Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2022 | Sep. 12, 2022 | Dec. 31, 2021 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Jun. 30, 2022 | ||
Entity File Number | 001-40159 | ||
Entity Registrant Name | InnovAge Holding Corp | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-0710819 | ||
Entity Address, Address Line One | 8950 | ||
Entity Address, Address Line Two | E. Lowry Boulevard | ||
Entity Address, City or Town | Denver | ||
Entity Address State Or Province | CO | ||
Entity Address, Postal Zip Code | 80230 | ||
City Area Code | 844 | ||
Local Phone Number | 803-8745 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | INNV | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 94.9 | ||
Entity Common Stock, Shares Outstanding | 135,565,699 | ||
Entity Central Index Key | 0001834376 | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | Deloitte & Touche LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Denver, CO |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Current Assets | ||
Cash and cash equivalents | $ 184,429 | $ 201,466 |
Restricted cash | 17 | 2,234 |
Accounts receivable, net of allowance ($3,403 - June 30, 2022 and $4,350 - June 30, 2021) | 35,907 | 32,582 |
Prepaid expenses | 13,842 | 9,249 |
Income tax receivable | 6,761 | 5,401 |
Total current assets | 240,956 | 250,932 |
Noncurrent Assets | ||
Property and equipment, net | 176,260 | 142,715 |
Investments | 5,493 | 3,493 |
Deposits and other | 2,812 | 3,877 |
Goodwill | 124,217 | 124,217 |
Other intangible assets, net | 5,858 | 6,518 |
Total noncurrent assets | 314,640 | 280,820 |
Total assets | 555,596 | 531,752 |
Current Liabilities | ||
Accounts payable and accrued expenses | 50,562 | 32,361 |
Reported and estimated claims | 38,454 | 33,234 |
Due to Medicaid and Medicare | 9,130 | 7,101 |
Current portion of long-term debt | 3,793 | 3,790 |
Current portion of capital lease obligations | 3,368 | 2,079 |
Total current liabilities | 105,307 | 78,565 |
Noncurrent Liabilities | ||
Deferred tax liability, net | 17,761 | 15,700 |
Capital lease obligations | 9,440 | 5,190 |
Other noncurrent liabilities | 1,134 | 2,758 |
Long-term debt, net of debt issuance costs | 68,210 | 71,574 |
Total liabilities | 201,852 | 173,787 |
Commitments and Contingencies (See Note 10) | ||
Redeemable Noncontrolling Interests (See Note 5) | 15,278 | 16,986 |
Stockholders' Equity | ||
Common stock, $0.001 par value; 500,000,000 authorized as of June 30, 2022 and 2021; 135,532,811 and 135,516,513 issued shares as of June 30, 2022 and June 30, 2021, respectively | 136 | 136 |
Additional paid-in capital | 327,499 | 323,760 |
Retained earnings | 4,729 | 10,663 |
Total InnovAge Holding Corp. | 332,364 | 334,559 |
Noncontrolling interests | 6,102 | 6,420 |
Total stockholders' equity | 338,466 | 340,979 |
Total liabilities and stockholders' equity | $ 555,596 | $ 531,752 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Consolidated Balance Sheets | ||
Allowance for loss | $ 3,403 | $ 4,350 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock issued (in shares) | 135,532,811 | 135,516,513 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenues | ||
Total revenues | $ 698,640 | $ 637,800 |
Expenses | ||
External provider costs | 383,046 | 309,317 |
Cost of care, excluding depreciation and amortization | 180,222 | 154,403 |
Sales and marketing | 24,201 | 22,236 |
Corporate, general and administrative | 101,653 | 132,333 |
Depreciation and amortization | 13,924 | 12,294 |
Equity loss | 1,343 | |
Other operating expense | 18,211 | |
Total expenses | 703,046 | 650,137 |
Operating Income (Loss) | (4,406) | (12,337) |
Other Income (Expense) | ||
Interest expense, net | (2,526) | (16,787) |
Loss on extinguishment of debt | (14,479) | |
Gain on equity method investment | 10,871 | |
Other expense | (305) | (2,237) |
Total other expense | (2,831) | (22,632) |
Income (Loss) Before Income Taxes | (7,237) | (34,969) |
Provision for Income Taxes | 723 | 9,771 |
Net Income (Loss) | (7,960) | (44,740) |
Less: net loss attributable to noncontrolling interests | (1,439) | (754) |
Net Income (Loss) Attributable to InnovAge Holding Corp. | $ (6,521) | $ (43,986) |
Weighted-average number of common shares outstanding - basic | 135,519,970 | 123,618,702 |
Weighted-average number of common shares outstanding - diluted | 135,519,970 | 123,618,702 |
Net income (loss) per share - basic | $ (0.05) | $ (0.36) |
Net income (loss) per share - diluted | $ (0.05) | $ (0.36) |
Capitation revenue | ||
Revenues | ||
Total revenues | $ 696,998 | $ 635,322 |
Other service revenue | ||
Revenues | ||
Total revenues | $ 1,642 | $ 2,478 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock As Previously Reported | Common Stock | Additional Paid-in Capital As Previously Reported | Additional Paid-in Capital | Retained Earnings (Deficit) As Previously Reported | Retained Earnings (Deficit) Adjustments | Retained Earnings (Deficit) | Treasury Stock | Noncontrolling Interests As Previously Reported | Noncontrolling Interests Adjustments | Noncontrolling Interests | As Previously Reported | Adjustments | Total |
Balances, Beginning at Jun. 30, 2020 | $ 133 | $ 36,338 | $ 64,737 | $ (193) | $ 6,735 | $ 107,750 | ||||||||
Balances, Beginning (in shares) at Jun. 30, 2020 | 132,718,461 | 102,030 | ||||||||||||
Treasury stock transaction | $ (77,603) | (77,603) | ||||||||||||
Treasury stock transaction (in shares) | 16,095,819 | |||||||||||||
Treasury stock retirement | $ (16) | (77,780) | $ 77,796 | |||||||||||
Treasury stock retirement (in shares) | (16,197,849) | (16,197,849) | ||||||||||||
Stock Option Cancellation, Value | (9,501) | (9,501) | ||||||||||||
Time based awards- option cancelation | (29,175) | (29,175) | ||||||||||||
Stock-based compensation | 1,664 | 1,664 | ||||||||||||
Reclassification of warrant liability | 2,264 | 2,264 | ||||||||||||
Owner contribution | 20,000 | 20,000 | ||||||||||||
Initial public offering of common stock, net of offering costs | $ 19 | 370,449 | 370,468 | |||||||||||
Initial public offering of common stock, net of offering costs (in shares) | 18,995,901 | |||||||||||||
Consolidation of equity method investment | 16,838 | 16,838 | ||||||||||||
Net income (loss) | $ (43,986) | (43,986) | $ (754) | $ 439 | (315) | $ (44,740) | $ 439 | (44,301) | ||||||
Adjustment to redemption value | $ (587) | (587) | (587) | (587) | ||||||||||
Balances, Ending at Jun. 30, 2021 | $ 136 | $ 136 | $ 323,760 | 323,760 | $ 11,250 | $ (587) | 10,663 | $ 22,819 | $ (16,399) | 6,420 | 357,965 | (16,986) | 340,979 | |
Balances, Ending (in shares) at Jun. 30, 2021 | 135,516,513 | 135,516,513 | ||||||||||||
Redeemable non-controlling interests (Temporary Equity) | ||||||||||||||
Temporary Equity, Accretion to Redemption Value, Adjustment | 16,838 | 16,838 | ||||||||||||
Adjustment to redemption value | 587 | 587 | ||||||||||||
Net income (loss) | (439) | (439) | ||||||||||||
Ending balance at Jun. 30, 2021 | 16,986 | 16,986 | ||||||||||||
Redeemable non-controlling interests (Temporary Equity) | ||||||||||||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | $ (44,740) | $ (44,740) | (44,740) | |||||||||||
Stock-based compensation | 3,739 | 3,739 | ||||||||||||
Stock-based compensation (in shares) | 16,298 | |||||||||||||
Net income (loss) | (6,521) | (318) | (6,839) | |||||||||||
Adjustment to redemption value | 587 | 587 | ||||||||||||
Balances, Ending at Jun. 30, 2022 | $ 136 | $ 327,499 | $ 4,729 | $ 6,102 | 338,466 | |||||||||
Balances, Ending (in shares) at Jun. 30, 2022 | 135,532,811 | |||||||||||||
Redeemable non-controlling interests (Temporary Equity) | ||||||||||||||
Adjustment to redemption value | (587) | |||||||||||||
Net income (loss) | (1,121) | |||||||||||||
Ending balance at Jun. 30, 2022 | 15,278 | |||||||||||||
Redeemable non-controlling interests (Temporary Equity) | ||||||||||||||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | $ (7,960) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | 12 Months Ended |
Jun. 30, 2021 USD ($) | |
Consolidated Statements of Stockholders' Equity | |
Offering costs | $ 28,445 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Activities | ||
Net income (loss) | $ (7,960) | $ (44,740) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities | ||
Loss on disposal of assets | 305 | 18 |
Provision for uncollectible accounts | 6,181 | 8,637 |
Depreciation and amortization | 13,924 | 12,294 |
Gain on equity method investment | (10,871) | |
Loss on extinguishment of long-term debt | 14,479 | |
Amortization of deferred financing costs | 429 | 1,056 |
Stock-based compensation | 3,739 | 1,664 |
Deferred income taxes | 2,061 | 6,418 |
Loss in equity of nonconsolidated entities | 1,343 | |
Change in fair value of warrants | 2,264 | |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable, net | (9,506) | 5,879 |
Prepaid expenses | (4,667) | (4,987) |
Income tax receivable | (1,360) | (3,658) |
Deposits and other | (475) | (874) |
Accounts payable and accrued expenses | 17,381 | 6,137 |
Reported and estimated claims | 5,221 | 2,613 |
Due to Medicaid and Medicare | 2,029 | (5,220) |
Net cash provided by (used in) operating activities | 27,302 | (7,548) |
Investing Activities | ||
Purchases of property and equipment | (38,238) | (17,541) |
Purchase of intangible assets | (2,000) | |
Purchase of cost method investment | (2,000) | |
Net cash used in investing activities | (40,238) | (19,541) |
Financing Activities | ||
Distributions to owners | (9,500) | |
Capital contributions | 20,000 | |
Payments on capital lease obligations | (2,528) | (1,788) |
Proceeds from long-term debt | 375,000 | |
Principal payments on long-term debt | (3,790) | (512,660) |
Payment of financing costs and debt premiums | (14,896) | |
Proceeds from initial public offering of common stock | 370,468 | |
Treasury stock purchases | (77,603) | |
Payments under acquisition agreements | (3,622) | |
Payments related to option cancellation | (29,175) | |
Net cash provided by (used in) financing activities | (6,318) | 116,224 |
INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS & RESTRICTED CASH | (19,254) | 89,135 |
CASH, CASH EQUIVALENTS & RESTRICTED CASH, BEGINNING OF PERIOD | 203,700 | 114,565 |
CASH, CASH EQUIVALENTS & RESTRICTED CASH, END OF PERIOD | 184,446 | 203,700 |
Supplemental Cash Flows Information | ||
Interest paid | 1,474 | 18,030 |
Income taxes paid | 84 | 7,048 |
Property and equipment included in accounts payable | 2,135 | 1,327 |
Property and equipment purchased under capital leases | $ 8,067 | $ 3,493 |
Business
Business | 12 Months Ended |
Jun. 30, 2022 | |
Business | |
Business | Note 1: Business InnovAge Holding Corp. (formerly, TCO Group Holdings, Inc.) (the “Company”) and certain wholly owned subsidiaries were formed as for-profit corporations effective May 13, 2016, for the purpose of purchasing all the outstanding common stock of Total Community Options, Inc. d/b/a InnovAge, which was formed in May 2007. In connection with this purchase, Total Community Options, Inc. and certain of its subsidiaries converted from not-for-profit organizations to for-profit corporations, and Total Community Options Foundation, Inc. and Johnson Adult Day Program, Inc, both not-for-profit organizations, separated from Total Community Options, Inc. In connection with our initial public offering (“IPO”), which occurred in March 2021, we changed the name of our company from TCO Group Holdings, Inc. to InnovAge Holding Corp. InnovAge Holding Corp. and its subsidiaries, which are headquartered in Denver, Colorado, have a record of innovation, quality, and sensitivity to the needs of participants and staff. The Company oversees, and in many cases directly provides, a broad range of medical and ancillary services for seniors in need of care and support to safely live independently in their homes and communities, including in-home care services (skilled, unskilled and personal care); in-center services such as primary care, physical therapy, occupational therapy, speech therapy, dental services, mental health and psychiatric services, meals, and activities; transportation to the Program of All-Inclusive Care for the Elderly (“PACE”) center and third-party medical appointments; and care management. The Company manages its business as one reportable segment, PACE. As of June 30, 2022, the Company served approximately 6,650 PACE participants, making it the largest PACE provider in the United States of America (the U.S.) based upon participants served, and operates 18 PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia. PACE is a fully-capitated managed care program, which serves the frail elderly, and predominantly dual-eligible, population in a community-based service model. InnovAge is obligated to provide, and participants receive, all needed healthcare services through an all-inclusive, coordinated model of care, and the Company is at risk for 100% of healthcare costs incurred with respect to the care of its participants. PACE programs receive capitation payments directly from Medicare Parts C and D, Medicaid, Veterans Administration (“VA”), and private pay sources. Additionally, under the Medicare Prescription Drug Plan, the Centers for Medicare and Medicaid Services (“CMS”) share part of the risk for providing prescription medication to the Company’s participants. On March 3, 2021, the Company’s Registration Statement on Form S-1 with respect to the Company’s IPO of shares of common stock, par value $0.001 per share, was declared effective by the Securities and Exchange Commission (“SEC”). The Company’s common stock began trading on March 4, 2021 on the Nasdaq Stock Market LLC (“NASDAQ”) under the ticker symbol “INNV”. On March 8, 2021, we completed our IPO in which we issued and sold 16,666,667 shares of our common stock at an offering price of $21.00 per share. In addition, the underwriters had the option to purchase 2,500,000 additional shares of common stock, and on March 9, 2021, the underwriters exercised the option to purchase 2,329,234 shares of common stock. We received net proceeds of $370.5 million, after deducting underwriting discounts and commissions of $23.9 million and deferred offering costs of $4.5 million. Deferred, direct offering costs were capitalized and consisted of fees and expenses incurred in connection with the sale of our common stock in the IPO, including the legal, accounting, printing and other offering related costs. Upon completion of the IPO, these deferred offering costs were reclassified from current assets to stockholders’ equity and recorded against the net proceeds from the offering. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies Basis of Preparation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and variable interest entities (VIEs) for which it is the primary beneficiary and entities for which it is the controlling general partner. All intercompany accounts and transactions have been eliminated in consolidation. Restatement of Prior Period Financial Statements Subsequent to the issuance of the Company’s consolidated financial statements as of and for the year ended June 30, 2021, we identified an error in our consolidated balance sheet and statement of stockholders’ equity as of June 30, 2021 related to the presentation of redeemable noncontrolling interests. The Company incorrectly recorded redeemable noncontrolling interests of $17.0 million as permanent equity rather than temporary equity The effect of the restatement on the consolidated balance sheet as of June 30, 2021 is as follows ( in thousands As Previously Reported Adjustments As Restated Redeemable Noncontrolling Interests (See Note 5) — 16,986 16,986 Retained earnings 11,250 (587) 10,663 Total InnovAge Holding Corp. 335,146 (587) 334,559 Noncontrolling interests 22,819 (16,399) 6,420 Total stockholders’ equity 357,965 (16,986) 340,979 The effect of the restatement on the consolidated statement of stockholders’ equity as of June 30, 2021 is as follows ( in thousands Redeemable Total Permanent Noncontrolling Retained Noncontrolling Stockholders’ Interests Retained Earnings Interests Equity (Temporary Equity) Earnings As Previously Reported Consolidation of equity method investment — 16,838 16,838 — — Net income (loss) (43,986) (754) (44,740) — — Adjustment to redemption value — — — — — Balances, June 30, 2021 11,250 22,819 357,965 — — Adjustments Consolidation of equity method investment — (16,838) (16,838) 16,838 — Net income (loss) — 439 439 (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 (587) (16,399) (16,986) 16,986 — As Restated Consolidation of equity method investment — — — 16,838 — Net income (loss) (43,986) (315) (44,301) (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 10,663 6,420 340,979 16,986 — Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, the allowance for uncollectible accounts; useful lives of property and equipment and the valuation of goodwill and intangible assets; risk-score adjustments to participant revenues; reported and estimated claims; accruals; the determination of assumptions for stock-based compensation costs; deferred taxes, including the determination of a need for a valuation allowance; valuation of the contingent consideration; legal contingencies, including medical malpractice claims; the determination of fair value of net assets acquired in a business combination; and other fair value measurements. Actual results may differ from previously estimated amounts. Cash and Cash Equivalents Cash and cash equivalents consist of cash and financial instruments issued by major financial institutions that have an original maturity of less than three months. Amounts are reported in the consolidated balance sheets at cost, which approximates fair value. The Company’s cash and cash equivalents are deposited with high credit quality financial institutions and are primarily in demand deposit accounts. The FDIC insurance coverage is $250,000 on the aggregate of interest bearing and non-interest bearing accounts. Investments Cost method investments do not have a readily determinable fair value and are carried at cost, less impairment plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company uses the equity method to account for investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. The Company’s investments in these nonconsolidated entities is reflected in the Company’s consolidated balance sheets under the equity method, and the Company’s proportionate net income (loss), if any, is included in the Company’s consolidated statements of operations as equity income (loss). The Company evaluates its investments for impairment whenever events or changes in circumstances indicate that a decline in value has occurred that is other than temporary. Evidence considered in this evaluation includes, but would not necessarily be limited to, the financial condition and near-term prospects of the investee, recent operating trends and forecasted performance of the investee, market conditions in the geographic area or industry in which the investee operates and the Company’s strategic plans for holding the investment in relation to the period of time expected for an anticipated recovery of its carrying value. If the investment is determined to have a decline in value deemed to be other than temporary it is written down to estimated fair value. There were no write-downs in the fiscal years ended June 30, 2022 or 2021. See Note 5 “Investments” for more information. Restricted Cash Restricted cash includes (1) cash held in certificates of deposit of $0.0 million and $2.2 million as of June 30, 2022 and 2021, respectively, and (2) cash held for participants who have established a personal-needs account to pay for nonmedical personal expenses, payment of which only occurs upon participant authorization, in the amount of approximately $0.02 million as of both June 30, 2022 and 2021. The Company records a related deposit liability for any participant contributions to these personal-needs accounts in accounts payable and accrued expenses in the consolidated balance sheets. Accounts Receivable The Company provides comprehensive health care services to participants on the basis of capitated or fixed fees per participant that are paid monthly by Medicare, Medicaid, the VA, and private pay sources. The Company records accounts receivable at net realizable value, which includes an allowance for estimated uncollectible accounts. The allowance for uncollectible accounts reflects the Company’s best estimate of probable losses considering eligibility, historical experience, and existing economic conditions. Accounts are written off as bad debts when they are deemed uncollectible based upon individual credit evaluations and specific circumstances underlying the accounts. See additional information in Note 3 “Revenue Recognition”. Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the shorter of estimated useful lives or lease terms, if the assets are being leased. Property and equipment were comprised of the following as of June 30: Estimated dollars in thousands Useful Lives 2022 2021 Land N/A $ 11,980 $ 11,980 Buildings and leasehold improvements 10 122,076 104,724 Software 3 16,264 13,316 Equipment and vehicles 3 47,546 35,341 Construction in progress N/A 35,479 22,130 233,345 187,491 Less accumulated depreciation and amortization (57,085) (44,776) Total property and equipment, net $ 176,260 $ 142,715 Depreciation of $13.3 million and $11.6 million was recorded during the fiscal years ended June 30, 2022 and 2021, respectively. Land is not depreciated, and construction in progress is not depreciated until ready for service. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. The costs of acquiring or developing internal-use software, including directly related payroll costs for internal resources, are capitalized. Software maintenance and training costs are expensed in the period incurred. Interest is capitalized on construction projects, including internal-use software development projects, while in progress. During the fiscal years ended June 30, 2022 and 2021, the Company capitalized interest of approximately $0.9 million and $1.0 million, respectively. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets, and the resulting gain or loss, if any, is reflected in the consolidated statements of operations. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. No impairment charges were recorded in the fiscal years ended June 30, 2022 or 2021. Goodwill and Intangible Assets Intangible assets consist of customer relationships acquired through business acquisitions. Goodwill represents the excess of consideration paid over the fair value of net assets acquired through business acquisitions. Goodwill is not amortized but is tested for impairment at least annually. The Company tests goodwill for impairment annually on April 1st or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale, disposition of a significant portion of the business, or other factors. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). ASC 350, Intangibles — Goodwill and Other (“ASC 350”), allows entities to first use a qualitative approach to test goodwill for impairment. When the reporting units where the Company performs the quantitative goodwill impairment are tested, the Company compares the fair value of the reporting unit, which the Company primarily determines using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. There were no goodwill impairments recorded during the years ended June 30, 2022 and 2021. Customer relationships represent the estimated values of customer relationships of acquired businesses and have definite lives. The Company amortizes these intangible assets on a straight-line basis over their ten-year estimated useful life. Intangible assets are reviewed for impairment in conjunction with long-lived assets. There were no intangible asset impairments recorded during the years ended June 30, 2022 and 2021. Reported and Estimated Claims Reported and estimated claims consist of unpaid claims reported as of the balance sheet date and estimates of claims incurred on or before June 30 that have not been reported by that date (IBNR). Such estimates are developed using actuarial methods and are based on many variables, including the utilization of health care services, historical payment patterns, cost trends, and other factors. These complex estimation methods and the resulting reserves are continually reviewed and updated, and any adjustments deemed necessary to contemplate new or updated information are reflected in current operations. Contingent Consideration The Company records contingent consideration at the time of agreement and records changes in the fair value of contingent consideration each reporting period in the consolidated statements of operations as a component of other operating expense (income). During the year ended June 30, 2021, we paid contingent consideration relating to our acquisition of NewCourtland, as defined and described in Note 5 “Investments”. There were no amounts outstanding related to contingent consideration as of June 30, 2022. Debt Issuance Costs Debt issuance costs are those costs that have been incurred in connection with the issuance of long-term debt and are offset against long-term debt in the consolidated balance sheets. Such costs are being amortized over the term of the underlying debt using the straight-line method, as the difference between that and the effective interest method are immaterial. Treasury Stock Treasury stock purchases are accounted for under the cost method where the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in-capital in excess of par value using the average-cost method. Revenue Recognition Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performed 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 as the entity satisfies a performance obligation. Medicaid and Medicare capitation revenues are based on PMPM capitation rates under the PACE program. For a discussion of our revenue recognition policies, please see Note 3 Professional Liability Claims The Company records a liability for medical malpractice claims based on estimated probable losses and costs associated with settling these claims and a receivable to reflect the estimated insurance recoveries, if any. See Note 10 “Commitments and Contingencies”. Advertising Costs The Company’s purchased services and contracts expenses include media advertising, tactical advertising, and promotion costs. The creative portion of these activities is expensed as incurred. Production costs of advertising and promotional materials are expensed when the advertising is first run, unless such costs support direct-response advertising campaigns. In that case, these costs are capitalized and amortized over the period estimated to benefit from the campaign. Total advertising expenses were $6.7 million and $6.5 million for the fiscal years ended June 30, 2022 and 2021, respectively. Stock-based Compensation The Company has long-term equity incentive plans that provide for stock-based compensation, including the granting of stock options, profits interest units and restricted stock units to employees, directors, consultants, or advisers, as determined by each of the respective plans. The Company utilizes the Black-Scholes option-pricing model to determine the fair value of the stock options on the date of grant. This model derives the fair value of the options based on certain assumptions related to expected stock price volatility, expected option life, risk-free interest rate, and dividend yield. The Company uses the Monte Carlo option model to determine the fair value of the granted profits interests units. For service-vesting awards, we recognize stock-based compensation expense over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. If the award was, in substance, multiple awards, we recognize stock-based compensation expense over the requisite service period for each separately vesting portion of the awards. For performance-vesting awards, we recognize stock-based compensation expense when it is probable that the performance condition will be achieved. We analyze if a performance condition is probable for each reporting period through the settlement date for awards subject to performance vesting. Stock-based compensation is included in corporate, general and administrative expenses on our consolidated statements of operations. Shares issued pursuant to our equity incentive plans are issued from authorized but unissued shares or from shares, if any, held by the Company as treasury stock. See Note 11 “Stock-based Compensation”. Income Taxes The Company and its subsidiaries calculate federal and state income taxes currently payable and for deferred income taxes arising from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to enacted tax laws and rates applicable to periods in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. The members of SH1 and InnovAge Sacramento have elected to be taxed as partnerships, and no provision for income taxes for SH1 or InnovAge Sacramento is included in these consolidated financial statements. A valuation allowance is provided to the extent that it is more likely than not that deferred tax assets will not be realized. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalty expense associated with uncertain tax positions as a component of provision for income taxes. Variable Interest Entities (VIE) A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk or whose equity owners lack certain decision-making and economic rights. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity. The primary beneficiary is required to consolidate the VIE. SH1 and PWD, each as defined and described in Note 5 “Investments”, are considered to be VIEs. The Company is not considered the primary beneficiary of PWD but is considered the primary beneficiary of SH1. Recently Adopted Accounting Pronouncements Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes Topic 740-Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. This guidance is effective for companies with fiscal years beginning after December 15, 2020, including interim periods therein, and early adoption is permitted. The Company adopted ASU 2019-12 during the quarter ended September 30, 2021 and it did not have a material effect on the Company’s condensed consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02 Leases (ASU 2016-02), which was intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than 12 months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance should be applied under a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. In June 2020, FASB issued ASU 2020-05 Revenue from contracts with customers (Topic 606) and leases (Topic 842)—Effective dates for certain entities which deferred the new lease standard effective date for the Company to December 15, 2022, with early adoption permitted. The Company will adopt this ASU in the fiscal year beginning July 1, 2022 and has not yet determined the effect of the standard on its ongoing financial reporting. Financial Instruments In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments The ASU is effective for private companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this guidance for the annual and interim reporting periods beginning July 1, 2023. We do not expect that any other recently issued accounting guidance will have a significant effect on our condensed consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Revenue Recognition | Note 3 : Revenue Recognition Capitation Revenue and Accounts Receivable Our capitation revenue relates to contracts with participants in which our performance obligation is to provide healthcare services to the participants. Revenues are recorded during the period our obligations to provide healthcare services are satisfied as noted below within each service type. The Company contracts directly with Medicare and Medicaid on a per member, per month (“PMPM”) basis. We receive 100% of the pooled capitated payment to directly provide or manage the healthcare needs of our participants. Fees are recorded gross in revenues because the Company is acting as a principal in providing for or overseeing comprehensive care provided to the participants. Neither the Company nor any of its affiliates is a registered insurance company because state law in the states in which it operates does not require such registration for risk-bearing providers. In general, a participant enrolls in the PACE program and is considered a customer of InnovAge. The Company considers all contracts with participants as a single performance obligation to provide comprehensive medical, health, and social services that integrate acute and long-term care. The Company identified that contracts with customers in the PACE program have similar performance obligations and therefore groups them into one portfolio. This performance obligation is satisfied as the Company provides comprehensive care to its participants. Our revenues are based on the estimated PMPM amounts we expect to be entitled to receive from the capitated fees per participant that are paid monthly by Medicaid, Medicare, the VA, and private pay sources. Medicaid and Medicare capitation revenues are based on PMPM capitation rates under the PACE program. VA is included in “Private Pay and other” and is also capitated. Private pay includes direct payments from participants who do not qualify for the full capitated rate and have to pay all or a portion of the capitated rate. The Company disaggregates capitation revenue from the following sources for the year ended June 30: 2022 2021 Medicaid 54 % 53 % Medicare 46 % 47 % Private pay and other * % * % Total 100 % 100 % * Less than 1% The Company determined the transaction price for these contracts is the amount we expect to be entitled to, which is the most likely amount. For certain capitation payments, the Company is subject to retroactive premium risk adjustments based on various factors. The Company estimates the amount of the adjustment and records it monthly on a straight-line basis. These adjustments are not expected to be material. The capitation revenues are recognized based on the estimated PMPM transaction price to transfer the service for a distinct increment of the series (i.e. month). We recognize revenue in the month in which participants are entitled to receive comprehensive care benefits during the contract term. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and did not adjust for the effects of a significant financing component. The Company also provides prescription drug benefits in accordance with Medicare Part D. Monthly payments received from CMS and the participants represent the bid amount for providing prescription drug coverage. The portion received from CMS is subject to risk sharing through Medicare Part D risk-sharing corridor provisions. These risk-sharing corridor provisions compare costs targeted in the Company’s bid to actual prescription drug costs. The Company estimates and records a monthly adjustment to Medicare Part D revenues associated with these risk-sharing corridor provisions. Medicare Part D comprised (i) 12% of capitation revenues for each of the years ended June 30, 2022 and 2021, and (ii) 23% and 21% of external provider costs for the year ended June 30, 2022 and 2021, respectively. The Company provides comprehensive health care services to participants on the basis of capitated or fixed fees per participant that are paid monthly by Medicare, Medicaid, the VA, and private pay sources. The concentration of net receivables from participants and third-party payers as of June 30, 2022 and 2021 was as follows: 2022 2021 Medicaid 70 % 60 % Medicare 22 % 20 % Private pay and other 8 % 20 % Total 100 % 100 % The Company records accounts receivable at net realizable value, which includes an allowance for estimated uncollectible accounts. The allowance for uncollectible accounts reflects the Company’s best estimate of probable losses considering eligibility, historical experience, and existing economic conditions. The balance of the allowance for uncollectible accounts was $3.4 million as of June 30, 2022, compared to $4.4 million as of June 30, 2021. Accounts are written off as bad debts when they are deemed uncollectible based upon individual credit evaluations and specific circumstances underlying the accounts. In fiscal year 2021, the Company and the Colorado Department of Health Care Policy & Financing (“HCPF”) completed the reconciliation for fiscal years 2018 and 2019. The reconciliation resulted in a reduction of accounts receivable of $17.0 million and due to Medicaid of $13.6 million, which was recorded in fiscal year 2021. The Company does not expect adjustments related to the reconciliation to be significant in future periods. Other Service Revenue and Accounts Receivable Other service revenue is comprised of rents earned related to Senior Housing and other fee for service revenue. Accounts receivable related to other service revenue were not significant as of both June 30, 2022 and June 30, 2021. Laws and regulations governing the Medicare and Medicaid programs are complex and subject to change, as well as government review. Failure to comply with these laws can expose the entity to significant regulatory action, including fines, penalties, and exclusion from the Medicare and Medicaid programs. See Note 10, “Commitments and Contingencies”. |
Equity
Equity | 12 Months Ended |
Jun. 30, 2022 | |
Equity | |
Equity | Note 4: Equity Equity Owner Transaction and Treasury Stock On July 27, 2020, the Company, Ignite Aggregator LP (“Purchaser”), and the former equity holders of the Company (“Sellers”) entered into a Securities Purchase Agreement (the “Agreement”), effective July 27, 2020. Under the terms of the Agreement, the Sellers sold a portion of their equity interest to the Purchaser. The Purchaser and the Sellers then contributed their equity interests in the Company to a newly formed limited partnership, TCO Group Holdings, L.P. (the “LP”) resulting in the Company being wholly owned by the LP. Concurrently with the entry into the Agreement, the Company amended and restated its 2016 Credit Agreement (as defined below), see Note 8 “Long-term Debt” for further discussion. A portion of the proceeds were used by the Company to repurchase 16,095,819 shares of its common stock from certain members of management, our Board of Directors and our equity partner, at $4.82 per share. As a result of the repurchase, $77.6 million was recorded as Treasury stock. In March 2021, the Company retired all outstanding shares of Treasury stock. Additionally, as part of the Agreement, the Company executed an Option Cancellation Agreement (the “Cancellation Agreement”), which canceled the Company’s common stock option awards of 16,994,975 granted under the 2016 Equity Incentive Plan for $74.6 million. Such cancellation resulted in a settlement of the awards. Vesting of the contingent performance-based awards was not deemed probable at the time of the settlement resulting in the settlement of the contingent performance-based awards being recorded as Corporate, general and administrative. Vesting of the time vesting awards was deemed probable at the time of the settlement resulting in a portion of the settlement of the time vesting awards being recorded as Corporate, general and administrative expense and the remainder being recorded as a reduction to Additional paid-in capital. Of the total settlement, $45.4 million was recorded as Corporate, general and administrative expense and $32.4 million was recorded as a reduction to Additional paid-in capital. The Cancellation Agreement resulted in the option holders receiving the same amount of cash that they would have received had they exercised their options, participated in the repurchase described above and sold their remaining shares. As part of the transaction, the Company incurred $22.6 million in transaction costs, of which $13.1 million was recognized as Corporate, general and administrative expense and $9.5 million was recognized as a distribution to owner as the costs were paid on behalf of the owners. Capital Contribution On October 15, 2020, Finback Pace, LP contributed $20.0 million for an investment in the LP, which in turn contributed the funds to the Company. |
Investments
Investments | 12 Months Ended |
Jun. 30, 2022 | |
Investments | |
Investments | Note 5: Investments The Company holds cost method and equity method investments as of June 30: 2022 2021 in thousands Cost method investments $ 4,645 $ 2,645 Equity method investments 848 848 Total investments $ 5,493 $ 3,493 Nonconsolidated Entities Cost Method Investments The Company maintains two investments that are accounted for using the cost method. The investments do not have a readily determinable fair value and the Company has elected to record the investments at cost, less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. During the years ended June 30, 2022 and 2021, there were no observable price changes or impairments recorded. JetDoc In August 2021, the Company acquired a minority interest equal to 806,481 shares of the outstanding common stock of Jetdoc, Inc. (“Jetdoc”), a telehealth and virtual urgent care app dedicated to effectively connecting users with medical professionals, for cash consideration of $2.0 million. The balance of the Company’s investment in Jetdoc is $2.0 million which represents the maximum exposure to loss. Dispatch Health On June 14, 2019, the Company invested $1.5 million in DispatchHealth Holdings, Inc., ("DispatchHealth") through the purchase of a portion of its outstanding Series B Preferred Stock. On April 2, 2020, the Company invested an additional $1.1 million through the purchase of a portion of its outstanding Series C Preferred Stock. The balance of the Company’s investment is $2.6 million which represents the maximum exposure to loss. The investment does not have a readily determinable fair value and the Company has elected to record the investment at cost, less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. During the period ended June 30, 2022 and 2021, there were no observable price changes. Equity Method Investments Pinewood Lodge Pinewood Lodge, LLP (“PWD”) InnovAge Sacramento On March 18, 2019, in connection with the formation of InnovAge Sacramento, the joint venture with Adventist Health System/West (“Adventist”) and Eskaton Properties, Incorporated (“Eskaton”), the Company contributed $9.0 million in cash and land valued at $4.2 million for a 59.9% membership interest in the joint venture, InnovAge Sacramento. Further, Adventist contributed $5.8 million in cash and Eskaton contributed $3.0 million in cash for membership interests of 26.41% and 13.69%, respectively. The Company made an additional contribution of $52,000 to obtain an additional 0.1% membership interest in the joint venture. With the acquisition of the additional 0.1% membership interest, the Company obtained control of InnovAge Sacramento effective January 1, 2021. Accordingly, beginning January 1, 2021, the results of InnovAge Sacramento are included in our consolidated results of operations. The InnovAge California PACE-Sacramento LLC Limited Liability Company Agreement (the “JV Agreement”) includes numerous provisions whereby, if certain conditions are met, the joint venture may be required to purchase, at fair market value, certain members’ interests or certain members’ may be required to purchase, at fair market value, the interests of certain other members. As of June 30, 2022, none of the conditions specified in the JV Agreement had been met. At the consummation of the JV Agreement, the Company issued to Adventist, warrants (the “Sacramento Warrants”) to purchase 5% of the Company’s issued and outstanding common stock, par value $0.001 at an exercise price equal to the fair market value per share at the time of exercise of this warrant. The Sacramento Warrants originally fully vested on the exercise date, which was defined as the date on which Adventist had made aggregate capital contributions in an amount greater than $25.0 million to one or more joint venture entities in which Adventist and the Company hold equity (the “Investment Threshold”). On February 9, 2021, the Company entered into an amendment agreement with our joint venture partner Adventist to amend the Sacramento Warrants. The amendment removed the Investment Threshold requirement and granted Adventist the right to purchase up to $15.0 million of the Company’s common stock at an exercise price equal to the IPO price. The warrant was exercisable for one year beginning on the date of the consummation of the IPO. The warrant expired in March 2022 without being exercised. The Sacramento Warrants were initially determined to be equity-based payments to nonemployees and as such the measurement date for these warrants was considered to be the date when the Investment Threshold is reached. At the time of the amendment, due to the removal of the Investment Threshold, the warrants were evaluated under ASC 815-40, Contracts in an Entity’s Own Equity Effective January 1, 2021, we obtained control of InnovAge Sacramento through acquisition of an additional 0.1% membership interest, which we consider to be a step acquisition, whereby the Company re-measured the previously held equity method investment to fair value. This resulted in a gain on consolidation of $10.9 million, which is recorded in gain on equity method investment in the condensed consolidated statement of operations. The fair value of the previously held equity investments was determined using a discounted cash flow model. This resulted in a gain on consolidation of $10.9 million during the year ended June 30, 2021. We accounted for the transaction as a business combination, which requires that we record the assets acquired and liabilities assumed at fair value. The amount by which the purchase price exceeds the fair value of the net assets acquired is recorded as goodwill. The fair value of the assets acquired and net liabilities assumed in the step acquisition of InnovAge Sacramento are as follows as of January 1, 2021: January 1, 2021 Assets: in thousands Cash $ 646 Accounts receivable 786 Property and equipment, net 30,667 Goodwill 8,078 Total assets 40,177 Liabilities: Accounts payable 530 Reported and estimated claims 330 Due to Medicaid and Medicare 77 Capital leases 428 Other liabilities 48 Total liabilities $ 1,413 The following table sets forth the results of InnovAge Sacramento for the six months ended December 31, 2020. The results of InnovAge Sacramento are consolidated beginning January 1, 2021. Six Months Ended December 31, 2020 in thousands Revenue: Total revenue $ 2,297 Less: members’ interest 921 The Company’s 1,376 Cost of operations: Total cost of operations 4,538 Less: members’ interest 1,820 The Company’s 2,718 The Company’s $ (1,342) Consolidated Entities Noncontrolling Interest Senior Housing InnovAge Senior Housing Thornton, LLC (“SH1”) The following table shows the assets and liabilities of SH1 as of June 30: 2022 2021 in thousands Assets Cash and cash equivalents $ 526 $ 431 Accounts receivable — — Prepaid expenses and other 5 5 Property, plant and equipment, net 10,404 10,164 Deposits and other, net 395 390 Liabilities Accounts payable and accrued expenses 256 219 Current portion long-term debt 43 40 Noncurrent liabilities 454 454 Long-term debt, net of debt issuance costs 3,784 3,827 InnovAge Sacramento Effective January 1, 2021, we obtained control of InnovAge Sacramento through acquisition of an additional 0.1% membership interest, which we consider to be a step acquisition, whereby the Company re-measured the previously held equity method investment to fair value. Payment Pursuant to Acquisition Agreement During the fiscal year ended June 30, 2019, the Company finalized the acquisition of NewCourtland LIFE Program (“NewCourtland”) in Pennsylvania. The Company paid a base purchase price of $30 million, subject to certain net working capital and closing adjustments plus deferred cash consideration of up to $20 million. On March 8, 2021, we completed our IPO, which satisfied the condition that the Company sell equity securities pursuant to an effective registration statement. Accordingly, $20.0 million of contingent consideration was paid under the terms of the acquisition agreement during the year ended June 30, 2021. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | Note 6: Goodwill and Intangible Assets Goodwill represents the excess of cost over the fair value of net assets acquired. Pursuant to ASC 350, “Intangibles — Goodwill and Other,” we review the recoverability of goodwill annually as of April 1 or whenever significant events or changes occur which might impair the recovery of recorded amounts. For purposes of the annual goodwill impairment assessment, the Company has identified three reporting units. In September of 2021, we were notified that CMS and the State of California had suspended new enrollments at our Sacramento center based on deficiencies detected in an audit related to the provision of participant services. In February 2022, we were notified by . We considered these events to be triggering events, which required us to perform quantitative procedures as part of a Step 1 goodwill impairment analysis to assess whether it was more-likely-than-not that the fair value of the Company was greater than the net book value during the quarter periods in which the events occurred. As a result of the above interim assessment and our annual impairment test, we concluded that there was no goodwill impairment. If assumptions or estimates in the fair value calculations change or if future cash flows vary from what was expected, including those assumptions relating to the duration and severity of the financial impact of the enrollment suspension at Sacramento, California and Colorado or new regulatory sanctions or other actions are imposed on the Company, this may impact the impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges. There were no goodwill impairments recorded during the years ended June 30, 2022 and 2021. The following summarizes the changes in goodwill for the fiscal years ended June 30: in thousands 2022 2021 Balance as of beginning of period $ 124,217 $ 116,139 Goodwill acquired during the period — 8,078 Balance as of end of period $ 124,217 $ 124,217 Intangible assets consisted of the following as of June 30: in thousands 2022 2021 Definite-lived intangible assets $ 6,600 $ 6,600 Indefinite-lived intangible assets 2,000 2,000 Total intangible assets 8,600 8,600 Accumulated amortization (2,742) (2,082) Balance as of end of period $ 5,858 $ 6,518 Intangible assets with a finite useful life continue to be amortized over their useful lives. The Company recorded amortization expense of $0.7 million for both years ended June 30, 2022 and 2021. The total expected future annual amortization expense for the next 5 years ended June 30, is as follows: in thousands Amortization Expense 2023 $ 660 2024 660 2025 660 2026 660 2027 630 We review the recoverability of other intangible assets in conjunction with long-lived assets whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. There were no intangible asset impairments recorded during the years ended June 30, 2022 and 2021. |
Leases
Leases | 12 Months Ended |
Jun. 30, 2022 | |
Leases | |
Leases | Note 7: Leases Property and equipment includes property under various capital leases. These leases have expiration dates ranging from August 2022 to November 2027, varying interest rates, and generally include an option to purchase the equipment at fair value at the end of the underlying lease period. The Company’s capital leases included the following: June 30, June 30, 2022 2021 in thousands Equipment $ 18,727 $ 13,302 Less accumulated depreciation (7,541) (7,081) Total capital leases $ 11,186 $ 6,221 Certain of the Company’s property and equipment is leased under operating leases. Total rental expense under operating leases was $4.9 million and $4.5 million for the year ended June 30, 2022 and 2021, respectively. Future minimum lease payments related to (i) capital leases having initial terms of more than one year and (ii) non-cancelable operating leases as of June 30, 2022 were as follows: Operating Leases Capital Leases Minimum Lease in thousands Obligations Payments 2023 $ 4,405 $ 4,873 2024 3,909 4,581 2025 3,126 4,122 2026 2,092 4,061 2027 1,393 3,764 Thereafter 535 10,265 Total 15,460 $ 31,666 Less amount representing interest (2,652) Total minimum lease payments 12,808 Less current maturities 3,368 Noncurrent maturities $ 9,440 |
Long-term Debt
Long-term Debt | 12 Months Ended |
Jun. 30, 2022 | |
Long-term Debt | |
Long-term Debt | Note 8: Long-term Debt The components of our long-term debt are as follows: June 30, June 30, 2022 2021 in thousands Senior secured borrowings: Term Loan Facility $ 71,250 $ 75,000 Convertible term loan 2,327 2,367 Total debt 73,577 77,367 Less unamortized debt issuance costs 1,574 2,003 Less current maturities 3,793 3,790 Noncurrent maturities $ 68,210 $ 71,574 2016 Credit Agreement The Company originally entered into a senior secured borrowing agreement (the “2016 Credit Agreement”) on May 13, 2016, that consisted of a senior secured term loan for $75.0 million and a revolving credit facility for $20.0 million. The 2016 Credit Agreement was subsequently amended (i) on May 2, 2019 to increase the senior secured term loan to $190.0 million and a revolving credit facility for $30.0 million and a delayed draw term loan facility (“DDTL”) for $45.0 million and (ii) on July 27, 2020, to increase the senior secured term loan to $300.0 million, the revolving credit facility to $40.0 million and to terminate Concurrent with the Company’s entry into the 2021 Credit Agreement (defined below), the Company terminated and repaid in full all outstanding indebtedness under the 2016 Agreement. 2021 Credit Agreement On March 8, 2021, concurrently with the closing of the IPO, the Company entered into a new credit agreement (the “2021 Credit Agreement”) that replaced the 2016 Credit Agreement. The 2021 Credit Agreement consists of a senior secured term loan (the “Term Loan Facility”) of $75.0 million principal amount and a revolving credit facility (the “Revolving Credit Facility”) of $100.0 million maximum borrowing capacity. The maturity date of each of the Term Loan Facility and the Revolving Credit Facility is March 8, 2026. Loans under the 2021 Credit Agreement are secured by substantially all of the Company’s assets. Principal on the Term Loan Facility is paid each calendar quarter beginning September 2021 in an amount equal to 1.25% of the initial term loan on closing date. Proceeds of the Term Loan Facility, together with proceeds from the IPO, were used to repay amounts outstanding under the 2016 Credit Agreement. Outstanding principal amounts under the 2021 Credit Agreement accrue interest at a variable interest rate. As of June 30, 2022 and 2021, the interest rate on the Term Loan Facility was 3.83% and 1.84%, respectively. Under the terms of the 2021 Credit Agreement, the Revolving Credit Facility fee accrues at 0.25% of the average daily unused amount and is paid quarterly. During the year ended June 30, 2020, the Company borrowed and repaid $25.0 million under the revolving credit facility at an interest rate of 3.94%, to ensure sufficient funds available during the unknown time of the COVID-19 pandemic and for general corporate purposes. The Company repaid all outstanding amounts on the Revolving Credit Facility during the year ended June 30, 2021. As of June 30, 2022, we had no borrowings outstanding under the facility. The remaining capacity under the Revolving Credit Facility as of June 30, 2022 was $100.0 million, subject to (i) any issued amounts under our letters of credit, which as of June 30, 2022 was $2.6 million, and (ii) applicable covenant compliance restrictions and any other conditions precedent to borrowing. The 2021 Credit Agreement requires the Company to meet certain operational and reporting requirements, including, but not limited to, a secured net leverage ratio. Additionally, annual capital expenditures and permitted investments, including acquisitions, are limited to amounts specified in the 2021 Credit Agreement. The 2021 Credit Agreement also provides certain restrictions on dividend payments and other equity transactions and requires the Company to make prepayments under specified circumstances. The Company was in compliance with the covenants of the 2021 Credit Agreement as of June 30, 2022 and 2021, respectively. The deferred financing costs of $2.0 million are amortized over the term of the underlying debt and unamortized amounts have been offset against long-term debt in the consolidated balance sheets. Total amortization of deferred financing costs was $0.4 million and $1.1 million for the year ended June 30, 2022 and 2021, respectively. Convertible Term Loan On June 29, 2015, SH1 entered into a convertible term loan. Monthly principal and interest payments of $0.02 million commenced on September 1, 2015, and the loan bears interest at an annual rate of 6.68%. The remaining principal balance is due upon maturity, which is August 20, 2030. The loan is secured by a deed of trust to Public Trustee, assignment of leases and rents, security agreements, and SH1’s fixture filing. Aggregate maturities of our debt as of June 30, 2022 were as follows: Long-term debt in thousands Year ending June 30: 2023 $ 3,793 2024 3,796 2025 3,799 2026 60,052 2027 56 Thereafter 2,081 Total debt $ 73,577 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Jun. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 9: Fair Value Measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy was established that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources outside the reporting entity. Unobservable inputs are inputs that reflect the Company’s own assumptions based on market data and assumptions that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The sensitivity to changes in inputs and their impact on fair value measurements can be significant. The three levels of inputs that may be used to measure fair value are: Level 1 Level 2 Level 3 Recurring Measurements Effective August 7, 2018, the Company finalized the acquisition of NewCourtland in Pennsylvania. The Company paid a base purchase price of $30.0 million, subject to certain net working capital and closing adjustments plus contingent consideration of up to $20.0 million. On March 8, 2021, we completed our IPO, which satisfied one of the conditions outlined in the Securities Purchase Agreement. Accordingly, $20.0 million of contingent consideration was paid under the terms of the Securities Purchase Agreement. There are no amounts of contingent consideration outstanding after the $20.0 million payment. Changes in fair value resulted in immaterial amounts recorded in other operating (income) expense within the consolidated statement for the fiscal years ended June 30, 2021. The Company’s investment in InnovAge Sacramento includes a put right for the noncontrolling interest holders to require the Company to repurchase the interest of the noncontrolling interest holders at fair value, after the initial term of the management services agreement in 2028. As a result, at each fiscal period end the Company reports this put right at the greater of i) carrying value of the redeemable noncontrolling interest or (ii) fair value of the redeemable noncontrolling interest. Because this asset does not have observable inputs, level 3 inputs are used to measure fair value. The fair value of the redeemable noncontrolling interest is determined utilizing a discounted cash flow model. As of June 30, 2022, the Company’s redeemable noncontrolling interest was recorded at carrying value of $15.3 million. There were no transfers in and out of Level 3 during the fiscal years ended June 30, 2022 and 2021. The Company’s policy is to recognize transfers as of the actual date of the event or change in circumstances. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 10: Commitments and Contingencies Professional Liability The Company pays fixed premiums for annual professional liability insurance coverage under a claims-made policy. Under such policy, only claims made and reported to the insurer are covered during the policy term, regardless of when the incident giving rise to the claim occurred. The Company records claim liabilities and expected recoveries, if any, at gross amounts. The Company is not currently aware of any unasserted claims or unreported incidents that are expected to exceed medical malpractice insurance coverage limits. Litigation From time to time in the normal course of business, the Company is involved in or subject to legal proceedings related to its business. The Company regularly evaluates the status of claims and legal proceedings in which it is involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss may have been incurred, and to determine if accruals are appropriate. The Company expenses legal costs as such costs are incurred. On October 14, 2021, and subsequently amended on June 21, 2022, the Company was named as a defendant in a putative class action complaint filed in the District Court for the District of Colorado on behalf of individuals who purchased or acquired shares of the Company’s common stock during a specified period. Through the complaint, plaintiffs are asserting claims against the Company, certain of the Company’s officers and directors, Apax Partners, L.P., Welsh, Carson, Anderson & Stowe and the underwriters in the Company’s IPO, alleging violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 for making allegedly inaccurate and misleading statements and omissions in connection with the Company’s IPO and subsequent earnings calls and public filings, and seeking compensatory damages, among other things. We are currently unable to predict the outcome of this matter. In July 2021, the Company received a civil investigative demand from the Attorney General for the State of Colorado under the Colorado Medicaid False Claims Act. The demand requests information and documents regarding Medicaid billing, patient services and referrals in connection with the Company’s PACE program in Colorado. We continue to fully cooperate with the Attorney General and produce the requested information and documentation. We are currently unable to predict the outcome of this investigation. In February 2022, the Company received a civil investigative demand from the Department of Justice (“DOJ”) under the Federal False Claims Act on similar subject matter. The demand requests information and documents regarding audits, billing, orders tracking, and quality and timeliness of patient services in connection with the Company’s PACE programs in the states where the Company operates (California, Colorado, New Mexico, Pennsylvania, and Virginia). The Company continues to fully cooperate with the DOJ and produce the requested information and documentation. We are currently unable to predict the outcome of this investigation. On April 20, 2022, the Board of Directors of the Company received a books and records demand pursuant to Section 220 of the Delaware General Corporation Law, from a purported stockholder of the Company, in connection with the stockholder’s investigation of, among other matters, potential breaches of fiduciary duty, mismanagement, self-dealing, corporate waste or other violations of law by the Company’s Board with respect to these matters. We are currently unable to predict the outcome of this matter. Because the results of legal proceedings and claims are inherently unpredictable and uncertain, we are currently unable to predict whether the legal proceedings we are involved in will, either individually or in the aggregate, have a material adverse effect on our business, financial condition, or cash flows. The outcomes of legal proceedings and claims could be material to the Company’s operating results for any particular period, depending in part, upon the operating results of such period. Regardless of the outcome, litigation has the potential to have an adverse impact on us due to any related defense and settlement costs, diversion of management resources, and other factors. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Jun. 30, 2022 | |
Stock-based Compensation | |
Stock-based Compensation | Note 11: A summary of our aggregate share-based compensation expense is set forth below. Stock-based compensation expense is included in corporate, general and administrative expenses on our consolidated statements of operations. Year ended June 30, 2022 2021 in thousands Stock options (a) $ 719 $ 45,387 Profits interests units 1,162 1,629 Restricted stock units 1,858 35 Total stock-based compensation expense $ 3,739 $ 47,051 (a) The amount for 2021 relates to stock-based compensation expense recognized as a result of the Cancellation Agreement. 2016 Equity Incentive Plan The Company maintained the 2016 Equity Incentive Plan pursuant to which various stock-based awards were granted to employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock that was authorized under the 2016 Equity Incentive Plan was 17,836,636, of which a total of 16,994,976 awards were granted. On July 27, 2020, the Company, Ignite Aggregator LP (the “LP”), and the equity holders of the Company entered into a Securities Purchase Agreement, and in conjunction therewith, the Company amended and restated the 2016 Credit Agreement. A portion of the proceeds from the 2016 Credit Agreement were used by the Company to repurchase 16,095,819 shares of its common stock from the certain members of management, the Board of Directors, and members of our equity partner. Additionally, as part of the 2016 Credit Agreement, the Company executed the Cancellation Agreement with each of the 2016 Equity Incentive Plan option holders, 2020 Equity Incentive Plan Profits Interests The LP maintains the 2020 Equity Incentive Plan pursuant to which interests in the LP in the form of Class B Units (profits interests) may be granted to employees, directors, consultants, and advisers. A maximum number of 16,162,177 Class B Units are authorized for grant under the 2020 Equity Incentive Plan. As of June 30, 2022, a total of 13,009,137 profits interests units have been granted under the 2020 Equity Incentive Plan. These profits interests represented profits interest ownership in the LP tied solely to the accretion, if any, in the value of the LP following the date of issuance of such profits interests. Profits interests participated in any increase of LP value related to their profits interests after the hurdle value had been achieved and the LP profits interests received the agreed-upon return on their invested capital. The hurdle value per unit is $5.49 for both the performance-based and time-based units. Each profits interests unit contains the following material terms: (i) The profits interests receive distributions (other than tax distributions) only upon a liquidity event, as defined, that exceed a threshold equivalent to the fair value of the LP, as determined by the Company’s Board of Directors, at the grant date. (ii) A portion of the units vest over a period of continuous employment or service (service-vesting units) while the other portion of the units only vest based on the level of aggregate multiple of invested capital and internal rate of return achieved by Ignite Aggregator LP, one of the limited partners of the LP, upon a change of control of the Company (performance-vesting units). The performance-vesting units are subject to a market condition, which the Company incorporated as part of its determination of the grant date fair value of the units. The Company used the Monte Carlo option model to determine the fair value of the granted profits interests units at the time of the grant. As these awards were granted prior to our IPO, the stock price was based on the price realized in the equity owner transaction. Expected stock price volatility was based on consideration of indications observed from several publicly traded peer companies. The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the unit. The dividend yield percentage is zero because the Company neither currently pays dividends nor intends to do so during the expected term. The expected term of the units represents the time the units are expected to be outstanding. The assumptions under the Monte Carlo model related to the profits interests units, presented on a weighted-average basis, are provided below: 2021 Expected volatility 44 % Expected life (years) - time vesting units 1.8 Interest rate 0.16 % Dividend yield — % Weighted-average fair value $ 1.28 Fair value of underlying stock $ 5.49 A summary of profits interests activity for the year ended June 30, 2022, was as follows: Number of Weighted average Time-based unit awards units grant date fair value Outstanding balance, June 30, 2021 6,587,261 $ 1.28 Granted — Forfeited (2,807,201) $ 1.28 Vested (1,621,988) $ 1.28 Outstanding balance, June 30, 2022 2,158,072 $ 1.28 Number of Weighted average Performance-based unit awards units grant date fair value Outstanding balance, June 30, 2021 6,223,262 $ 0.57 Granted — Forfeited (4,005,397) $ 0.57 Vested — Outstanding balance, June 30, 2022 2,217,865 $ 0.57 The total unrecognized compensation cost related to profits interests units outstanding as of June 30, 2022 was $4.8 million, comprised (i) $3.5 million related to time-based unit awards expected to be recognized over a weighted-average period of 1.8 years and (ii) $1.3 million related to performance-based unit awards, which will be recorded when it is probable that the performance-based criteria will be met. 2021 Omnibus Incentive Plan In March 2021, the compensation committee of our Board of Directors approved the InnovAge Holding Corp. 2021 Omnibus Incentive Plan (“2021 Omnibus Incentive Plan”), pursuant to which various stock-based awards may be granted to employees, directors, consultants, and advisers. The total number of shares of the Company’s common stock authorized under the 2021 Omnibus Incentive Plan is 14,700,000. The Company has issued time-based restricted stock units under this plan to its employees which generally vest (i) on March 4, 2023, the second anniversary of the grant date, (ii) over a three-year period with one Restricted Stock Units A summary of time-based vesting restricted stock units activity for the year ended June 30, 2022, was as follows: Weighted average Number of grant-date fair Restricted stock units - time based awards value per share Outstanding balance, June 30, 2021 48,470 $ 22.87 Forfeited (17,990) $ 23.21 Vested (18,517) $ 11.36 Granted 464,805 $ 9.69 Outstanding balance, June 30, 2022 476,768 $ 9.69 The total unrecognized compensation cost related to time-based restricted stock units outstanding as of June 30, 2022, was $3.0 million and is expected to be recognized over a weighted-average period of 1.9 years. A summary of performance-based vesting restricted stock units activity for the year ended June 30, 2022, was as follows: Weighted average Number of grant-date fair Restricted stock units - performance based awards value per share Outstanding balance, June 30, 2021 — $ — Forfeited — $ — Vested — $ — Granted 258,767 $ 5.18 Outstanding balance, June 30, 2022 258,767 $ 5.18 The fair value of the performance-based restricted stock units and performance-based stock options granted during the year ended June 30, 2022, was based upon a Monte Carlo option pricing model using the assumptions in the following table: 2022 Expected volatility 34.5 % Expected term (in years) 5.0 Interest rate 1.56 % Dividend yield 0 % Weighted-average fair values $ 5.18 Fair value of underlying stock $ 7.89 The total unrecognized compensation cost related to performance-based vesting restricted stock units outstanding as of June 30, 2022, was $1.1 million and is expected to be recognized over a weighted-average period of 3.3 years. Nonqualified Stock Options A summary of time-based vesting stock option activity for the year ended June 30, 2022, was as follows: Weighted average Number of grant-date fair Stock options - time based awards value per share Outstanding balance, June 30, 2021 — $ — Granted 554,499 $ 1.61 Forfeited — $ — Outstanding balance, June 30, 2022 554,499 $ 1.61 The total unrecognized compensation costs related to time-based vesting stock options outstanding as of June 30, 2022, was $0.6 million and is expected to be recognized over a weighted-average period of 2.5 years. The fair value of the time-based stock options granted during the year ended June 30, 2022, was based upon the Black-Scholes option pricing model using the assumptions in the following table: 2022 Expected volatility 34.5 % Weighted-average expected life (years) - time vesting units 2.9 Interest rate 0.83 % Dividend yield 0 % Weighted-average fair values $ 1.61 Fair value of underlying stock $ 7.89 A summary of performance-based vesting stock option activity for the year ended June 30, 2022, was as follows: Weighted average Number of grant-date fair Stock options - performance based awards value per share Outstanding balance, June 30, 2021 — $ — Granted 776,299 $ 3.08 Forfeited — $ — Outstanding balance, June 30, 2022 776,299 $ 3.08 The fair value of the performance-based stock options granted during the year ended June 30, 2022, was based upon a Monte Carlo option pricing model using the assumptions in the table above under the ‘Restricted Stock Units’ heading. The total unrecognized compensation cost related to performance-based vesting stock options outstanding as of June 30, 2022, was $2.0 million and is expected to be recognized over a weighted-average period of 3.4 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Income Taxes | Note 12: The Company’s effective income tax rate for the years ended June 30, 2022 and 2021 was (10.0%) and (27.9%), respectively, which differed from the amount computed by applying the applicable U.S. federal statutory corporate income tax rate of 21% in each period as a result of the following factors: Year ended June 30, 2022 2021 in thousands Statutory rate $ (1,520) $ (7,343) IRC Section 162(m) limitation (a) 506 12,526 Transaction costs (b) — 2,770 Change in valuation allowance 2,738 1,500 Permanent adjustments 662 306 Prior year true-up and other 389 (227) Income from entities not subject to taxation 302 66 State tax (2,354) 173 Provision for income taxes $ 723 $ 9,771 (a) Reflects the permanent addback for the Section 162(m) limitation, which limits the deduction of compensation for the five highest paid officers to $1,000,000 . (b) Amount relates to transaction costs incurred as a result of the July 27, 2020 transaction between us, Ignite Aggregator LP (an investment vehicle owned by certain funds advised by Apax Partners LLP) and our then existing equity holders entering into a Securities Purchase Agreement. Provision for income taxes consisted of the following for the years ended June 30, 2022 and 2021: Year ended June 30, 2022 2021 in thousands Current: Federal $ (998) $ 2,710 State (339) 642 Total current tax expense (1,337) 3,352 Deferred: Federal 1,408 5,342 State 652 1,077 Total deferred tax expense 2,060 6,419 Total provision for income taxes $ 723 $ 9,771 The significant components of deferred tax assets and liabilities were as follows for the years ended June 30, 2022 and 2021: Year ended June 30, 2022 2021 in thousands Deferred tax assets: Amortization $ 686 $ 2,241 Federal net operating losses 3,083 — State net operating losses 4,048 1,887 Transaction costs — 1,092 Provision for uncollectible accounts 869 1,112 Accrued vacation 828 979 Reported and estimated claims 1,025 941 Stock-based compensation 185 428 Accrued bonuses 102 65 Interest Expense 496 — Other 6 — Total deferred tax assets 11,328 8,745 Valuation allowance (4,050) (1,887) Deferred tax assets, net of valuation allowance 7,278 6,858 Deferred tax liabilities: Goodwill (9,108) (9,934) Depreciation (8,430) (7,394) Equity investment (5,429) (3,222) Prepaid expenses (2,072) (2,008) Total deferred tax liabilities (25,039) (22,558) Net deferred tax liability $ (17,761) $ (15,700) Carryforwards The Company had state net operating loss carryforwards of $73.1 million and $30.9 million at June 30, 2022 and 2021, respectively, which will begin to expire in 2037 if not utilized. Included in this is a city net operating loss which will begin to expire in 2025 if not utilized. Additionally, the Company federal net operating loss carryforwards of $14.7 million and $0 as of June 30, 2022 and 2021, respectively. Valuation Allowance The Company has provided $4.1 million and $1.9 million at June 30, 2022 and June 30, 2021, respectively, as a valuation allowance against its deferred tax assets for state net operating losses and state 163(j) interest expense limitations where there is not sufficient positive evidence to substantiate that these deferred tax assets will be realized at a more-likely-than-not level of assurance. Other The Company had no uncertain tax positions at June 30, 2022 and 2021. The Company files income tax returns as a consolidated group, excluding SH1 and InnovAge Sacramento, in the U.S. federal jurisdiction and various states and is subject to examination by taxing authorities in all of those jurisdictions. From time to time, the Company’s tax returns are reviewed or audited by U.S. federal and various U.S. state-taxing authorities. The Company believes that adjustments, if any, resulting from these reviews or audits would not be material, individually or in the aggregate, to the Company’s consolidated financial position, results of operations, or liquidity. The Company is subject to income tax examinations by U.S. federal and state jurisdictions for the period ended June 30, 2019 and forward. The Company is subject to income tax examinations by California, Colorado and New Mexico state jurisdictions for the period ended June 30, 2018 and forward. |
Related Parties
Related Parties | 12 Months Ended |
Jun. 30, 2022 | |
Related Parties | |
Related Parties | Note 13: PWD VIE |
Segment Reporting
Segment Reporting | 12 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Segment Reporting | Note 14: The Company applies ASC Topic 280, “Segment Reporting,” which establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about operations, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the Company’s chief executive officer, who is the chief operating decision maker (“CODM”), and for which discrete financial information is available. The Company has determined that it has five operating segments, three of which are related to the Company’s PACE offering. The PACE-related operating segments are based on three geographic divisions, which are West, Central, and East. Due to the similar economic characteristics, nature of services, and customers, we have aggregated our West, Central, and East operating segments into one reportable segment for PACE. The Company’s remaining two operating segments relate to Homecare and Senior Housing, which are immaterial operating segments, and are shown below as “Other” along with certain corporate unallocated expenses. As of June 30, 2022, the Company served approximately 6,650 PACE participants, making it the largest PACE provider in the U.S. based upon participants served, and operated 18 PACE centers across Colorado, California, New Mexico, Pennsylvania and Virginia. PACE, an alternative to nursing homes, is a managed care, capitated program, which serves the frail elderly in a community-based service model. Participants receive all medical services through a comprehensive, consolidated model of care. Capitation payments are received from Medicare parts C and D; Medicaid; VA, and private pay sources. The Company is at risk for all health and allied care costs incurred with respect to the care of its participants, although it does negotiate discounted rates with its provider network consisting of hospitals, nursing homes, assisted living facilities, and medical specialists. Additionally, under the Medicare Prescription Drug Plan, the CMS share part of the risk for providing prescription medication to the Company’s participants. The Company evaluates performance and allocates capital resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. The Company does not review assets by segment and therefore assets by segment are not disclosed below. For the periods presented, all of the Company’s long-lived assets were located in the U.S. and all revenue was earned in the U.S. The Company’s management uses Center-level Contribution Margin as the measure for assessing performance of its segments. Center-level Contribution Margin is defined as total segment revenues less external provider costs and cost of care (excluding depreciation and amortization). The Company allocates corporate level expenses to its segments with a majority of the allocation going to the PACE segment. The following table summarizes the operating results regularly provided to the CODM by reportable segment for the twelve months ended: June 30, 2022 June 30, 2021 in thousands PACE All other (1) Totals PACE All other (1) Totals Capitation revenue $ 696,998 $ — $ 696,998 $ 635,322 $ — $ 635,322 Other service revenue 403 1,239 1,642 294 2,184 2,478 Total revenues 697,401 1,239 698,640 635,616 2,184 637,800 External provider costs 383,046 — 383,046 309,317 — 309,317 Cost of care, excluding depreciation and amortization 178,904 1,318 180,222 151,412 2,991 154,403 Center-Level Contribution Margin 135,451 (79) 135,372 174,887 (807) 174,080 Overhead costs (2) 125,948 (94) 125,854 154,607 (38) 154,569 Depreciation and amortization 13,491 433 13,924 11,951 343 12,294 Equity loss — — — 1,343 — 1,343 Other operating (income) expense — — — 18,211 — 18,211 Interest expense, net 2,335 191 2,526 16,595 192 16,787 Loss on extinguishment of debt — — — 14,479 — 14,479 Gain on equity method investment — — — (10,871) — (10,871) Other expense (income) 305 — 305 2,237 — 2,237 Income (Loss) Before Income Taxes $ (6,628) $ (609) $ (7,237) $ (33,665) $ (1,304) $ (34,969) (1) Center-level Contribution Margin from segments below the quantitative thresholds are attributable to two operating segments of the Company. Those segments consist of Homecare and Senior Housing. Neither of those segments has ever met any of the quantitative thresholds for determining reportable segments. (2) Overhead consists of the Sales and marketing and Corporate, general and administrative financial statement line items. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Jun. 30, 2022 | |
Earnings per Share | |
Earnings per Share | Note 15: Basic earnings (loss) per share (“EPS”) is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options, using the treasury stock method and the average market price of the Company’s common stock during the applicable period. When a loss from continuing operations exists, all dilutive securities and potentially dilutive securities are anti-dilutive and are therefore excluded from the computation of diluted earnings per share. When net income from continuing operations exists, performance-based units, are omitted from the calculation of diluted EPS until it is determined that the performance criteria has been met at the end of the reporting period. As of June 30, 2022, there were 1,035,066 performance-based awards excluded from the calculation of diluted EPS. There were no performance-based awards excluded from diluted EPS at June 30, 2021. The following table sets forth the computation of basic and diluted net loss per common share: Year ended June 30, in thousands, except share values 2022 2021 Net income (loss) attributable to InnovAge Holding Corp. $ (6,521) $ (43,986) Weighted average common shares outstanding (basic) 135,519,970 123,618,702 EPS (basic) $ (0.05) $ (0.36) Dilutive shares — — Weighted average common shares outstanding (diluted) 135,519,970 123,618,702 EPS (diluted) $ (0.05) $ (0.36) |
Subsequent Event
Subsequent Event | 12 Months Ended |
Jun. 30, 2022 | |
Subsequent Events | |
Subsequent Event | Note 16: The Company has evaluated subsequent events through September 13, 2022, the date on which the condensed consolidated financial statements were issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Preparation and Principles of Consolidation | Basis of Preparation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (GAAP). The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and variable interest entities (VIEs) for which it is the primary beneficiary and entities for which it is the controlling general partner. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used in accounting for, among other things, the allowance for uncollectible accounts; useful lives of property and equipment and the valuation of goodwill and intangible assets; risk-score adjustments to participant revenues; reported and estimated claims; accruals; the determination of assumptions for stock-based compensation costs; deferred taxes, including the determination of a need for a valuation allowance; valuation of the contingent consideration; legal contingencies, including medical malpractice claims; the determination of fair value of net assets acquired in a business combination; and other fair value measurements. Actual results may differ from previously estimated amounts. |
Restatement of Prior Period Financial Statements | Restatement of Prior Period Financial Statements Subsequent to the issuance of the Company’s consolidated financial statements as of and for the year ended June 30, 2021, we identified an error in our consolidated balance sheet and statement of stockholders’ equity as of June 30, 2021 related to the presentation of redeemable noncontrolling interests. The Company incorrectly recorded redeemable noncontrolling interests of $17.0 million as permanent equity rather than temporary equity The effect of the restatement on the consolidated balance sheet as of June 30, 2021 is as follows ( in thousands As Previously Reported Adjustments As Restated Redeemable Noncontrolling Interests (See Note 5) — 16,986 16,986 Retained earnings 11,250 (587) 10,663 Total InnovAge Holding Corp. 335,146 (587) 334,559 Noncontrolling interests 22,819 (16,399) 6,420 Total stockholders’ equity 357,965 (16,986) 340,979 The effect of the restatement on the consolidated statement of stockholders’ equity as of June 30, 2021 is as follows ( in thousands Redeemable Total Permanent Noncontrolling Retained Noncontrolling Stockholders’ Interests Retained Earnings Interests Equity (Temporary Equity) Earnings As Previously Reported Consolidation of equity method investment — 16,838 16,838 — — Net income (loss) (43,986) (754) (44,740) — — Adjustment to redemption value — — — — — Balances, June 30, 2021 11,250 22,819 357,965 — — Adjustments Consolidation of equity method investment — (16,838) (16,838) 16,838 — Net income (loss) — 439 439 (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 (587) (16,399) (16,986) 16,986 — As Restated Consolidation of equity method investment — — — 16,838 — Net income (loss) (43,986) (315) (44,301) (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 10,663 6,420 340,979 16,986 — |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash and financial instruments issued by major financial institutions that have an original maturity of less than three months. Amounts are reported in the consolidated balance sheets at cost, which approximates fair value. The Company’s cash and cash equivalents are deposited with high credit quality financial institutions and are primarily in demand deposit accounts. The FDIC insurance coverage is $250,000 on the aggregate of interest bearing and non-interest bearing accounts. |
Investments | Investments Cost method investments do not have a readily determinable fair value and are carried at cost, less impairment plus or minus any changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company uses the equity method to account for investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. The Company’s investments in these nonconsolidated entities is reflected in the Company’s consolidated balance sheets under the equity method, and the Company’s proportionate net income (loss), if any, is included in the Company’s consolidated statements of operations as equity income (loss). The Company evaluates its investments for impairment whenever events or changes in circumstances indicate that a decline in value has occurred that is other than temporary. Evidence considered in this evaluation includes, but would not necessarily be limited to, the financial condition and near-term prospects of the investee, recent operating trends and forecasted performance of the investee, market conditions in the geographic area or industry in which the investee operates and the Company’s strategic plans for holding the investment in relation to the period of time expected for an anticipated recovery of its carrying value. If the investment is determined to have a decline in value deemed to be other than temporary it is written down to estimated fair value. There were no write-downs in the fiscal years ended June 30, 2022 or 2021. See Note 5 “Investments” for more information. |
Restricted Cash | Restricted Cash Restricted cash includes (1) cash held in certificates of deposit of $0.0 million and $2.2 million as of June 30, 2022 and 2021, respectively, and (2) cash held for participants who have established a personal-needs account to pay for nonmedical personal expenses, payment of which only occurs upon participant authorization, in the amount of approximately $0.02 million as of both June 30, 2022 and 2021. The Company records a related deposit liability for any participant contributions to these personal-needs accounts in accounts payable and accrued expenses in the consolidated balance sheets. |
Accounts Receivable | Accounts Receivable The Company provides comprehensive health care services to participants on the basis of capitated or fixed fees per participant that are paid monthly by Medicare, Medicaid, the VA, and private pay sources. The Company records accounts receivable at net realizable value, which includes an allowance for estimated uncollectible accounts. The allowance for uncollectible accounts reflects the Company’s best estimate of probable losses considering eligibility, historical experience, and existing economic conditions. Accounts are written off as bad debts when they are deemed uncollectible based upon individual credit evaluations and specific circumstances underlying the accounts. See additional information in Note 3 “Revenue Recognition”. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are recorded using the straight-line method over the shorter of estimated useful lives or lease terms, if the assets are being leased. Property and equipment were comprised of the following as of June 30: Estimated dollars in thousands Useful Lives 2022 2021 Land N/A $ 11,980 $ 11,980 Buildings and leasehold improvements 10 122,076 104,724 Software 3 16,264 13,316 Equipment and vehicles 3 47,546 35,341 Construction in progress N/A 35,479 22,130 233,345 187,491 Less accumulated depreciation and amortization (57,085) (44,776) Total property and equipment, net $ 176,260 $ 142,715 Depreciation of $13.3 million and $11.6 million was recorded during the fiscal years ended June 30, 2022 and 2021, respectively. Land is not depreciated, and construction in progress is not depreciated until ready for service. Costs of enhancements or modifications that substantially extend the capacity or useful life of an asset are capitalized and depreciated accordingly. Ordinary repairs and maintenance are expensed as incurred. The costs of acquiring or developing internal-use software, including directly related payroll costs for internal resources, are capitalized. Software maintenance and training costs are expensed in the period incurred. Interest is capitalized on construction projects, including internal-use software development projects, while in progress. During the fiscal years ended June 30, 2022 and 2021, the Company capitalized interest of approximately $0.9 million and $1.0 million, respectively. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets, and the resulting gain or loss, if any, is reflected in the consolidated statements of operations. Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. No impairment charges were recorded in the fiscal years ended June 30, 2022 or 2021. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Intangible assets consist of customer relationships acquired through business acquisitions. Goodwill represents the excess of consideration paid over the fair value of net assets acquired through business acquisitions. Goodwill is not amortized but is tested for impairment at least annually. The Company tests goodwill for impairment annually on April 1st or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. These events or circumstances would include a significant change in the business climate, legal factors, operating performance indicators, competition, sale, disposition of a significant portion of the business, or other factors. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). ASC 350, Intangibles — Goodwill and Other (“ASC 350”), allows entities to first use a qualitative approach to test goodwill for impairment. When the reporting units where the Company performs the quantitative goodwill impairment are tested, the Company compares the fair value of the reporting unit, which the Company primarily determines using an income approach based on the present value of discounted cash flows, to the respective carrying value, which includes goodwill. If the fair value of the reporting unit exceeds its carrying value, the goodwill is not considered impaired. If the carrying value is higher than the fair value, the difference would be recognized as an impairment loss. There were no goodwill impairments recorded during the years ended June 30, 2022 and 2021. Customer relationships represent the estimated values of customer relationships of acquired businesses and have definite lives. The Company amortizes these intangible assets on a straight-line basis over their ten-year estimated useful life. Intangible assets are reviewed for impairment in conjunction with long-lived assets. There were no intangible asset impairments recorded during the years ended June 30, 2022 and 2021. |
Reported and Estimated Claims | Reported and Estimated Claims Reported and estimated claims consist of unpaid claims reported as of the balance sheet date and estimates of claims incurred on or before June 30 that have not been reported by that date (IBNR). Such estimates are developed using actuarial methods and are based on many variables, including the utilization of health care services, historical payment patterns, cost trends, and other factors. These complex estimation methods and the resulting reserves are continually reviewed and updated, and any adjustments deemed necessary to contemplate new or updated information are reflected in current operations. |
Contingent Consideration | Contingent Consideration The Company records contingent consideration at the time of agreement and records changes in the fair value of contingent consideration each reporting period in the consolidated statements of operations as a component of other operating expense (income). During the year ended June 30, 2021, we paid contingent consideration relating to our acquisition of NewCourtland, as defined and described in Note 5 “Investments”. There were no amounts outstanding related to contingent consideration as of June 30, 2022. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are those costs that have been incurred in connection with the issuance of long-term debt and are offset against long-term debt in the consolidated balance sheets. Such costs are being amortized over the term of the underlying debt using the straight-line method, as the difference between that and the effective interest method are immaterial. |
Treasury Stock | Treasury Stock Treasury stock purchases are accounted for under the cost method where the entire cost of the acquired stock is recorded as treasury stock. Gains and losses on the subsequent reissuance of shares are credited or charged to paid-in-capital in excess of par value using the average-cost method. |
Revenue Recognition | Revenue Recognition Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performed 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 as the entity satisfies a performance obligation. Medicaid and Medicare capitation revenues are based on PMPM capitation rates under the PACE program. For a discussion of our revenue recognition policies, please see Note 3 |
Professional Liability Claims | Professional Liability Claims The Company records a liability for medical malpractice claims based on estimated probable losses and costs associated with settling these claims and a receivable to reflect the estimated insurance recoveries, if any. See Note 10 “Commitments and Contingencies”. |
Advertising Costs | Advertising Costs The Company’s purchased services and contracts expenses include media advertising, tactical advertising, and promotion costs. The creative portion of these activities is expensed as incurred. Production costs of advertising and promotional materials are expensed when the advertising is first run, unless such costs support direct-response advertising campaigns. In that case, these costs are capitalized and amortized over the period estimated to benefit from the campaign. Total advertising expenses were $6.7 million and $6.5 million for the fiscal years ended June 30, 2022 and 2021, respectively. |
Stock-based Compensation | Stock-based Compensation The Company has long-term equity incentive plans that provide for stock-based compensation, including the granting of stock options, profits interest units and restricted stock units to employees, directors, consultants, or advisers, as determined by each of the respective plans. The Company utilizes the Black-Scholes option-pricing model to determine the fair value of the stock options on the date of grant. This model derives the fair value of the options based on certain assumptions related to expected stock price volatility, expected option life, risk-free interest rate, and dividend yield. The Company uses the Monte Carlo option model to determine the fair value of the granted profits interests units. For service-vesting awards, we recognize stock-based compensation expense over the requisite service period, which is generally the vesting period of the respective award, on a straight-line basis. If the award was, in substance, multiple awards, we recognize stock-based compensation expense over the requisite service period for each separately vesting portion of the awards. For performance-vesting awards, we recognize stock-based compensation expense when it is probable that the performance condition will be achieved. We analyze if a performance condition is probable for each reporting period through the settlement date for awards subject to performance vesting. Stock-based compensation is included in corporate, general and administrative expenses on our consolidated statements of operations. Shares issued pursuant to our equity incentive plans are issued from authorized but unissued shares or from shares, if any, held by the Company as treasury stock. See Note 11 “Stock-based Compensation”. |
Income Taxes | Income Taxes The Company and its subsidiaries calculate federal and state income taxes currently payable and for deferred income taxes arising from temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to enacted tax laws and rates applicable to periods in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment. The members of SH1 and InnovAge Sacramento have elected to be taxed as partnerships, and no provision for income taxes for SH1 or InnovAge Sacramento is included in these consolidated financial statements. A valuation allowance is provided to the extent that it is more likely than not that deferred tax assets will not be realized. Tax benefits from uncertain tax positions are recognized when it is more likely than not that the position will be sustained upon examination based on the technical merits of the position. The amount recognized is measured as the largest amount of benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalty expense associated with uncertain tax positions as a component of provision for income taxes. |
Variable Interest Entities (VIE) | Variable Interest Entities (VIE) A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk or whose equity owners lack certain decision-making and economic rights. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity. The primary beneficiary is required to consolidate the VIE. SH1 and PWD, each as defined and described in Note 5 “Investments”, are considered to be VIEs. The Company is not considered the primary beneficiary of PWD but is considered the primary beneficiary of SH1. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Income Taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, Income Taxes Topic 740-Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application of Topic 740. This guidance is effective for companies with fiscal years beginning after December 15, 2020, including interim periods therein, and early adoption is permitted. The Company adopted ASU 2019-12 during the quarter ended September 30, 2021 and it did not have a material effect on the Company’s condensed consolidated financial statements. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted Leases In February 2016, the FASB issued ASU 2016-02 Leases (ASU 2016-02), which was intended to increase transparency and comparability among organizations by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. Under the new guidance, lessees will be required to recognize a right-of-use asset and a lease liability, measured on a discounted basis, at the commencement date for all leases with terms greater than 12 months. Additionally, this guidance will require disclosures to help investors and other financial statement users to better understand the amount, timing, and uncertainty of cash flows arising from leases, including qualitative and quantitative requirements. The guidance should be applied under a modified retrospective transition approach for leases existing at the beginning of the earliest comparative period presented in the adoption-period financial statements. Any leases that expire before the initial application date will not require any accounting adjustment. In June 2020, FASB issued ASU 2020-05 Revenue from contracts with customers (Topic 606) and leases (Topic 842)—Effective dates for certain entities which deferred the new lease standard effective date for the Company to December 15, 2022, with early adoption permitted. The Company will adopt this ASU in the fiscal year beginning July 1, 2022 and has not yet determined the effect of the standard on its ongoing financial reporting. Financial Instruments In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments The ASU is effective for private companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will adopt this guidance for the annual and interim reporting periods beginning July 1, 2023. We do not expect that any other recently issued accounting guidance will have a significant effect on our condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of effect of restatement on financial statements | The effect of the restatement on the consolidated balance sheet as of June 30, 2021 is as follows ( in thousands As Previously Reported Adjustments As Restated Redeemable Noncontrolling Interests (See Note 5) — 16,986 16,986 Retained earnings 11,250 (587) 10,663 Total InnovAge Holding Corp. 335,146 (587) 334,559 Noncontrolling interests 22,819 (16,399) 6,420 Total stockholders’ equity 357,965 (16,986) 340,979 The effect of the restatement on the consolidated statement of stockholders’ equity as of June 30, 2021 is as follows ( in thousands Redeemable Total Permanent Noncontrolling Retained Noncontrolling Stockholders’ Interests Retained Earnings Interests Equity (Temporary Equity) Earnings As Previously Reported Consolidation of equity method investment — 16,838 16,838 — — Net income (loss) (43,986) (754) (44,740) — — Adjustment to redemption value — — — — — Balances, June 30, 2021 11,250 22,819 357,965 — — Adjustments Consolidation of equity method investment — (16,838) (16,838) 16,838 — Net income (loss) — 439 439 (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 (587) (16,399) (16,986) 16,986 — As Restated Consolidation of equity method investment — — — 16,838 — Net income (loss) (43,986) (315) (44,301) (439) (44,740) Adjustment to redemption value (587) — (587) 587 — Balances, June 30, 2021 10,663 6,420 340,979 16,986 — |
Schedule of property and equipment | Estimated dollars in thousands Useful Lives 2022 2021 Land N/A $ 11,980 $ 11,980 Buildings and leasehold improvements 10 122,076 104,724 Software 3 16,264 13,316 Equipment and vehicles 3 47,546 35,341 Construction in progress N/A 35,479 22,130 233,345 187,491 Less accumulated depreciation and amortization (57,085) (44,776) Total property and equipment, net $ 176,260 $ 142,715 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition | |
Schedule of source of revenue | 2022 2021 Medicaid 54 % 53 % Medicare 46 % 47 % Private pay and other * % * % Total 100 % 100 % * Less than 1% |
Schedule of concentration of net receivable | 2022 2021 Medicaid 70 % 60 % Medicare 22 % 20 % Private pay and other 8 % 20 % Total 100 % 100 % |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Investments | |
Schedule of equity method and cost method investments | 2022 2021 in thousands Cost method investments $ 4,645 $ 2,645 Equity method investments 848 848 Total investments $ 5,493 $ 3,493 |
Schedule of variable interest entity | 2022 2021 in thousands Assets Cash and cash equivalents $ 526 $ 431 Accounts receivable — — Prepaid expenses and other 5 5 Property, plant and equipment, net 10,404 10,164 Deposits and other, net 395 390 Liabilities Accounts payable and accrued expenses 256 219 Current portion long-term debt 43 40 Noncurrent liabilities 454 454 Long-term debt, net of debt issuance costs 3,784 3,827 |
Summary of the fair value of the assets acquired and net liabilities assumed | January 1, 2021 Assets: in thousands Cash $ 646 Accounts receivable 786 Property and equipment, net 30,667 Goodwill 8,078 Total assets 40,177 Liabilities: Accounts payable 530 Reported and estimated claims 330 Due to Medicaid and Medicare 77 Capital leases 428 Other liabilities 48 Total liabilities $ 1,413 |
Summarized income statement of nonconsolidated entities | Six Months Ended December 31, 2020 in thousands Revenue: Total revenue $ 2,297 Less: members’ interest 921 The Company’s 1,376 Cost of operations: Total cost of operations 4,538 Less: members’ interest 1,820 The Company’s 2,718 The Company’s $ (1,342) |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets | |
Summary of changes in goodwill | in thousands 2022 2021 Balance as of beginning of period $ 124,217 $ 116,139 Goodwill acquired during the period — 8,078 Balance as of end of period $ 124,217 $ 124,217 |
Summary of intangible assets by major class | in thousands 2022 2021 Definite-lived intangible assets $ 6,600 $ 6,600 Indefinite-lived intangible assets 2,000 2,000 Total intangible assets 8,600 8,600 Accumulated amortization (2,742) (2,082) Balance as of end of period $ 5,858 $ 6,518 |
Schedule of estimated future amortization expense related to other intangible assets | in thousands Amortization Expense 2023 $ 660 2024 660 2025 660 2026 660 2027 630 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Leases | |
Schedule of Company's capital leases | June 30, June 30, 2022 2021 in thousands Equipment $ 18,727 $ 13,302 Less accumulated depreciation (7,541) (7,081) Total capital leases $ 11,186 $ 6,221 |
Schedule of capital lease obligations | Future minimum lease payments related to (i) capital leases having initial terms of more than one year and (ii) non-cancelable operating leases as of June 30, 2022 were as follows: Operating Leases Capital Leases Minimum Lease in thousands Obligations Payments 2023 $ 4,405 $ 4,873 2024 3,909 4,581 2025 3,126 4,122 2026 2,092 4,061 2027 1,393 3,764 Thereafter 535 10,265 Total 15,460 $ 31,666 Less amount representing interest (2,652) Total minimum lease payments 12,808 Less current maturities 3,368 Noncurrent maturities $ 9,440 |
Schedule of operating lease minimum lease payments | Operating Leases Capital Leases Minimum Lease in thousands Obligations Payments 2023 $ 4,405 $ 4,873 2024 3,909 4,581 2025 3,126 4,122 2026 2,092 4,061 2027 1,393 3,764 Thereafter 535 10,265 Total 15,460 $ 31,666 Less amount representing interest (2,652) Total minimum lease payments 12,808 Less current maturities 3,368 Noncurrent maturities $ 9,440 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Long-term Debt | |
Schedule of long-term debt | June 30, June 30, 2022 2021 in thousands Senior secured borrowings: Term Loan Facility $ 71,250 $ 75,000 Convertible term loan 2,327 2,367 Total debt 73,577 77,367 Less unamortized debt issuance costs 1,574 2,003 Less current maturities 3,793 3,790 Noncurrent maturities $ 68,210 $ 71,574 |
Schedule of aggregate maturities of the total debt outstanding | Long-term debt in thousands Year ending June 30: 2023 $ 3,793 2024 3,796 2025 3,799 2026 60,052 2027 56 Thereafter 2,081 Total debt $ 73,577 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock-based compensation expense | Year ended June 30, 2022 2021 in thousands Stock options (a) $ 719 $ 45,387 Profits interests units 1,162 1,629 Restricted stock units 1,858 35 Total stock-based compensation expense $ 3,739 $ 47,051 (a) The amount for 2021 relates to stock-based compensation expense recognized as a result of the Cancellation Agreement. |
Profits Interests Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of profits interests transactions and number of units outstanding | Number of Weighted average Time-based unit awards units grant date fair value Outstanding balance, June 30, 2021 6,587,261 $ 1.28 Granted — Forfeited (2,807,201) $ 1.28 Vested (1,621,988) $ 1.28 Outstanding balance, June 30, 2022 2,158,072 $ 1.28 Number of Weighted average Performance-based unit awards units grant date fair value Outstanding balance, June 30, 2021 6,223,262 $ 0.57 Granted — Forfeited (4,005,397) $ 0.57 Vested — Outstanding balance, June 30, 2022 2,217,865 $ 0.57 |
Performance Based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock units activity | Weighted average Number of grant-date fair Restricted stock units - performance based awards value per share Outstanding balance, June 30, 2021 — $ — Forfeited — $ — Vested — $ — Granted 258,767 $ 5.18 Outstanding balance, June 30, 2022 258,767 $ 5.18 |
Time Based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of restricted stock units activity | Weighted average Number of grant-date fair Restricted stock units - time based awards value per share Outstanding balance, June 30, 2021 48,470 $ 22.87 Forfeited (17,990) $ 23.21 Vested (18,517) $ 11.36 Granted 464,805 $ 9.69 Outstanding balance, June 30, 2022 476,768 $ 9.69 |
Time-based option awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of weighted-average assumptions | 2022 Expected volatility 34.5 % Weighted-average expected life (years) - time vesting units 2.9 Interest rate 0.83 % Dividend yield 0 % Weighted-average fair values $ 1.61 Fair value of underlying stock $ 7.89 |
Summary of stock option activity | Weighted average Number of grant-date fair Stock options - time based awards value per share Outstanding balance, June 30, 2021 — $ — Granted 554,499 $ 1.61 Forfeited — $ — Outstanding balance, June 30, 2022 554,499 $ 1.61 |
Performance-based option awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of weighted-average assumptions | 2022 Expected volatility 34.5 % Expected term (in years) 5.0 Interest rate 1.56 % Dividend yield 0 % Weighted-average fair values $ 5.18 Fair value of underlying stock $ 7.89 |
Summary of stock option activity | Weighted average Number of grant-date fair Stock options - performance based awards value per share Outstanding balance, June 30, 2021 — $ — Granted 776,299 $ 3.08 Forfeited — $ — Outstanding balance, June 30, 2022 776,299 $ 3.08 |
2020 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of weighted-average assumptions | 2021 Expected volatility 44 % Expected life (years) - time vesting units 1.8 Interest rate 0.16 % Dividend yield — % Weighted-average fair value $ 1.28 Fair value of underlying stock $ 5.49 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Income Taxes | |
Schedule of effective income tax rate reconciliation | Year ended June 30, 2022 2021 in thousands Statutory rate $ (1,520) $ (7,343) IRC Section 162(m) limitation (a) 506 12,526 Transaction costs (b) — 2,770 Change in valuation allowance 2,738 1,500 Permanent adjustments 662 306 Prior year true-up and other 389 (227) Income from entities not subject to taxation 302 66 State tax (2,354) 173 Provision for income taxes $ 723 $ 9,771 (a) Reflects the permanent addback for the Section 162(m) limitation, which limits the deduction of compensation for the five highest paid officers to $1,000,000 . (b) Amount relates to transaction costs incurred as a result of the July 27, 2020 transaction between us, Ignite Aggregator LP (an investment vehicle owned by certain funds advised by Apax Partners LLP) and our then existing equity holders entering into a Securities Purchase Agreement. |
Schedule of provision for income taxes | Year ended June 30, 2022 2021 in thousands Current: Federal $ (998) $ 2,710 State (339) 642 Total current tax expense (1,337) 3,352 Deferred: Federal 1,408 5,342 State 652 1,077 Total deferred tax expense 2,060 6,419 Total provision for income taxes $ 723 $ 9,771 |
Schedule of components of deferred tax assets and liabilities | Year ended June 30, 2022 2021 in thousands Deferred tax assets: Amortization $ 686 $ 2,241 Federal net operating losses 3,083 — State net operating losses 4,048 1,887 Transaction costs — 1,092 Provision for uncollectible accounts 869 1,112 Accrued vacation 828 979 Reported and estimated claims 1,025 941 Stock-based compensation 185 428 Accrued bonuses 102 65 Interest Expense 496 — Other 6 — Total deferred tax assets 11,328 8,745 Valuation allowance (4,050) (1,887) Deferred tax assets, net of valuation allowance 7,278 6,858 Deferred tax liabilities: Goodwill (9,108) (9,934) Depreciation (8,430) (7,394) Equity investment (5,429) (3,222) Prepaid expenses (2,072) (2,008) Total deferred tax liabilities (25,039) (22,558) Net deferred tax liability $ (17,761) $ (15,700) |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Segment Reporting | |
Schedule of operating results by reportable segments | June 30, 2022 June 30, 2021 in thousands PACE All other (1) Totals PACE All other (1) Totals Capitation revenue $ 696,998 $ — $ 696,998 $ 635,322 $ — $ 635,322 Other service revenue 403 1,239 1,642 294 2,184 2,478 Total revenues 697,401 1,239 698,640 635,616 2,184 637,800 External provider costs 383,046 — 383,046 309,317 — 309,317 Cost of care, excluding depreciation and amortization 178,904 1,318 180,222 151,412 2,991 154,403 Center-Level Contribution Margin 135,451 (79) 135,372 174,887 (807) 174,080 Overhead costs (2) 125,948 (94) 125,854 154,607 (38) 154,569 Depreciation and amortization 13,491 433 13,924 11,951 343 12,294 Equity loss — — — 1,343 — 1,343 Other operating (income) expense — — — 18,211 — 18,211 Interest expense, net 2,335 191 2,526 16,595 192 16,787 Loss on extinguishment of debt — — — 14,479 — 14,479 Gain on equity method investment — — — (10,871) — (10,871) Other expense (income) 305 — 305 2,237 — 2,237 Income (Loss) Before Income Taxes $ (6,628) $ (609) $ (7,237) $ (33,665) $ (1,304) $ (34,969) (1) Center-level Contribution Margin from segments below the quantitative thresholds are attributable to two operating segments of the Company. Those segments consist of Homecare and Senior Housing. Neither of those segments has ever met any of the quantitative thresholds for determining reportable segments. (2) Overhead consists of the Sales and marketing and Corporate, general and administrative financial statement line items. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Jun. 30, 2022 | |
Earnings per Share | |
Schedule of earnings per share | Year ended June 30, in thousands, except share values 2022 2021 Net income (loss) attributable to InnovAge Holding Corp. $ (6,521) $ (43,986) Weighted average common shares outstanding (basic) 135,519,970 123,618,702 EPS (basic) $ (0.05) $ (0.36) Dilutive shares — — Weighted average common shares outstanding (diluted) 135,519,970 123,618,702 EPS (diluted) $ (0.05) $ (0.36) |
Business (Details)
Business (Details) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Mar. 09, 2021 USD ($) shares | Mar. 08, 2021 $ / shares shares | Jun. 30, 2022 segment item $ / shares | Jun. 30, 2021 $ / shares | Mar. 03, 2021 $ / shares | |
Segment Reporting Information [Line Items] | |||||
Par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common stock issued | shares | 2,329,234 | ||||
Net proceeds | $ | $ 370.5 | ||||
Underwriting discounts and commissions | $ | 23.9 | ||||
Deferred offering costs | $ | $ 4.5 | ||||
IPO | |||||
Segment Reporting Information [Line Items] | |||||
Common stock issued | shares | 16,666,667 | ||||
Offering price | $ / shares | $ 21 | ||||
Over-Allotment Option | |||||
Segment Reporting Information [Line Items] | |||||
Common stock issued | shares | 2,500,000 | ||||
PACE | |||||
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Number of PACE participants | item | 6,650 | ||||
Number of PACE centers excluding non-consolidating joint ventures | item | 18 | ||||
Percentage of obligation for health care costs | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Effect of Restatement on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Redeemable Noncontrolling Interests (See Note 5) | $ 15,278 | $ 16,986 | ||
Stockholders' Equity | ||||
Retained earnings | 4,729 | 10,663 | ||
Total InnovAge Holding Corp. | 332,364 | 334,559 | ||
Noncontrolling interests | 6,102 | 6,420 | ||
Total stockholders' equity | $ 338,466 | 340,979 | $ 107,750 | |
As Previously Reported | ||||
Stockholders' Equity | ||||
Retained earnings | 11,250 | |||
Total InnovAge Holding Corp. | 335,146 | |||
Noncontrolling interests | 22,819 | |||
Total stockholders' equity | 357,965 | |||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Redeemable Noncontrolling Interests (See Note 5) | 16,986 | $ 16,900 | ||
Stockholders' Equity | ||||
Retained earnings | (587) | |||
Total InnovAge Holding Corp. | (587) | |||
Noncontrolling interests | (16,399) | |||
Total stockholders' equity | $ (16,986) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Effect of Restatement on Consolidated Statements of Stockholders' Equity (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | $ (6,839) | $ (44,301) | ||
Adjustment to redemption value | 587 | (587) | ||
Total Stockholders' Equity, Balances | 338,466 | 340,979 | $ 107,750 | |
Temporary Equity, Accretion to Redemption Value, Adjustment | 16,838 | |||
Adjustment to redemption value | (587) | 587 | ||
Net income (loss) | (1,121) | (439) | ||
Redeemable Noncontrolling Interests | 15,278 | 16,986 | ||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | (7,960) | (44,740) | ||
Retained Earnings (Deficit) | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | (6,521) | (43,986) | ||
Adjustment to redemption value | 587 | (587) | ||
Total Stockholders' Equity, Balances | 4,729 | 10,663 | 64,737 | |
Noncontrolling Interests | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | (318) | (315) | ||
Total Stockholders' Equity, Balances | $ 6,102 | 6,420 | $ 6,735 | |
As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Consolidation of equity method investment. | 16,838 | |||
Net income (loss) | (44,740) | |||
Total Stockholders' Equity, Balances | 357,965 | |||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | (44,740) | |||
As Previously Reported | Retained Earnings (Deficit) | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net income (loss) | (43,986) | |||
Total Stockholders' Equity, Balances | 11,250 | |||
As Previously Reported | Noncontrolling Interests | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Consolidation of equity method investment. | 16,838 | |||
Net income (loss) | (754) | |||
Total Stockholders' Equity, Balances | 22,819 | |||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Consolidation of equity method investment. | (16,838) | |||
Net income (loss) | 439 | |||
Adjustment to redemption value | (587) | |||
Total Stockholders' Equity, Balances | (16,986) | |||
Temporary Equity, Accretion to Redemption Value, Adjustment | 16,838 | |||
Adjustment to redemption value | 587 | |||
Net income (loss) | (439) | |||
Redeemable Noncontrolling Interests | 16,986 | $ 16,900 | ||
Net Income (Loss) Attributable to Redeemable Noncontrolling Interest | (44,740) | |||
Adjustments | Retained Earnings (Deficit) | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Adjustment to redemption value | (587) | |||
Total Stockholders' Equity, Balances | (587) | |||
Adjustments | Noncontrolling Interests | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Consolidation of equity method investment. | (16,838) | |||
Net income (loss) | 439 | |||
Total Stockholders' Equity, Balances | $ (16,399) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 17 | $ 2,234 |
Certificates of deposit | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | 0 | 2,200 |
Personal-needs account | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 20 | $ 20 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Property and equipment gross | $ 233,345 | $ 187,491 |
Less accumulated depreciation and amortization | (57,085) | (44,776) |
Total capital leases | 176,260 | 142,715 |
Depreciation | 13,300 | 11,600 |
Capitalized interest | 900 | 1,000 |
Impairment charges | 0 | 0 |
Land | ||
Summary of Significant Accounting Policies | ||
Property and equipment gross | 11,980 | 11,980 |
Buildings and leasehold improvements | ||
Summary of Significant Accounting Policies | ||
Property and equipment gross | $ 122,076 | 104,724 |
Buildings and leasehold improvements | Minimum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 10 years | |
Buildings and leasehold improvements | Maximum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 40 years | |
Software | ||
Summary of Significant Accounting Policies | ||
Property and equipment gross | $ 16,264 | 13,316 |
Software | Minimum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 3 years | |
Software | Maximum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 5 years | |
Equipment and vehicles | ||
Summary of Significant Accounting Policies | ||
Property and equipment gross | $ 47,546 | 35,341 |
Equipment and vehicles | Minimum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 3 years | |
Equipment and vehicles | Maximum | ||
Summary of Significant Accounting Policies | ||
Estimated Useful Lives | 7 years | |
Construction in progress | ||
Summary of Significant Accounting Policies | ||
Property and equipment gross | $ 35,479 | $ 22,130 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Goodwill and Intangible Assets (Details) $ in Millions | 12 Months Ended | |
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | |
Summary of Significant Accounting Policies | ||
Number of reporting units | item | 3 | |
Goodwill, impairment charges | $ 0 | $ 0 |
Intangible assets, useful life | 10 years | 10 years |
Intangible assets, impairment charges | $ 0 | $ 0 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Contingent Consideration (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Summary of Significant Accounting Policies | |
Deferred cash consideration | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Summary of Significant Accounting Policies | ||
Advertising expenses | $ 6.7 | $ 6.5 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue Recognition | ||
Pooled capitated payment | 100% | |
Allowances for uncollectable accounts | $ 3,403 | $ 4,350 |
HCPF | ||
Revenue Recognition | ||
Accounts receivable | $ 17,000 | |
Capitated revenues | Customer concentration risk | ||
Revenue Recognition | ||
Risk percentage | 100% | 100% |
Medicare Part D | Capitated revenues | Customer concentration risk | ||
Revenue Recognition | ||
Risk percentage | 12% | 12% |
Medicare Part D | External provider costs. | Customer concentration risk | ||
Revenue Recognition | ||
Risk percentage | 23% | 21% |
Medicaid | ||
Revenue Recognition | ||
Accounts receivable | $ 13,600 | |
Medicaid | Capitated revenues | Customer concentration risk | ||
Revenue Recognition | ||
Risk percentage | 54% | 53% |
Revenue Recognition - Source of
Revenue Recognition - Source of Revenue (Details) - Capitated revenues - Customer concentration risk | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 100% | 100% |
Medicaid | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 54% | 53% |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 46% | 47% |
Private pay and other | Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 1% |
Revenue Recognition - Concentra
Revenue Recognition - Concentration of Net Receivable (Details) - Accounts Receivable - Customer concentration risk | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 100% | 100% |
Medicaid | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 70% | 60% |
Medicare | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 22% | 20% |
Private pay and other | ||
Disaggregation of Revenue [Line Items] | ||
Risk percentage | 8% | 20% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 15, 2020 | Jul. 27, 2020 | Jun. 30, 2022 | Jun. 30, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Reduction in additional paid-in capital | $ 327,499 | $ 323,760 | ||
Transaction costs | $ 22,600 | |||
Dividends | 9,500 | |||
Investment in TCO Group Holdings, L.P | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Investment | $ 20,000 | |||
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Transaction costs | $ 13,100 | |||
Credit Agreement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Repurchase (in shares) | 16,095,819 | |||
Treasury stock cost per share (in dollars per share) | $ 4.82 | |||
Treasury stock, value | $ 77,600 | |||
Cancellation Agreement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Corporate, general and administrative expense | 45,400 | |||
Reduction in additional paid-in capital | $ 32,400 | |||
2016 Incentive Plan | Cancellation Agreement | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares cancelled (in shares) | 16,994,975 | |||
Shares cancelled | $ 74,600 |
Investments - Equity Method and
Investments - Equity Method and Cost Method Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Investments | ||
Cost method investments | $ 4,645 | $ 2,645 |
Equity method investments | 848 | 848 |
Total investments | $ 5,493 | $ 3,493 |
Investments - Nonconsolidated E
Investments - Nonconsolidated Entities (Details) | 1 Months Ended | 12 Months Ended | |||||||
Feb. 09, 2021 USD ($) | Mar. 18, 2019 USD ($) $ / shares | Aug. 31, 2021 USD ($) shares | Jun. 30, 2022 USD ($) item $ / shares | Jun. 30, 2021 USD ($) $ / shares | Mar. 03, 2021 $ / shares | Jan. 01, 2021 | Apr. 02, 2020 USD ($) | Jun. 14, 2019 USD ($) | |
Nonconsolidated Entities | |||||||||
Number of investments | item | 2 | ||||||||
Observable price changes | $ 0 | $ 0 | |||||||
Cash | $ 9,000,000 | 184,429,000 | 201,466,000 | ||||||
Land | $ 4,200,000 | ||||||||
Cash consideration | $ 2,000,000 | ||||||||
Cash contributions | $ 20,000,000 | ||||||||
Par value per share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Change in fair value of warrants | $ 2,300,000 | $ 2,264,000 | |||||||
Gain on consolidation | $ 10,900,000 | ||||||||
InnovAge Sacramento | |||||||||
Nonconsolidated Entities | |||||||||
Percentage of additional membership interest | 0.10% | 0.10% | 0.10% | ||||||
Jetdoc, Inc. | |||||||||
Nonconsolidated Entities | |||||||||
Shares Acquired | shares | 806,481 | ||||||||
Cash consideration | $ 2,000,000 | ||||||||
Maximum exposure to loss of the cost method investments | $ 2,000,000 | ||||||||
Dispatch Health Holdings, Inc. | |||||||||
Nonconsolidated Entities | |||||||||
Maximum exposure to loss of the cost method investments | $ 2,600,000 | ||||||||
Dispatch Health Holdings, Inc. | Series B Preferred Stock | |||||||||
Nonconsolidated Entities | |||||||||
Investments in securities | $ 1,500,000 | ||||||||
Dispatch Health Holdings, Inc. | Series C Preferred Stock | |||||||||
Nonconsolidated Entities | |||||||||
Investments in securities | $ 1,100,000 | ||||||||
InnovAge Sacramento | |||||||||
Nonconsolidated Entities | |||||||||
Membership interest (as a percent) | 59.90% | ||||||||
Adventist Health System/West Joint Venture | |||||||||
Nonconsolidated Entities | |||||||||
Percentage of issued and outstanding equity interests | 5% | ||||||||
Par value per share | $ / shares | $ 0.001 | ||||||||
Capital contributions | $ 25,000,000 | ||||||||
Warrants right to purchase common stock | $ 15,000,000 | ||||||||
Warrant exercise term | 1 year | ||||||||
InnovAge California Pace-Sacramento, LLC | |||||||||
Nonconsolidated Entities | |||||||||
Cash contributions | 52,000 | ||||||||
InnovAge California Pace-Sacramento, LLC | Adventist Health System/West Joint Venture | |||||||||
Nonconsolidated Entities | |||||||||
Cash contributions | $ 5,800,000 | ||||||||
InnovAge California Pace-Sacramento, LLC | Adventist Health System/West Joint Venture | InnovAge Sacramento | |||||||||
Nonconsolidated Entities | |||||||||
Membership interest (as a percent) | 26.41% | ||||||||
InnovAge California Pace-Sacramento, LLC | Eskaton | |||||||||
Nonconsolidated Entities | |||||||||
Cash contributions | $ 3,000,000 | ||||||||
InnovAge California Pace-Sacramento, LLC | Eskaton | InnovAge Sacramento | |||||||||
Nonconsolidated Entities | |||||||||
Membership interest (as a percent) | 13.69% | ||||||||
PWD | |||||||||
Nonconsolidated Entities | |||||||||
Maximum exposure amount in VIE | $ 800,000 |
Investments - Nonconsolidated_2
Investments - Nonconsolidated Entities - Summary of Fair Value of the Assets Acquired and Net Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 | Jan. 01, 2021 | Jun. 30, 2020 |
Assets: | ||||
Goodwill | $ 124,217 | $ 124,217 | $ 116,139 | |
InnovAge Sacramento | ||||
Assets: | ||||
Cash | $ 646 | |||
Accounts receivable | 786 | |||
Property and equipment, net | 30,667 | |||
Goodwill | 8,078 | |||
Total Assets | 40,177 | |||
Liabilities: | ||||
Accounts payable | 530 | |||
Reported and estimated claims | 330 | |||
Due to Medicaid and Medicare | 77 | |||
Capital leases | 428 | |||
Other liabilities | 48 | |||
Total Liabilities | $ 1,413 |
Investments - Nonconsolidated_3
Investments - Nonconsolidated Entities - Summary of Income Statement (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | |||
Total revenues | $ 698,640 | $ 637,800 | |
Cost of operations: | |||
Total cost of operations | 703,046 | 650,137 | |
The Company's interest in net loss | $ (4,406) | $ (12,337) | |
InnovAge California Pace-Sacramento, LLC | |||
Revenue: | |||
Total revenues | $ 2,297 | ||
Less: members' interest | 921 | ||
The Company's interest | 1,376 | ||
Cost of operations: | |||
Total cost of operations | 4,538 | ||
Less: members' interest | 1,820 | ||
The Company's interest | 2,718 | ||
The Company's interest in net loss | $ (1,342) |
Investments - Variable Interest
Investments - Variable Interest Entity - Schedule of Variable Interest Entity (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 18, 2019 |
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | $ 184,429 | $ 201,466 | $ 9,000 |
Accounts receivable | 35,907 | 32,582 | |
Property, plant and equipment, net | 176,260 | 142,715 | |
Deposits and other, net | 2,812 | 3,877 | |
Accounts payable and accrued expenses | 50,562 | 32,361 | |
Current portion of long-term debt | 3,793 | 3,790 | |
Long-term debt, net of debt issuance costs | 68,210 | 71,574 | |
SH1 | |||
Variable Interest Entity [Line Items] | |||
Cash and cash equivalents | 526 | 431 | |
Prepaid expenses and other | 5 | 5 | |
Property, plant and equipment, net | 10,404 | 10,164 | |
Deposits and other, net | 395 | 390 | |
Accounts payable and accrued expenses | 256 | 219 | |
Current portion of long-term debt | 43 | 40 | |
Noncurrent liabilities | 454 | 454 | |
Long-term debt, net of debt issuance costs | $ 3,784 | $ 3,827 |
Investments - Acquisitions (Det
Investments - Acquisitions (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Mar. 08, 2021 | Aug. 07, 2018 | Jun. 30, 2019 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Deferred cash consideration | $ 0 | |||
Contingent consideration paid | $ 20 | |||
NewCourtland LIFE Program | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 30 | $ 30 | ||
Contingent consideration paid | $ 20 | |||
NewCourtland LIFE Program | Maximum | ||||
Business Acquisition [Line Items] | ||||
Deferred cash consideration | $ 20 | $ 20 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2022 USD ($) item | Jun. 30, 2021 USD ($) | Jun. 30, 2020 USD ($) | |
Goodwill and Intangible Assets | |||
Goodwill | $ 124,217 | $ 124,217 | $ 116,139 |
Number of reporting units | item | 3 | ||
Impairment of goodwill | $ 0 | 0 | |
Amortization expense | 700 | ||
Intangible asset impairments | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Changes in Goodwill (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2021 USD ($) | |
Goodwill [Roll Forward] | |
Balance as of beginning of period | $ 116,139 |
Goodwill acquired during the period | 8,078 |
Balance as of end of period | $ 124,217 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Intangible Asset by Major Class (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Definite-lived intangible assets | $ 6,600 | $ 6,600 |
Indefinite-lived intangible assets | 2,000 | 2,000 |
Total intangible assets | 8,600 | 8,600 |
Accumulated amortization | (2,742) | (2,082) |
Balance as of end of period | $ 5,858 | $ 6,518 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future Annual Amortization Expense (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
2023 | $ 660 |
2024 | 660 |
2025 | 660 |
2026 | 660 |
2027 | $ 630 |
Leases - Assets Under Lease (De
Leases - Assets Under Lease (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Operating Leased Assets [Line Items] | ||
Equipment | $ 233,345 | $ 187,491 |
Less accumulated depreciation | (57,085) | (44,776) |
Total capital leases | 176,260 | 142,715 |
Rental expense | 4,900 | 4,500 |
Equipment under capital leases | ||
Operating Leased Assets [Line Items] | ||
Equipment | 18,727 | 13,302 |
Less accumulated depreciation | (7,541) | (7,081) |
Total capital leases | $ 11,186 | $ 6,221 |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Capital Leases Obligations | |
2023 | $ 4,405 |
2024 | 3,909 |
2025 | 3,126 |
2026 | 2,092 |
2027 | 1,393 |
Thereafter | 535 |
Total | 15,460 |
Less amount representing interest | (2,652) |
Total minimum lease payments | 12,808 |
Less current maturities | 3,368 |
Noncurrent maturities | 9,440 |
Operating Leases Minimum Lease Payments | |
2023 | 4,873 |
2024 | 4,581 |
2025 | 4,122 |
2026 | 4,061 |
2027 | 3,764 |
Thereafter | 10,265 |
Total | $ 31,666 |
Long-term Debt - Schedule of Lo
Long-term Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 01, 2015 |
Debt Instrument [Line Items] | |||
Total debt | $ 73,577 | $ 77,367 | |
Less unamortized debt issuance costs | 1,574 | 2,003 | |
Less current maturities | 3,793 | 3,790 | |
Noncurrent maturities | 68,210 | 71,574 | |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Total debt | $ 25,000 | ||
Interest rate (as a percent) | 3.94% | ||
Senior secured term loan | |||
Debt Instrument [Line Items] | |||
Total debt | 71,250 | $ 75,000 | |
Convertible term loan | |||
Debt Instrument [Line Items] | |||
Total debt | $ 2,327 | $ 2,367 | |
Interest rate (as a percent) | 6.68% |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Mar. 08, 2021 | Jul. 27, 2020 | Sep. 01, 2015 | Jun. 30, 2022 | Jun. 30, 2021 | May 02, 2019 | May 13, 2016 | |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of long-term debt | $ 14,479 | ||||||
Outstanding borrowings | $ 73,577 | 77,367 | |||||
Amortization of deferred financing costs | 400 | 1,100 | |||||
Deferred financing costs amortized | 2,000 | ||||||
Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | $ 25,000 | ||||||
Interest rate (as a percent) | 3.94% | ||||||
Remaining borrowing capacity | 100,000 | ||||||
Letters of credit, issued amounts | 2,600 | ||||||
Senior secured term loan | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | 71,250 | $ 75,000 | |||||
Convertible term loan | |||||||
Debt Instrument [Line Items] | |||||||
Outstanding borrowings | 2,327 | 2,367 | |||||
Interest rate (as a percent) | 6.68% | ||||||
Monthly principal and interest payments | $ 20 | ||||||
2016 Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt extinguishment | 57,100 | ||||||
Loss on extinguishment of long-term debt | $ 1,000 | ||||||
Modified debt | 250,000 | ||||||
Outstanding borrowings | 50,000 | ||||||
Total deferred financing costs | $ 9,100 | ||||||
2016 Credit Agreement | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 40,000 | $ 30,000 | $ 20,000 | ||||
2016 Credit Agreement | Senior secured term loan | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | 300,000 | 190,000 | $ 75,000 | ||||
2016 Credit Agreement | Delayed draw term loan facility (DDTL) | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 45,000 | ||||||
Termination of loan | $ 45,000 | ||||||
2021 Credit Agreement | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 100,000 | ||||||
Revolving credit facility fee | 0.25% | ||||||
2021 Credit Agreement | Senior secured term loan | |||||||
Debt Instrument [Line Items] | |||||||
Loan amount | $ 75,000 | ||||||
Percentage of aggregate outstanding principal amount | 1.25% | ||||||
Interest rate (as a percent) | 3.83% | 1.84% |
Long-term Debt - Maturities (De
Long-term Debt - Maturities (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Long-term Debt | |
2023 | $ 3,793 |
2024 | 3,796 |
2025 | 3,799 |
2026 | 60,052 |
2027 | 56 |
Thereafter | 2,081 |
Total debt | $ 73,577 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Mar. 08, 2021 | Aug. 07, 2018 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Contingent consideration | $ 0 | ||||
Contingent consideration paid | $ 20,000 | ||||
Redeemable Noncontrolling Interests | 15,278 | $ 16,986 | |||
Transfers into Level 3 | 0 | 0 | |||
Transfers out of Level 3 | $ 0 | $ 0 | |||
NewCourtland LIFE Program | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Purchase price | $ 30,000 | $ 30,000 | |||
Contingent consideration paid | $ 20,000 | ||||
NewCourtland LIFE Program | Maximum | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Contingent consideration | $ 20,000 | $ 20,000 |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 3,739 | $ 47,051 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 719 | 45,387 |
Profits Interests Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 1,162 | 1,629 |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $ 1,858 | $ 35 |
Stock-based Compensation - Equi
Stock-based Compensation - Equity Incentive Plan (Details) - shares | 12 Months Ended | |
Jul. 27, 2020 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Repurchase (in shares) | 16,095,819 | |
Number of shares cancelled | 16,994,976 | |
2016 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized | 17,836,636 | |
Granted (in shares) | 16,994,976 |
Stock-based Compensation - Prof
Stock-based Compensation - Profits Interests (Details) - 2020 Equity Incentive Plan | 12 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | 16,162,177 |
Profits interests granted | 13,009,137 |
Hurdle value per unit | $ / shares | $ 5.49 |
Stock-based Compensation - Mont
Stock-based Compensation - Monte Carlo Option Pricing Model (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Profits Interests Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 44% | |
Expected term (in years) | 1 year 9 months 18 days | |
Interest rate | 0.16% | |
Dividend yield | 0% | |
Weighted-average fair values | $ 1.28 | |
Fair value of underlying stock | $ 5.49 | |
Unrecognized compensation cost | $ 4.8 | |
Time Vesting Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 3.5 | |
Weighted-average period (in years) | 1 year 9 months 18 days | |
Performance Vesting Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized compensation cost | $ 1.3 | |
Time-based options awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 2 years 10 months 24 days | |
Interest rate | 0.83% | |
Dividend yield | 0% | |
Weighted-average fair values | $ 1.61 | |
Fair value of underlying stock | $ 7.89 | |
Weighted-average period (in years) | 2 years 6 months | |
Performance-based option awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-average period (in years) | 3 years 4 months 24 days | |
Performance-Based Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 34.50% | |
Expected term (in years) | 5 years | |
Interest rate | 1.56% | |
Dividend yield | 0% | |
Weighted-average fair values | $ 5.18 | |
Fair value of underlying stock | $ 7.89 | |
Unrecognized compensation cost | $ 1.1 | |
Weighted-average period (in years) | 3 years 3 months 18 days | |
Minimum | Time-based options awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 34.50% |
Stock-based Compensation - Pr_2
Stock-based Compensation - Profits Interests Transactions and Number of Units Outstanding (Details) | 12 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Time Vesting Units | |
Number of Units | |
Outstanding balance, June 30, 2021 | shares | 6,587,261 |
Forfeited | shares | (2,807,201) |
Vested | shares | (1,621,988) |
Outstanding balance, June 30, 2022 | shares | 2,158,072 |
Weighted-Average Grant Date FV | |
Outstanding balance, June 30, 2021 | $ / shares | $ 1.28 |
Forfeited | $ / shares | 1.28 |
Vested | $ / shares | 1.28 |
Outstanding balance, June 30, 2022 | $ / shares | $ 1.28 |
Performance Vesting Units | |
Number of Units | |
Outstanding balance, June 30, 2021 | shares | 6,223,262 |
Forfeited | shares | (4,005,397) |
Outstanding balance, June 30, 2022 | shares | 2,217,865 |
Weighted-Average Grant Date FV | |
Outstanding balance, June 30, 2021 | $ / shares | $ 0.57 |
Forfeited | $ / shares | 0.57 |
Outstanding balance, June 30, 2022 | $ / shares | $ 0.57 |
Stock-based Compensation - 2021
Stock-based Compensation - 2021 Omnibus Incentive Plan (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2022 USD ($) shares | |
2021 Omnibus Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of shares authorized | shares | 14,700,000 |
Vesting period | 3 years |
Percentage of vesting | 33.33% |
Restricted Stock Units | 2021 Omnibus Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 3 |
Weighted-average period (in years) | 1 year 10 months 24 days |
Performance-Based Restricted Stock Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 1.1 |
Weighted-average period (in years) | 3 years 3 months 18 days |
Performance-based option awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average period (in years) | 3 years 4 months 24 days |
Stock-based Compensation - 20_2
Stock-based Compensation - 2021 Omnibus Incentive Plan (RSU Activity) (Details) | 12 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Restricted Stock Units | |
Number of Units | |
Granted | shares | 258,767 |
Outstanding balance, June 30, 2022 | shares | 258,767 |
Weighted-Average Grant Date FV | |
Granted | $ / shares | $ 5.18 |
Outstanding balance, June 30, 2022 | $ / shares | $ 5.18 |
Time-Based Restricted Stock Units | |
Number of Units | |
Outstanding balance, June 30, 2021 | shares | 48,470 |
Granted | shares | 464,805 |
Forfeited | shares | (17,990) |
Vested | shares | (18,517) |
Outstanding balance, June 30, 2022 | shares | 476,768 |
Weighted-Average Grant Date FV | |
Outstanding balance, June 30, 2021 | $ / shares | $ 22.87 |
Granted | $ / shares | 9.69 |
Forfeited | $ / shares | 23.21 |
Vested | $ / shares | 11.36 |
Outstanding balance, June 30, 2022 | $ / shares | $ 9.69 |
Stock-based Compensation - Time
Stock-based Compensation - Time-based Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jul. 27, 2020 | Jun. 30, 2022 | |
Number of Options | ||
Forfeited (in shares) | 16,994,976 | |
Time-based options awards | ||
Number of Options | ||
Granted (in shares) | 554,499 | |
Outstanding balance, June 30, 2022 | 554,499 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Granted | $ 1.61 | |
Outstanding balance, June 30, 2022 | $ 1.61 | |
Unrecognized compensation cost | $ 0.6 | |
Weighted-average period (in years) | 2 years 6 months |
Stock-based Compensation - Perf
Stock-based Compensation - Performance-based Awards (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Jul. 27, 2020 | Jun. 30, 2022 | |
Number of Options | ||
Forfeited (in shares) | 16,994,976 | |
Performance-based option awards | ||
Number of Options | ||
Granted (in shares) | 776,299 | |
Outstanding balance, June 30, 2022 | 776,299 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Outstanding balance, June 30, 2021 | $ 3.08 | |
Granted | 3.08 | |
Outstanding balance, June 30, 2022 | $ 3.08 | |
Unrecognized compensation cost | $ 2 | |
Weighted-average period (in years) | 3 years 4 months 24 days |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Income Taxes | ||
Effective tax rate (as a percent) | (10.00%) | (27.90%) |
Federal statutory tax rate (as a percent) | 21% | 21% |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) | 12 Months Ended | |
Jun. 30, 2022 USD ($) employee | Jun. 30, 2021 USD ($) | |
Income Taxes | ||
Statutory rate | $ (1,520,000) | $ (7,343,000) |
IRC Section 162(m) limitation | 506,000 | 12,526,000 |
Transaction costs | 2,770,000 | |
Change in valuation allowance | 2,738,000 | 1,500,000 |
Permanent adjustments | 662,000 | 306,000 |
Prior year true-up and other | 389,000 | (227,000) |
Income from entities not subject to taxation | 302,000 | 66,000 |
State tax | (2,354,000) | 173,000 |
Provision for income taxes | $ 723,000 | $ 9,771,000 |
Highest compensation paid, Officers | employee | 5 | |
Nondeductible compensation paid | $ 1,000,000 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Current: | ||
Federal | $ (998) | $ 2,710 |
State | (339) | 642 |
Total current tax expense | (1,337) | 3,352 |
Deferred: | ||
Federal | 1,408 | 5,342 |
State | 652 | 1,077 |
Total deferred tax expense | 2,060 | 6,419 |
Provision for income taxes | $ 723 | $ 9,771 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Deferred tax assets: | ||
Amortization | $ 686 | $ 2,241 |
Federal net operating losses | 3,083 | |
State net operating losses | 4,048 | 1,887 |
Transaction costs | 1,092 | |
Provision for uncollectible accounts | 869 | 1,112 |
Accrued vacation | 828 | 979 |
Reported and estimated claims | 1,025 | 941 |
Stock-based compensation | 185 | 428 |
Accrued bonuses | 102 | 65 |
Interest Expense | 496 | |
Other | 6 | |
Total deferred tax assets | 11,328 | 8,745 |
Valuation allowance | (4,050) | (1,887) |
Deferred tax assets, net of valuation allowance | 7,278 | 6,858 |
Deferred tax liabilities: | ||
Goodwill | (9,108) | (9,934) |
Depreciation | (8,430) | (7,394) |
Equity investment | (5,429) | (3,222) |
Prepaid expenses | (2,072) | (2,008) |
Total deferred tax liabilities | (25,039) | (22,558) |
Net deferred tax liability | $ (17,761) | $ (15,700) |
Income Taxes - Carryforwards (D
Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Jun. 30, 2021 |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowance | $ 4,050 | $ 1,887 |
Uncertain tax positions | 0 | 0 |
State | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | 73,100 | 30,900 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforwards | $ 14,700 | $ 0 |
Related Parties (Details)
Related Parties (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Related Party Transaction [Line Items] | ||
Revenue from related parties | $ 35,000 | |
Deposits and other | ||
Related Party Transaction [Line Items] | ||
Loans and leases receivable, related parties | $ 700,000 | $ 700,000 |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Jun. 30, 2022 segment Center item | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 5 |
PACE | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Number of geographic divisions | 3 |
Number of reportable segments | 1 |
Number of PACE participants | item | 6,650 |
Number of PACE centers | Center | 18 |
Others | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 2 |
Segment Reporting - Operating R
Segment Reporting - Operating Results (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 698,640 | $ 637,800 |
External provider costs | 383,046 | 309,317 |
Cost of care, excluding depreciation and amortization | 180,222 | 154,403 |
Equity loss | (1,343) | |
Other operating (income) expense | (18,211) | |
Interest expense, net | (2,526) | (16,787) |
Loss on extinguishment of debt | (14,479) | |
Gain on equity method investment | (10,871) | |
Other expense (income) | 305 | 2,237 |
Income (Loss) Before Income Taxes | (7,237) | (34,969) |
Capitation revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 696,998 | 635,322 |
Other service revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1,642 | 2,478 |
Operating segments | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 698,640 | 637,800 |
External provider costs | 383,046 | 309,317 |
Cost of care, excluding depreciation and amortization | 180,222 | 154,403 |
Center-Level Contribution Margin | 135,372 | 174,080 |
Overhead costs | 125,854 | 154,569 |
Depreciation and amortization | 13,924 | 12,294 |
Equity loss | 1,343 | |
Other operating (income) expense | 18,211 | |
Interest expense, net | (2,526) | (16,787) |
Loss on extinguishment of debt | 14,479 | |
Gain on equity method investment | (10,871) | |
Other expense (income) | 305 | 2,237 |
Income (Loss) Before Income Taxes | (7,237) | (34,969) |
Operating segments | Capitation revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 696,998 | 635,322 |
Operating segments | Other service revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1,642 | 2,478 |
Operating segments | PACE | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 697,401 | 635,616 |
External provider costs | 383,046 | 309,317 |
Cost of care, excluding depreciation and amortization | 178,904 | 151,412 |
Center-Level Contribution Margin | 135,451 | 174,887 |
Overhead costs | 125,948 | 154,607 |
Depreciation and amortization | 13,491 | 11,951 |
Equity loss | 1,343 | |
Other operating (income) expense | 18,211 | |
Interest expense, net | (2,335) | (16,595) |
Loss on extinguishment of debt | 14,479 | |
Gain on equity method investment | (10,871) | |
Other expense (income) | 305 | 2,237 |
Income (Loss) Before Income Taxes | (6,628) | (33,665) |
Operating segments | PACE | Capitation revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 696,998 | 635,322 |
Operating segments | PACE | Other service revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 403 | 294 |
Operating segments | Others | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 1,239 | 2,184 |
Cost of care, excluding depreciation and amortization | 1,318 | 2,991 |
Center-Level Contribution Margin | (79) | (807) |
Overhead costs | (94) | (38) |
Depreciation and amortization | 433 | 343 |
Interest expense, net | (191) | (192) |
Income (Loss) Before Income Taxes | (609) | (1,304) |
Operating segments | Others | Other service revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenues | $ 1,239 | $ 2,184 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Net income (loss) attributable to InnovAge Holding Corp. | $ (6,521) | $ (43,986) |
Weighted average common shares outstanding (basic) | 135,519,970 | 123,618,702 |
Net income (loss) per share - basic | $ (0.05) | $ (0.36) |
Weighted average common shares outstanding (diluted) | 135,519,970 | 123,618,702 |
Net income (loss) per share - diluted | $ (0.05) | $ (0.36) |
Performance-based option awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Performance-based units, respectively, excluded from the calculation of diluted EPS | 1,035,066 | 0 |