TVTY - Earnings call transcript Q4 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon and welcome to the Tivity Health Fourth Quarter and Year-End 2018 Financial Results Conference Call. Today's call is being recorded and will be available for replay beginning today and through February 26, 2019, by dialing 855-859-2056. The replay passcode is 6390017. The replay may also be accessed for the next 12 months on the company's website. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After that financial extent discussed also [Operator GAAP most in of is according the release, posted measure non-GAAP comparable find to measure financial direct reconciliation today's will Instructions] To to you on any the is calculated website. today's call, in a which news measure also today's company's regarding Securities including forward-looking and This within the the performance others, Private may statements, pending the Health's XXXX, of contain financial statements of of Health's closing and Litigation call beyond, quarterly Act Nutrisystem. conference of Reform and as expected annual Tivity among meaning acquisition Tivity as operating well XXXX of

of any statements deemed call For be are during expects Without this to statements. be any -- identify forward-looking expressions similar forward plans, the intended believes, purpose anticipates, fact, to words historical forward-looking foregoing, statements. and the may not made statements limiting this that are

Tramuto. forward-looking You no among the new to results the be are with obligation and a hereby cautioned in as from the turn Exchange and Health's And actual forward-looking results over Commission call materially or Chief I'll set company the today's future the operations in statements. others, publicly important differ may filings otherwise. any company's discussed Officer, Securities events, consequently, in of The statements and may information, to the undertakes Tivity Donato by Mr. whether update result affected release. forth news that And these statements factors, Executive now,

sir. begin, may You

Donato Tramuto

quarter Officer, will he Holland, us financial Nutrisystem, for and company also XXXX as following me have around prepared with session as results Executive and the provide discuss to review the call during fourth preliminary and Mike Nutrisystem, results, President Nutrisystem's our review joined standalone be and XXXX. I is President who available CFO will has XXXX Executive Nutrisystem's of Zier, you on question-and-answer Tivity's will Adam our outlook of thank Welcome and Chief Dawn a our CFO, outlook. with acquisition details Monahan, the everyone combined remarks. who well today. Vice

Finally, Relations on add today. company and highlights provide also a Investor our also us few is discussing our color joining We've by Tivity's outlook. leads XXXX slides today's on XXXX some begin published then website our Tommy Lewis, Integration supplemental comments. additional who our Initiatives, comments around and call to I'll

our XXXX, our colleagues partly to XXXX First, the and I we the flow In Tivity changes. our applied results execution debt with XX% business have model. EPS delivered am cash transforming pay-down and managing very that to growth, pleased and both due

had and new left we XXXX, clients, we renewals. that backup client business three won During had closed takeaways, one XX of XX% previously competitive

can market wins with into have by of strong to allows XXXX as recall All clients, two, us one, and we power leveraging we and enter the as due SilverSneakers; this in with the television. digital of the well trust retaining XXXX, earned that investing the we market introduced key to in now the first time momentum, whose for initiatives, brand first other SilverSneakers strategy key the that

All of working. is and engagement drive no mistake it, about and these efforts make enrollment it

and were our triggered XX% of last ads Arizona I calls. inbound of was the week, they now who aware in eligible aging-in enrolled. by just and spent that and and were had SilverSneakers. members, have away many are TV calls to Further, in who those in example, that were select a many offers choice Advantage I participated For number of in time a center months were Medicare been individuals Plan from a never the call calls

more enrollment, will All in strategy August members. our growth more engagement XXXX. our of more future be introduced transformational our and Namely, awareness, supported, of growth of these driven levers SilverSneakers have by

We with by the driven will customer have we are key third I for innovation, year. U.S. consecutive one-year in Prime In Prime the announcing today, recommitted fitness bring XXXX, had was And also agreement X.X renewable with a primarily first, million offer that strong our ahead business to a Walmart that first, growth of to multi-year we emphasized to program its a partnership. and comprehensive full-time our we

also only delivering not a of first build to step, retail largest reciprocity we called many the SilverSneakers. Associates, tremendous to opportunity Program. to which powered health other the Associate the determinants are brand will with is look our us leadership, recreation which for is our healthier a going Prime for centers, is Walmart but This provides Walmart healthier of social channels the work Walmart Fitness centers partner, by excited to chains, marquee and community nationwide communities. to chain fitness very centers, our be programs with locally-owned address side-by-side including at facilities. workforce, including it national to other Long-term, And at Network, thousands National national be and and what core

we we wins year pull our mosaic expectations and As forward expansion. years that on we even lives, more Thank I organic revenue business ahead have a offset ago In new over during expected Janicak projections a and initially had entire have we a explained UnitedHealthcare to the organization XXXX many into January, UnitedHealthcare years account new with market came in revenue for times the leadership our been growth XX% But leading preliminary our average those customers. once the of Steve Every a there with for final of XXXX. rate. renewal team focus and year, reflected, XX new of under his outs, of as reduction Steve sales our with his and we factors of in where removal less nearly a ins loss lives the hold built million comfortable two and than our an why enrollment are November, more high occasions data mid winning has sales of million last two Steve before, and in revenue you, lives. of hence on in fierce of from customer August, of in organization has week and output nearly that leaned we single-digit other XXXX. We a again $XX in provided lives. felt UnitedHealth's additional and those lives than the team. discovered with a both secured

affect is throughout as that of believe This and as some we behind the wave would strategy anticipated Allow to you on us. lives business sales that as it has we year as an any indicated this truly SilverSneakers new or point. with of UnitedHealthcare's impact it nearly said, continue and part recognize for three-year calls, that Setting in the and provide growth UnitedHealthcare the company relates XX,XXX We all transition, my the revenue SilverSneakers media in have impact most to plan with been as of SilverSneakers. as mosaic, customers our members last entire in as members do revenue a leadership states. be is business. I As reduction not they of to In our our go met been lives made important the the made X% few previous well That is UnitedHealthcare me even serve we the now normal our the XX this from overall CEO we UnitedHealthcare investments to guidance perspective SilverSneakers year. years, group the significant and the I lives. these continues value in will UnitedHealthcare just the their aside XXXX. of to long-term individual important receive. of loss have plan appreciate XXXX. approach customers now in the our seen our impact top minute, believe brand tenure customer a an we on have In the case group meaningful away and we iconic in this for of our have relates most believe lives and of to we have lives as up have to a business benefits customary and final we who by results significant known And offset group individual those And the of not

positioned I well am And is is have successful single the opportunities. Four, every the growing recent one, continue revenue proud XX,XXX strategy. serve Number proving turn Number continue on whose digital two, out day strong we pipeline Three, a combination components. new essential of are and the premise. one population execution. with customer media this is investment and that instant and to our of We critical become we the SilverSneakers that and a to we we XX and of Medicare fierce in organic individuals team media Advantage. five leadership robust evolve last, have for trust senior brand focus most garners eligible

All now call million transaction $XXX cash million Nutrisystem's this outlook. if outlook with review thrilled $XXX and our excluding XXXX us. here free that adjusted million you and million between and $XX $XXX stand-alone Dawn, in she's between can the to turn of million. $XXX fourth I of and and XXXX Health the results revenue between the Tivity quarter will over EBITDA culminates $XXX flow the I'm million, Dawn.

Dawn Zier

slight earnings $X.XX XXXX million our and I'm our line pleased were XXXX now came Donato update and for in items. our that with $X.XX and quick share Adjusted guidance. adjusted the of this based million. items. of early believe earnings any Thank we're the and at can or per projections mixed of share was of from does afternoon. on and $XXX.X per Health. inclusive on give for diet realized start XXXX at be guidance good I'd Revenue of EBITDA you, season. was on diet like a to to EBITDA revenue color This point, transactions for tax report $XXX the synergies, some expecting tax-related around revenue transaction in results first the year-over-year we Tivity To our At which indicate midpoint trends our cost and our growth results. seven XXXX, provide Nutrisystem adjusted not based season combination weeks reflect revenue

On and for increased has journey with front, flexibility, customers, focus at will start been of programs balance their best trends. to FreshStart and excited allow consumer XXXX. have product enhanced which remain structure new our new We engagement optimal us diet nutrition to our program innovation our which reflect about personalized and South between program Beach the offers which the on the throughout and both and Keto-Friendly Nutrisystem's flexibility evolving health. both

the importance we'll lead to front. nutrition consumers ahead, is to health on plans and This personalized continue alike. of Looking high

with example current programs targeted for how general some we of which innovate. examples configurations some Blueprint plus and points of Body you can price specific per just revenue without drive different Our at expect we nutrition DNA customer to food extend and Other and deepen is as relationships. products, out of one range to and wide continue will a will conditions seniors, customer our

which competence continue around with in to driving higher stressed. our customer, engagement Our results revenue win customer a to along be back former customers ability per

that, refined plan media Regarding out of and up our started optimized anticipated, proactively in as our The good January initial is softer pullback laid seen our we back new spend driving us some campaigns, improvements spike strategy, January consideration versus response sequential towards mix we've we week-over-week competition marketing led and into February last assessed to and as initial inputs. in than the taking an media end additional media these spend. was our customer short-term we cost reevaluated acquisition which in news which January,

have media continue to influencer who multiple year-over-year more and by readied social from February some We've analysis channels much media to a directionally made around deployment there decisions been independent focusing based These and and Jessie media knowledge diet. off right, we're that social our and South add be some deliberate required media XXXX, but Building recommendations that believe to refinements. early James deployment our here. input success to and deep to digital We're increase on around for multi-tiered gaining internal we we and campaign with mix optimization. January throughout digital ourselves able we experts and influencer launched As top-of-funnel and results. were and influencers ambassadors as Decker on more traction Beach is ambassador of pleased done brand mix

we expert we analysis on based television and on external strategically spend. discussed and previously digital, increased back input focus As as our deliberately pulled on

on we results TV. However, January actual that far indicate too back cut

we're Given now the affected to of habits on shift digital And our late media our competitive customers environment in efficiency. total television and top spend. seeing of and a mix drove the the layback media in response. reduction improved January, spend core In begun response

is to new segments. to mix target and a exercise. Our objective to continue expand Media is our traditional balancing reach audience

media take on into models competitive viewership As in-the-moment account consumption and we adjust the current based predictive environment. and

brand Our trends. XXXX and evolving consumer promise creative supports approach our

different see We'll Based the TV to to be creative continue different creative will I've as we're the million expand shared, $XXX reach. throughout that We on creative and our applications $XXX core appeals $XXX of million expecting in year. and what that for just demographics some $XXX to full the to of to across year synergies. allows adjusted million, new independent introduce of we've and digital revenue range million to us EBITDA

range approximately our how For EBITDA $XX has adjusted consistency compensation Nutrisystem adjusted estimated metric, EBITDA million. historically with the of expense provided excludes noncash

for to XXXX revenue we in different expected be adjusted first of adjusted a approximately expect EBITDA of As of our to XXXX. Currently revenue by changes and X% is deployment, to I flow XX% share X% our come be media slightly quarter. to our what in of of to a now than to quarter Health to and EBITDA that and $XX cadence Nutrisystem result the the believe is year items. cash $XX personally investors. transaction-related moment full take good like is Tivity a XXXX Free combination range the I'd million excluding in for the expected million of

opportunities and significant the I for Tivity and and Health's provide marketing companies are coming can complementary. growth in that engagement upside and in deep with paradigm years. highly healthcare Nutrisystem's fitness the believe and combined and Our expertise, relationships consumer nutrition health change wellness expertise

perfect asking broader best for access extend XX% for out is and health Prime entry Here a that first Three, skillsets database Approximately the in about channels into I accessing able for the cross partnering plus talking to We'll tapping and fitness solutions And do marketing the targets fitness and that our when conduct step have Donato, able beyond be which and what wellness. positioned Nutrisystem's One, calories on easy Two, able significant others and is across An Nutrisystem weight-loss visits plan, be growth channels that standalone distribution it solutions to capitalize are companies. for health holistic be to programs converting Likewise, approach nutrition to comes about, revenue I well why? calories our opportunity with Tivity of nutrition-based will health direct-to-consumer to eligibility have profit XX% as our do we are believe plans Prime is will our help offering. we close not that for base the health tailor SilverSneakers example. seniors, long-term for data meaningful revenue them to and checks. by the currently Four, locations. as two believe will and drive nutrition customer, critical make as is for brands weight their are only expertise plus the conscious partner consumers. Like in are expand barriers brand these these Health's to upon customers to driving to we to fitness recognition remaining these it will a to relationships is management of and equation. lies conditions chronic specific based educate XX-plus. as well we companies, Tivity SilverSneakers to for Tivity's to drive

I'm detailed we'll Our of about companies joining down Adam? will personally turn and future will the with XXX-degree have stronger points of to I financials. the Donato forces are to a Adam combined and the over the we healthy multiple approach run provide be call and of a consumer excited to more ahead as his standalone now organizations now team and even access. us.

Adam Holland

with the I'm Thank it the I’ll share around you on regarding an relates our company a as conclude results Then for key Dawn fourth everyone. the and few going commenting year to outlook. full quarter to standalone update Tivity's good afternoon XXXX combined XXXX financial Nutrisystem before outlook. highlights transaction XXXX and points

the fourth in in of QX SilverSneakers an XXXX, X.X% XX% of revenues period revenue million, of increase by growing or quarter total $XXX.X $XXX eligible visits. lives, enrollment of over revenue over Our XXXX. results X.X% million, and same increase an generated represented driven

million due XXXX. to fourth in an during fourth rate part a the we quarter the net led quarter. that's a quarter. as of tax in XX.X% by amount the XXXX. increase from XXXX, share XX% diluted of of $XX.X $XX fourth $X.XX $X.XX the for flow of per XX.X%, business to ended visits Prime's the flow the million, We while reflected fourth for of fourth which impact reflected quarter. XX.X%, accounted compared results windfall a XX.X% during compared total to XX.X cash During as million driven for perspective, of in the related a subscribers. tax per Results benefits fourth increase an over QX, quarter of effective share or fourth rate, of following XXXX tallied to pay revenue of to of over XXX,XXX of the for earnings free which quarter effective in an was cash compensation reform rate SilverSneakers subscribers. $X.XX included primarily tax an Tivity stock-based growth statutory generated for well tax Prime's From and awards lower reform meaningful divesting year of QX tax was XXXX, of Prime EBITDA increase with $XX.X XXXX XX,XXX Adjusted quarter QX quarter member adjusted of approximately million

of Prime or million remainder. XX.X% to up results. XXXX. increase or Living made of XX.X%. comprised to Day were X.X% million, year highlighted total of Investor year XX.X%, points $XXX.X year the million XXXX Revenues our $XX.X an of XX.X% $XXX.X the June. million. operating increased during $XXX.X Tivity compared last and margin cash free EBITDA flow of increased revenue Moving generated million Adjusted demonstrating XXXX. WholeHealth SilverSneakers to generated XX basis full full some adjusted EBITDA leverage $XXX.X to Full compared

eligible enrolled, XX.X business million At XX% remainder remaining million a From Medicare under XXXX, ended perspective, hybrid enrollment XXXX, SilverSneakers with the of the year approximately of XXXX. approximately to eligibles a compared a for X.X were approximately an structure. coming Medicare million with members members end the we PMPM end our of the from from our contract we ended with Supplement. and Regarding contracts form XX% year of under at the Advantage the X.X with

Turning our now transaction. Tivity's outlook for standalone without to the to business regard

shared we a are revenue million, growth Donato million As low XXXX rate of to follows. implying key assumptions to single-digit guiding over XXXX. The range as a are $XXX $XXX

First, we what driven due Donato total much net for a reduction to lives in discussed revenue slightly decline earlier. SilverSneakers to expect by the year

approximately noted $XX slides, revenue to estimated As in our in our for million total be expectations XXXX. United supplemental is

We business, for of continue expect which that will the the makes at approximately two-thirds the approximately contract. revenue group United up levels current

to for more financial. five enrollees the to provide with revenue enrollees engagement, strategy result, For Two, us longer-term lives. is our on as dovetails we least and this One, ratio an Donato million health XX had our to last media as SilverSneakers targets. drive need believe focus maintain the or eligible digital achieve aggressive hybrid to focus telegraphed and we More at as We in X.X design growth. million all have XXXX, least million incentives three, same enrollees. X.X million to only metrics And the organization the expected will both And are. our business. with increased year, compared aligning by with more key PMPM of at year better a hybrid

these an an get last million members. months of a eligibility weighted We the The dollar PMPM to payment with potential comes receiving high eligible a driven members supported should visits more be been which in knowing XX to our investment, growth number that million revenue activity. expected about approximately throughout to upside has hybrid company lastly, for our them transition of into to hybrids our from expect offers towards by from total X.X XXX This one XX%. from engaged of from about incentive year, and enrollment someone up members, the expect will to paid get enrollees well And translate five, we again, number comprise visits to the hit keep have is we and this opportunity XX% increased better engagement that in and change active, mix engagement initiatives and more every now for potentially member as is the transformative, where activity. of to

business slight Living relationship strong over to believe with Prime and new multiple Our Walmart represent expected Prime have have is member-paid in will in mentioned during XX% total the revenue that that the to facets. growth Donato Tivity by of expected XXXX, driven is WholeHealth we year. will growth

Tivity's to Free million range $XX at standalone of guidance is Moving flow a on we to adjusted EBITDA, range to million. standalone a on of a have $XXX million cash expected million. $XXX established basis $XXX be to

after transactions mix combination term the anticipated X. cash shares Tivity's and loan. and would on XX. I announced early meeting the and financed the a to you be scheduled hand of on close a December shareholder like of The transaction a on March March force cash and will previously committed through Nutrisystem Next We for is transaction Nutrisystem cash a to is update in anticipate consideration

EBITDA approximately billion estimated into rate for currently the raising outstanding of debt pro are of and acquisition. to transaction, debt the we anticipate working million run $XX of leverage close of We account $X of process ratio synergies having the cost trailing forma million. at representing through XX-month times a the And taking $X.X X.X

continues model down debt we be company. to capital-wide and free outstanding robust aggressively the a with from cash flow intend the business to combined Our pay

than of XXXX. less end end XXXX the times by ratio As less X.X X.X the by indicated, are targeting than a and of currently we previously times have leverage we of

composed excluding Nutrisystem $XXX $XXX basis, synergies. be on billion a to $X.XXX Nutrisystem's leadership revenue close, Tivity cover The managing our early to expected I and and anticipate million we of to combined in between proven from want an in on and outlook. aware, of from to transaction the early million $XXX revenue Based of be end. March point And history potential is $X.XXX leverage. to closed you're finally, year assuming have outlook of from the and to combined a March revenue debt revenue million As million billion initial success combined of revenue our team XXXX $XXX

result As the closing differences of Tivity's of between we highlight contribute Nutrisystem a timing of with fourth quarterly of XXXX. you the to to also first expect of the the are weeks acquisition, to I Most results seasonality three of first a with approximately the step-up want cadence some quarter only of will the two notable from businesses. quarter. familiar the

As result determining a calendar The their the their January is relatively and year. the steady year result their coverage of Medicare each over Xst. membership starting course Advantage eligibles of plans of

diet of seasonality between busiest to restructuring synergies benefit is million a mentioned, estimated Nutrisystem's EBITDA costs. be Dawn $XXX for expected the XXXX. the company of EBITDA more we which which realize front-end combined transaction-related in Adjusted expect as season cost is $X includes and the $XXX in year million is expenses to an the period. little As and and integration that early million million $XX excludes loaded is their Adjusted to

two, per the happen; net not in a to or we're a one, the place; transaction. things complete financing accounting yet for closes; position deal three, we income earnings As is EPS and in share, for until provide the our few

for after two Both our transaction, division purposes many the metrics we on will for the early fitness and from key to the one forward, EPS and income And net and and for lines; divisions. outlook quarterly revenue provide we close finally, May. will within both reported going from quarter an our continue nutrition we in annual our first the be on provide likely call modeling will reporting as divisions to division. expect updates other individual be of reports We segments

call Now, Donato some back the over I'll closing remarks. Donato? to for turn

Donato Tramuto

powerful I of about In Tivity to feel Adam, share you, combination thank of all focus we excitement areas and key fitness Thank you and and want closing, nutrition. our with you the the Dawn. for

the the As and our further We be the of that we about both offset we as a in year point enrollment lives of continue believe will we of for be revenue possibly we XXXX our and Number transition committed and for engagement of we SilverSneakers Two, have clearly before pipeline XXXX drive benefit to one, businesses are UnitedHealthcare at have will have who of and and Three, demonstrated ability members is new reasons. Tivity stronger loss made has our growth will reaccelerating investments X% now view to are several in working. a confirms arrived customer predictability. number now that enrollment through SilverSneakers with engagement media. our to business. to to able more related the

future surface will We play in are and launches. just a role scratching the significant media Nutrisystem

eligibility this to metric indicators a for and will monitoring XXXX, our over Thus expectations is and location checks you strategy let leading in for TV well be enrollment. of as our me However, campaigns. surpassed very reach checks due upside be our far, in to XXXX. seen total engagement closely. SilverSneakers XX% share with the this as first weeks we our primarily two an believe increased we seven We our increase XXXX could digital have plan This media eligibility nice

Following the will spend. close efficient to of benefit we enhance media and our marketing have the more Dawn's expertise Nutrisystem acquisition, the with Nutrisystem program media the of further and leadership

the and loneliness interest and are to plans around the Medicare a current significant seniors, is nutrition, addresses needs work our Fourth, our the both Advantage Tivity in specific quickly a model of and activity. laying that minute. cover on with between groundwork synergies Tivity health We to there more Nutrisystem, I'll which prospective with revenue care capitalize holistic to

who here There CEO the with pipeline we was type on out game I fact recently solution Just at who's there of no putting done offering this a company our who a is of what scale. you've basically we stated plan are integrated health in is believe changer.

We of Care opportunity CMS by their the the provided are this plans added serve Advantage moving fast with on our beneficiaries Act XXXX. in to flexibility CHRONIC Medicare help better

our on progress. We will this throughout year share updates

subsequently, by the address nearly larger we effective well of the last reminder, system as in a multiple growth health one and that for and fueled as Act by result health need one. lesson of single-point solutions acquire and the December and that are evolution If address to combined and services chronic is our to our approach you XX% with when telling any to then associated partners with health Single-point more solutions. end, it three the reward announced difficult the model. in that will this been the care has is and efficient living solutions challenges cost programs affect passed the aware, our happen conditions. the care of as And health our achieve, modern cannot or CMS seek throughout those Senate system advancement are of to you our in care our have positively will fully factors care. XXXX activity, for And to Nutrisystem. a same Modernization Care not As will offering of by Act believe providing CHRONIC SilverSneakers. the that nutrition providers the XXXX value-based changes a movement integrate We growth the believe we Medicare The isolation social as these pay-for-value demanding recent intent

this nutrition, and that who combination comments to revenue the a believe on combined will this several We that fitness, executing on new and work at already wellness. revenue I synergies creating opportunity, both next step entire a we stream exciting are as support have is delivery engagement really in a that will social represents company a and solutions transformational growth Meanwhile and teams our believe continue be integrate identified planning. to opportunities overall few health what

on me the we our a to first Nutrisystem near let opportunities reiterate offering to Prime and Fitness those focus opportunities. unique and want In I March, will midterm provide So members.

our Blue leverage will we Shield Additionally, promote and Cross relationship Association to Blue with Nutrisystem.

also opportunity will We a for as a members unique offer Nutrisystem the benefit. WholeHealth adding promotional Living

offer members. food opportunity We unique will a also to and SilverSneakers delivery nutrition

We and promote through Prime Fitness Beach the will South Nutrisystem Diet.

management carte to la solution for locations turnkey participating member and starter including kits a their à develop will basis We options. weight offer to solutions entire

in food such items And to Prime caregivers. and our fitness engage management unique diabetes, nutrition for and these we have the and create creating program marketing We as leverage to offering which members. an offering to offerings, could and for will COPD believe opportunity a the digital targeting term, conditions Nutrisystem's differentiated chronic longer and we the and and direct-to-consumer nutritional creating include benefits new better expertise SilverSneakers faster SilverSneakers integrated Fitness like

We and Dawn and address are It's of the are clear been of into colleagues to transaction and want transaction. believe remarkable. to you. of to forward will look needs two and on Tivity gratitude be Operator, Nutrisystem and We take Thank that combined health to I and simply Tivity holistic and and another up-to-date XXXX we family. will sincere an organizations company a colleagues continued a population. in invaluable In a portion large organization be year fit Nutrisystem the you my I health been it as critical execution everyone of want this in our values successful exciting has will to strategic ability closing, to welcome this the Nutrisystem about our me could now incredibly powerful well wellness the questions. aligned Health a Health we whose their for unique enthusiastic express we members solution Further. this key the improving success. integration. of be to our will see keeping all culture our of a and our priority offering to the we take the believe unlock interest thank opportunity that

Operator

from first Ryan Your comes Instructions] Daniels question Blair. William [Operator with

is line open. Your

Ryan Daniels

Yes. questions. for my taking Thanks

few Let me start specific. with Tivity a

United it in-souring combined for going how much individual forward entity. risked in that How your be bit the a versus as which the that is group? is versus more in about revenue a Meaning, stable? much $XX view You future of mentioned group million is would little

Adam Holland

Ryan, Yes. is this Adam.

supplemental group total you If at can two-thirds the of you makes about slides, $XX up million. business that look see the

get remarks has so past we roll group business once we just leaving mentioned continue what And individual to lives essentially Donato his will XXXX. life in XXXX prepared is in off anticipate the

Ryan Daniels

there? January, they That's they're already Or existing were what your leave? Did you markets in is thought going you to knew in were in the customers in those do of the And Okay. bit what they to the and going you uncertain. a to capture markets I'm kind helpful. got that color then guys they because regards just just any specific late as thought? markets in, bring in-sourcing, data little better didn't enrollment I markets much shares

Donato Tramuto

Yes, actually our customers Ryan, question. major good Actually actually did better.

say, surfaced And I’m is of the – weeks we going any at us last a entire way in to which why the months summer the the we that to updates… last normally of lean the during to quite surprise looked reasons those two so the this did of honestly, eligibility January, one don't as come by it when list give

Ryan Daniels

Right.

Donato Tramuto

of XX the other into plans two very getting don't United for optimistic good weeks, did And days us. and were we specifics have months. larger we then last looking first the numbers good course, the a frankly, with plans the the news know. the some in very, without Quite did have kicked …because the in very of

Ryan Daniels

Nutrisystems, then what to and a going we Fair the numbers proxy, you end And in XX% initially Obviously, call the is lot, revenue the so question get X%. here. about suggested; EBITDA were guidance Okay. pose you the it that enough. had I'll a in below is they versus on had about to regards I’m

the So year? valuation the really after bid it will the Thanks. you set of entire deal season piece why does that not if information? question the critical given why up determine for bodes the till season having that wait diet do before to company and So the diet

Donato Tramuto

do for it we there's Well, let question. And that acquired the didn't I for me We the Nutrisystem acquire synergies. say that is it's teams more and already this, long-term. cost do the fair to think these short-term. a And listen, It to on there. my we're certainly see quite synergies. we better around belief come honestly, starting revenue And can work the together

we've approach long-term think taken I here. the So

Ryan Daniels

hop Fair the Thanks. I Right. enough. in queue.

Operator

SunTrust. from with comes David question next Your MacDonald

Your line is open.

David MacDonald

for Good SilverSneakers you minute. just seniors if was locations the back for relationship I any to thoughts wondering wanted potential the there? into potential around either with opportunity about running the the talk general Walmart's that and leverage to ability of And marketing amount to just area of kind afternoon. a Walmart come flex just Donato could spend minute a

Donato Tramuto

that it David. because that update emphasize Yes. say in It's sure working why one number in opportunity what a great value the around Health. next I of wanted want wrap make going partnership and is to to Tivity to We're with of in Walmart think you What arms Prime question. we this that's you've I the careful your can And a wrap you I kind first that I a is his together. own. arms answered quite to around the of you, remarks prepared to bit that, we things Thank be combination will just opportunity. that SilverSneakers be a little are in the that venues longer as provide see honestly, doesn't my we do we its between of Nutrisystem will quarters, working

tuned. the on Stay today. So in last more is been year. my working what with We've this be good the that six, this great that I seeing for announcements would is of us belief those you'll months partnership spirit seven Walmart, for news ask

David MacDonald

comments kind out terms early and in or on a of One season? I just competition. around ebb kind just spike you on new Can of quick you incremental in any the season mean participants? Anything flow some side us was call there mixed what of saw? results diet competition of of question diet there sense that Okay. the initial just and give other

Dawn Zier

Sure. This is Dawn.

want we couple on honestly early as they see competitors out coming during a people people. weeks And what in or any specific the – call and quite more to then we few fast. of did see generally, I more first space digital anything, So but say don't we is happen those

couple new that's came in and there typically what So a that bit then we see. entrants little was back heavy spend and pulled of

on way environment sequential to improvements some a that our seen ability So and talk spike able when quickly we week-over-week to redeploy nimble in about adapt we're back to we I as saw talked we've of cost. and to decided pull And buy are now that. that in about, that, We facing. spend, because to then media we've very core the any goes

David MacDonald

bit Okay. with And above then the within in about or not XX% book? about to currently guys Any folks the the you any to standpoint question gym how of with Nutrisystem have are that, on, any fit by that's just terms using one many a talk breakdown a statistics around an XX-plus. regards demographic age visibility another quick you from Do those cross-sell? XX% Nutrisystem opportunity business Prime of details little

Dawn Zier

again. Dawn, Hi. is This

can see grow after were awareness matched will there we haven't again, I was Prime that tell that a Donato able increase right We close. I do yet. that be to I But files that We'll SilverSneakers lot the that, collectively pleased to in to that is And XX% that that. believe we bucket. around together do you with and

that. we can we database, while do So, see

Donato Tramuto

Yeah.

there it David, for not his years because, party used XX-year at coincidental, cook management. wife product to because an was call old two weight was it the there senior other and unable longer. They who a Let answer night for was dinner have me any has I just that used Nutrisystem

been respective now over since as so with which don’t of us also arrive here we million. And Dawn develop I’ve in well to only to are here nutrition. you a that it's arrived who did I population. now you weight. work They're to But can liked be lose when if program if have will I probably not database. program tailor, know, X their and we it join for typically having be the our a quite going Nutrisystem was all can silver-spoon, they we'll the of sign that mechanism XXX,XXX members to this recall telegraphing right individuals that going to able proper And you We're only there about database, to that in name. way with develop to because will opportunity a terms it those reach, is just is What programs want up an to joining come I've frankly the but to

two going benefit is So databases are here. obviously there to that

David McDonald

much. Okay. Thanks very

Operator

Sean comes Piper with Wieland from Jaffray. next Your question

open. is line Your

Sean Wieland

you. Thank Hi.

How being promote other you work side going some exactly? synergy this you revenue customers? And the is template BlueCross mentioned a your BlueShield on of that does involve So health discounting? do to that Is Nutrisystem's. plan anticipate

Donato Tramuto

it's Yes. Hi, Donato. Shawn,

significant fact is It's you BlueShield comprised due the most diligence know, during of of three discoveries as comprised BlueCross one So the it's we with one that, Prime, is the of now had partnerships. Walmart. the Association that ones. significant with

We been advertising has for working doing with but on marketing also website, Nutrisystem the have Prime them core been activities. same their on Nutrisystem.

they ahead have because of of Dawn have be will think traction. plan been this, to those in Nutrisystem years the say terms we don't first light I relationships, getting

members end do here with to But to already a on plan it been as the in The reveal a us has it planned excited, trying and relationship are we're lot are dialogue you. going nutrition not allow lose program before them we to they weight can realize of we absolutely The we management. and done of bringing tables. you those that then to just exercise specific nature to because launch of that's by extraordinary the soon ask and are, the so very speak, would us the that a quarter. the we And of program, get I first

Sean Wieland

then Okay. And on enough. Fair United. quick follow-up one

happening my that you in that some anticipate current part in place term their of United with understanding minimums as $XX contract. the And stuff? guaranteed million Is do accurate? of had So that XXXX what

Donato Tramuto

Yes.

first in to of kind answer answer part buckets. four this the I'm your going is, And of the yes, So to question.

into that this that that with that's but First United of to been were, me diversify previous I our I think, fair. leadership, the has looking want shared time. all, think fact, way the don't they get I exactly scripted in before has to

is contract. think the controlled lives, focus individual by been has which I on one

And that's organizations. controlled The many, group, United. the there as by know, group reduction is in at many different been know, you you have lives no many, As all.

that the the that leaves tea I can think, if think, I that you the so, read look fits minimum. into And you group at minimum,

Sean Wieland

very Okay. Thank you much.

Operator

Mohan Your question Oppenheimer. Naidu from with comes next

line Your is open.

Mohan Naidu

Thanks the out to associates you Or roll the you minimum it to Do to the to need Walmart get for questions. on do you in Donato, engage individual taking a still my sign on program? contract. as then? summer

Adam Holland

is like, the is the details country's largest but Hey, not many We're self-insured to one of going Mohan, through of the is of get, Adam. into a which Donato benefit-driven arrangement, said, too Walmart, it arrangement this employers.

it's to take frankly, robust that by large package. going pushed part a think it's so, benefits of offer. other And think other we the and benefit And bit the a plans can certainly be States United spear Walmart to with tip Prime overall it's opportunities little we be different going itself, from their network to self-insured that in we

Donato Tramuto

side keep may I for the that. Remember the to to -- If a Walmart just second. add

lives on panel that, of in themselves, And part other about from following The lives. were is those employers most directly commitment wellness Walmart's the we a clear that think remember the a two X.X just those significant those if promoting this aggregate wellness recently million. of contracts that them the population the we at their is have with of one employees of and are Prime, you're ambassadorship and with plans aggregation We're The unique they Harvard. dealing employer. with within we're their employer. very of made one dealing They terms

on a makes that arrangement different lot it of than two. particular are other I this So there antecedents think the

Mohan Naidu

Is targets years. a That with next Thanks over should about target. separate the enrolled question, of million comfortable seems for that revisit target, that how talking right those growth color. Maybe now? just are like and we've member a a still the been you X we pretty big couple that

Donato Tramuto

organization out And or opportunity perhaps I saw CEO, good Chairman if may I hybrid you’ve became alignment our and to Board the members lower news it's news will, say a there is you X.X is, was is plans. means why When good there, you they’re often. and blend balance if now all when versus what a weight at the this I I'm CEO target that that, between will, get we're saying incentives weight heavier health reason clear. means quintessential between And the that often when learned an maybe we between going hybrid had those I a telegraphing And paid heavier I that PMPM amazing enrolled, now and the been PMPM. versus not and of I've because advertise going is with realized that get is put of to that to I Well push haven't that, been more when as I you're you hybrid. I to having when more as this X

that million to financial out when modeling X with we And between put there. fact X.X same in we five so now it's scripted the

it's everything we else commitment done years to we've we think getting something respects and to I So that the should be in fact done to three have the to maintain media that our ago, proven five out that continue there. think I many and with

Mohan Naidu

Okay. Donato. lot Thanks a

Operator

Styblo Dave with [Operator Jefferies. Instructions] comes Your next question from

open. Your is line

Dave Styblo

Hi there. And CEO come and questions. maybe for had produced taking just revenue Good thanks year -- the to nutrition of this plan for back for years. the seat, get Dawn I'll attractive very some turnaround outlook sense a a afternoon, better growth after the nice you've several very

longer of spend things whack-a-mole this just how be some the just what an learn this last attractive more it's a if marketing get about do sense either term how business I growth the be that longer over this can a over think the company? challenges guess a or did up little visibility about what that additional couple year, year. you comfortable seems could term? better when a the bit challenge, every so a challenges campaign often? for last product And get differently growing gives do to years you Some to might over that from Maybe market the on pop the business there you can you of confidence

Dawn Zier

off doing Sure. talked do we talking to saying, just confidence were in each by about But start about, we're can we when we for of XXXX. I'd more. the areas like okay

excited there's and configurations our around can food forward. move we're price different again, nonfood. about a more they launches we So lot as in XXXX do product and But points

So I for something about. us think we're that is a growth and opportunity excited

the and the kind January that audience more front. way creatives on success more we you especially the we there campaigns. amazing see started different program to right this made in On audiences, as the breaks overhauled are social and ambassadors to look out that And seeing influencer we right creative are progress before February they you that fine-tune if there, and people. geared front the can to South still getting Beach to just to And campaigns with a brand with roll noise we you creatives message we again running, target. more more but come. our out do rolling can are on take after our can the Diet in expect and digital that We've us initial of continue a can We're expect to said, messaging, the multiple through and more television, the in I then see

balancing between to We this a really which shifted our it's act and see deployment, we thing on digital media opportunity more a of For sources. mix more is good front.

we there in. about is think again, are talk and I been pulled and opportunity a perhaps back an media TV working. expansion able it. This final to I We think players for rooms multiple market in on much in Social too layer is January this point in a back is we've successfully when see general. we and The is large addressable market the little

small I part only billion to you it, it. of at $XX market, $XX look we're a if its So, billion think addressable

with things come to think XXX important think And well I one health talked with the ton will building with but in the is synergies, combined I access. those But with really is of dealing, of as out plans fitness So, to approach about relationships this a from as reaching these plan. the customers revenue also mechanisms. the expanded having and haven't that's reach I we growth us think opportunity there

with standalone combined Donato thank exciting I So, I his vision around a and that. with think into a think offers transformative for I and period really offers, combo we're as entering entity

Dave Styblo

back high revenue And might looks relationship? on the technically for benefit the how new this that to What example, then basis? United might single-digit levers that, thinking guys on been of management, get on? for want give be bring the from a that in the just you Walmart captures add XXXX. -- the to For advertising outlook just growth that or X.X% for What are about contemplate Okay. aggressive was guidance campaign to the has I about TV your us previous sense Any maybe conservative there. of mid-single-digit a impact If what like guess the range. up Tivity I to standalone going year here? you a sense Just higher would or from better for

Donato Tramuto

continuing now certainly, number an now a maybe that Well, of on that we're them. And opportunity that strong have there’s let putting honestly impact think philosopher, Yogi I just at to we've approach mistake." earlier to the you've identified continues with The And you a make I launched seen lever. show and quite a just stated as Berra favorite sign-ups to forward -- upside. and we're I want we up opportunity. a frankly people steroids. make play getting if season The question, their, I fitness flipXX, community quarter prepared and that it's think past of said, conservative they're the out, reveal going And remarks, areas the what see I Walmart, centers, in digital, expectations, you advancing signing because has this going want that algorithms planning. invest "You to and taking we the how be think our identified than launch my let we continuing up we that number significant have here. and been you get to terms a we media, a quite so as are loneliness? we that. don't The that that growth getting and it territory a very and of that have these you're checking credence been metrics and opportunity eligibility, me that sure in and beaten have we just our we Walmart let's to and the my they're a actually that kind hit definitely go managers paid to can on centers we’re XXXX But the are of have in on in given the secret, but asked The wrong are to are momentum monetize now an to

are us can media, So consumer that a we we those with growth the that are the respect with she areas levers some And of continue. with to honestly help quite business. working Dawn

ourselves have not. fooling business, are I to a simply we are think been that say we member we

We’re business. in the consumer

Dave Styblo

and talking levers So of some there to then can extent in the I is numbers? us guidance those being sense to or recap, mean, launch you the the potential -- if in some are earlier you none are upside give Walmart about and of like, a really you impacts

Adam Holland

it's I just is probably think every early, lever our biggest enrollment through April the so strong upside. enrollment marketing the season year. then really of of And runs

in January is probably a SilverSneakers so The visit the certainly And revenue. potential add-on if we can and is momentum to upside there continue on in there there's assumption keep seen -- the some summer. profile point count Walmart we've to lever. modest for I on biggest or the guidance five to wouldn't months TV this the There’s I late first four digital inside back launching the that the would always potential year. that. as affecting and of that in

Dave Styblo

Thanks. Okay.

Operator

today's no further concludes call. are This this There conference questions at time.

disconnect. You may now

Donato Tramuto

Thank you. Make it evening a great everyone.

Tivity Health (TVTY) 19 Feb 192018 Q4 Earnings call transcript