Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 31, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-40506 | |
Entity Registrant Name | Convey Health Solutions Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2099378 | |
Entity Address, Address Line One | 100 SE 3rd Avenue, 26th Floor | |
Entity Address, City or Town | Fort Lauderdale | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33394 | |
City Area Code | 800 | |
Local Phone Number | 559-9358 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | CNVY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 73,194,171 | |
Entity Central Index Key | 0001787640 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 36,441 | $ 45,366 |
Accounts receivable, net of allowance for doubtful accounts of $275 and $610 as of September 30, 2021, and December 31, 2020, respectively | 46,798 | 50,589 |
Inventories, net | 13,860 | 11,094 |
Prepaid expenses and other current assets | 12,894 | 15,220 |
Restricted cash | 3,560 | 3,560 |
Total current assets | 113,553 | 125,829 |
Property and equipment, net | 19,318 | 20,667 |
Intangible assets, net | 224,554 | 238,842 |
Goodwill | 455,206 | 455,206 |
Restricted cash | 0 | 160 |
Other assets | 1,725 | 2,364 |
Total assets | 814,356 | 843,068 |
Current liabilities | ||
Accounts payable | 11,864 | 21,308 |
Accrued expenses | 41,969 | 67,159 |
Capital lease obligations, current portion | 494 | 361 |
Deferred revenue, current portion | 4,662 | 6,466 |
Term loans, current portion | 0 | 2,500 |
Total current liabilities | 58,989 | 97,794 |
Capital leases obligations, net of current portion | 660 | 1,129 |
Deferred taxes, net | 21,417 | 26,561 |
Term loans, net of current portion | 189,482 | 239,290 |
Other long-term liabilities | 7,683 | 8,144 |
Total liabilities | 278,231 | 372,918 |
Commitments and contingencies (Note 14) | ||
Shareholders’ equity | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized and no shares issued or outstanding as of September 30, 2021 and no shares authorized, issued or outstanding as of December 31, 2020 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 and 126,000,000 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 73,194,171 and 61,321,424 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively | 733 | 613 |
Additional paid-in capital | 569,038 | 492,747 |
Accumulated other comprehensive income | 33 | 78 |
Accumulated deficit | (33,679) | (23,288) |
Total shareholders’ equity | 536,125 | 470,150 |
Total liabilities and shareholders’ equity | $ 814,356 | $ 843,068 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 275 | $ 610 |
Preferred stock par value (in usd per share) | $ 0.01 | |
Preferred stock shares authorized | 25,000,000 | 0 |
Preferred stock shares issued | 0 | 0 |
Preferred stock shares outstanding | 0 | 0 |
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock shares authorized | 500,000,000 | 126,000,000 |
Common stock shares issued | 73,194,171 | 61,321,424 |
Common stock shares outstanding | 73,194,171 | 61,321,424 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
Revenues [Abstract] | |||||
Net revenues | $ 82,411 | $ 69,528 | $ 240,290 | $ 195,833 | |
Costs and Expenses [Abstract] | |||||
Selling, general and administrative | 21,296 | 18,784 | 70,986 | 58,886 | |
Depreciation and amortization | 7,473 | 6,918 | 22,667 | 20,710 | |
Transaction related costs | 328 | 80 | 2,969 | 277 | |
Change in fair value of contingent consideration | 0 | 0 | 96 | 0 | |
Total operating expenses | 74,311 | 67,085 | 235,564 | 200,235 | |
Operating income (loss) | 8,100 | 2,443 | 4,726 | (4,402) | |
Other income (expense): | |||||
Interest income | 0 | 0 | 0 | 7 | |
Loss on extinguishment of debt | 0 | 0 | (5,015) | 0 | |
Interest expense | (3,283) | (4,561) | (15,144) | (13,478) | |
Total other expense, net | (3,283) | (4,561) | (20,159) | (13,471) | |
Income (loss) from continuing operations before income taxes | 4,817 | (2,118) | (15,433) | (17,873) | |
Income tax (expense) benefit | (1,131) | 472 | 5,042 | 3,272 | |
Net income (loss) from continuing operations | 3,686 | (1,646) | (10,391) | (14,601) | |
Income (loss) from discontinued operations, net of tax | 0 | (6) | 0 | 37 | |
Net income (loss) | $ 3,686 | $ (1,652) | $ (10,391) | $ (14,564) | |
Income (loss) per common share – Basic and diluted | |||||
Income (loss) per common share – basic; continuing operations (in usd per share) | $ 0.05 | $ (0.03) | $ (0.16) | $ (0.24) | |
Income (loss) per common share – diluted; continuing operations (in usd per share) | 0.05 | (0.03) | (0.16) | (0.24) | |
Income (loss) per common share – basic; discontinued operations (in usd per share) | 0 | 0 | 0 | 0 | |
Income (loss) per common share – diluted; discontinued operations (in usd per share) | 0 | 0 | 0 | 0 | |
Net income (loss) per common share - diluted (in usd per share) | 0.05 | (0.03) | (0.16) | (0.24) | |
Net income (loss) per common share - basic (in usd per share) | $ 0.05 | $ (0.03) | $ (0.16) | $ (0.24) | |
Foreign currency translation adjustments | $ (33) | $ 28 | $ (45) | $ 47 | |
Comprehensive income (loss) | 3,653 | (1,624) | (10,436) | (14,517) | |
Services | |||||
Revenues [Abstract] | |||||
Net revenues | 44,191 | 37,207 | 130,002 | 104,814 | |
Costs and Expenses [Abstract] | |||||
Cost of services and products, excluding depreciation, depletion, and amortization | [1] | 20,993 | 20,077 | 65,799 | 59,719 |
Products | |||||
Revenues [Abstract] | |||||
Net revenues | 38,220 | 32,321 | 110,288 | 91,019 | |
Costs and Expenses [Abstract] | |||||
Cost of services and products, excluding depreciation, depletion, and amortization | [1] | $ 24,221 | $ 21,226 | $ 73,047 | $ 60,643 |
[1] | Excludes amortization of intangible assets and depreciation, which are separately stated below. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common stock | Common stockIPO | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning Balance (in shares) at Dec. 31, 2019 | 61,321,424 | |||||
Beginning Balance at Dec. 31, 2019 | $ 469,873 | $ 613 | $ 486,065 | $ 21 | $ (16,826) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 5,671 | 5,671 | ||||
Foreign currency translation adjustments | 47 | 47 | ||||
Net income | (14,564) | (14,564) | ||||
Ending Balance (in shares) at Sep. 30, 2020 | 61,321,424 | |||||
Ending Balance at Sep. 30, 2020 | 461,027 | $ 613 | 491,736 | 68 | (31,390) | |
Beginning Balance (in shares) at Jun. 30, 2020 | 61,321,424 | |||||
Beginning Balance at Jun. 30, 2020 | 460,906 | $ 613 | 489,991 | 40 | (29,738) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 1,745 | 1,745 | ||||
Foreign currency translation adjustments | 28 | 28 | ||||
Net income | (1,652) | (1,652) | ||||
Ending Balance (in shares) at Sep. 30, 2020 | 61,321,424 | |||||
Ending Balance at Sep. 30, 2020 | 461,027 | $ 613 | 491,736 | 68 | (31,390) | |
Beginning Balance (in shares) at Dec. 31, 2020 | 61,321,424 | |||||
Beginning Balance at Dec. 31, 2020 | 470,150 | $ 613 | 492,747 | 78 | (23,288) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 3,166 | 3,166 | ||||
Foreign currency translation adjustments | (45) | (45) | ||||
Issuance of common stock to board of director member (in shares) | 25,200 | |||||
Issuance of common stock to a board of directors member | 250 | 250 | ||||
Issuance of common stock in initial public offering, net of issuance costs of $17.7 million (in shares) | 8,152 | 11,666,667 | ||||
Issuance of common stock in initial public offering, net of issuance costs of $17.2 million | $ 146,136 | $ 117 | 146,019 | |||
Exercise of vested stock options (in shares) | 172,728 | 172,728 | ||||
Exercise of vested stock options | $ 1,359 | $ 3 | 1,356 | |||
Dividend | (74,500) | (74,500) | ||||
Net income | (10,391) | (10,391) | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 73,194,171 | |||||
Ending Balance at Sep. 30, 2021 | 536,125 | $ 733 | 569,038 | 33 | (33,679) | |
Beginning Balance (in shares) at Jun. 30, 2021 | 73,013,291 | |||||
Beginning Balance at Jun. 30, 2021 | 530,020 | $ 730 | 566,589 | 66 | (37,365) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share-based compensation | 1,093 | 1,093 | ||||
Foreign currency translation adjustments | (33) | (33) | ||||
Issuance of common stock in initial public offering, net of issuance costs of $17.7 million (in shares) | 8,152 | |||||
Exercise of vested stock options (in shares) | 172,728 | |||||
Exercise of vested stock options | 1,359 | $ 3 | 1,356 | |||
Net income | 3,686 | 3,686 | ||||
Ending Balance (in shares) at Sep. 30, 2021 | 73,194,171 | |||||
Ending Balance at Sep. 30, 2021 | $ 536,125 | $ 733 | $ 569,038 | $ 33 | $ (33,679) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Parenthetical) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Stock issuance costs | $ 17.2 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Cash Flows [Abstract] | ||||
Net income | $ 3,686 | $ (1,652) | $ (10,391) | $ (14,564) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||
Depreciation expense | 1,400 | 900 | 4,155 | 2,933 |
Amortization expense | 18,512 | 17,777 | ||
Loss on extinguishment of debt | 0 | 0 | 5,015 | 0 |
Provision for bad debt | (125) | 79 | ||
Provision for inventory reserve | 941 | 25 | ||
Deferred income taxes | (5,144) | (4,182) | ||
Amortization of debt issuance costs | 876 | 783 | ||
Change in fair value of contingent consideration | 0 | 0 | 96 | 0 |
Share-based compensation | 1,093 | 1,745 | 3,166 | 5,671 |
Changes in operating assets and liabilities: | ||||
Accounts receivable | 3,916 | 9,782 | ||
Inventory | (3,707) | (6,522) | ||
Prepaid expenses and other assets | 2,830 | 3,092 | ||
Accounts payable and other accrued liabilities | (13,145) | 12,483 | ||
Deferred revenue | (1,489) | (3,042) | ||
Payment on contingent consideration | (10,329) | 0 | ||
Net cash (used in) provided by operating activities | (4,823) | 24,315 | ||
Cash flows from investing activities | ||||
Acquisition, net of cash received | 0 | (3,758) | ||
Purchases of property and equipment, net | (4,713) | (3,385) | ||
Capitalized software development costs | (4,051) | (2,960) | ||
Net cash used in investing activities | (8,764) | (10,103) | ||
Cash flows from financing activities | ||||
Proceeds from issuance of debt | 78,000 | 25,000 | ||
Payment of debt issuance cost | (2,133) | (1,148) | ||
Principal payment on term loan | (132,368) | (1,813) | ||
Payment on capital leases | (336) | (73) | ||
Proceeds from issuance of common stock to a board of directors member | 250 | 0 | ||
Proceeds from issuance of common stock in initial public offering, net of issuance costs | 146,136 | 0 | ||
Prepayment premium on early repayment of term loan | (1,563) | 0 | ||
Payment on contingent consideration | (10,303) | (11,010) | ||
Exercise of vested stock options | 1,359 | 0 | ||
Dividend | (74,500) | 0 | ||
Net cash provided by financing activities | 4,542 | 10,956 | ||
Effect of exchange rate changes on cash | (40) | 51 | ||
Net (decrease) increase in cash and cash equivalents and restricted cash | (9,085) | 25,219 | ||
Cash, cash equivalents and restricted cash at beginning of period | 49,086 | 21,346 | ||
Cash, cash equivalents and restricted cash at end of period | 40,001 | 46,565 | 40,001 | 46,565 |
Cash, cash equivalents and restricted cash as of the end of the period | ||||
Cash and cash equivalents | 36,441 | 41,230 | 36,441 | 41,230 |
Restricted cash | 3,560 | 1,615 | 3,560 | 1,615 |
Restricted cash, non-current | 0 | 3,720 | 0 | 3,720 |
Cash, cash equivalents and restricted cash | $ 40,001 | $ 46,565 | 40,001 | 46,565 |
Supplemental disclosures of cash flow information: | ||||
Cash paid for taxes | 1,111 | 38 | ||
Cash paid for interest | 14,885 | 11,028 | ||
Non-cash investing and financial activities: | ||||
Capitalized software and property and equipment, net included in accounts payable | $ 1,219 | $ 819 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS AND BASIS OF PRESENTATION | BUSINESS AND BASIS OF PRESENTATION Business Convey Holding Parent, Inc. (collectively with its subsidiaries, which includes our main operating subsidiary, Convey Health Solutions, Inc., “we”, “us”, “our”, “Convey” or the “Company”) provides technology enabled solutions to payors within the large and growing government sponsored health plan market. Our platform combines proprietary modular technology and end-to-end solutions to serve as an extension of our clients’ operations and core systems. Our clients are primarily Medicare Advantage, Medicare Part D and Employer Group Waiver Plans, as well as Pharmacy Benefit Managers. Convey is a United States (“U.S.”) based holding company incorporated in Delaware. Our principal executive offices are located in Fort Lauderdale, Florida. On April 21, 2021, we completed a corporate name change from Cannes Holding Parent, Inc. to Convey Holding Parent, Inc. Stock Split Prior to the IPO (as defined below), in June 2021, Convey’s Board of Directors (the “Board”) and stockholders approved a forward split of shares of Convey’s common stock, par value $0.01 per share, on a 126-for-1 basis (the “Stock Split”), which became effective as of June 4, 2021. Prior to the Stock Split, we were authorized to issue 1,000,000 shares of common stock of which (i) 915,000 shares were designated as voting common stock and (ii) 85,000 shares were designated as non-voting common stock. In connection with the Stock Split, the total number of authorized shares of common stock was proportionately increased and the par value of the common stock was not adjusted as a result of the Stock Split. In addition, all authorized shares of common stock were designated voting common stock. All references to common stock, options to purchase common stock, per share data and related information contained in the condensed consolidated financial statements have been retrospectively adjusted to reflect the effect of the Stock Split. Initial Public Offering On June 18, 2021, we closed our initial public offering (“IPO”) of our common stock through an underwritten sale of 13,333,334 shares of our common stock at a price of $14.00 per share. In the offering, we sold 11,666,667 shares and a selling stockholder sold 1,666,667 shares. The aggregate net proceeds to us from the offering after deducting underwriting discounts and commissions and other offering expenses payable by us, were approximately $146.1 million. We used approximately $131.5 million of the net proceeds from the IPO to repay outstanding indebtedness under our credit agreement. We did not receive any of the proceeds from the sale by the selling stockholder. Prior to the closing of the IPO, on June 17, 2021, our Second Amended and Restated Certificate of Incorporation (the “Charter”) and our Second Amended and Restated Bylaws, became effective. The Charter, among other things, provides that our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share. Basis of Presentation and Consolidation Convey was formed on June 13, 2019, for the purpose of acquiring Convey Health Solutions, Inc. (“CHS”). On September 4, 2019, Cannes Parent, Inc. (“Cannes”), a direct subsidiary of Convey, entered into an agreement (the “Merger Agreement”) to acquire all of the outstanding stock of CHS through the merger of Cannes Merger Sub, Inc. and Convey Health Parent, Inc. (“Parent”) (the “Merger”) with Parent surviving as a direct subsidiary of Cannes. The Merger principally occurred through an investment from TPG Cannes Aggregation, L.P. (the “selling stockholder”), which is primarily funded by partners of TPG Partners VIII, L.P. and TPG Healthcare Partners, L.P. or any parallel fund or their alternative investment vehicles (collectively, “TPG”). The accompanying condensed consolidated financial statements are unaudited and include the accounts of Convey and our wholly-owned subsidiaries. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated statements of operations and comprehensive income (loss), shareholders’ equity, and cash flows for the nine months ended September 30, 2021, and 2020, and the condensed consolidated balance sheet as of September 30, 2021, reflect all adjustments that are of a normal recurring nature and that are considered necessary for a fair statement of the results for the periods shown. Our condensed consolidated balance sheet as of December 31, 2020, has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2020, which include a complete set of footnote disclosures, including our significant accounting policies, and are included in the final prospectus for the Company’s IPO dated June 15, 2021, and filed with the SEC on June 17, 2021, pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All significant intercompany balances and transactions have been eliminated in consolidation. COVID-19 Pandemic During the first quarter ended March 31, 2020, concerns related to the spread of novel coronavirus (“COVID-19”) began to create global business disruptions as well as disruptions in our operations. COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. Governments at the national, state and local level in the U.S., and globally, have implemented aggressive actions to reduce the spread of the virus, with such actions including lockdown and shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and ordering certain businesses and governmental agencies to cease non-essential operations at physical locations. While some of these actions have eased, escalating transmission rates (including of the Delta variant of COVID-19), slowing and uneven vaccination rates and further governmental guidance and orders may result in having to reimplement certain of these measures or implementing new and additional ones. The spread of COVID-19 has also caused significant volatility in the U.S. and international markets and the global impact of the pandemic continues to evolve. The impact of COVID-19 on our business has resulted in elongated sales cycles, postponement of customer contract renewals, and slower implementation of software solutions for our clients, as well as a reduction in billable hours in one of our reportable segments, the Advisory Services segment. The full extent to which the COVID-19 pandemic and the various responses to the COVID-19 pandemic will impact our business, operations or financial condition will depend on numerous evolving factors that we may not be able to accurately predict, including, but not limited to, the duration, severity and scope of the COVID-19 pandemic (including due to new variants, such as Delta); actions by governmental entities, businesses and individuals that have been and continue to be taken in response to the pandemic; the effect on our clients and demand by clients, clients and our clients’ members for and ability to pay for our solutions and services; and disruptions or restrictions on our employees’ ability to work and travel. The impact of these factors and others on our suppliers and clients could persist for some time after governments ease their restrictions and after the overall number of COVID-19 cases in the United States decreases. We have assessed various accounting estimates and other matters, including those that require consideration of forecasted financial information, in context with the unknown future impacts of COVID-19 using information that is reasonably available to us at this time. While our current assessment of our estimates did not have a material impact on our condensed consolidated financial statements as of and for the nine months ended September 30, 2021, as additional information becomes available to us, our future assessment of our estimates, including our expectations at the time regarding the duration, scope and severity of the pandemic, as well as other factors, could materially and adversely impact our consolidated financial statements in future reporting periods. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information currently available to us and based on various other assumptions that we conclude to be reasonable under the circumstances. While management concludes that such estimates are reasonable when considered in conjunction with our condensed consolidated balance sheets and statements of operations and comprehensive income (loss) taken as a whole, actual results could differ materially from those estimates. Deferred Initial Public Offering Costs We have incurred certain costs in connection with our IPO. Deferred IPO costs of $5.8 million were charged to shareholders’ equity upon the completion of the IPO (see Note 1). As of December 31, 2020, deferred IPO costs were $0.4 million and were included within Prepaid expenses and other current assets on the condensed consolidated balance sheets. Customer Concentrations Revenue and Accounts receivable from our major customers are as follows: Revenues Revenues For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Customer A $ 15,409 $ 13,479 $ 41,594 $ 33,547 % of total revenue 18.7 % 19.4 % 17.3 % 17.1 % Customer B $ 13,492 $ 12,215 $ 44,888 $ 34,636 % of total revenue 16.4 % 17.6 % 18.7 % 17.7 % Accounts Receivable (in thousands) September 30, 2021 December 31, 2020 Customer A $ 4,344 $ 7,582 % of total accounts receivable 9.3 % 15.0 % Customer B $ 7,558 $ 3,447 % of total accounts receivable 16.2 % 6.8 % Our customer base is highly concentrated. Revenue may significantly decline if we were to lose one or more of our significant customers. However, our risk is reduced due to our significant customers having multiple product delivery solutions under separate contracts. Contingent Consideration We recognized an earn-out liability in connection with the November 2018 acquisition of HealthScape Advisors, LLC (“HealthScape Advisors”) and Pareto Intelligence LLC (“Pareto Intelligence”), which represented contingent consideration. The initial fair value of the earn-out liability was determined by employing a Monte-Carlo simulation model. The underlying simulated variable was adjusted revenue discounted by the market price of risk embedded in the revenue metrics. The revenue volatility estimate was based on a study of historical asset volatility and implied volatility for a set of comparable public companies, adjusted by our operating leverage. The earn-out payments were calculated based on simulated revenue metrics and payment thresholds as set forth in the HealthScape Advisors and Pareto Intelligence purchase agreement. The calculated payments were further discounted back to present value using cost of debt reflecting our credit risk. The fair value of the earn-out liability at each reporting date subsequent to the acquisition was measured using a probability weighted approach. In connection with the Merger, we recognized a holdback liability, which represented contingent consideration. The initial fair value of the holdback liabilities and at each subsequent reporting date was measured using a probability weighted approach. A change in any of the unobservable inputs used can change the fair value of our Level 3 earn-out and holdback liabilities. During the nine months ended September 30, 2021, we made a final payment of $13.1 million related to the holdback liability and a $7.5 million final payment related to the earn-out liability due to HealthScape Advisors. The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the nine months ended September 30, 2021: (in thousands) Balance at December 31, 2020 $ 20,538 Payments against the earn-out liabilities (7,500) Payments against the holdback liabilities (13,134) Change in fair value of earn-out liabilities 96 Balance at September 30, 2021 $ — The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the nine months ended September 30, 2020: (in thousands) Balance at December 31, 2019 $ 43,175 Payments against the earn-out liabilities (11,010) Change in fair value of the holdback liabilities — Change in fair value of the earn-out liabilities — Balance at September 30, 2020 $ 32,165 Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted net income (loss) per common share attributable to common shareholders is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period adjusted for the dilutive effects of common stock equivalents. In periods when losses from continuing operations are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. For the Three Months Ended For the Nine Months Ended (in thousands, except per share data) 2021 2020 2021 2020 Net income (loss) attributable to common shareholders Net income (loss) from continuing operations $ 3,686 $ (1,646) $ (10,391) $ (14,601) Net income (loss) from discontinued operations — (6) — 37 Net income (loss) attributable to common shareholders $ 3,686 $ (1,652) $ (10,391) $ (14,564) Weighted-average common shares outstanding: Basic and diluted 73,061,790 61,321,424 65,841,840 61,321,424 Income (Loss) per share: Basic and diluted Continuing operations $ 0.05 $ (0.03) $ (0.16) $ (0.24) Discontinued operations — — — — Net income (loss) per common share $ 0.05 $ (0.03) $ (0.16) $ (0.24) For the three and nine months ended September 30, 2021, and 2020, 5,790,375 and 5,621,364 of potentially dilutive share-based awards outstanding, respectively, were excluded from the computation of diluted net income (loss) related to common holders as their effect was anti-dilutive. See Note 10. Share-Based Compensation . Significant Accounting Policies There have been no material changes in our significant accounting policies during the nine months ended September 30, 2021, as compared to the significant accounting policies described in Note 2 to the consolidated financial statements for the year ended December 31, 2020, which are included in the Prospectus. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which amended the accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the guidance for income taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences as well as simplifying aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. We early adopted ASU 2019-12 on January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The guidance specifies that lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases except those which meet the definition of a short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or financing. Classification will be based on criteria that are similar to those applied in current lease accounting, but without explicit bright lines. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As of September 30, 2021, we have identified our arrangements that are within the scope of the new guidance and have evaluated our portfolio of leases, which is primarily comprised of operating real estate leases for our respective offices. We will elect the package of practical expedients under which we will not reassess prior conclusions about lease identification, lease classification, and initial direct costs of existing leases as of the date of the adoption and, upon adoption, will recognize the right-of-use lease assets and related lease liabilities as of the adoption date using the modified retrospective approach. Prior period information will not be restated. Upon transition to the guidance as of the date of adoption, we expect a material effect on the consolidated balance sheet. Further, we do not expect that the adoption of the guidance will have a material effect on the consolidated statements of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERSWe provide technology enabled solutions and advisory services to assist our clients with workflows across product developments, sales, member experience, clinical management, core operations and business intelligence and analytics. We generate our revenues through our two reporting segments: (i) Technology Enabled Solutions and (ii) Advisory Services. Technology Enabled Solutions We help health plans to grow membership and revenue as well as operate more effectively and efficiently. We also assist our clients in managing the compliance and administrative requirements imposed under government sponsored health plans. Our technology solutions are primarily delivered through a web-based customizable application. This application is used to identify, track, and administer contractual services, or benefits provided under a client’s plan to its Medicare and Medicaid beneficiaries. We also provide analytics over healthcare data to capture and assess gaps in risk documentation, quality, clinical care, and compliance. Our services are provided through three primary solutions: • Advanced Plan Administration provides technology-enabled plan administration services for government-sponsored health plans. Our solution encompasses eligibility and enrollment processing, member services, premium billing and payment processing, reconciliation and other related services. • Supplemental Benefit Administration provides technology enabled services to manage supplemental benefits provided to members through their Medicare Advantage plans. Our services include benefit design and administration, member eligibility and engagement, product fulfillment, end to end analytics and reporting, as well as catalog development and product distribution. • Value Based Payment Assurance provides payment tools and data analytics to improve revenue accuracy and identify gaps in quality, clinical care and compliance. Increasingly we are combining these analytics capabilities with our Advanced Plan Administration and Supplemental Benefit Administration offerings. Advisory Services We provide Advisory Services that complement our technology enabled solutions, including sales and marketing strategies, provider network strategies, compliance, Star ratings, quality, clinical, pharmacy, analytics and risk adjustment. Revenues are recognized when goods and services are transferred to our clients in exchange for the consideration we expect to be entitled to receive. To determine the appropriate recognition of revenue for transactions, we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Disaggregation of revenue The following tables present disaggregated revenue by reporting segment: (in thousands) For the Three Months Ended Technology Advisory Total Product Revenue $ 38,220 $ — $ 38,220 Health Plan Management 20,750 — 20,750 Consulting Services 1,671 13,090 14,761 Software Services 5,705 73 5,778 Data Analytics 2,902 — 2,902 Total $ 69,248 $ 13,163 $ 82,411 (in thousands) For the Nine Months Ended Technology Advisory Total Product Revenue $ 110,288 $ — $ 110,288 Health Plan Management 65,856 — 65,856 Consulting Services 4,153 40,021 44,174 Software Services 10,631 73 10,704 Data Analytics 9,268 — 9,268 Total $ 200,196 $ 40,094 $ 240,290 (in thousands) For the Three Months Ended Technology Advisory Total Product Revenue $ 32,321 $ — $ 32,321 Health Plan Management 18,334 — 18,334 Consulting Services 1,969 9,472 11,441 Software Services 5,060 — 5,060 Data Analytics 2,372 — 2,372 Total $ 60,056 $ 9,472 $ 69,528 (in thousands) For the Nine Months Ended Technology Advisory Total Product Revenue $ 91,019 $ — $ 91,019 Health Plan Management 55,795 — 55,795 Consulting Services 3,604 28,983 32,587 Software Services 9,139 — 9,139 Data Analytics 7,293 — 7,293 Total $ 166,850 $ 28,983 $ 195,833 The revenue recognition pattern, point in time or over time, is consistent within all revenue categories with the exception of Data Analytics which includes revenue recognized on both a point in time and over time basis. The amount of point in time revenue within Data Analytics was $1.2 million and $0.7 million during the three months ended September 30, 2021, and 2020, respectively, and $4.3 million and $2.5 million during the nine months ended September 30, 2021, and 2020, respectively. Contract Balances The timing of our revenue recognition, invoicing, and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue. Accounts receivable includes unbilled receivable balances of $10.6 million and $16.0 million as of September 30, 2021, and December 31, 2020, respectively. Deferred revenue represents payments received from our customers in advance of recognition of revenue. Deferred revenue that will be recognized during the succeeding 12 months is recognized as current deferred revenue and the remaining portion is recognized as non-current deferred revenue within Other long-term liabilities. Revenue recognized during the nine months ended September 30, 2021, and 2020 that was included in the deferred revenue balance at the beginning of the period was $5.9 million and $6.5 million, respectively. Remaining Performance Obligations Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not yet been recognized, which includes contract liabilities and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The timing and amount of revenue recognition for our remaining performance obligations are influenced by several factors and therefore the amount of remaining obligations may not be a meaningful indicator of future results. Total RPO equaled $10.3 million as of September 30, 2021, of which we expect to recognize approximately $4.8 million over the next 12 months. The remaining $5.5 million is expected to be recognized in fiscal years 2022, 2023 and 2024 by $1.2 million, $4.1 million and $0.2 million, respectively. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following: (in thousands) September 30, 2021 December 31, 2020 Prepaid expenses and other advances $ 2,513 $ 4,272 Software licenses 3,220 1,492 Insurance 1,095 852 Inventory purchase advances 177 2,206 Cloud computing subscription & implementation costs 4,806 1,986 Tenant facility lease allowances 789 789 Deferred IPO costs — 446 Other current assets 294 3,177 Total prepaid expenses and other current assets $ 12,894 $ 15,220 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment consist of the following: (in thousands) Estimated Life September 30, 2021 December 31, 2020 Office and computer equipment 3 – 8 years $ 12,822 $ 10,383 Leasehold improvements Up to 10 years 10,503 10,572 Furniture and fixtures 2 – 8 years 3,794 3,794 Software 3 years 1,836 1,486 28,955 26,235 Less: accumulated depreciation (9,637) (5,568) Property and equipment, net $ 19,318 $ 20,667 Depreciation expense for the three months ended September 30, 2021, and 2020 totaled $1.4 million and $0.9 million, respectively. Depreciation expense for the nine months ended September 30, 2021, and 2020 totaled $4.2 million and $2.9 million, respectively. We lease various equipment and software under capital leases. The depreciation expense associated with the assets under capital leases for the three months ended September 30, 2021, and 2020, totaled $0.1 million and $0.02 million, respectively. The depreciation expense associated with the assets under capital leases for the nine months ended September 30, 2021, and 2020, totaled $0.3 million and $0.05 million, respectively. Assets held under capital leases are included in property and equipment as follows: (in thousands) September 30, 2021 December 31, 2020 Office and computer equipment $ 1,682 $ 1,682 Less: accumulated depreciation (528) (192) Total financing leases included in property and equipment $ 1,154 $ 1,490 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The carrying amount of goodwill by reporting unit as of both September 30, 2021, and December 31, 2020 was $88.9 million for Advanced Plan Administration, $190.2 million for Supplemental Benefits Administration, $138.2 million for Value Based Payment Assurance and $37.9 million for Advisory Services, respectively. The goodwill allocated to the Technology Enabled Solutions and Advisory Services reportable segments is $417.3 million and $37.9 million, respectively as of September 30, 2021, and December 31, 2020. Goodwill is assessed for impairment on an annual basis and on an interim basis when indicators of impairment exist. There were no indicators of impairment as of September 30, 2021. The carrying value of identifiable intangible assets consisted of the following as of September 30, 2021: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (3,031) $ 24,269 Customer relationships 189,000 (35,795) 153,205 Technology 47,800 (9,958) 37,842 Capitalized software development costs 10,628 (1,390) 9,238 Total intangible assets $ 274,728 $ (50,174) $ 224,554 The carrying value of identifiable intangible assets consisted of the following as of December 31, 2020: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (1,940) $ 25,360 Customer relationships 189,000 (22,909) 166,091 Technology 47,800 (6,373) 41,427 Capitalized software development costs 6,405 (441) 5,964 Total intangible assets $ 270,505 $ (31,663) $ 238,842 Amortization expense for Trade names, Customer relationships and Technology for the three months ended September 30, 2021, and 2020, totaled $5.9 million for each period. Amortization expense for Trade names, Customer relationships and Technology for the nine months ended September 30, 2021, and 2020, totaled $17.6 million for each period. Amortization expense for Capitalized software development costs for the three months ended September 30, 2021, and 2020, totaled $0.2 million and $0.1 million, respectively. Amortization expense for Capitalized software development costs for the nine months ended September 30, 2021, and 2020, totaled $0.9 million and $0.2 million, respectively. |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES Accrued expenses and other current liabilities consist of the following: (in thousands) September 30, 2021 December 31, 2020 Contingent consideration $ — $ 20,538 Incentive bonus 11,345 12,198 Employee related 9,306 11,065 Sales and use tax 10,957 7,469 Rebates 2,803 3,822 Accrued interest 1,493 2,794 Accrued professional fees 3,772 6,389 Other 2,293 2,884 Total accrued expenses $ 41,969 $ 67,159 |
CREDIT FACILITY
CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY On September 4, 2019, we entered into the First Lien Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for senior secured credit facilities consisting of (i) a $225.0 million closing date term loan (the “Term Facility”) and loans thereunder (the “Term Loans”) and (ii) a $40.0 million revolving credit facility (the “Revolving Facility”) (collectively, the “Credit Facility”). The Term Facility has a seven-year term which expires on September 4, 2026 and the Revolving Facility has a five-year term which expires on September 4, 2024. We paid debt issuance costs of approximately $6.1 million on the closing date of the Credit Facility, $5.2 million is being amortized over the life of the Term Facility (84 months) and $0.9 million is being amortized over the term of the Revolving Facility (60 months) on a straight-line method. The Revolving Facility includes a letter of credit sub-facility (subject to a sublimit not to exceed $10.0 million) and a swing line loan sub-facility (subject to a sublimit not to exceed $10.0 million). On April 8, 2020, we amended the Credit Agreement to establish an incremental loan facility in an aggregate principal amount equal to $25.0 million for an incremental term loan request (the “2020 Incremental Term Loan”) bearing interest at the Eurodollar Rate (as defined in the Credit Agreement) expiring September 4, 2026. We capitalized debt issuance costs of approximately $1.1 million on the closing date of the 2020 Incremental Term Loan, which was being amortized over the life of the 2020 Incremental Term Loan (77 months) on a straight-line basis. On February 12, 2021, we further amended the Credit Agreement to establish an incremental term loan in an aggregate principal amount equal to $78.0 million (the “2021 Incremental Term Loan”) bearing interest at the Eurodollar Rate (as defined in the Credit Agreement) expiring September 4, 2026. We capitalized debt issuance costs of approximately $2.4 million on the closing date of the 2021 Incremental Term Loan, which was being amortized over the life of the 2021 Incremental Term Loan (67 months) on a straight-line basis. The Credit Agreement includes an uncommitted incremental facility, which provides that we have the right at any time to request term loan increases, additional term loan facilities, revolving commitment increases and/or additional revolving credit facilities, in an aggregate principal amount, together with the aggregate principal amount of permitted incremental equivalent debt under the Credit Agreement, not to exceed (a) the sum of the greater of (i) $46.9 million and (ii) 100.0% of Consolidated EBITDA (as defined in the Credit Agreement) of CHS and its restricted subsidiaries for the most recently ended period of four consecutive fiscal quarters of CHS (calculated on a pro forma basis), plus (b) certain additional amounts, including an unlimited amount subject to pro forma compliance with a leverage ratio test. Interest Rate and Fees Borrowings under the Credit Agreement (other than borrowings of swing line loans) bear interest at a rate per annum equal to, at our election, either (i) the LIBOR for the relevant interest period (subject to a floor of 1.00% per annum) plus an applicable margin, as defined in the Credit Agreement, or (ii) a base rate plus an applicable margin, as defined in the Credit Agreement. We elected to use the LIBOR rate for the Term Loans and the Revolving Facility. The Credit Agreement provides for the replacement of LIBOR with a successor or alternative index rate in the event LIBOR is phased-out. In addition to paying interest on the outstanding principal of the Credit Facility, we are required to pay a commitment fee in respect of any unused commitments under the Revolving Facility at a rate that is subject to adjustment based upon the First Lien Net Leverage Ratio, as defined in the Credit Agreement (maximum debt to Earnings Before Interest, Income Tax, Depreciation and Amortization (“EBITDA”), as defined in the Credit Agreement) at such time and ranges from 0.375% to 0.500% per annum. We are also required to pay customary letter of credit fees and certain other agency fees. On July 12, 2021, CHS entered into Amendment No. 4 to the Credit Agreement (“Amendment No. 4”). Amendment No. 4 amends the Credit Agreement to provide for, among other things, (i) the reduction of the Applicable Rate (as defined in the Credit Agreement) for Eurodollar Rate Loans (as defined in the Credit Agreement) from 5.25% to 4.75% and, for Base Rate Loans (as defined in the Credit Agreement), from 4.25% to 3.75%, and (ii) the reduction of the floor for the Eurodollar Rate (as defined in the Credit Agreement) from 1.00% to 0.75% for the Closing Date Term Loans (as defined in the Credit Agreement). Amendment No. 4 was accounted for as a debt modification. Covenants The Credit Facility contains a financial covenant that requires us to maintain as of the last day of each period of four consecutive quarters of the Company, a First Lien Net Leverage Ratio not to exceed 7.4 to 1.0 if, as of the last day of any fiscal quarter of the Company, there are outstanding revolving loans and letters of credit (excluding (i) undrawn letters of credit in an aggregate face amount up to $10.0 million and (ii) letters of credit (whether drawn or undrawn) to the extent reimbursed, cash collateralized or backstopped on terms reasonably acceptable to the applicable issuing bank on or prior to the date that is three business days following the end of the applicable period of four consecutive fiscal quarters of CHS in an aggregate principal amount exceeding 35% of the aggregate principal amount of the Revolving Facility at such time. Prepayments and Mandatory Prepayment Under the terms of the Credit Agreement, we are permitted to voluntarily prepay outstanding loans or commitments in whole or part without premium or penalty other than certain exceptions described in the Credit Agreement; however, the Credit Agreement requires us to prepay outstanding term loans, subject to certain exceptions and limitations with (i) 50% of our annual excess cash flow, subject to certain step-downs based upon the First Lien Net Leverage Ratio; (ii) 100% of the net cash proceeds of certain asset sales or casualty events; and (iii) 100% of the net cash proceeds of certain incurrences or issuances of indebtedness. Scheduled Repayments We are required to make scheduled quarterly payments on the Term Loans. Prior to the 2021 Incremental Term Loan, we were required to make quarterly payments (i) commencing with the quarter ended December 31, 2019, in an amount equal to 0.25% of the aggregate principal amount of the Term Loans outstanding on September 4, 2019 with the balance due upon maturity date and (ii) in respect of the 2020 Incremental Term Loans, beginning with the quarter ended June 30, 2020, in an amount equal to 0.25% of the aggregate principal amount of the 2020 Incremental Term Loan outstanding on April 8, 2020, with the balance due on maturity. Subsequent to the 2021 Incremental Term Loan, we are required to make quarterly payments (i) commencing with the quarter ended March 31, 2021, in an aggregate principal amount equal to $0.8 million for the Term Facility and the 2021 Incremental Term Loan, with the balance due upon maturity date and (ii) in respect of the 2020 Incremental Term Loans, in an amount equal to 0.25% of the aggregate principal amount of the 2020 Incremental Term Loan outstanding on April 8, 2020, with the balance due on maturity. We are required to repay the aggregate principal amount outstanding under the Revolving Facility, and the aggregate principal amount of each swing line loan under the Revolving Facility, at maturity of the Revolving Facility on September 4, 2024. In connection with the prepayment noted under the “Extinguishment of Debt” below, no additional scheduled installments of principal are required. Guarantees and Collateral All obligations under the Credit Agreement are unconditionally guaranteed by Parent and certain subsidiaries. All obligations under the Credit Agreement are secured, subject to permitted liens and other exceptions and limitations, by first priority security interests in substantially all the assets of the Company and each guarantor (including all the equity interests of CHS). Extinguishment of Debt On June 18, 2021, $131.5 million from the IPO proceeds (see Note 1) were used to repay the principal balance, accrued but unpaid interest, and prepayment premium under the Credit Agreement. The 2020 Incremental Term Loan and the 2021 Incremental Term Loan were repaid in full and the remainder of the proceeds were used to repay a portion of the Term Facility. The prepayment for the Term Facility was applied to the remaining scheduled installments of principal and as a result of the prepayment, no additional scheduled installments of principal are required. The Company recorded a loss on extinguishment of debt of $5.0 million. The loss consisted of $3.4 million for unamortized deferred financing costs and $1.6 million for prepayment premiums. Other Information As of September 30, 2021, and December 31, 2020, unamortized deferred financing costs for the Term Loans totaled $3.1 million and $5.2 million, respectively. Amortization of deferred financing costs for the three months ended September 30, 2021, and 2020, totaled $0.2 million for each period. Amortization of deferred financing costs for the nine months ended September 30, 2021, and 2020, totaled $0.7 million and $0.6 million, respectively. As of September 30, 2021 and December 31, 2020, unamortized deferred financing costs associated with the Revolving Facility totaled $0.5 million and $0.7 million, respectively, and were included in Other assets in the condensed consolidated balance sheets. Amortization of deferred financing costs was approximately $50 thousand for each of the three months ended September 30, 2021, and 2020. Amortization of deferred financing costs was approximately $0.1 million for each of the nine months ended September 30, 2021, and 2020. Amortization of deferred financing costs is included within Interest expense in the condensed consolidated statement of operations and comprehensive income (loss). For the nine months ended September 30, 2021, and 2020, the average interest rate for the Term Facility was 6.3% and 6.6%, respectively. As of September 30, 2021, and December 31, 2020, the aggregate principal balance was $192.6 million and $222.2 million, respectively. For the nine months ended September 30, 2021, the average interest rate for the 2020 Incremental Term Loan was 10%. As of December 31, 2020, the aggregated principal balance was $24.8 million. For the nine months ended September 30, 2021, the average interest rate for the 2021 Incremental Term Loan was 7.0%. For the nine months ended September 30, 2021, and 2020, the average interest rate for the Revolving Facility was 2.75% for each period. As of September 30, 2021, and December 31, 2020, the available balance was $39.5 million. On January 23, 2020, we established an irrevocable transferable letter of credit (“LOC”) in the favor of a lessor totaling $0.5 million. The LOC expired on January 31, 2021, however, per the terms of the agreement, the LOC automatically extends for a one year period upon the expiration date and each anniversary thereafter, unless at least 60 days prior to such expiration date or anniversary written notice is provided that we elect not to extend the LOC. The LOC was automatically extended for a one year period on January 31, 2021. Debt consists of the following as of September 30, 2021, and December 31, 2020: (in thousands) September 30, 2021 December 31, 2020 Term loans $ 192,631 $ 246,999 Less: deferred financing costs (3,149) (5,209) Term loans, net of deferred financing costs 189,482 241,790 Less: current portion — (2,500) $ 189,482 $ 239,290 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | SHAREHOLDERS’ EQUITY As of September 30, 2021, we are authorized to issue 500,000,000 shares of common stock, par value $0.01 per share and 25,000,000 shares of preferred stock, par value $0.01 per share. See Note 1 for additional information related to the Stock Split and IPO. In February 2021, our Board, through a unanimous written consent, adopted a written resolution declaring a special dividend of $1.18 per share of common stock totaling $74.5 million in cash (“Special Dividend”) ultimately to be distributed to the shareholders of Convey. Of the Special Dividend, $72.2 million was paid to existing shareholders and $2.3 million was paid |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION On September 4, 2019, the effective date, Convey’s Board of Directors adopted the Cannes Holding Parent, Inc. 2019 Equity Incentive Plan (the “2019 Equity Plan”). The 2019 Equity Plan was terminated and replaced and superseded by the 2021 Plan (as defined below) on the effective date of the 2021 Plan and no further grant of awards under the 2019 Equity Plan will be made after such effective date. Outstanding awards granted under the 2019 Equity Plan remain in effect pursuant to their terms. On June 4, 2021, in connection with the IPO, the Company adopted the Convey Holding Parent, Inc. 2021 Omnibus Incentive Compensation Plan (the “2021 Plan”). The 2021 Plan has a term of ten years. In March 2020, pursuant to the 2019 Equity Plan, Convey issued option awards to acquire 5,723,676 shares, respectively, of Convey’s common stock having an exercise price of $7.94 per share and a term of ten The time-vesting options will vest 20% on the first anniversary of the commencement date, defined in each option agreement, and the remainder will vest in 16 equal 3-month installments over the following four years. Upon a change in control, the time-vested options will vest fully. The performance-vesting options are eligible to vest 20% each year subject to the Company meeting certain annual Adjusted Earnings Before Interest, Income Tax, Depreciation and Amortization (“Adjusted EBITDA”) targets. Each year has been accounted for as a separate tranche. To the extent that any performance-based options have not vested pursuant to achievement of the annual Adjusted EBITDA targets (performance condition), catch-up vesting may occur if at any time prior to or upon the option expiration date of the award, TPG achieves a certain multiple-of-money return (market condition). Upon the consummation of a change in control, all performance-based options that have not become vested pursuant to the achievement of the Adjusted EBITDA targets or do not satisfy the catch-up vesting criteria will be immediately forfeited without any payment or consideration due from us. In March 2021, pursuant to the 2019 Equity Plan, Convey issued option awards to acquire 69,300 shares of Convey’s common stock with an exercise price of $9.92 per share and a term of ten In June 2021, in connection with the IPO and pursuant to the 2021 Plan, Convey issued option awards to acquire 497,321 shares of Convey’s common stock with an exercise price of $14.00 per share and a term of ten In August 2021, pursuant to the 2021 Plan, Convey issued option awards to acquire 20,380 shares of Convey’s common stock with an exercise price of $9.20 per share and a term of five (5) years. In addition, Convey issued 8,152 RSUs with a grant date fair value of $9.20 per unit. The option awards and RSUs were fully vested as of the date of the grant. The following table summarizes the total share-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Selling, general and administrative $ 1,093 $ 1,745 $ 3,166 $ 5,671 Total stock-based compensation expense $ 1,093 $ 1,745 $ 3,166 $ 5,671 Stock Option Modification On February 15, 2021, Convey’s Board of Directors approved a stock option award modification (the “Modification”) whereby the exercise price of certain previously granted and still outstanding unvested stock option awards held by current employees and certain executives were reduced by $1.18 per award, which represented the cash payment made for the vested awards as part of the Special Dividend. No other terms of the repriced stock options were modified, and the modified stock options will continue to vest according to their original vesting schedules and will retain their original expiration dates. As a result of the Modification, 3,653,837 unvested stock options outstanding with an original exercise price of $7.94 were modified. There was no incremental stock-based compensation expense as there was no incremental fair value generated as a result of the Modification. Stock Option Grants Stock option activity and information about stock options outstanding are summarized in the following table: Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2020 5,621,364 $ 7.94 9.20 Granted 587,001 13.35 Exercised (172,728) 7.86 Forfeited (399,483) 8.78 Outstanding at September 30, 2021 5,636,154 7.68 8.49 Vested or expect to vest as of September 30, 2021 5,636,154 7.68 8.49 Vested and Exercisable as of September 30, 2021 2,084,658 7.80 8.36 The stock options are equity-based awards and their aggregate intrinsic value outstanding and exercisable at September 30, 2021, is $0. The weighted average fair value of options granted in 2021 was $4.60. As of September 30, 2021, there was approximately $11.5 million total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of 2.29 years. We estimate the fair value of the time-vesting stock option awards on the date of grant using the Black-Scholes Merton model. The time-vesting options have a service condition. Option valuation models, including the Black-Scholes Merton model, require the input of certain assumptions that involve judgment. Changes in the input assumptions can materially affect the fair value estimates and, ultimately, how much we recognize as stock-based compensation expense. The fair value of the options granted during the year were estimated on the date of the grant using the Black-Scholes Merton model based on the following assumptions: 2021 Grants Expected term (years) 6.11 Expected volatility 45 % Risk free interest rate 1.11 % Expected dividend yield — % Prior to the IPO, there was no active external or internal market for our common shares. Thus, it was not possible to estimate the expected volatility of our share price in estimating fair value of options granted. Accordingly, as a substitute for such volatility, the Company used the historical volatility of the common stock of other companies in the same industry over an approximate period of time commensurate with the expected term of the options awarded. The expected term for options granted is based on the “simplified” method described in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment , and SAB No. 110, Share-Based Payment , since the simplified method provides a reasonable estimate in comparison to actual experience. Management had estimated the risk-free interest rate based on U.S. Treasury note rates for the expected term. Restricted Stock Units Activity and information about non-vested RSUs outstanding are summarized in the following table: Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 207,081 2,661 Vested (8,152) (75) Forfeited (44,643) (580) Outstanding at September 30, 2021 154,286 $ 2,006 One RSU gives the right to one share of the Company’s common stock. RSUs that vest based on service are measured based on the fair value of the underlying stock on the date of grant. Compensation with respect to RSU awards is expensed on a straight-line basis over the vesting period. As of September 30, 2021, there was approximately $1.9 million total unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted average period of 3.71 years. Long-Term Incentive Awards In March 2020, Convey issued fifty-six (56) Long-Term Incentive (LTI) awards with a total grant-date fair value of $1.1 million to employees. These awards vest upon satisfaction of the performance condition as determined by our Board of Directors at its sole discretion, subject to the participants continued employment or service. The performance condition is satisfied by TPG meeting a certain multiple-of-money return, on a scale, prior to or upon (i) TPG in the aggregate beneficially owning less than 20% of the voting equity securities of the Company or (ii) the date on which a change in control occurs. The awards contain a market condition with an implicit performance condition. No awards have vested as of September 30, 2021, as such events did not occur during the nine months ended September 30, 2021. No awards have been granted or cancelled during the nine months ended September 30, 2021. The awards do not expire. On the date the performance condition is met, any unvested awards will be forfeited. LTI Awards Outstanding as of December 31, 2020 54 Forfeited (10) Outstanding as of September 30, 2021 44 Settlement of the award can be made, as determined by the Board of Directors at its sole discretion, (i) in cash, (ii) common stock, or (iii) in other property acceptable to the Board of Directors. The LTIs are treated as liability-based awards under Accounting Standards Codification (“ASC”) Topic 718, Compensation — Stock Compensation , (“ASC 718”) and the Company shall recognize compensation expense for the LTIs upon the liquidity event occurring. |
EMPLOYEE SAVINGS PLAN
EMPLOYEE SAVINGS PLAN | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE SAVINGS PLAN | EMPLOYEE SAVINGS PLANWe offer our employees a savings plan pursuant to Section 401(k) of the Internal Revenue Code (the “Code”), whereby employees may contribute a percentage of their compensation, not to exceed the maximum amount allowable under the Code. At the discretion of the Board of Directors, we may elect to make matching or other contributions into the savings plan. We made matching contributions of $0.4 million for each of the three months ended September 30, 2021 and 2020, and $1.6 million and $1.4 million for the nine months ended September 30, 2021, and 2020, respectively, to our employee savings plan, which is included within Selling, general and administrative expenses, Cost of services and Cost of products in the condensed consolidated statement of operations and comprehensive income (loss). |
TAXES
TAXES | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
TAXES | TAXES Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our global annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to change resulting from several factors, including variability in forecasting our pre-tax and taxable income and loss due to external changes in market conditions, changes in statutes, regulations and administrative practices, principles, and interpretations related to tax. Our |
TRANSACTION RELATED COSTS
TRANSACTION RELATED COSTS | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition Related and Deferred Offering Costs [Abstract] | |
TRANSACTION RELATED COSTS | TRANSACTION RELATED COSTS The following table represents the components of Transaction related costs as reported in the condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Mergers and acquisitions related costs $ 70 $ 80 $ 168 $ 277 Public company readiness costs 258 — 2,801 — Total $ 328 $ 80 $ 2,969 $ 277 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases We lease office space, warehouse and distribution space, and equipment under non-cancelable operating and capital leases expiring at various dates through 2029. Lease terms generally range from two Rent expense under all operating leases was approximately $2.1 million for each of the three months ended September 30, 2021, and 2020, respectively. Rent expense under all operating leases was approximately $6.3 million and $6.0 million, for the nine months ended September 30, 2021, and 2020, respectively. Employment Agreements We have employment agreements with various executives. The agreements have open-ended terms providing that employment shall continue until terminated by either party in accordance with the agreement. In addition to salary, bonuses, and benefits, the agreements also provide for termination benefits if the agreements are terminated by us for reasons other than cause or by the executives for good reason. Inventory Purchases As of September 30, 2021 and December 31, 2020, we have contractual commitments to purchase inventory from certain manufacturers totaling $3.3 million and $6.5 million, respectively. Legal Proceedings We are involved in various lawsuits, claims, inquiries, and other regulatory and compliance matters, most of which are routine to the nature of our business. When it is probable that a loss will be incurred and where a range of the loss can be reasonably estimated, the best estimate within the range is accrued. When the best estimate within the range cannot be determined, the low end of the range is accrued. The ultimate resolution of these claims could affect future results of operations should our exposure be materially different from our estimates or should liabilities be incurred that were not previously accrued. Potential insurance reimbursements are not offset against potential liabilities. Because of the uncertainties associated with claims resolution and litigation, future losses to resolve these matters could be higher than the liabilities we have accrued; however, we are unable to reasonably estimate a range of potential losses. If new information were to become available that allowed us to reasonably estimate a range of potential losses in an amount higher or lower than what we have accrued, we would adjust our accrued liabilities accordingly. Based upon current information, we concluded that the impact of the resolution of these matters would not be, individually or in the aggregate, material to our financial position, results of operations or cash flows. Additional lawsuits, claims, inquiries, and other regulatory and compliance matters could arise in the future. The range of losses for resolving any future matters would be assessed as they arise. On July 11, 2017, Ronnie Kahululani Solis (“Solis”) filed suit in the Los Angeles Superior Court against one of our former subsidiaries, Gorman Health Group, LLC (“Gorman”), which merged into Convey Health Solutions, Inc. effective September 1, 2020, for damages for negligence and negligence per se arising out of an incident that occurred on March 3, 2017. Solis alleged damages in excess of $6.0 million stemming from an accident involving a vehicle and a motorcycle. The vehicle was being operated by a Gorman employee in the scope of his employment. The Company is covered by insurance up to $6.0 million. In July 2021, the parties reached an agreement to settle the claim for $1.2 million and in August 2021, the settlement was paid by the insurance company. Sales Tax Accrual On June 21, 2018, the U.S. Supreme Court issued an opinion in South Dakota v. Wayfair. The State of South Dakota alleged that U.S. constitutional law should be revised to permit South Dakota to require remote sellers to collect and remit sales tax in South Dakota in accordance with South Dakota’s sales tax statute. Under the U.S. Supreme Court’s ruling, the longstanding Quill Corp v. North Dakota sales tax case was overruled, and states may now require remote sellers to collect sales tax under certain circumstances. Consequently, we began collecting sales tax in 21 states that we deemed in accordance with the new statute. Pursuant to South Dakota’s statute, we are not required to pay sales tax retroactively. ASC Topic 450, Contingencies , (“ASC 450”) requires an estimated loss to be accrued by a charge to income if it is probable that a liability has been incurred at the date of the financial statements and the amount of the liability can be reasonably estimated. We recognized liabilities for contingencies related to state sales and use tax deemed probable and estimable totaling $11.0 million and $7.5 million at September 30, 2021, and December 31, 2020, respectively. These are included in accrued liabilities in our condensed consolidated balance sheets. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS TPG Management Service Agreement On September 4, 2019, in connection with the Merger, we entered into a management services agreement (“MSA”) with TPG. Under the MSA, TPG agreed to provide certain financial, strategic advisory services, and consulting services in exchange for (i) reimbursement of certain expenses incurred by TPG and (ii) an aggregate annual retainer fee of 1% based on our previous year’s consolidated EBITDA determined by Convey’s Board of Directors. Additional services may be provided in exchange for the fees structured within the MSA. During the nine months ended September 30, 2021, and 2020, we paid management and consulting fees of $0.4 million and $0.3 million, respectively. Also, during the nine months ended September 30, 2021, and 2020, we paid TPG a fee of $1.2 million and $0.3 million for services provided in connection with establishing: (i) the 2021 Incremental Term Loan and the July 2021 amendment to the Credit Agreement and (ii) the 2020 Incremental Term Loan, respectively. In the event the MSA is terminated by an IPO or business combination and TPG continues to hold at least 10% of equity of the Company upon closing of such transaction, we are required to pay TPG the net present value of the remaining portion of management and consulting fees that would have been incurred until three years after the date of such termination, as well as certain other expenses of TPG. In connection with the IPO completed in June 2021, we paid TPG a $2.3 million termination fee. The termination fee is included within Selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive income (loss). There was no amount payable to TPG as of September 30, 2021, or December 31, 2020. EIR Partners Consulting Agreement We have a Consulting Agreement with EIR Partners, LLC (“EIR”), a former member of the Company’s Board of Directors, and a current shareholder. Under the terms of the Consulting Agreement, EIR provides consulting services for the purpose of analyzing and reviewing potential sellers in the marketplace for the benefit of the Company as agreed to from time-to-time. As compensation for service, the Company remits to EIR $10 thousand monthly, plus reasonable out-of-pocket expenses incurred in the performance of the duties under the Consulting Agreement. The Consulting Agreement may be terminated by either party upon providing 10 days advance written notice and unless terminated, automatically renews for additional terms of one year. For the nine months ended September 30, 2021, and 2020, $80 thousand and $90 thousand were paid for services rendered, respectively. The Consulting Agreement is still active with the Company. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS On February 9, 2018, in order to focus on our Technology Enabled Solutions and Advisory Services, we announced a plan to abandon our Business Processing Outsourcing (“BPO”) unit which provided labor resources to fulfill a wide range of plan administration functions based on client requirements. All run-off operations of our BPO unit ceased in the first quarter of 2020. We abandoned the BPO unit as we were unable to sell the line due to competitive pricing and the ease of transition to competitors. The operating results of our discontinued operations through the date of abandonment are as follows: (in thousands) For the Three Months Ended For the Nine Months Ended Major line items constituting income from discontinued operations Operating income (loss) $ (8) $ 50 Income (loss) from discontinued operations before provision for income taxes (8) 50 Provision expense (benefit) for income taxes (2) 13 Income (loss) from discontinued operations, net of tax $ (6) $ 37 There were no assets or liabilities related to discontinued operations as of September 30, 2021, and December 31, 2020. Cash flows from discontinued operations for the nine months ended September 30, 2021, and 2020, were insignificant. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION ASC 280 establishes the standards for reporting information about segments in financial statements. In applying the criteria set forth in ASC 280, we have determined that we have two reportable segments: Technology Enabled Solutions and Advisory Services. These reportable segments reflect the manner in which the Chief Operating Decision Maker (“CODM”) group assesses information for decision-making purposes. The CODM group consists of our Chief Executive Officer and Chief Financial Officer. The key factors used to identify these reportable segments are the organization and alignment of our internal operations and the nature of our products and services. This reflects how the CODM group monitors performance, allocates resources, and makes strategic and operational decisions. In addition to the reportable segments, we have the “Unallocated” classification which includes those profit and loss items not allocated to either reportable segment. Unallocated includes corporate costs, primarily relating to group wide functions, including but not limited to, finance, tax and legal. There are no inter-segment sales that require elimination. We present reportable segment revenue and Segment Adjusted EBITDA. Segment Adjusted EBITDA is the financial measure by which management and the CODM group allocate resources and analyze the performance of the reportable segments. Segment Adjusted EBITDA represents each segment’s earnings before interest, tax, depreciation and amortization and is further adjusted to exclude certain items of a significant or unusual nature, including but not limited to, COVID-19 cost impacts, sales and use tax, non-cash stock compensation, transaction related costs, acquisition bonus expense, loss on extinguishment of debt, director and officer prior act liability insurance policy and other costs. Other includes costs such as contract termination fees, management and board of directors fees, and costs associated with obtaining the incremental term loans. We do not report assets by reportable segment, as this metric is not used by the CODM group to allocate resources to the segments. Presented in the tables below is revenue and Segment Adjusted EBITDA by reportable segment: For the Three Months Ended For the Nine Months Ended (in thousands) Technology Enabled Advisory Technology Enabled Advisory Revenue $ 69,248 $ 13,163 $ 200,196 $ 40,094 Segment Adjusted EBITDA $ 19,786 $ 4,559 $ 52,038 $ 13,159 For the Three Months Ended For the Nine Months Ended (in thousands) Technology Enabled Advisory Technology Enabled Advisory Revenue $ 60,056 $ 9,472 $ 166,850 $ 28,983 Segment Adjusted EBITDA $ 19,088 $ 1,799 $ 44,196 $ 4,068 The following table presents a reconciliation of Segment Adjusted EBITDA to the condensed consolidated U.S. GAAP net income (loss) from continuing operations: (in thousands) For the Three Months Ended For the Nine Months Ended 2021 2020 2021 2020 Technology Enabled Solutions Segment Adjusted EBITDA $ 19,786 $ 19,088 $ 52,038 $ 44,196 Advisory Services Segment Adjusted EBITDA 4,559 1,799 13,159 4,068 Total $ 24,345 $ 20,887 $ 65,197 $ 48,264 Unallocated (1) $ (3,742) $ (2,086) $ (8,731) $ (6,410) Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations Depreciation and amortization (7,473) (6,918) (22,667) (20,710) Interest, net (3,283) (4,561) (15,144) (13,471) Income tax provision (1,131) 472 5,042 3,272 Cost of COVID-19 (2) (746) (3,254) (3,057) (7,772) Sales and use tax (1,734) (2,122) (5,802) (5,577) Non-cash stock compensation expense (1,093) (1,745) (3,166) (5,671) Transaction related costs (328) (80) (2,969) (277) Acquisition bonus expense – HealthScape and Pareto acquisition (192) (481) (481) (1,476) Loss on extinguishment of debt — — (5,015) — Director and officer prior act liability insurance policy (3) — — (7,861) — Other (4) (937) (1,758) (5,737) (4,773) Net income (loss) from continuing operations $ 3,686 $ (1,646) $ (10,391) $ (14,601) ________________________ (1) Represents certain corporate costs associated with the executive compensation, legal, accounting, finance and other costs not specifically attributable to the segments. (2) Expenses incurred due to the COVID-19 pandemic are primarily related to higher pricing from vendors due to supply chain disruptions and product shortages and higher employee costs due to hazard pay for our employees. (3) In connection with the IPO, we made a $7.9 million one-time payment on a 3-year director and officer prior act liability insurance policy. We deemed this policy to be a retroactive insurance policy and in accordance with ASC 720-20-25, “Retrospective Contracts”, we expensed the premium of $7.9 million in June 2021. (4) These adjustments include individual adjustments related to fees associated with obtaining the incremental loans, management fees, management service agreement termination fee, board of directors related fees, and consulting costs for the selection of ERP solution. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | SUBSEQUENT EVENTEffective November 4, 2021, Convey Holding Parent, Inc., changed its name to Convey Health Solutions Holdings, Inc. by filing a Certificate of Amendment (the “Certificate of Amendment”) to the Charter with the Secretary of State of the State of Delaware. In accordance with the General Corporation Law of the State of Delaware (the “DGCL”), the board of directors of the Company approved the name change and the Certificate of Amendment. Pursuant to Section 242(b)(1) of the DGCL, stockholder approval was not required for the name change or the Certificate of Amendment. Also, effective November 4, 2021, the Company amended and restated the Bylaws to reflect the change of its name described above. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation Convey was formed on June 13, 2019, for the purpose of acquiring Convey Health Solutions, Inc. (“CHS”). On September 4, 2019, Cannes Parent, Inc. (“Cannes”), a direct subsidiary of Convey, entered into an agreement (the “Merger Agreement”) to acquire all of the outstanding stock of CHS through the merger of Cannes Merger Sub, Inc. and Convey Health Parent, Inc. (“Parent”) (the “Merger”) with Parent surviving as a direct subsidiary of Cannes. The Merger principally occurred through an investment from TPG Cannes Aggregation, L.P. (the “selling stockholder”), which is primarily funded by partners of TPG Partners VIII, L.P. and TPG Healthcare Partners, L.P. or any parallel fund or their alternative investment vehicles (collectively, “TPG”). The accompanying condensed consolidated financial statements are unaudited and include the accounts of Convey and our wholly-owned subsidiaries. They have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP” or “GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. Our condensed consolidated statements of operations and |
Consolidation | Our condensed consolidated balance sheet as of December 31, 2020, has been derived from our audited consolidated financial statements as of that date. Our condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2020, which include a complete set of footnote disclosures, including our significant accounting policies, and are included in the final prospectus for the Company’s IPO dated June 15, 2021, and filed with the SEC on June 17, 2021, pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”). The results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information currently available to us and based on various other assumptions that we conclude to be reasonable under the circumstances. While management concludes that such estimates are reasonable when considered in conjunction with our condensed consolidated balance sheets and statements of operations and comprehensive income (loss) taken as a whole, actual results could differ materially from those estimates. |
Contingent Consideration | Contingent Consideration We recognized an earn-out liability in connection with the November 2018 acquisition of HealthScape Advisors, LLC (“HealthScape Advisors”) and Pareto Intelligence LLC (“Pareto Intelligence”), which represented contingent consideration. The initial fair value of the earn-out liability was determined by employing a Monte-Carlo simulation model. The underlying simulated variable was adjusted revenue discounted by the market price of risk embedded in the revenue metrics. The revenue volatility estimate was based on a study of historical asset volatility and implied volatility for a set of comparable public companies, adjusted by our operating leverage. The earn-out payments were calculated based on simulated revenue metrics and payment thresholds as set forth in the HealthScape Advisors and Pareto Intelligence purchase agreement. The calculated payments were further discounted back to present value using cost of debt reflecting our credit risk. The fair value of the earn-out liability at each reporting date subsequent to the acquisition was measured using a probability weighted approach. In connection with the Merger, we recognized a holdback liability, which represented contingent consideration. The initial fair value of the holdback liabilities and at each subsequent reporting date was measured using a probability weighted approach. |
Net Loss Per Common Share | Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) attributable to common shareholders (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted net income (loss) per common share attributable to common shareholders is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period adjusted for the dilutive effects of common stock equivalents. In periods when losses from continuing operations are reported, the weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes (Topic 740) (“ASU 2019-12”), which amended the accounting for income taxes. ASU 2019-12 eliminates certain exceptions to the guidance for income taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences as well as simplifying aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. We early adopted ASU 2019-12 on January 1, 2021, and the adoption did not have a material impact on our consolidated financial statements. Accounting Pronouncements Issued Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”). The guidance specifies that lessees will need to recognize a right-of-use asset and a lease liability for virtually all of their leases except those which meet the definition of a short-term lease. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or financing. Classification will be based on criteria that are similar to those applied in current lease accounting, but without explicit bright lines. ASU 2016-02, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. As of September 30, 2021, we have identified our arrangements that are within the scope of the new guidance and have evaluated our portfolio of leases, which is primarily comprised of operating real estate leases for our respective offices. We will elect the package of practical expedients under which we will not reassess prior conclusions about lease identification, lease classification, and initial direct costs of existing leases as of the date of the adoption and, upon adoption, will recognize the right-of-use lease assets and related lease liabilities as of the adoption date using the modified retrospective approach. Prior period information will not be restated. Upon transition to the guidance as of the date of adoption, we expect a material effect on the consolidated balance sheet. Further, we do not expect that the adoption of the guidance will have a material effect on the consolidated statements of operations or cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Entities will be required to use a model that will result in the earlier recognition of allowances for losses for trade and other receivables, held-to-maturity debt securities, loans, and other instruments. For available-for-sale debt securities with unrealized losses, the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. ASU 2016-13, as subsequently amended for various technical issues, is effective for emerging growth companies following private company adoption dates for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. We are currently evaluating the new guidance to determine the impact it will have on our consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedules of Concentration of Risk, by Risk Factor | Revenue and Accounts receivable from our major customers are as follows: Revenues Revenues For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Customer A $ 15,409 $ 13,479 $ 41,594 $ 33,547 % of total revenue 18.7 % 19.4 % 17.3 % 17.1 % Customer B $ 13,492 $ 12,215 $ 44,888 $ 34,636 % of total revenue 16.4 % 17.6 % 18.7 % 17.7 % Accounts Receivable (in thousands) September 30, 2021 December 31, 2020 Customer A $ 4,344 $ 7,582 % of total accounts receivable 9.3 % 15.0 % Customer B $ 7,558 $ 3,447 % of total accounts receivable 16.2 % 6.8 % |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the nine months ended September 30, 2021: (in thousands) Balance at December 31, 2020 $ 20,538 Payments against the earn-out liabilities (7,500) Payments against the holdback liabilities (13,134) Change in fair value of earn-out liabilities 96 Balance at September 30, 2021 $ — The following table provides a reconciliation of our Level 3 earn-out and holdback liabilities for the nine months ended September 30, 2020: (in thousands) Balance at December 31, 2019 $ 43,175 Payments against the earn-out liabilities (11,010) Change in fair value of the holdback liabilities — Change in fair value of the earn-out liabilities — Balance at September 30, 2020 $ 32,165 |
Schedule of Earnings per Share, Basic and Diluted | For the Three Months Ended For the Nine Months Ended (in thousands, except per share data) 2021 2020 2021 2020 Net income (loss) attributable to common shareholders Net income (loss) from continuing operations $ 3,686 $ (1,646) $ (10,391) $ (14,601) Net income (loss) from discontinued operations — (6) — 37 Net income (loss) attributable to common shareholders $ 3,686 $ (1,652) $ (10,391) $ (14,564) Weighted-average common shares outstanding: Basic and diluted 73,061,790 61,321,424 65,841,840 61,321,424 Income (Loss) per share: Basic and diluted Continuing operations $ 0.05 $ (0.03) $ (0.16) $ (0.24) Discontinued operations — — — — Net income (loss) per common share $ 0.05 $ (0.03) $ (0.16) $ (0.24) |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following tables present disaggregated revenue by reporting segment: (in thousands) For the Three Months Ended Technology Advisory Total Product Revenue $ 38,220 $ — $ 38,220 Health Plan Management 20,750 — 20,750 Consulting Services 1,671 13,090 14,761 Software Services 5,705 73 5,778 Data Analytics 2,902 — 2,902 Total $ 69,248 $ 13,163 $ 82,411 (in thousands) For the Nine Months Ended Technology Advisory Total Product Revenue $ 110,288 $ — $ 110,288 Health Plan Management 65,856 — 65,856 Consulting Services 4,153 40,021 44,174 Software Services 10,631 73 10,704 Data Analytics 9,268 — 9,268 Total $ 200,196 $ 40,094 $ 240,290 (in thousands) For the Three Months Ended Technology Advisory Total Product Revenue $ 32,321 $ — $ 32,321 Health Plan Management 18,334 — 18,334 Consulting Services 1,969 9,472 11,441 Software Services 5,060 — 5,060 Data Analytics 2,372 — 2,372 Total $ 60,056 $ 9,472 $ 69,528 (in thousands) For the Nine Months Ended Technology Advisory Total Product Revenue $ 91,019 $ — $ 91,019 Health Plan Management 55,795 — 55,795 Consulting Services 3,604 28,983 32,587 Software Services 9,139 — 9,139 Data Analytics 7,293 — 7,293 Total $ 166,850 $ 28,983 $ 195,833 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following: (in thousands) September 30, 2021 December 31, 2020 Prepaid expenses and other advances $ 2,513 $ 4,272 Software licenses 3,220 1,492 Insurance 1,095 852 Inventory purchase advances 177 2,206 Cloud computing subscription & implementation costs 4,806 1,986 Tenant facility lease allowances 789 789 Deferred IPO costs — 446 Other current assets 294 3,177 Total prepaid expenses and other current assets $ 12,894 $ 15,220 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following: (in thousands) Estimated Life September 30, 2021 December 31, 2020 Office and computer equipment 3 – 8 years $ 12,822 $ 10,383 Leasehold improvements Up to 10 years 10,503 10,572 Furniture and fixtures 2 – 8 years 3,794 3,794 Software 3 years 1,836 1,486 28,955 26,235 Less: accumulated depreciation (9,637) (5,568) Property and equipment, net $ 19,318 $ 20,667 |
Schedule of Capital Leased Assets | Assets held under capital leases are included in property and equipment as follows: (in thousands) September 30, 2021 December 31, 2020 Office and computer equipment $ 1,682 $ 1,682 Less: accumulated depreciation (528) (192) Total financing leases included in property and equipment $ 1,154 $ 1,490 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The carrying value of identifiable intangible assets consisted of the following as of September 30, 2021: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (3,031) $ 24,269 Customer relationships 189,000 (35,795) 153,205 Technology 47,800 (9,958) 37,842 Capitalized software development costs 10,628 (1,390) 9,238 Total intangible assets $ 274,728 $ (50,174) $ 224,554 The carrying value of identifiable intangible assets consisted of the following as of December 31, 2020: (in thousands) Gross Accumulated Net Carrying Amortized intangible assets Trade names $ 27,300 $ (1,940) $ 25,360 Customer relationships 189,000 (22,909) 166,091 Technology 47,800 (6,373) 41,427 Capitalized software development costs 6,405 (441) 5,964 Total intangible assets $ 270,505 $ (31,663) $ 238,842 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities consist of the following: (in thousands) September 30, 2021 December 31, 2020 Contingent consideration $ — $ 20,538 Incentive bonus 11,345 12,198 Employee related 9,306 11,065 Sales and use tax 10,957 7,469 Rebates 2,803 3,822 Accrued interest 1,493 2,794 Accrued professional fees 3,772 6,389 Other 2,293 2,884 Total accrued expenses $ 41,969 $ 67,159 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | Debt consists of the following as of September 30, 2021, and December 31, 2020: (in thousands) September 30, 2021 December 31, 2020 Term loans $ 192,631 $ 246,999 Less: deferred financing costs (3,149) (5,209) Term loans, net of deferred financing costs 189,482 241,790 Less: current portion — (2,500) $ 189,482 $ 239,290 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | The following table summarizes the total share-based compensation expense included in the condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Selling, general and administrative $ 1,093 $ 1,745 $ 3,166 $ 5,671 Total stock-based compensation expense $ 1,093 $ 1,745 $ 3,166 $ 5,671 |
Share-based Payment Arrangement, Option, Activity | Stock option activity and information about stock options outstanding are summarized in the following table: Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Outstanding at December 31, 2020 5,621,364 $ 7.94 9.20 Granted 587,001 13.35 Exercised (172,728) 7.86 Forfeited (399,483) 8.78 Outstanding at September 30, 2021 5,636,154 7.68 8.49 Vested or expect to vest as of September 30, 2021 5,636,154 7.68 8.49 Vested and Exercisable as of September 30, 2021 2,084,658 7.80 8.36 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of the options granted during the year were estimated on the date of the grant using the Black-Scholes Merton model based on the following assumptions: 2021 Grants Expected term (years) 6.11 Expected volatility 45 % Risk free interest rate 1.11 % Expected dividend yield — % |
Share-based Payment Arrangement, Restricted Stock Unit, Activity | Activity and information about non-vested RSUs outstanding are summarized in the following table: Restricted Stock Units Weighted Average Grant Date Fair Value (in thousands) Outstanding at December 31, 2020 — $ — Granted 207,081 2,661 Vested (8,152) (75) Forfeited (44,643) (580) Outstanding at September 30, 2021 154,286 $ 2,006 |
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | LTI Awards Outstanding as of December 31, 2020 54 Forfeited (10) Outstanding as of September 30, 2021 44 |
TRANSACTION RELATED COSTS (Tabl
TRANSACTION RELATED COSTS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition Related and Deferred Offering Costs [Abstract] | |
Schedule of Acquisition Related and Deferred Offering Costs | The following table represents the components of Transaction related costs as reported in the condensed consolidated statements of operations and comprehensive income (loss): For the Three Months Ended For the Nine Months Ended (in thousands) 2021 2020 2021 2020 Mergers and acquisitions related costs $ 70 $ 80 $ 168 $ 277 Public company readiness costs 258 — 2,801 — Total $ 328 $ 80 $ 2,969 $ 277 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The operating results of our discontinued operations through the date of abandonment are as follows: (in thousands) For the Three Months Ended For the Nine Months Ended Major line items constituting income from discontinued operations Operating income (loss) $ (8) $ 50 Income (loss) from discontinued operations before provision for income taxes (8) 50 Provision expense (benefit) for income taxes (2) 13 Income (loss) from discontinued operations, net of tax $ (6) $ 37 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Presented in the tables below is revenue and Segment Adjusted EBITDA by reportable segment: For the Three Months Ended For the Nine Months Ended (in thousands) Technology Enabled Advisory Technology Enabled Advisory Revenue $ 69,248 $ 13,163 $ 200,196 $ 40,094 Segment Adjusted EBITDA $ 19,786 $ 4,559 $ 52,038 $ 13,159 For the Three Months Ended For the Nine Months Ended (in thousands) Technology Enabled Advisory Technology Enabled Advisory Revenue $ 60,056 $ 9,472 $ 166,850 $ 28,983 Segment Adjusted EBITDA $ 19,088 $ 1,799 $ 44,196 $ 4,068 The following table presents a reconciliation of Segment Adjusted EBITDA to the condensed consolidated U.S. GAAP net income (loss) from continuing operations: (in thousands) For the Three Months Ended For the Nine Months Ended 2021 2020 2021 2020 Technology Enabled Solutions Segment Adjusted EBITDA $ 19,786 $ 19,088 $ 52,038 $ 44,196 Advisory Services Segment Adjusted EBITDA 4,559 1,799 13,159 4,068 Total $ 24,345 $ 20,887 $ 65,197 $ 48,264 Unallocated (1) $ (3,742) $ (2,086) $ (8,731) $ (6,410) Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations Depreciation and amortization (7,473) (6,918) (22,667) (20,710) Interest, net (3,283) (4,561) (15,144) (13,471) Income tax provision (1,131) 472 5,042 3,272 Cost of COVID-19 (2) (746) (3,254) (3,057) (7,772) Sales and use tax (1,734) (2,122) (5,802) (5,577) Non-cash stock compensation expense (1,093) (1,745) (3,166) (5,671) Transaction related costs (328) (80) (2,969) (277) Acquisition bonus expense – HealthScape and Pareto acquisition (192) (481) (481) (1,476) Loss on extinguishment of debt — — (5,015) — Director and officer prior act liability insurance policy (3) — — (7,861) — Other (4) (937) (1,758) (5,737) (4,773) Net income (loss) from continuing operations $ 3,686 $ (1,646) $ (10,391) $ (14,601) ________________________ (1) Represents certain corporate costs associated with the executive compensation, legal, accounting, finance and other costs not specifically attributable to the segments. (2) Expenses incurred due to the COVID-19 pandemic are primarily related to higher pricing from vendors due to supply chain disruptions and product shortages and higher employee costs due to hazard pay for our employees. (3) In connection with the IPO, we made a $7.9 million one-time payment on a 3-year director and officer prior act liability insurance policy. We deemed this policy to be a retroactive insurance policy and in accordance with ASC 720-20-25, “Retrospective Contracts”, we expensed the premium of $7.9 million in June 2021. (4) These adjustments include individual adjustments related to fees associated with obtaining the incremental loans, management fees, management service agreement termination fee, board of directors related fees, and consulting costs for the selection of ERP solution. |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Millions | Jun. 18, 2021USD ($)shares | Jun. 03, 2021$ / sharesshares | Sep. 30, 2021$ / sharesshares | Jun. 17, 2021$ / sharesshares | Jun. 16, 2021USD ($)$ / shares | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | ||||||
Common stock par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Stock split, conversion ratio | 126 | |||||
Common stock shares authorized | 1,000,000 | 500,000,000 | 500,000,000 | 126,000,000 | ||
Sale of stock, net proceeds | $ | $ 131.5 | |||||
Preferred stock shares authorized | 25,000,000 | 25,000,000 | 0 | |||
Preferred stock par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Voting Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares authorized | 915,000 | |||||
Nonvoting Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Common stock shares authorized | 85,000 | |||||
IPO | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 13,333,334 | |||||
Sale of stock, price per share (in usd per share) | $ / shares | $ 14 | |||||
Sale of stock, consideration received on transaction | $ | $ 146.1 | |||||
IPO - Company Shares | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 11,666,667 | |||||
IPO - Shares From Existing Shareholders | ||||||
Class of Stock [Line Items] | ||||||
Sale of stock, number of shares issued in transaction | 1,666,667 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Jun. 18, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Deferred offering costs | $ 5.8 | $ 0.4 | ||
Earn-out and holdback liabilities, fair value | $ 13.1 | |||
Antidilutive securities excluded from computation of earnings per share, amount | 5,790,375 | 5,621,364 | ||
HealthScape Advisors | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Earn-out and holdback liabilities, fair value | $ 7.5 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Customer Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||||
Net revenues | $ 82,411 | $ 69,528 | $ 240,290 | $ 195,833 | |
Accounts receivable, net of allowance for doubtful accounts of $275 and $610 as of September 30, 2021, and December 31, 2020, respectively | 46,798 | 46,798 | $ 50,589 | ||
Revenue Benchmark | Customer Concentration Risk | Customer A | |||||
Concentration Risk [Line Items] | |||||
Net revenues | $ 15,409 | $ 13,479 | $ 41,594 | $ 33,547 | |
Concentration risk, percentage | 18.70% | 19.40% | 17.30% | 17.10% | |
Revenue Benchmark | Customer Concentration Risk | Customer B | |||||
Concentration Risk [Line Items] | |||||
Net revenues | $ 13,492 | $ 12,215 | $ 44,888 | $ 34,636 | |
Concentration risk, percentage | 16.40% | 17.60% | 18.70% | 17.70% | |
Accounts Receivable | Customer Concentration Risk | Customer A | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 9.30% | 15.00% | |||
Accounts receivable, net of allowance for doubtful accounts of $275 and $610 as of September 30, 2021, and December 31, 2020, respectively | $ 4,344 | $ 4,344 | $ 7,582 | ||
Accounts Receivable | Customer Concentration Risk | Customer B | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 16.20% | 6.80% | |||
Accounts receivable, net of allowance for doubtful accounts of $275 and $610 as of September 30, 2021, and December 31, 2020, respectively | $ 7,558 | $ 7,558 | $ 3,447 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earn-Out and Holdback Liabilities Reconciliation (Details) - Fair Value, Inputs, Level 3 - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at December 31, 2020 | $ 20,538 | $ 43,175 |
Balance at September 30, 2021 | 0 | 32,165 |
Earn-Out Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments against the earn-out liabilities | (7,500) | (11,010) |
Change in fair value of contingent consideration | 96 | 0 |
Holdback Liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Payments against the earn-out liabilities | $ (13,134) | |
Change in fair value of contingent consideration | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss (income) Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net income (loss) attributable to common shareholders | ||||
Net income (loss) from continuing operations | $ 3,686 | $ (1,646) | $ (10,391) | $ (14,601) |
Net income (loss) from discontinued operations | 0 | (6) | 0 | 37 |
Net income (loss) | $ 3,686 | $ (1,652) | $ (10,391) | $ (14,564) |
Weighted-average common shares outstanding: | ||||
Weighted-average common shares outstanding: basic | 73,061,790 | 61,321,424 | 65,841,840 | 61,321,424 |
Weighted-average common shares outstanding: diluted | 73,061,790 | 61,321,424 | 65,841,840 | 61,321,424 |
Income (loss) per common share – Basic and diluted | ||||
Income (loss) from continuing operations, per basic share (in usd per share) | $ 0.05 | $ (0.03) | $ (0.16) | $ (0.24) |
Income (loss) from continuing operations, per diluted share (in usd per share) | 0.05 | (0.03) | (0.16) | (0.24) |
Income (loss) from continuing operations, per basic (in usd per share) | 0 | 0 | 0 | 0 |
Income (loss) from continuing operations, per diluted (in usd per share) | 0 | 0 | 0 | 0 |
Net income (loss) per common share - basic (in usd per share) | 0.05 | (0.03) | (0.16) | (0.24) |
Net income (loss) per common share - diluted (in usd per share) | $ 0.05 | $ (0.03) | $ (0.16) | $ (0.24) |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Net revenues | $ 82,411 | $ 69,528 | $ 240,290 | $ 195,833 | |
Unbilled receivables, current | 10,600 | 10,600 | $ 16,000 | ||
Contract with customer, liability, revenue recognized | 5,900 | 6,500 | |||
Revenue, remaining performance obligation, amount | 10,300 | 10,300 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 4,800 | $ 4,800 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 1,200 | $ 1,200 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Performance Period Two Through Four | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 5,500 | $ 5,500 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 4,100 | $ 4,100 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | 1 year | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue, remaining performance obligation, amount | $ 200 | $ 200 | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | 1 year | |||
Data Analytics | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | $ 2,902 | 2,372 | $ 9,268 | 7,293 | |
Data Analytics | Transferred at Point in Time | |||||
Disaggregation of Revenue [Line Items] | |||||
Net revenues | $ 1,200 | $ 700 | $ 4,300 | $ 2,500 |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 82,411 | $ 69,528 | $ 240,290 | $ 195,833 |
Product Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 38,220 | 32,321 | 110,288 | 91,019 |
Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 20,750 | 18,334 | 65,856 | 55,795 |
Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 14,761 | 11,441 | 44,174 | 32,587 |
Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 5,778 | 5,060 | 10,704 | 9,139 |
Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 2,902 | 2,372 | 9,268 | 7,293 |
Technology Enabled Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 69,248 | 60,056 | 200,196 | 166,850 |
Technology Enabled Solutions | Product Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 38,220 | 32,321 | 110,288 | 91,019 |
Technology Enabled Solutions | Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 20,750 | 18,334 | 65,856 | 55,795 |
Technology Enabled Solutions | Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 1,671 | 1,969 | 4,153 | 3,604 |
Technology Enabled Solutions | Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 5,705 | 5,060 | 10,631 | 9,139 |
Technology Enabled Solutions | Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 2,902 | 2,372 | 9,268 | 7,293 |
Advisory Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 13,163 | 9,472 | 40,094 | 28,983 |
Advisory Services | Product Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Advisory Services | Health Plan Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 0 | 0 | 0 | 0 |
Advisory Services | Consulting Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 13,090 | 9,472 | 40,021 | 28,983 |
Advisory Services | Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | 73 | 0 | 73 | 0 |
Advisory Services | Data Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenues | $ 0 | $ 0 | $ 0 | $ 0 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses and other advances | $ 2,513 | $ 4,272 |
Software licenses | 3,220 | 1,492 |
Insurance | 1,095 | 852 |
Inventory purchase advances | 177 | 2,206 |
Cloud computing subscription & implementation costs | 4,806 | 1,986 |
Tenant facility lease allowances | 789 | 789 |
Deferred IPO costs | 0 | 446 |
Other current assets | 294 | 3,177 |
Total prepaid expenses and other current assets | $ 12,894 | $ 15,220 |
PROPERTY AND EQUIPMENT - Proper
PROPERTY AND EQUIPMENT - Property and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 28,955 | $ 26,235 |
Less: accumulated depreciation | (9,637) | (5,568) |
Property and equipment, net | 19,318 | 20,667 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 12,822 | 10,383 |
Office and computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 3 | |
Office and computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 8 | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 10,503 | 10,572 |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 10 | |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,794 | 3,794 |
Furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 2 | |
Furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 8 | |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life (in years) | 3 years | |
Property, plant and equipment, gross | $ 1,836 | $ 1,486 |
PROPERTY AND EQUIPMENT - Narrat
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 1,400 | $ 900 | $ 4,155 | $ 2,933 |
Capital lease, depreciation expense | $ 100 | $ 20 | $ 300 | $ 50 |
PROPERTY AND EQUIPMENT - Assets
PROPERTY AND EQUIPMENT - Assets Held Under Capital Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (528) | $ (192) |
Total financing leases included in property and equipment | 1,154 | 1,490 |
Office and computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Office and computer equipment | $ 1,682 | $ 1,682 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 455,206 | $ 455,206 | $ 455,206 | ||
Advanced Plan Administration | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 88,900 | 88,900 | |||
Supplemental Benefits Administration | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 190,200 | ||||
Value Based Analytics | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 138,200 | 138,200 | |||
Tradenames, Customer Relationships and Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 5,900 | $ 5,900 | 17,600 | $ 17,600 | |
Capitalized software development costs | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | 200 | $ 100 | 900 | $ 200 | |
Technology Enabled Solutions | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | 417,300 | 417,300 | 417,300 | ||
Advisory Services | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill | $ 37,900 | $ 37,900 | $ 37,900 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Carrying Value of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 274,728 | $ 270,505 |
Accumulated Amortization | (50,174) | (31,663) |
Net Carrying Amount | 224,554 | 238,842 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 27,300 | 27,300 |
Accumulated Amortization | (3,031) | (1,940) |
Net Carrying Amount | 24,269 | 25,360 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 189,000 | 189,000 |
Accumulated Amortization | (35,795) | (22,909) |
Net Carrying Amount | 153,205 | 166,091 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 47,800 | 47,800 |
Accumulated Amortization | (9,958) | (6,373) |
Net Carrying Amount | 37,842 | 41,427 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 10,628 | 6,405 |
Accumulated Amortization | (1,390) | (441) |
Net Carrying Amount | $ 9,238 | $ 5,964 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Contingent consideration | $ 0 | $ 20,538 |
Incentive bonus | 11,345 | 12,198 |
Employee related | 9,306 | 11,065 |
Sales and use tax | 10,957 | 7,469 |
Rebates | 2,803 | 3,822 |
Accrued interest | 1,493 | 2,794 |
Accrued professional fees | 3,772 | 6,389 |
Other | 2,293 | 2,884 |
Total accrued expenses | $ 41,969 | $ 67,159 |
CREDIT FACILITY (Details)
CREDIT FACILITY (Details) $ in Thousands | Jun. 18, 2021USD ($) | Feb. 12, 2021USD ($) | Apr. 08, 2020USD ($) | Sep. 04, 2019USD ($) | Sep. 30, 2021USD ($) | Jun. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020 | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Jan. 23, 2020USD ($) |
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, gross | $ 192,631 | $ 192,631 | $ 246,999 | |||||||||
Payment of debt issuance cost | $ 6,100 | 2,133 | $ 1,148 | |||||||||
Amortization of debt issuance costs | 876 | 783 | ||||||||||
Consolidated EBITDA, maximum amount | $ 46,900 | |||||||||||
Consolidated EBITDA, percentage | 1 | |||||||||||
Debt instrument, leverage ratio | 7.4 | 7.4 | ||||||||||
Annual excess cash flow, percentage | 0.50 | |||||||||||
Net cash proceeds of certain asset sales or casualty events, percentage | 1 | |||||||||||
Net cash proceeds of debt, percentage | 1 | |||||||||||
Prepayment premium on early repayment of term loan | $ 1,563 | 0 | ||||||||||
Loss on extinguishment of debt | $ 5,000 | $ 0 | $ 0 | $ 5,015 | $ 0 | |||||||
Long-term debt, irrevocable letter of credit threshold | $ 500 | |||||||||||
Long-term debt, irrevocable letter of credit, extension period | 1 year | |||||||||||
IPO | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Prepayment premium on early repayment of term loan | 131,500 | |||||||||||
Unamortized Deferred Financing Costs | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loss on extinguishment of debt | 3,400 | |||||||||||
Prepayment Premiums | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Loss on extinguishment of debt | $ 1,600 | |||||||||||
Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.375% | |||||||||||
Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.50% | |||||||||||
London Interbank Offered Rate (LIBOR) | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, gross | 192,600 | $ 192,600 | 222,200 | |||||||||
Amortization of debt issuance costs | $ 5,200 | |||||||||||
Debt issuance costs, amortization period | 84 months | |||||||||||
Long-term debt, weighted average interest rate, over time | 6.30% | 6.60% | ||||||||||
2020 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, gross | 24,800 | $ 24,800 | ||||||||||
Term Loans | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Amortization of debt issuance costs | 200 | $ 200 | 700 | $ 600 | ||||||||
Debt instrument, aggregate principal amount, payment, percentage | 0.0025 | |||||||||||
Unamortized debt issuance expense | 3,100 | $ 3,100 | 5,200 | |||||||||
Term Loans | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 225,000 | |||||||||||
Debt instrument, term | 7 years | |||||||||||
2020 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, weighted average interest rate, over time | 10.00% | |||||||||||
2020 Incremental Term Loan | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 25,000 | |||||||||||
Debt issuance costs, amortization period | 77 months | |||||||||||
Debt issuance costs, gross | $ 1,100 | |||||||||||
Debt instrument, aggregate principal amount, payment, percentage | 0.0025 | 0.0025 | ||||||||||
2021 Incremental Term Loan | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, weighted average interest rate, over time | 7.00% | |||||||||||
2021 Incremental Term Loan | Secured Debt | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 78,000 | |||||||||||
Debt issuance costs, amortization period | 67 months | |||||||||||
Debt issuance costs, gross | $ 2,400 | |||||||||||
Debt instrument, quarterly payment amount | $ 800 | |||||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 5.25% | |||||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 4.75% | |||||||||||
Credit Agreement | Base Rate | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 4.25% | |||||||||||
Credit Agreement | Base Rate | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 3.75% | |||||||||||
Credit Agreement | Eurodollar | Minimum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 1.00% | |||||||||||
Credit Agreement | Eurodollar | Maximum | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, basis spread on variable rate | 0.75% | |||||||||||
Revolving Credit Facility | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Long-term debt, gross | 39,500 | $ 39,500 | 39,500 | |||||||||
Amortization of debt issuance costs | 50 | $ 50 | 100 | $ 100 | ||||||||
Unamortized debt issuance expense | 500 | $ 500 | $ 700 | |||||||||
Long-term debt, weighted average interest rate, over time | 2.75% | 2.75% | ||||||||||
Revolving Credit Facility | Line of Credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 40,000 | |||||||||||
Debt instrument, term | 5 years | |||||||||||
Amortization of debt issuance costs | $ 900 | |||||||||||
Debt issuance costs, amortization period | 60 months | |||||||||||
Bridge Loan | Line of Credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000 | |||||||||||
Undrawn Letter Of Credit | ||||||||||||
Line of Credit Facility [Line Items] | ||||||||||||
Debt instrument, face amount | $ 10,000 | $ 10,000 |
CREDIT FACILITY - Schedule of D
CREDIT FACILITY - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Long-term debt, gross | $ 192,631 | $ 246,999 |
Debt Issuance Costs, Line of Credit Arrangements, Net | (3,149) | (5,209) |
Long-term Debt | 189,482 | 241,790 |
Term loans, current portion | 0 | 2,500 |
Term loans, net of current portion | $ 189,482 | $ 239,290 |
SHAREHOLDERS_ EQUITY (Details)
SHAREHOLDERS’ EQUITY (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Feb. 28, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 17, 2021 | Jun. 03, 2021 | Dec. 31, 2020 | |
Dividends Payable [Line Items] | ||||||
Common stock shares authorized | 500,000,000 | 500,000,000 | 1,000,000 | 126,000,000 | ||
Common stock par value (in usd per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||
Preferred stock shares authorized | 25,000,000 | 25,000,000 | 0 | |||
Preferred stock par value (in usd per share) | $ 0.01 | $ 0.01 | ||||
Dividends payable, amount per share (in usd per share) | $ 1.18 | |||||
Dividends payable, current | $ 74,500 | |||||
Payments of Dividends | $ 74,500 | $ 0 | ||||
Dividends Paid, Existing Shareholders | ||||||
Dividends Payable [Line Items] | ||||||
Payments of Dividends | 2,300 | |||||
Dividends Paid, Outstanding and Vested Option Holders | ||||||
Dividends Payable [Line Items] | ||||||
Payments of Dividends | $ 72,200 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 03, 2021 | Aug. 31, 2021$ / sharesshares | Jun. 30, 2021$ / sharesshares | Mar. 31, 2021shares | Mar. 31, 2020USD ($)award$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Feb. 15, 2021$ / sharesshares | Dec. 31, 2020USD ($)$ / shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 7.68 | $ 7.94 | ||||||
Award vesting rights, percentage | 20.00% | |||||||
Granted (in shares) | 8,152 | 198,929 | ||||||
Options, nonvested, weighted average grant date fair value, reduction (in usd per share) | $ / shares | $ 1.18 | |||||||
Options nonvested, number of shares | 3,653,837 | |||||||
Option, nonvested, weighted average exercise price (in usd per share) | $ / shares | $ 7.94 | |||||||
Options, outstanding, intrinsic value | $ | $ 0 | |||||||
Options, exercisable, intrinsic value | $ | $ 0 | $ 0 | ||||||
Granted (in usd per share) | $ / shares | $ 13.35 | |||||||
Number of long term incentive awards | award | 56 | |||||||
2021 Omnibus Incentive Compensation Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based payment award expiration period | 10 years | |||||||
Share-based Payment Arrangement, Option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting rights, percentage | 25.00% | 25.00% | ||||||
Award vesting period | 4 years | |||||||
Granted (in usd per share) | $ / shares | $ 4.60 | |||||||
Share-based payment arrangement, nonvested award, option, cost not yet recognized, amount | $ | $ 11,500 | |||||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 2 years 3 months 14 days | |||||||
Share-based Payment Arrangement, Option | 2021 Omnibus Incentive Compensation Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based payment award expiration period | 5 years | |||||||
Share-based payment award, shares issued in period | 20,380 | 497,321 | ||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 9.20 | $ 14 | ||||||
Share-based Payment Arrangement, Option | 2019 Equity Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based payment award expiration period | 10 years | 10 years | 10 years | |||||
Share-based payment award, shares issued in period | 69,300 | 5,723,676 | ||||||
Options outstanding, weighted average exercise price (in usd per share) | $ / shares | $ 9.92 | $ 7.94 | ||||||
Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Award vesting period | 3 years | |||||||
Granted (in shares) | 207,081 | |||||||
Outstanding at beginning of period (in shares) | $ / shares | $ 9.20 | $ 13 | ||||||
Share-based payment arrangement, nonvested award, cost not yet recognized, period for recognition | 3 years 8 months 15 days | |||||||
Share-based payment arrangement, nonvested award, excluding option, cost not yet recognized, amount | $ | $ 1,900 | |||||||
Exercised (in shares) | 8,152 | |||||||
LTI Awards | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Granted (in shares) | 0 | |||||||
Equity instruments other than options, aggregate intrinsic value, nonvested | $ | $ 1,100 | |||||||
Exercised (in shares) | 0 | |||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, cancelled in period | 0 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,093 | $ 1,745 | $ 3,166 | $ 5,671 |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,093 | $ 1,745 | $ 3,166 | $ 5,671 |
SHARE-BASED COMPENSATION - St_2
SHARE-BASED COMPENSATION - Stock Option Activity (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | |
Stock Option Awards | ||
Beginning balance (in shares) | shares | 5,621,364 | |
Granted (in shares) | shares | 587,001 | |
Exercised (in shares) | shares | (172,728) | |
Forfeited (in shares) | shares | (399,483) | |
Ending balance (in shares) | shares | 5,636,154 | 5,621,364 |
Vested or expect to vest (in shares) | shares | 5,636,154 | |
Vested or expect to vest (in shares) | shares | 2,084,658 | |
Weighted Average Exercise Price | ||
Beginning balance (in usd per share) | $ / shares | $ 7.94 | |
Granted (in usd per share) | $ / shares | 13.35 | |
Exercised (in usd per share) | $ / shares | 7.86 | |
Forfeited (in usd per share) | $ / shares | 8.78 | |
Ending balance (in usd per share) | $ / shares | 7.68 | $ 7.94 |
Vested or expect to vest at end of period (in usd per share) | $ / shares | 7.68 | |
Vested or expect to vest at end of period (in usd per share) | $ / shares | $ 7.80 | |
Weighted Average Remaining Contractual Life (Years) | ||
Weighted Average Remaining Contractual Life (Years) | 8 years 5 months 26 days | 9 years 2 months 12 days |
Weighted average remaining contractual life vested or expect to vest | 8 years 5 months 26 days | |
Weighted average remaining contractual life vested or expect to vest | 8 years 4 months 9 days |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule Of Fair Value Assumptions (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Share-based Payment Arrangement [Abstract] | |
Expected term (years) | 6 years 1 month 9 days |
Expected volatility | 45.00% |
Risk free interest rate | 1.11% |
Expected dividend yield | $ 0 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Activity (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | |
Restricted Stock Units | |||
Granted (in shares) | 8,152 | 198,929 | |
Restricted Stock Units | |||
Restricted Stock Units | |||
Outstanding at beginning of period (in shares) | 0 | ||
Granted (in shares) | 207,081 | ||
Exercised (in shares) | (8,152) | ||
Forfeited (in shares) | (44,643) | ||
Outstanding at end of period (in shares) | 154,286 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Outstanding at beginning of period (in usd per share) | $ 0 | ||
Granted (in usd per share) | 2,661 | ||
Exercised (in usd per share) | (75) | ||
Forfeited (in usd per share) | (580) | ||
Outstanding at end of period (in usd per share) | $ 2,006 |
SHARE-BASED COMPENSATION - Long
SHARE-BASED COMPENSATION - Long Term Incentive Activity (Details) - LTI Awards | 9 Months Ended |
Sep. 30, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding at beginning of period (in shares) | 54 |
Forfeited (in shares) | (10) |
Outstanding at end of period (in shares) | 44 |
EMPLOYEE SAVINGS PLAN (Details)
EMPLOYEE SAVINGS PLAN (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Retirement Benefits [Abstract] | ||||
Defined contribution plan, cost | $ 0.4 | $ 0.4 | $ 1.6 | $ 1.4 |
TAXES (Details)
TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (expense) benefit | $ (1,131,000) | $ 472,000 | $ 5,042,000 | $ 3,272,000 |
Effective income tax rate reconciliation, percent | 26.00% | 15.00% | ||
Unrecognized tax benefits, period increase (decrease) | 0 | $ 0 | ||
Income tax examination, penalties and interest expense | $ 0 | $ 0 |
TRANSACTION RELATED COSTS (Deta
TRANSACTION RELATED COSTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Acquisition Related and Deferred Offering Costs [Abstract] | ||||
Mergers and acquisitions related costs | $ 70 | $ 80 | $ 168 | $ 277 |
Public company readiness costs | 258 | 0 | 2,801 | 0 |
Total | $ 328 | $ 80 | $ 2,969 | $ 277 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Jul. 11, 2017 | Jul. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Other Commitments [Line Items] | |||||||
Operating leases, rent expense | $ 2.1 | $ 2.1 | $ 6.3 | $ 6 | |||
Contractual obligation | 3.3 | 3.3 | $ 6.5 | ||||
Loss contingency accrual | $ 11 | $ 11 | $ 7.5 | ||||
Insurance Claims | |||||||
Other Commitments [Line Items] | |||||||
Loss contingency, damages sought, value | $ 6 | ||||||
Loss contingency, insurance coverage | $ 6 | ||||||
Litigation settlement, amount awarded to other party | $ 1.2 | ||||||
Minimum | |||||||
Other Commitments [Line Items] | |||||||
Lease terms | 2 years | 2 years | |||||
Maximum | |||||||
Other Commitments [Line Items] | |||||||
Lease terms | 7 years | 7 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Related Party Transaction [Line Items] | ||||
Related party, equity held, percent | 0.10 | |||
Related party, payment, term | 3 years | |||
Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Annual retainer fee | 0.01 | |||
Affiliated Entity | TPG Management and Consulting Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | $ 400,000 | $ 300,000 | ||
Affiliated Entity | TPG Management Service Agreement | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | 1,200,000 | 300,000 | ||
Loss on contract termination | $ 2,300,000 | |||
Due from related parties, current | $ 0 | |||
Affiliated Entity | EIR Partners Monthly Consulting Agreement | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | 10,000 | |||
Affiliated Entity | EIR Partners Consulting Agreement | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amounts of transaction | $ 80,000 | $ 90,000 | ||
Related party transaction, renewal term | 1 year |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - Business Processing Outsourcing - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Operating income (loss) | $ (8) | $ 50 |
Income (loss) from discontinued operations before provision for income taxes | (8) | 50 |
Provision expense (benefit) for income taxes | (2) | 13 |
Income (loss) from discontinued operations, net of tax | $ (6) | $ 37 |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Discontinued Operations and Disposal Groups [Abstract] | ||
Disposal group, including discontinued operation, assets | $ 0 | $ 0 |
Disposal group, including discontinued operation, liabilities | $ 0 | $ 0 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) $ in Thousands | Jun. 18, 2021USD ($) | Jun. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) |
Segment Reporting [Abstract] | ||||||
Number of reportable segments | segment | 2 | |||||
Director and Officer Prior Act Liability Insurance Policy, Premium Expense | $ | $ 7,900 | $ 7,900 | $ 0 | $ 0 | $ 7,861 | $ 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | Jun. 18, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Segment Reporting Information [Line Items] | ||||||
Net revenues | $ 82,411 | $ 69,528 | $ 240,290 | $ 195,833 | ||
Segment Adjusted EBITDA | 24,345 | 20,887 | 65,197 | 48,264 | ||
Unallocated | (3,742) | (2,086) | (8,731) | (6,410) | ||
Adjustments to reconcile to U.S. GAAP net income (loss) from continuing operations | ||||||
Depreciation and amortization | (7,473) | (6,918) | (22,667) | (20,710) | ||
Interest expense | (3,283) | (4,561) | (15,144) | (13,471) | ||
Income tax provision | (1,131) | 472 | 5,042 | 3,272 | ||
Cost of COVID-19 | (746) | (3,254) | (3,057) | (7,772) | ||
Sales and use tax | (1,734) | (2,122) | (5,802) | (5,577) | ||
Non-cash stock compensation expense | (1,093) | (1,745) | (3,166) | (5,671) | ||
Transaction related costs | (328) | (80) | (2,969) | (277) | ||
Acquisition bonus expense – HealthScape and Pareto acquisition | (192) | (481) | (481) | (1,476) | ||
Loss on extinguishment of debt | $ (5,000) | 0 | 0 | (5,015) | 0 | |
Director and officer prior act liability insurance policy | $ (7,900) | $ (7,900) | 0 | 0 | (7,861) | 0 |
Other | (937) | (1,758) | (5,737) | (4,773) | ||
Net income (loss) from continuing operations | 3,686 | (1,646) | (10,391) | (14,601) | ||
Technology Enabled Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenues | 69,248 | 60,056 | 200,196 | 166,850 | ||
Segment Adjusted EBITDA | 19,786 | 19,088 | 52,038 | 44,196 | ||
Advisory Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenues | 13,163 | 9,472 | 40,094 | 28,983 | ||
Segment Adjusted EBITDA | $ 4,559 | $ 1,799 | $ 13,159 | $ 4,068 |