TVTY - Earnings call transcript Q3 2019

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Operator

Good afternoon, and welcome to the Tivity Health Third Quarter 2019 Financial Results Conference Call. [Operator Instructions].

To the extent any non-GAAP financial measures discussed in today's call, you will also find a reconciliation of that measure to the most directly comparable financial measure calculated in accordance with GAAP in today's news release, which is also posted on the company's website. This conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements, among others, regarding Tivity Health's expected quarterly and annual operating and financial performance for 2019 and beyond.

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

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

over Mr. now turn And company's Chief to Donato the Tramuto. Executive Officer, call I'll the

begin, may sir. You

Donato Tramuto

I'd Health third start X,XXX objectives, like the nearly you, XXXX whose advancing results colleagues thinking for to the quarter. has Thank everyone to today. and off Tivity welcome and drive the strategic who the commitment dedication helped to call joined the

our tremendous you. have Despite of of this I to all execute colleagues continued year change be of fiercely. Tivity couldn't prouder for Health,

work this year for beyond. hard us prepared and XXXX well has Your

of executives President following our and questions. Steve today, here Janecek, be key Nutrition to like with leads have and Business available initiatives. Chief Tommy our President the He both additional Unit will our Health's be as President Officer, as I Officer; session question-and-answer Relations Adam Today, the Dawn for two prepared remarks. Holland, Zier, Operating also CFO; Business Transformation I Chief during available Lewis, our introduce well me today of Healthcare Unit, Investor who Tivity would and the will integration

on this quarter businesses. we achieved am important, equally update business, A-B-C-D earnings and financials address pleased and update term. will me the you QX, our may. OE and this all let Adam if Healthcare the regarding segment, the with strategy remarks conclude long the then company our August strategy. I across for with including an I where the Dawn specifically, positioning results will call, last provide to So progress Today, have the as before around you I are will on update the on us nutrition we introduced the I

the for update. business Now unit Healthcare

to SilverSneakers. selling out closed I season note. am on high start we very happy with report a that Let's this

to XXX,XXX announced As we new new continue year. eligible an during for add yielding And members new start estimated to August, contract next third well members year. eligible quarter, In the wins, new of we end added to the Steve from tail Congratulations season, our heading into XXX,XXX team. another sales additional yet the includes positioning and entire wins, which members we XXXX. us selling contract the

by end XXXX. reinforcing eligibles By our million expect end last SilverSneakers we our million earnings stated call to XX.X from XX XX.X members to SilverSneakers million the eligible goal have the approximately in confidence of of of XXXX, the

our growth retention members XXXX XX As seniors the plus in more client XX,XXX well strong shared, collective successful levers choosing Americans turning selling reflects every Advantage plans, growth eligible Medicare a nearly season. of as as the day,

X the enrollment United we now the another of portion with UnitedHealth a others, We employed and investments XXXX. that retain to and efforts report believe remaining lives We SilverSneakers lives XXXX. appreciate continue. also A-B-C-D Group of the the the you made strategy. last our UnitedHealth years for that the they power the are SilverSneakers shared will I'm as me quarter Let to beyond by recognized strategy brand in engagement pleased expect individual and being for for through retain

the million XXXX, FYI, approximately business revenue. annual an represented As in in group $XX

and our a and Tivity Turning Center. ground-breaking launched a their that agreement partnered health one we few This newly wellness now the Walmart, in to the health that level. well-being Walmart update Tivity Walmart's ago. best-in-class announced an activity, the of will weeks deliver care in room at Dallas Georgia community offer with health services on affordable a community. relationship including community one with has creates Center. services the Health Health and excited to social facility Health at our Walmart programming opportunity we to are engagement provide will programs, art quality state physical nutrition,

we to our topics groups care to example, will For economic workshops healthy poor of to disruptive they meet health social setting. the our determinants quality healthy where the at activity those for and also services. and adults, that host access specialized eating model such to consistent and community of classes gather social with health, courses to physical health-related goal both of same to from care needs meet food, address This the members commitment on the is time, drivers contribute access status, as health, nonmedical and ranging

Walmart recognizing address take for within relationship these overnight. to like to and our derived as to from brands you this happen happen ongoing may health years where together of development, powerful collaboration of types health I'd leadership opportunities wellness like over and the the don't work opportunity, the imagine, team X They to take opportunity partnerships thank value this can I'd system.

nationwide. has of While the pleased last and with support of the with very Prime on offering Fitness April signed was provided. the the early X than launched leadership in million Walmart Walmart October Walmart X.X level the Walmart, more We're for process that associates on topic

Additionally, we quarter. early we the have sign-ups, report and will more to happy with next are

the follow with are And the too will third this when further partnership lastly, exciting along to we rollout. prime leg

a associates. roll will associates we and pilot be we Specifically, for offering where program D out the Nutrisystem prediabetic Walmart's diabetic will to

and XX,XXX the year-end quick our leadership the of fitness Caroline her assumed has this total renewal very to have date Let XXXX, who XXX XXXX over team entire me to renewed been have now well. to unmatched team XXXX My locations growth new today, managed we Since contracts in manner. our expanded report net greater from network is in over partner XX% rates in been as a XX,XXX to just and have helm a our are of than fitness the locations. thanks locations update added pleased on nearly the center provide and

important, is is network business driving innovative and to options. a members model. of the to is broad-based having While we at me to venue engage Allow another members, and for on been have centers that employed those fitness update home moment hallmark to enroll our an provide a looking offer

of participants Tivity months. the workout Early capability the an just our of early of silversneakers.com. part simply On occurring enrollment home engagement tested driving to specifically, As B the strategy, aspects XXXX, membership through X around insights effective watch increase method a more and the enrollment actually activating of was a members bringing online series and are showing before promotion we into A-B-C-D programming SilverSneakers rolled available average, This in summer country demand gym Health's at on ongoing out A-B-C-D to which strategy, over with engagement, videos videos the visits. their across strategy that is is location. gym eligible put

Additionally, these average showing at par new than the large. better the participants rates slightly are visit population reactivate participants or and on

intervention mind, on the results enrollment centers, outbound co-marketing While still in we this are across early our complements adoption, programs proposition. call enrollment But keep other incentive on deployment we're of in that positive these the please a value such engagement the our on territory fitness having the digital side the months, XX nation, underlying over tailgates and program strategy at center. home from prove media, business demand interventions the launched with as successful and our managers impact call off CollegeSave last TV digital the overall believe investments our of that

increase As enrollment adage to in of the old goes, and all lead roads engagement. to lead the Rome, all well, these interventions

said single business digits, our projections Wholehealth in in by Reiterating however, to also health low are somewhere double our the preliminary driven seeing we growth what growth quarter both high second the in and growth call, in for between are business unit. SilverSneakers Living care Prime, XXXX we revenue

we're excited see success going As I'm you our potential business care continued related great for in progress the health And to as offering. combined can sure we forward. as continued well our the success by tell,

the who I'll now over Nutrition Dawn, turn an Dawn? the unit. business view to will you on give call

Dawn Zier

The Donato. business and in Nutrition performance expected, plan. is unit's on came third results QX quarter-to-date you, Thank quarter as

year, second to for executing diet the the quarter. preparing within have OE calendar also As we're we announced strategy that focus And historically the of XXXX season. done business shifts half unit during successful last a nutrition the our we

dependent strategy the One, the on business us being the response reminder, diversify to diet a season revenue encompasses: from OE will business XXXX two, singularly optimizing and direct advertising approach. the As channels new that support to core expanding growth; based launch

to We where this we today's believe several of strategy growth I'll making strides. are reduced stabilization, execution will areas highlight On the lead call, volatility. and

our OE of the areas. with consists start action or optimization Let's X strategy, component of major which O

South very season. we for We're development all front, both and and innovation leader its we of South diet Beach for have prepare XXXX, as to is our among Nutrisystem's and program program Nutrisystem pleased of draw clinical versus news years. will efficacy some positive any brand. this a top Beach exciting and the foods this weight And based loss will and of to around attention have highest the since on First, in food diet XXXX in be results product that development. e-commerce the believe new competitors introduce we diet requiring innovative significant we the number X most milestones the the program year lot hit the prior

Diet Beach around next will the program per cadence. share announcement our we and South month Nutrisystem the As always, normal details XXXX

enable platform cost continued platform. Ad we into data also better touch the demand These as messaging data management the as XXXX. technologies we've technology, head we sequencing of and enhanced customer or our often side third engagement referred all precise more to Tech. will and onboarded first Second, new to In Martech phase personalization our enhance quarter, across and completed and management points, customer

digital And building in its our in have in digital associated success invested and Expanding critical achieved growth reach. is and significant out in digital marketing. marketing is and reach mind, spend XXXX. to with resources profitable our we've team Third that

and of a has of expansion in channels the diet continued central to the the enabler. third XXXX The the referenced Our strategy quarter, call on fullest the has busy reach further digital expect season. we our year-over-year new to being and with earnings been wherever capitalize customers digital of start at on marketing growth to they last expand acceleration build rapid to are to

orders channels. our coming digital of XX% approximately Year-to-date, through are

app, complement RR experience marketing XX% this that with and Now programs app Roughly engagement customers revenue up support from uses the our are enhance as map, which digital the of a our which the the necessary stores. very improve use apps X.X was built food, we which Nutrisystem Of on are important our rating user a and engagement our closely are purchases supply last per benefit strong free new achieve the have of we in and stand-alone, the and optimal of from apps, from in-app all approach star not note, technology our year, we Sessions year, aligned is customers believe to program. have our customer we satisfaction. in results. double digits and complements human are indicators up holistic customer to to which

relationships apps Additionally, allow us use their the on the moving after loss apps from extend as and the customers initial weight content still to program.

messaging as refining new for approaches And creative number prepare testing XXXX. of a finally, as the also channels well we're we as and

early by these initial come mix. the in media channels on successes new as this results our some QX we seeing to are encouraged add our and to flowback intend into More next are We call. in

we to nutrition on update create food together strength. date. macro working We're each new offer the with in separate issues but strategy. security To will and our prepared that nutrient will living announcing hunger fully foods with dense satisfy food end, fuel security us realize synergies our some forward new loss. designed body. release provide will seniors healthy and Wisely products only leveraging our E launching to in to January, capitalize specifically may help made not programs designed to revenue are pilots or will Well for and I'll The launching nutrient from nurture opportunities press to of to and programs our on those an science that that with X development care and drive and weight meals These are energize closely you be are These January. and our post-discharge brand-new capabilities seen business of unit yesterday, expansion have which line business serve profile initiatives and now that our to service units our food

weight major other of loss set us us line and senior will expansion This and XXXX. service are also worked more on, for reach. our beyond more opportunity more products news competitors, represents from breadth being a care initiatives program will This traditional which actively differentiates on that throughout share giving of we us

care In in mentioned commitment the X pilot is leverage XXXX from combined Humana the the January markets earlier, addition The security Humana pilot, food and will for pilot on health delivery capabilities members. Donato to track services that need is plans providers, high. streamline of social local food counseling Advantage solutions deliver meal health nutrition as and innovative referral secure workflows and case management, delivery Medicare capabilities as well to plan to and

front. conversations strategy. preparation, with on executing closing, I'm diet in and progress we're the health as to this track Nutrition on planning, the other we also plans We're inventory related business quarter well. In the revenue the pleased performance season We're synergy with making OE our on and XXXX are

turn over update. I'll for the financial call Adam to now a Adam?

Adam Holland

financial Similar page supplemental information website will QX with that results explanations. afternoon, tables good and Further, you, hit to understanding please provided our last of and guidance. the includes today's and Thank note quarter, press we of a release Relations related our XXXX reconciliation on non-GAAP Dawn, Investor Donato everyone.

Turning now to combined our results. third quarter

August Adjusted As release. period and and $XXX.X XXXX $XX.X million of last same results third XXX.X% Total last within the last third in of in million, the pleased revenue million Net increase to we in million $XX.X guidance net the compared XXXX QX compared million quarter year. the Dawn year. $XX.X earnings to of income was was in QX quarter was of year. income Donato $XX.X an mentioned, our of tracking over with our annual communicated for are

for of million for amount XXXX EBITDA This quarter third during EBITDA million million acquisition $X.X Adjusted the $X.XX, QX cost pretax diluted excludes per synergies compared Adjusted QX. with earnings net connection of certain of per share year's items in $XX.X with Nutrisystem. incurred QX post-tax and GAAP approximately the earnings diluted benefit includes realized to of the $XX.X last $X.XX. adjusted was of share of income was year.

on to health Moving care.

last XXXX. well. the over of perform generated third to to with of revenues the million, quarter lives. in X.X% continues fewer started SilverSneakers up segment revenue XX% of of represented revenues eligible increase were X.X% SilverSneakers for an QX $XXX.X year, a over Total Healthcare XX.X Our million, $XXX The segment or period the despite XXXX we segment increase of this million, XXX,XXX XXXX. visits QX fact quarter and X.X% same is

of visits We versus an and XX.X basis XX.X% an the visits, accounted approximately year. the monthly increase for same last XXXX driven Prime's Prime with QX, ended with million growth approximately quarter over a of $XX.X Healthcare In by was revenue were subscribers, pay primarily segment total for XXX,XXX in year. the of quarter, QX XX.X% more over QX addition, members year points eligible of last or increase net with member the subscribers. quarter participation XX% increase million ending million those of Prime period rate revenue-generating active SilverSneakers this Fitness last XX over X.X enrolled during year. a X.X%

third totaled segment or revenues XX.X% approximately last year's cost segment QX million non-GAAP $XX.X of million $XX.X revenues XX.X% compared to amount EBITDA of This Our the of synergies. from $XXX,XXX or for Healthcare benefits segment's for includes quarter adjusted year.

Turning now segment. to Nutrition the

DTC DTC, decline business, quarter revenues last a $XXX.X This which decrease QX customer to segment revenue. Nutrition the from quarter initial the fewer year. year-over-year, cycle compared starts. by in million new to $XXX.X down due in customers Third were in decrease XX% driven for a primarily in primarily the came million, was at X.X% diet their generated Within same revenues

helping revenue. the revenue total $X.X out X% Rounding reactivation last revenue, the balancing was our gross retail to up and QVC costs. QX to the supply Similar revenue, percentage was optimizing million year-over-year, last a showed decline $X.X of as million. from quarter, Nutrition year compared revenue, DTC of contributed channel customer in XX% some offset made new revenue, the up offers and segment which promotional margin chain by QX XXXX of improvement

And third increased in to the million as quarter. expected, $XX.X expense marketing X.X%

during costs recently $X announced Additionally, incremental quarter. about OE the which expense million during our QX, for of related we incurred strategy to accounted

segment approximately from adjusted This the in QX was segment XX.X% million $X.X or million benefits for EBITDA revenues. Our includes amount $XX.X synergies. of Nutrition cost

reminder, Nutrition EBITDA within landed quarter each our the year. third second segment's and the OE QX contribution delivers to its during the new underway quarter. sequential quarterly year's cadence during the the historical As typically QX a decline on largest activity expectations based This pattern historical from investment

acquisition pleased Loan A payments provide loan XXXX, I'm remainder XXXX. the repaid $X.XX today's of a of as our through senior call, pay credit agreement Nutrisystem with balance and the Term conjunction the all do $XXX revolving of and have borrowed expect $XXX on to X, loan, down loan Turning initial as well a we totaling we to March until as closing Health, term facility. B to the sheet. report we the under In Because million into material of Term we Tivity billion secured amounts million to facilities. amounts entered have of that facility addressed not of amortization March required a

meet expect the a than XXXX. We by our to less end of X.Xx ratio objective achieving of of leverage

Turning to for our XXXX. outlook

marketing XXXX Fitness DTC range expected revenue, declines press quarter provided fourth Healthcare both today's improve single-digit lower due year-over-year anticipates we and sequentially marketing a in EBITDA segment from fourth of to Prime quarter segment, percentage improving the segment guidance gross August. from our margins in a revenues in guidance expenses growth Reaffirmed Nutrition noted and stronger in driven fourth decrease year-over-year operational to in which segment health QX quarter care reaffirmed growth Walmart. by This as to annual QX to anticipates and trends EBITDA think margins in margin includes from to better costs. our are retail. Prime margin business We Nutrition As reduced our to in compared release, revenues. fourth by QX, driven segment's guidance high as quarter combined EBITDA our and benefit

on quarter are during from The to call center vendor XXXX million. fourth savings. track the for number we compensated other synergies $XX be initiatives first quarter employees, cost which of highly operations excess full labor $X and savings of to Finally, deliver QX, includes of implemented million synergy will a facilities,

I over to Donato. Donato? will now turn call the back

Donato Tramuto

have In of Tivity there as outcomes. the Adam. the and that loneliness published Dawn you, food acknowledgment briefly around per contribute day future determinants Thank articles me to cigarettes social is on social health now the XX are year, smoking scores health, to ranging from activity touch isolation Health. can and last of poor Allow of medicine, toxic in and and been

of the of self-reported caregivers. have been unhealthy a Tivity healthy our plan platform the We for All social partners, health days. of number on specific Health X members great health as have and address impact believe areas to having these determinants validated major and/or critical these their

Our activity holistic management, approach physical and community and behavioral encompasses engagement modification. nutritional intervention

We the and have long been loneliness. rural thought and leader continue health on industry to be aging,

fitness unique us truly health consumer brands connectivity determinants way. address in nutrition, a social and allows of offer social health-oriented to the Our that

nutrition to and as to address as lower brand the only XX, are well. long And We recognized our life of indeed to beyond and well through support population. by that loneliness well on physical and consumer support demographic We days physical a X study in healthy activity to aging healthy live permission can as as as isolation, activity senior also of XX%. activity. Score loneliness younger But trust as a and the strong consumer Promoter increasing much firm consecutive Net as a improved a more number leader with years sit social helping own as signifying a the not expand

loneliness of care and key social thought Our acquisition this and enablers aging on history are address our partnership leadership and our collaboration to isolation and in supporting movement of and Nutrisystem, not health

and player believe company let make determinants other health is in platform offering healthy isolation to clear. me of key partners. following positioned is active and We it days, a well social of address no that physical impact strong nutrition. of social So as combined crystal today inactivity, Tivity there health. all through a an as areas, which Health well plan is loneliness and addressing The

following points progress. and In key closing, the our year-to-date summarize last quarter

is we we that have both heard within gained all plans, have health season. the to diet Nutrisystem our the X with post as close further solid necessary gaining in in to our you have gained to leading thirdly, and strategic with business; on new business our positioned Just unit And months business one, positive eligible offering, health traction. we the a last momentum into we momentum And care and the two, acquisition, to partners, have number in launched traction, we our entering right the enrollment growth. combined which imperatives segment today, our have a fourth, current increase Nutrisystem of for in return product quarter Nutrition And focus XXXX lives. have ensure investments made of

And as a holistic deliver of preliminary a now and around care positioning And we we XXXX to our health to well work ourselves both required to population fifth, of on well our shout short as months payments approach us to is the has collective the ability focal we on a cost company's team to big XXXX. been as result have have on cash of as the the employee cash well of paid $XXX members and to opportunities revenue strong on and of seven, enrollment million of partnership executed and we a programs, in our more key ahead XX managing imperative doing to debt sixth, leverage in of fiercely to point eighth, nearly result the long-term strategy, out the schedule. and collaborative with paying a with highway the obligatory intervention And organization's expand potential of XX, projections. we their this and have synergies, have driving suite have And clearly executed A-B-C-D strategic Walmart XXXX. a lastly, execute generate schedule. September managing loan great deliver finance positioned ahead This our

the team, key without of just achievable none and customers points dedicated I established closing, loyal a collaborative partners. are In

As me thanks all successful. sincere Thanksgiving who've holiday, we approach to the made this let express company you my Day of

We'll your take now questions.

Operator

[Operator Instructions].

question comes Alex Capital. Furman from first Your from Craig-Hallum

Alex Fuhrman

obviously, that as Great. a I about the Is how Well. of strategy curious continuation offering and big Wisely about nutrition Nutrisystem sounds yesterday's announcement opportunity there's that about a it be should the business. integration to the be thinking you marketing you've ask wanted brand Just kind marketing about new and do Certainly been for strategy beginning talking the very here it what time. get for customer a you of Hi, everyone. you're about new Are like your look how And bulk some what and and trying about be then thinking I'm just the of to XXXX? the Well? anticipating could to that insurance think model, and Is like. your going be, similar business that do sounds this Or acquisition? running we a it can expectation program. your going Wisely of at will sense heavy up just of some is TV the paying a marketing to well. it for like thinking

Donato Tramuto

Sure.

Dawn answer Let's have that.

Dawn Zier

to something brand, It our chronic using then strategy, going our road. X for will down and from our of in our for used talked use advantage the we ways. weight separate be totally of loss that be that This far we've the using is will rollout separate pilots, condition will have is how Nutrisystem we're Great. it, it science discharge we'll and something for we used see takes be we're from talking which different about truly in capabilities. rollout happening caregiver our it to and be be What so food more but first It's to post an it January. opportunity

we're post-discharge to giving to the more X will business-to-business of in more arounds the would of some for a any as will Nutrisystem programs more for or the think caregivers traditional have that come around first wrap any direct channels later could of efforts. we brand-new at consumer. after way we out program. not rollout The more advertising plays, things projections through talking marketing the they're you that marketing not it. this end, our time. and reimbursement about, in revenue building But We're start primarily or against not BXC with see typical now, It's be BXB XXXX. on this But They're

Alex Fuhrman

it I core sense. sounds there's like on being scales business. years it come, makes similar That to marketing mean, business? less that in overall you EBITDA Okay. I a be going And the anticipate guess, to as then Nutrisystem the it to margins would

Adam Holland

I Alex, this is -- Adam. think it's

it's yet. quite more come, think Dawn on that into But soon think tell too probably new to to year. I we the I as look to said, have

Alex Fuhrman

Okay. just lot the sheet. X of a ask That balance I if makes on then sense. And could

the year have decision, you've You over at the just of have to debt that a down guys been paid guided that be think about. for of lot early. the factors that course helpful that Can us you talk would about looking what

Adam Holland

Yes, Alex. sure, A things. of couple

really the businesses, and been long term, on free flow pay thing to appropriately And the available year. to focused and continue down, working are continuing this and the debt. we this working to to businesses the nature, businesses. manage It's businesses to we commitment more next terms are. that's they to options, make capital team in either first early focus This our down and so get are the at on we it important They're we that the on we'll sure to year risk, balance year, next don't ratio getting very sure I albeit in both leverage has healthy move into want and cash investing by while committed balance and team. that both think capital-light profile was these the on interest we're are want beneficial to is which a for do complement feed want for been make investment. we we we of management segments That First, from expense is something Both open over put the and as capital to short-term capital the utilizing of we said, down that focused getting improve in a reason efficient for we've getting sheet. and

Operator

question SunTrust. David from comes from next MacDonald Your

David MacDonald

couple just changed. running about One, year, should A at the And Adam, Is anything cash just the look of free flow, working questions. quick flow guidance well of think and out capital? if hasn't in there? of just terms there to anything cash on we call it's for ahead timing I

Adam Holland

from QX at to inventory factor bring the that it's the given biggest influencers be guidance. Yes, Probably diet number we've year-to-date that levels a the to and is, going you look if to as of ahead one that's could of typically range QX season, question. down would build the great they

David MacDonald

what these bit of outperform Okay. cross mentioned for potential can I've imagine terms ability kind of you And got Donato, can business inside with signed interest chatting you the in Nutrition to continues in when the take bundled sell of room of contracts, being the just to little you're the wins? that? potential to terms a of us and talk some about is who folks SilverSneakers and some of up of kind clients, SilverSneakers level from

Donato Tramuto

then I answer, well. going want Steve as answer I'm to to Absolutely. have

X on fact, are trifecta. who it's not the and It the all, are there know and now million been secure, So first been property. has and in nutrition, and million food living seniors If, loneliness social of connections. has we that it X

I secure, learned that X is also in you already loneliness probably property today the you way If so question, have, last unfortunately, over CEOs, food have they at least what And are and plan plan. health seniors. Tivity have with been you're relationships the X your XX weeks, or the with have and we viewing living these and without health in

You from to they hear have want this you. trusted brand

there now so key there not Steve? what selling, out coming And dialogue, in is or is is renewal have they a Silversneakers is in dialogue contract an Steve a areas. as left that interest back around three of There a may of us. is Steve a because hearing terms just these

Steven Janicak

I XXX%, would Donato. you agree with

conversations that to we the So change. tried

to in ability of with that But taking it, along And we talk -- when where going. role a members. everybody the more our determinants of the engage that have conversation all excitement to the SilverSneakers We regards value social leadership around is about and developed. really comes now is understands that,

do kind do Advantage there's have the we the have fruit which ability population. objectives turns all of will to is their meal and address Medicare of components So around conversations are in And the to manage post-discharge really that. low-hanging their and our clearly around conversation take how then we trying the delivery, we

Donato Tramuto

were Act, XX, We changes writing to success. because social and lot And To information to CMS of that I in out. article lot first was changes all that, helped to is fortunately, honest. be of this on successful in passed bandwagon a the isolation. the of that become X Medicare the happened changes a last months. call efforts, and policy our a Modernization years right over of didn't Chronic with Care the the Sunday's respect we're that have all that of on SilverSneakers New of just the ago, XX Act loneliness now perfectly York that XXXX, one of post discharge, think the And drive whole all tailgating selling Times, Medicare

can bringing that be down is So about is not dialogue see renew dialogue population. in care the contract, our that you Silversneakers all three in venues as we critical the a health how partner about let's costs to

David MacDonald

Okay.

home, of mentioned time, as that an remarks, regular your you more that? Donato, as home quick think And questions. couple a of about engagement watching being we that paid you other do could feeder? for prepared over about or how we you in visits? Just is those for folks should Just right and now paid these be videos fitness think just something at

Donato Tramuto

all above. of the it's think I

up ago, will. started like And as venue of and could studies we used another running there in can on members? gold asking We're these interesting, reimbursed the and it was what at to it, think we engage and have that that not epidemic if venue sign be it. can have, you to the to have found frankly, quite participate also years the started workout. and be for you season season a get Remember a in alternative ago, the could So an surprise. off the we to all by something this very it that to flu ourselves, side, we caught first they're we by these when the get putting few be individuals years up but us I you another flu that few gym kept high there

we'll So business model. have of both venues as future part the

David MacDonald

then just And Okay. question. last

from at additional a the terms there Is looking who be payers terms in any terms that product commitment rollout meaningful the or comments in just there way? nutrition new any additional a in is looking of product they're high. Humana detail in on other this is mentioned may of You for of this side, the

Donato Tramuto

of an bring Humana had could bring with have want seniors. to understands better is what perfectly execution be an of I we have We upfront understanding is you we -- partner the how to done call with and what deal to out a that one not specifically couldn't they've What Yes. initiatives. we that focus.

and the same And go into to should when the very what actual into if Walmart, define And have Walmart to name price that's We are said, as going be just said, we the out of these Berra, do Humana. begin define we We How what outcomes, to it bring, know you you to shouldn't that a can not that opportunity second But it. want limiting it? it philosopher contracts have you similar with my pilot to favorite but you a pilots how mistake. a the kind so be learned XXXX. to How we're will, quite able is Yogi moving around, make once thing you frankly, the wrong don't lessons you pilot want pilot. define do this of do call product? and to XXXX,

Operator

[Operator David next Instructions]. The Styblo from comes question from Jefferies.

David Styblo

health and It business results like had good some in the care positive updates quarter. sounds the

another that kind square your think the guys million. to because you million I'm on lives. XX.X on expectation of curious think I had mentioned XXX,XXX XXXX to I $XX eligible map adding is still the roughly

XXX,XXX, can was in June that sort account would season have the million the So would I on was came color in bid that you and you more forth. to contemplated some that one million? the guys late, XX maybe XXX,XXX of thought already of by sort of give $XX.X so ahead us source have of that known And

just the walk us So progression through maybe there.

Donato Tramuto

the that lose As to is, XXX,XXX end question represent that lives his we chip and folks are lives. specifically? and That's But and left we total CEO used eligible they back, company. all XX as a And net-net, the or to fortunate say, a now you had No. happened new. we've XX.X the in will also mosaic right XXX,XXX love customers and we'll your Obviously, well. that lose have you has a team And the few is may as lives markets and you chip. as for million. as a sales that's that within had of been lost one and there last what we Steve, go from gain pocket between we about were this thanks expand XXX,XXX XXXX, long year, To efforts, you shared the win lose are for markets, August, Each as pocket. customer that with staying the you SilverSneakers. we've But out his you mosaic they this, This I've to million long customer. range of

David Styblo

you accept comments where provider those a Along there few partner you how question questions that have. business lines, face guys And expand you And are to partner from pricing the large regular forward? much in extending perhaps I've price well, to have year. gyms as that, and basis then comes in gotten wanting come pressure extent increase centers, locations an and a terms agreement about couldn't to more price vehicles price been fitness how from those do the the on other in a the you next look as able guys they it what insurer those to appreciate Or like drive might just contracts? sounded to to in sort willing how increases are the of wanted have Okay, that the Tennessee guys about is fitness guys those I on continued investors a of I higher. to the insurers, great. guess, the and increases? they the willing pass up step

Donato Tramuto

one you want This to take? do

Adam Holland

maybe David. sure, start I'll lot the a some you off, package in where maybe of ended. Yes, pieces to There's that

number and the out and have moving is in and of we XX,XXXs that year. One inside of network. the are come of deals the every advantages, look, go we static It a network not folks constantly

that's large to we've especially effective X you way the control meet better -- pressure. Tennessee, always sometimes margin by plans pay some lose voluntary, working to pressure that along but is the advantages adding you degree. it's MA to our to like partners same And managing that like want we're pockets network X of with redirect involuntary. a us. Sometimes are of and who of in able suited locations able new or lose when it's has able States been, to our the you're this, been growing those there's with SilverSneakers always There locations, and way to having other the that And way. United network members you're you're And members, the

Donato Tramuto

are thing arrival since we -- is on add we And that would that that, ago. really as get able been define focused I to my years CEO have the think the to and one stabilized listen, I company X now more

move The to health engaged, first we could check thing box getting enrolled We've plans needle was that. that approved had that people our we off. that the and and done

out brand, of you health coming back believe The you're when the their see to understanding the of that of number also on healthy XX, This them we're is last to long start that you you the medical to as that their members. to out we we passed going days. improve havoc visits, coming we demonstrate what on that a demonstrate on fact has the on new as to reduction second in not focused now can, I is we're passing membership is question, can that the that we And And that your plans is really have SilverSneakers enrollment bucket demonstrate loss bucket. lose pass blossomed is reduce able to to the ratio initiative what can some days, health plans, unhealthy that hospital us months. them That of really XX SilverSneakers what of matters number had indicative demonstrating to we're their in for profit are is you health asked outcomes. to a name coming

by lot Makes the outside think Walmart, do a pressure. traffic balance, with to know, their the plan. am trafficking by you that we and million a And store consumers if partnership tools the they go stores mind way, uniqueness excited other in able through nice take that job. be to he could a class XXXX, also think Steve better want confident. believe, Where do is have I into we to thing at having is will, every have relationship to is box. help And have outcomes to a think that will I we as is care to the XXX of I that, some be as silversneaker going the Walmart I'm to way of I have the keep about Obviously, also that to members potentially pricing gather. the you sense?

David Styblo

some Yes, have right pilots Walmart on that now, That's one helpful. you really most lot the is lens, through biggest you, from revenue buck that X your that's over next Donato, you to for a years? obviously Well Wisely Last the are X of standpoint about of new the guys things just to great. that from a of opportunity bang just everything you're cusp might curious its what excited I'm have launched. kind you for

Donato Tramuto

Yes.

I answer would think ways. X in I that

not for and associated cost. look health. is not plans, not because hemoglobin AXc have is $X most -- of billion at revenue hemoglobin on Yet, diabetic associated is remarks all or that you're at probably an determinants which the health a with example, elevated the we stream horizon, is the a to think you of it's foot for foot that was reality there closing billion the just there my social And when at that ulcers, you're it's you're ulcers eating active. foot that opportunity, I'm to $X correctly even why you When I associated patients. look new or to excited overarching that's ulcers, AXc, take, all

this the one are begin Listen, clearly and I of And is year momentum am on season whole aging. all Steve's X and wider optimistic think, we think investments the But the I that, fitness stream. people the I I of say investments in and into into now revenue new you've with vertical growth. to travel the unit. be we're investments I quite think business business, enter two innovation quite cures more in Nutrition would trends each that frankly, get feeds this vertical nutrition John's And we I for or physical these honestly, making verticals, to the getting leadership, as there. that those under will travel, I have to I and not think also verticals the seen enroll bigger, leadership the And driving time, that's And I are to the population making engaged. more in taller see diet remiss

those over. think what are get I X So excited areas I

Operator

Blair. William from Daniels Ryan from comes question next Your

Nicholas Spiekhout

is there Ryan. Spiekhout be health Like this on be that about big start much Well going to Nick Or Wisely towards I something in focused a that's to effort product, plans? guess, off, I were wondering kind is sales to marketing would the pretty go like was This of that? for you for how more consumer? going

Donato Tramuto

at you why this we having talk when plan take because Steve he's the customers, was about reason he's the two of health able when to contracts portfolio. look the plan them in now post-discharge bring able front entire in talk XX to I'll years about the of on And me have to because and health nearly let don't forget it's customers. this. easy forgets, Everybody comment and Well, maybe

how part Wisely interaction So talk take have instantly, you we to health the second Karen, have of with their maybe extend prepared want into segments. they non-health the plan can the sales plans. the now Well terms and to we do relative about organization this in to prepped

Dawn Zier

you. Thank Sure, Donato.

I it. think John touched on it briefly, but I'll just add to

expand we going through BXB the it's get DTC, to through So the BXBXC. going, be see contacts beginning, And opportunity to make we that there's do and primarily as then we into BXB. primarily yes, at

people received want they've for or to who post-discharge extend So what caregivers. for

Nicholas Spiekhout

Got Nutrisystem? to And you. online would similar order like be mostly then through that

Dawn Zier

That is it how envisioning though. we're

with to and start First, BXBXC. we the the BXB have

Nicholas Spiekhout

guess Got -- go ahead. you. And I sorry,

Donato Tramuto

keep have to up that also in members. silversneakers.com. we and acknowledge there's And to been over now members. have to our to again, We much be be is we going X that the design, XXX,XXX CEO, it. million had population. By changed we When last in as Nick, so building channel able vehicle I years also mind, forget nearly that another X became And has reach

and telegraphing, been will, We the that centers SilverSneakers with population. population. membership have who deal a fitness not with broader They have also Tivity you XX,XXX Prime deal we Health, if only

so with will And partnering them channel. another be

believer am plans, big, I the next the with small, months. a to XX So begin think execute X build let's firm execute and now, start health over quickly. Right this will to out

Nicholas Spiekhout

kind an the your when pay to there? area class look at great. in that. mobile and of there's for kind kind of past, wondering to will if accessing mobile monetize about And I was online, I guess, it, plans comment you sort online of their any potentially Got the That's an SilverSneakers getting updates I been still being or members a know SilverSneakers do future? class there of then, I able guess, going off in about of talked you too.

Donato Tramuto

Steve, you want to take that?

Steven Janicak

Donato. that, Yes. take I'll Yes,

doing this build Donato and viewing participant video gym, this that we the home. is, this then who thought full to it at actually when executed and and going level they're would. somebody would are going is primarily that we what be the So view What that that we the started was people same program, a have as actually for really can at they're found said, theory videos, engaging we we're and just X

for know lot we this. the hypothesis into Which It's it be. at videos what, the I Our do and it I as thought believe people a are going facility not looking that easier. is going, you would intimidating we we makes this, going continue will the That's combination gym Or do look in. all something options, including a we visits? Or at Once build go is there do to just do we thereof. approach with the up?

have as more bit to through a progress continue data little to get it. we We

Donato Tramuto

discussed plans. health I Yes. the obviously, aligned your is, to goal conversations plans. get we to And question people active. is. have And could there health if That and outcome the be not is what we with more is various interested, had what

used or going not vehicle this said, may And it be so get We'll to explore and was Steve's to huge a payment. the to now exploring to stop direct a But a try could as there finding, whether that. be to we're point, people gym. that not

Operator

Your question from from next Jaffray. Jessica Piper comes

Unidentified Analyst

I'm on Wieland. Sean for

that little any hoping how in today. new of about to then a And future? are expand monetizing extent to detail understand more the guys you Just just bit opportunity the monetization the

Donato Tramuto

Perfect.

Unidentified Company Representative

Yes, this is [indiscernible].

built loss as is delivery newly and today, run food So to complement weight a program. our

a And cetera. recipes, also a sell per So It's tracker. that that way whether customer. way et it's we revenue a the share content to it's advice, that's we increase

basically We will right we future complement Is we it's and in the people, revenue take might can be but a as per as to ways that customer. of that-- increasing each looking meet way now

Unidentified Company Representative

that's perfect. think I

Operator

back questions the over this additional I There presenters. at are no time. will turn to the call

Donato Tramuto

with Well, all appreciate day thank again the a on and you you of this Thanksgiving. look I and again, time wish all, happy forward late to, connecting and do you

Operator

concludes today's conference this gentlemen, call. and participating. you for Ladies Thank

disconnect. You may now

Tivity Health (TVTY) 12 Nov 192019 Q3 Earnings call transcript