EX-99.1 2 a991multiplanpressrelease-.htm EX-99.1 Document
EXHIBIT 99.1
RELEASE
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MultiPlan Reports Second Quarter 2023 Results
–Q2 2023 Revenues of $238.0 million, Net Loss of $36.4 million, and Adjusted EBITDA of $152.7 million
–Identified potential medical cost savings of approximately $5.7 billion in Q2 2023, up 2% from Q1 2023
–In Q2 2023, acquired Benefits Science Technologies, a leading data science company, and partnered with ECHO Health to offer a B2B healthcare payments service
NEW YORK, NY — August 2, 2023 — MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE: MPLN), a leading value-added provider of data analytics and technology-enabled end-to-end cost management, payment, and revenue integrity solutions to the U.S. healthcare industry, today reported financial results for the second quarter ended June 30, 2023.
“The second quarter marked an inflection point for MultiPlan,” said Dale White, CEO of MultiPlan. “We executed on several key initiatives within our Growth Plan. These included the acquisition of Benefits Science Technologies (“BST”), which accelerates our new Data & Decision Science service line, and our new partnership with ECHO Health, which adds a B2B healthcare payments service to our suite of solutions. These actions, along with further progress we have made toward the launch of several new products to enhance our core business, position us for growth in 2024 and set us on a path of transformation over the next several years.”

“Also, a normalizing volume environment and favorable savings mix helped us deliver second quarter results at the high end of our expectations and in-line with our prior quarter, providing a solid baseline for the second half of 2023,” Mr. White continued. “Based on our second quarter results and our expectations for the second half, we are modestly increasing the midpoint of our revenue guidance range for full-year 2023, before the contribution of BST.”

Mr. White concluded, “As we move forward, we remain laser-focused on executing the plan we outlined at our Investor Day in June: leveraging the enormous strength of our platform; transforming our business by expanding our products and services; and unlocking the value of our franchise by accelerating our growth, diversifying our revenues, and improving our capital structure.”
Business and Financial Highlights
•Revenues of $238.0 million for Q2 2023, a decrease of 18.0%, compared to revenues of $290.1 million for Q2 2022. BST contributed $2.1 million to revenues in Q2 2023, reflecting a partial quarter since the close of the acquisition on May 8, 2023.
•Net loss of $36.4 million for Q2 2023, compared to net income of $13.5 million for Q2 2022.
•Adjusted EBITDA of $152.7 million for Q2 2023, compared to Adjusted EBITDA of $209.6 million for Q2 2022.
•Net cash provided by operating activities of $7.7 million for Q2 2023, compared to net cash provided by operating activities of $40.7 million for Q2 2022.
•Free Cash Flow of $(24.3) million for Q2 2023, compared to Free Cash Flow of $21.8 million for Q2 2022.
•In Q2 2023, the Company used $141.3 million of cash for the acquisition of Benefits Science LLC (“Benefits Science Technologies” or “BST”) and used $7.4 million to repurchase shares of its common stock in the open market.


•The Company ended Q2 2023 with $89.8 million of cash and cash equivalents on the balance sheet.
•The Company processed approximately $43.1 billion in claim charges during the second quarter of 2023, identifying potential medical cost savings of approximately $5.7 billion.
2023 Financial Guidance1
The Company is updating its Full Year 2023 guidance, as detailed in the table below:
Financial Metric
Prior FY 2023 Guidance (excluded BST)
Updated FY 2023 Guidance (includes BST)
Revenues$925 million to $975 million$950 million to $980 million
Adjusted EBITDA1
$600 million to $650 million$615 million to $635 million
Interest expense$325 million to $340 million$325 million to $335 million
Cash flow from operations2
$175 million to $215 million$160 million to $190 million
Capital expenditures$100 million to $115 million$110 million to $120 million
Depreciation$70 million to $75 million$70 million to $75 million
Amortization of intangible assets$335 million to $345 million$340 million to $345 million
Effective tax rate25% to 28%25% to 28%

Our updated FY 2023 guidance includes approximately $12 million of revenues and adjusted EBITDA of $(2) million from the contribution of BST post-closing of the transaction.
The Company anticipates Q3 2023 revenues between $235 million and $250 million and Adjusted EBITDA1 between $150 million and $160 million.
Conference Call Information
The Company will host a conference call today, Wednesday, August 2, 2023 at 10:00 a.m. U.S. Eastern Time (ET) to discuss its financial results. Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will receive access details via email. Pre-registration may be completed at any time up to and following the call start time.

To pre-register, go to: https://www.netroadshow.com/events/login?show=1b7fdc10&confId=52126.
A live webcast of the conference call can be accessed through the Investor Relations section of the Company’s website at investors.multiplan.com/events-and-presentations. Participants should join the webcast ten minutes prior to the start of the conference call. The earnings press release and a supplemental slide deck will also be available on this section of the Company’s website.
For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the Investor Relations section of the Company’s website or by dialing (866) 813-9403 or (929) 458-6194. The replay access code is 964758.
1 We have not reconciled the forward-looking Adjusted EBITDA guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction-related expenses, and certain fair value measurements, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
2 Cash flow from operations guidance includes the impact of approximately $22 million that MultiPlan paid in Q1 2023 in connection with the settlement of our previously disclosed Delaware stockholder litigation.




About MultiPlan
MultiPlan is committed to helping healthcare payors manage the cost of care, improve their competitiveness, and inspire positive change. Leveraging sophisticated technology, data analytics, and a team rich with industry experience, MultiPlan interprets customers' needs and customizes innovative solutions that combine its payment and revenue integrity, network-based, and analytics-based services. MultiPlan is a trusted partner to over 700 healthcare payors in the commercial health, government, and property and casualty markets. For more information, visit www.multiplan.com.



Investor Relations Contact
Luke Montgomery, CFA
SVP, Finance & Investor Relations
MultiPlan
866-909-7427
investor@multiplan.com
Shawna Gasik
AVP, Investor Relations
MultiPlan
866-909-7427
investor@multiplan.com


Forward Looking Statements

This press release includes statements that express our management’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements”. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “forecasts,” “intends,” “plans,” “may,” “will,” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this press release, including the discussion of 2023 outlook and guidance, plans to expand or enhance the Company’s products and service lines, and the long-term prospects of the Company. Such forward-looking statements are based on available current market information and management’s expectations, beliefs and forecasts concerning future events impacting the business. Although we believe that these forward-looking statements are based on reasonable assumptions at the time they are made, you should be aware that these forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These factors include: the ongoing COVID-19 pandemic and its related effects on our results of operations, financial performance, liquidity or other financial metrics; loss of our customers, particularly our largest customers; trends in the U.S. healthcare system, including recent trends of unknown duration of reduced healthcare utilization and increased patient financial responsibility for services; inability to preserve or increase our existing market share or the size of our preferred provider networks; effects of competition; effects of pricing pressure; the inability of our customers to pay for our services; decreases in discounts from providers; the loss of our existing relationships with providers; the loss of key members of our management team or inability to maintain sufficient qualified personnel; pressure to limit access to preferred provider networks; the ability to achieve the goals of our strategic plans and recognize the anticipated strategic, operational, growth and efficiency benefits when expected; our ability to enter new lines of business and broaden the scope of our services; our ability to identify, complete and successfully integrate acquisitions; our ability to obtain additional financing; changes in our industry and in industry standards and technology; interruptions or security breaches of our information technology systems and other cybersecurity attacks; our ability to protect proprietary information, processes and applications; our ability to maintain the licenses or rights of use for the software we use; our inability to expand our network infrastructure; changes in accounting principles or the incurrence of impairment charges; our ability to remediate any material weaknesses or maintain effective internal controls over financial reporting; our ability to continue to attract, motivate and retain a large number of skilled employees, and adapt to the effects of inflationary pressure on wages; changes in our regulatory environment, including healthcare law and regulations; the expansion of privacy and security laws; heightened enforcement activity by government agencies; our ability to pay interest and principal on our notes and other indebtedness; lowering or withdrawal of our credit ratings; the possibility that we may be adversely affected by other political, economic, business, and/or competitive factors; adverse outcomes related to litigation or governmental proceedings; other factors disclosed in our Securities and Exchange Commission (“SEC”) filings from time to time, including, without limitation, those factors described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 and our Quarterly Report for the three months ended March 31, 2023; and other factors beyond our control. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

There can be no assurance that future developments affecting our business will be those that we have anticipated. Forward-looking statements speak only as of the date made.

We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.



Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”), this press release contains certain non-GAAP financial measures, including EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio. A non-GAAP financial measure is generally defined as a numerical measure of a company’s financial or operating performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP.

EBITDA, Adjusted EBITDA, Free Cash Flow, Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio are supplemental measures of MultiPlan’s performance that are not required by or presented in accordance with GAAP. These measures are not measurements of our financial or operating performance under GAAP, have limitations as analytical tools and should not be considered in isolation or as an alternative to net income, cash flows or any other measures of performance prepared in accordance with GAAP.

EBITDA represents net income before interest expense, interest income, income tax provision, depreciation, amortization of intangible assets, and non-income taxes. Adjusted EBITDA is EBITDA as further adjusted by certain items as described in the table below.

In addition, in evaluating EBITDA and Adjusted EBITDA you should be aware that, in the future, we may incur expenses similar to the adjustments in the presentation of EBITDA and Adjusted EBITDA. The presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The calculations of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. Based on our industry and debt financing experience, we believe that EBITDA and Adjusted EBITDA are customarily used by investors, analysts and other interested parties to provide useful information regarding a company’s ability to service and/or incur indebtedness.

We also believe that Adjusted EBITDA is useful to investors and analysts in assessing our operating performance during the periods these charges were incurred on a consistent basis with the periods during which these charges were not incurred. Both EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of the limitations are:

•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•EBITDA and Adjusted EBITDA do not reflect interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

•EBITDA and Adjusted EBITDA do not reflect our tax expense or the cash requirements to pay our taxes; and

•Although depreciation and amortization are non-cash charges, the tangible assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements.

MultiPlan’s presentation of Adjusted EBITDA should not be construed as an inference that our future results and financial position will be unaffected by unusual items.

Free Cash Flow is defined as net cash provided by operating activities less capital expenditures, all as disclosed in the Statements of Cash Flows. Unlevered Free Cash Flow is defined as net cash provided by operating activities less capital expenditures, plus cash interest paid, all as disclosed in the Statements of Cash Flows. Free Cash Flow and Unlevered Free Cash Flow are measures of our operational performance used by management to evaluate our


business after purchases of property and equipment and, in the case of Unlevered Free Cash Flow, prior to the impact of our capital structure. Free Cash Flow and Unlevered Free Cash Flow should be considered in addition to, rather than as a substitute for, consolidated net income as a measure of our performance and net cash provided by operating activities as a measure of our liquidity. Additionally, MultiPlan’s definitions of Free Cash Flow and Unlevered Free Cash Flow are limited, in that they do not represent residual cash flows available for discretionary expenditures, due to the fact that the measures do not deduct the payments required for debt service, in the case of Unlevered Free Cash Flow, and other contractual obligations or payments made for business acquisitions.

Adjusted Cash Conversion Ratio is defined as Unlevered Free Cash Flow divided by Adjusted EBITDA. MultiPlan believes that the presentation of the Adjusted Cash Conversion Ratio provides useful information to investors because it is a financial performance measure that shows how much of its Adjusted EBITDA MultiPlan converts into Unlevered Free Cash Flow.




MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
June 30,
2023		December 31,
2022
Assets
Current assets:
Cash and cash equivalents$89,757 $334,046 
Restricted cash6,137 6,513 
Trade accounts receivable, net69,904 78,907 
Prepaid expenses20,523 22,244 
Prepaid taxes17,195 1,351 
Other current assets, net5,512 3,676 
Total current assets209,028 446,737 
Property and equipment, net248,732 232,835 
Operating lease right-of-use assets22,618 24,237 
Goodwill3,829,356 3,705,199 
Other intangibles, net2,805,148 2,940,201 
Other assets, net21,508 21,895 
Total assets$7,136,390 $7,371,104 
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable$15,489 $13,295 
Accrued interest56,866 57,982 
Operating lease obligation, short-term5,322 6,363 
Current portion of long-term debt13,250 13,250 
Accrued compensation28,413 34,568 
Accrued legal contingencies12,423 33,923 
Other accrued expenses15,641 16,463 
Total current liabilities147,404 175,844 
Long-term debt4,603,583 4,741,856 
Operating lease obligation, long-term19,716 20,894 
Private Placement Warrants and Unvested Founder Shares4,836 2,442 
Deferred income taxes592,331 639,498 
Other liabilities— 28 
Total liabilities5,367,870 5,580,562 
Commitments and contingencies (Note 6)
Shareholders’ equity:
Shareholder interests
Preferred stock, $0.0001 par value — 10,000,000 shares authorized; no shares issued——
Common stock, $0.0001 par value — 1,500,000,000 shares authorized; 667,381,255 and 666,290,344 issued; 649,480,795 and 639,172,938 shares outstanding67 67 
Additional paid-in capital2,338,509 2,330,444 
Retained deficit(443,771)(347,800)
Treasury stock — 17,900,460 and 27,117,406 shares(126,285)(192,169)
Total shareholders’ equity1,768,520 1,790,542 
Total liabilities and shareholders’ equity$7,136,390 $7,371,104 


MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
(in thousands, except share and per share data)
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenues$237,991 $290,128 $474,585 $588,174 
Costs of services (exclusive of depreciation and amortization of intangible assets shown below)59,007 49,977 113,857 97,049 
General and administrative expenses39,750 40,085 71,217 72,673 
Depreciation18,901 17,171 37,107 33,767 
Amortization of intangible assets85,626 85,127 170,753 170,281 
Total expenses203,284 192,360 392,934 373,770 
Operating income34,707 97,768 81,651 214,404 
Interest expense82,475 72,696 165,903 144,141 
Interest income(2,366)(46)(5,605)(58)
Gain on extinguishment of debt — — (36,778)— 
Gain on investments — — — (289)
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares763 5,149 2,394 (7,592)
Net (loss) income before taxes(46,165)19,969 (44,263)78,202 
(Benefit) provision for income taxes(9,795)6,457 (8,102)20,712 
Net (loss) income$(36,370)$13,512 $(36,161)$57,490 
Weighted average shares outstanding – Basic643,339,328 639,001,506 640,996,659 638,750,938 
Weighted average shares outstanding – Diluted643,339,328 640,097,349 640,996,659 639,709,247 
Net (loss) income per share – Basic$(0.06)$0.02 $(0.06)$0.09 
Net (loss) income per share – Diluted$(0.06)$0.02 $(0.06)$0.09 
Comprehensive (loss) income$(36,370)$13,512 $(36,161)$57,490 


MULTIPLAN CORPORATION
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
Six Months Ended June 30,
20232022
Operating activities:
Net (loss) income$(36,161)$57,490 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation37,107 33,767 
Amortization of intangible assets170,753 170,281 
Amortization of the right-of-use asset2,865 3,339 
Stock-based compensation8,522 7,234 
Deferred income taxes(47,167)(59,481)
Non-cash interest costs5,106 5,192 
Gain on extinguishment of debt (36,778)— 
Gain on equity investments — (289)
Loss on disposal of property and equipment243 2,785 
Loss (gain) on change in fair value of Private Placement Warrants and Unvested Founder Shares2,394 (7,592)
Changes in assets and liabilities:
Accounts receivable, net11,056 5,900 
Prepaid expenses and other assets522 9,888 
Prepaid taxes(15,844)5,064 
Operating lease obligation(3,513)(5,403)
Accounts payable, accrued expenses, legal contingencies and other(27,205)7,464 
Net cash provided by operating activities71,900 235,639 
Investing activities:
Purchases of property and equipment(55,095)(43,399)
Proceeds from sale of investment— 289 
Purchase of equity investments— (15,000)
BST Acquisition, net of cash acquired(141,294)— 
Net cash used in investing activities(196,389)(58,110)
Financing activities:
Repurchase of 5.750% Notes(99,954)— 
Repayments of Term Loan B(6,625)(6,625)
Taxes paid on settlement of vested share awards(457)(2,196)
Purchase of treasury stock(13,140)— 
Net cash used in financing activities(120,176)(8,821)
Net (decrease) increase in cash, cash equivalents and restricted cash(244,665)168,708 
Cash, cash equivalents and restricted cash at beginning of period340,559 188,379 
Cash, cash equivalents and restricted cash at end of period$95,894 $357,087 
Cash and cash equivalents$89,757 $354,310 
Restricted cash6,137 2,777 
Cash, cash equivalents and restricted cash at end of period$95,894 $357,087 
Noncash investing and financing activities:
Purchases of property and equipment not yet paid$4,206 $4,589 
Operating lease right-of-use assets obtained in exchange for operating lease liabilities$— $40 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest$(161,484)$(139,013)
Income taxes, net of refunds$(55,533)$(72,452)


MULTIPLAN CORPORATION
Calculation of EBITDA and Adjusted EBITDA

Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Net income (loss)$(36,370)$13,512 $(36,161)$57,490 
Adjustments:
Interest expense82,475 72,696 165,903 144,141 
Interest income(2,366)(46)(5,605)(58)
(Benefit) provision for income taxes(9,795)6,457 (8,102)20,712 
Depreciation18,901 17,171 37,107 33,767 
Amortization of intangible assets85,626 85,127 170,753 170,281 
Non-income taxes662 440 1,003 993 
EBITDA$139,133 $195,357 $324,898 $427,326 
Adjustments:
Other expenses, net(1)
353 2,543 238 1,653 
Integration expenses788 1,024 1,831 2,696 
Change in fair value of Private Placement Warrants and unvested founder shares763 5,149 2,394 (7,592)
Transaction-related expenses6,818 1,457 7,836 4,012 
Gain on extinguishment of debt — — (36,778)— 
Gain on investments— — — (289)
Stock-based compensation4,827 4,104 8,522 7,234 
Adjusted EBITDA$152,682 $209,634 $308,941 $435,040 
(1) "Other expenses, net" represent miscellaneous non-recurring income, miscellaneous non-recurring expense, gain or loss on disposal of assets, impairment of other assets, gain or loss on disposal of leases, tax penalties, and non-integration related severance costs.

Calculation of Unlevered Free Cash Flow and Adjusted Cash Conversion Ratio

Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2023202220232022
Net cash provided by operating activities$7,685 $40,702 $71,900 $235,639 
Purchases of property and equipment(31,994)(18,945)(55,095)(43,399)
Free Cash Flow(24,309)21,757 16,805 192,240 
Interest paid99,767 92,816 161,484 139,013 
Unlevered Free Cash Flow$75,458 $114,573 $178,289 $331,253 
Adjusted EBITDA$152,682 $209,634 $308,941 $435,040 
Adjusted Cash Conversion Ratio49 %55 %58 %76 %
Net cash used in investing activities$(173,288)(33,945)$(196,389)$(58,110)
Net cash used in financing activities$(10,739)(3,551)$(120,176)$(8,821)