) 89 % Income tax expense 12,918 711 NM % 19,800 12,780 55 % Transaction-related expenses and other (b) 773 16 NM % 2,165 909 138 % Stock-based compensation (c) 5,752 17,042 (66) % 10,290 21,544 (52) % Loss on extinguishment of debt (d) - 9,349 (100) % 3,183 16,417 (81) % Adjusted EBITDA $ 68,384 $ 61,634 11 % $ 190,263 $ 175,266 9 % % of revenue 39.3% 39.4% 37.9% 38.3% 2016 Nine Months Ended September 30, (unaudited, $ in thousands) Three Months Ended September 30, 2017 2016 2017

 

 


 

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Cotiviti Holdings, Inc. 2017 Adjusted Net Income (Non-GAAP) Represents loss on extinguishment of debt that consists primarily of fees paid and write-offs of unamortized debt issuance costs and original issue discount in connection with the 2017 repricing of our First Lien Term B Loan, the 2016 early repayment of a portion of our long-term debt and the 2016 refinancing of our long-term debt. Represents transaction-related expenses that consist primarily of certain expenses associated with our secondary offerings and our Initial Public Offering and other offering costs in 2016 as well as certain corporate development activity, including the RowdMap Acquisition. Represents expense related to equity incentive awards granted to certain employees, officers and non‑employee directors as long‑term incentive compensation. We recognize the related expense for these awards ratably over the vesting period. Represents expense related to restricted stock issued in connection with the RowdMap Acquisition. We recognize the related expense for these awards ratably over the vesting period or as achievement of performance criteria become probable. This line represents the tax impact of the amortization of acquired intangible assets - tax deductible, loss on extinguishment of debt and stock-based compensation – tax deductible. The tax rate assumed is 38% and 40% for the three and nine months ended September 30, 2017 and 2016, respectively. Change Change Net Income $ 19,472 $ 4,583 325 % $ 67,535 $ 23,560 187 % Adjustments to net income: Amortization of acquired intangible assets - non tax deductible 11,191 10,402 8 % 31,995 31,206 3 % Amortization of acquired intangible assets - tax deductible 3,556 4,801 (26) % 13,152 14,412 (9) % Loss on extinguishment of debt (a) - 9,349 (100) % 3,183 16,417 (81) % Transaction-related expenses and other (b) 773 16 NM % 2,165 909 138 % Stock-based compensation - tax deductible (c) 1,786 17,042 (90) % 6,324 21,544 (71) % Stock-based compensation - non tax deductible (d) 3,966 - NM % 3,966 - NM % Tax effect of above adjustments (e) (2,030) (12,476) (84) % (8,611) (20,949) (59) % Tax benefit related to stock option exercises (1,833) - NM % (14,874) - NM % Adjusted Net Income $ 36,881 $ 33,717 9 % $ 104,835 $ 87,099 20 % Weighted average shares of common stock - Diluted (000s) 95,266 93,954 1 % 95,151 86,858 10 % Adjusted Net Income per Diluted Share $ 0.39 $ 0.36 8 % $ 1.10 $ 1.00 10 % (unaudited, $ in thousands) 2017 2016 2017 2016 Nine Months Ended September 30, Three Months Ended September 30,

 

 


 

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Cotiviti Holdings, Inc. 2017 Adjusted EBITDA Guidance (Non-GAAP) Represents other non-operating (income) expense that consists primarily of interest income and gains and losses on transactions settled in foreign currencies. Income received for certain sub-leases is included herein. Income tax expense for 2017 assumes an effective tax rate of approximately 38% excluding the impact of the benefit related to stock option exercises that have actually occurred through September 30, 2017. Represents transaction-related expenses that consist primarily of certain expenses associated with our secondary offerings and our Initial Public Offering and other offering costs in 2016 as well as certain corporate development activity, including the RowdMap Acquisition. Represents expense related to equity incentive awards granted to certain employees, officers and non-employee directors as long-term incentive compensation and restricted stock issued in connection with the RowdMap Acquisition. We recognize the related expense for these awards ratably over the vesting period or as achievement of performance criteria become probable. Represents loss on extinguishment of debt that consists primarily of fees paid and write-offs of unamortized debt issuance costs and original issue discount in connection with the 2017 repricing of our First Lien Term B Loan, the 2016 early repayment of a portion of our long-term debt and the 2016 refinancing of our long-term debt. (unaudited, in millions) Low High Net income 91 $ 95 $ Adjustments to net income: Depreciation and amortization 85 83 Interest expense 35 35 Other non-operating (income) expense (a) (2) (3) Income tax expense (b) 34 36 Transaction-related expenses and other (c) 2 2 Stock-based compensation (d) 17 17 Loss on extinguishment of debt (e) 3 3 Adjusted EBITDA 265 $ 268 $

 

 


 

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Cotiviti Holdings, Inc. Cash Flow Data Free cash flow is a non-GAAP financial measure. Therefore, it should not be considered a substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines free cash flow as net cash provided by operating activities less capital expenditures. It should not be inferred that the entire free cash flow amount is available for discretionary expenditures. Management believes free cash flow is meaningful as it is used by management and investors as a measure and indicator of the financial strength of the company and its ability to generate cash. Operating Cash Flow $ 107,163 $ 108,345 Capex 23,610 22,578 Free Cash Flow (a) $ 83,553 $ 85,767 (unaudited, $ in thousands) Nine Months Ended September 30, 2017 2016

 

 


 

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Cotiviti Holdings, Inc. Consolidated Balance Sheet Data ($ in thousands) September 30, 2017 December 31, 2016 (unaudited) Cash and cash equivalents $ 123,008 $ 110,635 Total assets 2,072,225 2,002,263 Total long-term debt (a) 771,592 780,202 Total liabilities 1,041,359 1,062,927 Total stockholders’ equity 1,030,866 939,336 Net debt leverage 2.6x 2.9x Working capital 70,951 31,037 a) Includes the current portion of our long-term debt and is net of debt issuance costs.

 

 


 

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0 Analytics. Insight. Value.