Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-40028 | |
Entity Registrant Name | Signify Health, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-3481223 | |
Entity Address, Address Line One | 800 Connecticut Avenue | |
Entity Address, City or Town | Norwalk | |
Entity Address, State or Province | CT | |
Entity Address, Postal Zip Code | 06854 | |
City Area Code | 203 | |
Local Phone Number | 541-4600 | |
Title of 12(b) Security | Class A common stock, par value $0.01 per Share | |
Trading Symbol | SGFY | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001828182 | |
Amendment Flag | false | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 176,317,381 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 57,372,117 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 451.3 | $ 678.5 |
Accounts receivable, net | 220.7 | 217.2 |
Contract assets | 132.5 | 84.3 |
Restricted cash | 2.3 | 5.7 |
Prepaid expenses and other current assets | 19.1 | 14.9 |
Total current assets | 825.9 | 1,000.6 |
Property and equipment, net | 23.4 | 23.7 |
Goodwill | 796.4 | 597.1 |
Intangible assets, net | 540.2 | 455.3 |
Operating lease right-of-use assets | 21.3 | 0 |
Deferred tax assets | 53.5 | 38.8 |
Other assets | 10.7 | 11.7 |
Total assets | 2,271.4 | 2,127.2 |
Current liabilities | ||
Accounts payable and accrued expenses | 105.5 | 136.7 |
Contract liabilities | 44 | 32.9 |
Current maturities of long-term debt | 3.5 | 3.5 |
Other current liabilities | 18.3 | 10 |
Total current liabilities | 171.3 | 183.1 |
Long-term debt | 334.5 | 334.9 |
Contingent consideration | 30.6 | 0 |
Customer EAR liability | 84 | |
Tax receivable agreement liability | 56.3 | 56.3 |
Deferred tax liabilities | 22.4 | 0 |
Noncurrent operating lease liabilities | 25.2 | 0 |
Other noncurrent liabilities | 1.2 | 11.4 |
Total liabilities | 725.5 | 634.3 |
Commitments and Contingencies | ||
Additional paid-in capital | 1,160 | 1,101.3 |
Retained earnings | 8.4 | 19.7 |
Contingently redeemable noncontrolling interest | 375.1 | 369.6 |
Total stockholders' equity | 1,545.9 | 1,492.9 |
Total liabilities and stockholders' equity | 2,271.4 | 2,127.2 |
Class A Common Stock | ||
Current liabilities | ||
Common stock | 1.8 | 1.7 |
Class B Common Stock | ||
Current liabilities | ||
Common stock | $ 0.6 | $ 0.6 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Class A Common Stock | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 176,232,513 | 170,987,365 |
Common stock outstanding (in shares) | 176,232,513 | 170,987,365 |
Class B Common Stock | ||
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock issued (in shares) | 57,313,051 | 56,838,744 |
Common stock outstanding (in shares) | 57,313,051 | 56,838,744 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 216.5 | $ 180 |
Operating expenses | ||
Service expense (exclusive of depreciation and amortization shown below) | 114.5 | 98.5 |
Selling, general and administrative expense (exclusive of depreciation and amortization, shown below) | 70.3 | 57.3 |
Transaction-related expenses | 3.2 | 5.6 |
Depreciation and amortization | 18 | 16.7 |
Total operating expenses | 206 | 178.1 |
Income from operations | 10.5 | 1.9 |
Interest expense | 4 | 6.8 |
Other (income) expense | 28.8 | 56.7 |
Other (income) expense, net | 32.8 | 63.5 |
Loss before income taxes | (22.3) | (61.6) |
Income tax benefit | (6) | (9.9) |
Net loss | (16.3) | $ (51.7) |
Net income (loss) attributable to parent | (10.9) | |
Net loss attributable to noncontrolling interest | $ (5.4) | |
Loss per share of Class A common stock | ||
Basic (in dollars per share) | $ (0.06) | $ (0.14) |
Diluted (in dollars per share) | $ (0.06) | $ (0.14) |
Weighted average shares of Class A common stock outstanding | ||
Basic (in shares) | 172,761,665 | 165,486,015 |
Diluted (in shares) | 172,761,665 | 165,486,015 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' / Members’ Equity - 3 months ended Mar. 31, 2022 - USD ($) $ in Millions | Total | Cumulative Effect, Period of Adoption, Adjustment | Class A Common Stock | Class B Common Stock | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional paid-in capital | Non-controlling interest | Retained earnings (Accumulated deficit) | Retained earnings (Accumulated deficit)Cumulative Effect, Period of Adoption, Adjustment |
Increase (Decrease) in Members' Equity [Roll Forward] | ||||||||||
Net loss prior to Reorganization Transactions | $ (16.3) | $ (5.4) | $ (10.9) | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 170,987,365 | 56,838,744 | 170,987,365 | 56,838,744 | ||||||
Beginning balance at Dec. 31, 2021 | 1,492.9 | $ (0.4) | $ 1.7 | $ 0.6 | $ 1,101.3 | 369.6 | 19.7 | $ (0.4) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Equity-based compensation (in shares) | 492,383 | |||||||||
Equity-based compensation | 6.6 | 2.9 | 3.7 | |||||||
RSU releases to Class A common stock (in shares) | 57,651 | |||||||||
Proceeds from exercises of stock options | 1.6 | 1.2 | 0.4 | |||||||
Proceeds from exercises of stock options (in shares) | 407,287 | |||||||||
Tax payments on behalf of non-controlling interest | (0.3) | (0.3) | ||||||||
Exchange of LLC units (in shares) | 18,076 | (18,076) | ||||||||
Exchange of LLC units | 0 | 0.1 | (0.1) | |||||||
Issuance of Class A common stock in connection with Caravan Health acquisition (in shares) | 4,762,134 | |||||||||
Issuance of Class A common stock in connection with Caravan Health acquisition | 61.8 | $ 0.1 | 54.5 | 7.2 | ||||||
Net loss | (16.3) | (5.4) | (10.9) | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 176,232,513 | 57,313,051 | 176,232,513 | 57,313,051 | ||||||
Ending balance at Mar. 31, 2022 | $ 1,545.9 | $ 1.8 | $ 0.6 | $ 1,160 | $ 375.1 | $ 8.4 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating activities | ||
Net loss | $ (16.3) | $ (51.7) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 18 | 16.7 |
Equity-based compensation | 6.6 | 2.5 |
Customer equity appreciation rights | 6.5 | 4.9 |
Remeasurement of customer equity appreciation rights | 28.9 | 56.8 |
Amortization of deferred financing fees | 0.6 | 0.7 |
Amortization of right-of-use assets | 1.7 | |
Remeasurement of contingent consideration | 0.1 | 0.2 |
Deferred income taxes | (12.9) | (14) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1.9) | 101.2 |
Prepaid expenses and other current assets | (2.3) | 2.4 |
Contract assets | (39.1) | (33.5) |
Other assets | 1.3 | (1) |
Accounts payable and accrued expenses | (32.1) | (13.8) |
Contract liabilities | 11.1 | 14.6 |
Other current liabilities | (0.7) | 1.9 |
Noncurrent lease liabilities | (1.9) | |
Other noncurrent liabilities | 0.1 | (1.2) |
Net cash (used in) provided by operating activities | (32.3) | 86.7 |
Investing activities | ||
Capital expenditures - property and equipment | (1.7) | (0.7) |
Capital expenditures - internal-use software development | (6.8) | (5.7) |
Purchase of long-term investment | (0.3) | 0 |
Business combinations, net of cash acquired | (189.6) | 0 |
Net cash used in investing activities | (198.4) | (6.4) |
Financing activities | ||
Repayment of long-term debt | (0.9) | (1) |
Repayments of borrowings under financing agreement | (0.3) | (0.3) |
Distributions to/on behalf of non-controlling interest members | (0.3) | 0 |
Proceeds from IPO, net | 0 | 604.8 |
Proceeds related to the issuance of common stock under stock plans | 1.6 | 0.1 |
Net cash provided by financing activities | 0.1 | 603.6 |
(Decrease) increase in cash, cash equivalents and restricted cash | (230.6) | 683.9 |
Cash, cash equivalents and restricted cash - beginning of period | 684.2 | 77 |
Cash, cash equivalents and restricted cash - end of period | 453.6 | 760.9 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 3.3 | 4.8 |
Cash payments, net of refunds, for taxes | 0 | (0.1) |
Noncash transactions | ||
Capital expenditures not yet paid | 0.9 | 0.6 |
Assumption of liabilities from New Remedy Corp | 0 | 26 |
Issuance of common stock related to acquisition | 60 | 0 |
Items arising from LLC interest ownership exchanges: | ||
Establishment of liabilities under tax receivable agreement | $ (0.1) | $ 0 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Nature of Operations Signify Health, Inc. (referred to herein as “we”, “our”, “us”, “Signify Health” or the “Company”) was incorporated in the state of Delaware on October 1, 2020 and was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related reorganization transactions as described below. As a result of the reorganization transactions in February 2021, we control, and therefore consolidate the operations of Cure TopCo, LLC (“Cure TopCo”) and its direct and indirect subsidiaries. Cure TopCo is a Delaware limited liability company formed on November 3, 2017. Cure TopCo has adopted a holding company structure and is the indirect parent company of Signify Health, LLC (“Signify”), a Delaware limited liability company. Signify was formed on November 3, 2017. Operations are performed through our wholly-owned subsidiaries. We are a healthcare platform that leverages advanced analytics, technology and nationwide healthcare provider networks to create and power value-based payment programs. Our customers include health plans, governments, employers, health systems and physician groups. We operate in two segments of the value-based healthcare payment industry: payment models based on individual episodes of care, or the Episodes of Care Services segment, and in-home health evaluations (“IHE”), or the Home & Community Services segment. Payment models based on individual episodes of care organize or bundle payments for all, or a substantial portion of, services received by a patient in connection with an episode of care, such as a surgical procedure, particular condition or other reason for a hospital stay. IHEs are health evaluations performed by a clinician in the home to support payors’ participation in Medicare Advantage and other government-run managed care plans. Our solutions support value-based payment programs by aligning financial incentives around outcomes, providing tools to health plans and healthcare organizations designed to assess and manage risk and identify actionable opportunities for improved patient outcomes, care coordination and cost-savings. Through our platform, we coordinate what we believe is a holistic suite of clinical, social, and behavioral services to address an individual’s healthcare needs and prevent adverse events that drive excess cost, all while shifting services towards the home. On March 1, 2022, we acquired Caravan Health, Inc. (“Caravan Health”), see Note 4. Business Combinations. With this combination, we will now be able to provide a broader range of value-based and shared savings models from advanced primary care to specialty care bundles to total cost of care programs. Initial Public Offering On February 16, 2021, we closed an initial public offering (“IPO”) of 27,025,000 shares of our Class A common stock at a public offering price of $24 per share, which included 3,525,000 shares issued pursuant to the full exercise of the underwriters’ over-allotment option. We received gross proceeds of $648.6 million, which resulted in net cash proceeds of $609.7 million after deducting underwriting discounts and commissions of $38.9 million and before fees and expenses incurred in connection with the IPO and paid for by Cure TopCo. We used the proceeds to purchase newly-issued membership interests from Cure TopCo at a price per interest equal to the IPO price of our Class A common stock, net of the underwriting discount and commissions. Reorganization Transactions In connection with the IPO, Signify Health and Cure TopCo completed a series of transactions (“Reorganization Transactions”), the effects of which included, among other things, Signify Health becoming the controlling shareholder of Cure TopCo. As of March 31, 2022, we owned approximately 75.5% of the economic interest in Cure TopCo. The non-controlling interest, consisting of certain pre-IPO members who retained their equity ownership in Cure TopCo subsequent to the Reorganization Transactions owned the remaining 24.5% economic interest in Cure TopCo. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation These Condensed Consolidated Financial Statements are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and following the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements included in this report should be read in conjunction with the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. In our opinion, they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results of interim periods. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for future interim periods or the entire fiscal year. Our quarterly results of operations, including our revenue, income from operations, net loss and cash flows, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our interim results should not be relied upon as an indication of future performance. For the periods subsequent to the Reorganization Transactions effective February 12, 2021, the Condensed Consolidated Financial Statements represent Signify Health and our consolidated subsidiaries, including Cure TopCo. For the periods prior to the Reorganization Transactions, the condensed consolidated financial statements represent Cure TopCo and its consolidated subsidiaries, see Note 1 Nature of Operations . Signify Health was formed for the purpose of the IPO, which was effective in February 2021 and had no activities of its own prior to such date. We are a holding company and our sole material asset is a controlling ownership interest in Cure TopCo. The Condensed Consolidated Financial Statements include the accounts and financial statements of our wholly-owned subsidiaries and variable interest entities (“VIE”s) where we are the primary beneficiary. See Note 5 Variable Interest Entities. Results of operations of VIEs are included from the dates we became the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. We have two operating segments, Home & Community Services and Episodes of Care Services as described in Note 1 Nature of Operations . Use of Estimates The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions affecting the reported amounts in our Condensed Consolidated Financial Statements and accompanying notes. These estimates are based on information available as of the date of the Condensed Consolidated Financial Statements; therefore, actual results could differ from those estimates. The significant estimates underlying our Condensed Consolidated Financial Statements include revenue recognition; allowance for doubtful accounts; recoverability of long-lived assets, intangible assets and goodwill; loss contingencies; accounting for business combinations, including amounts assigned to definite and indefinite lived intangible assets and contingent consideration; customer equity appreciation rights; and equity-based compensation. As of March 31, 2022, the COVID-19 pandemic continues to evolve and impact our Episodes of Care Services segment due to the passage of time between episode initiation and the performance and subsequent recognition of revenue for our services; See Note 3 The COVID-19 Pandemic . As a result, many of our estimates and assumptions have required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in the future. Comprehensive Income (Loss) We have not identified any incremental items that would be considered a component of comprehensive income (loss) and accordingly a statement of comprehensive income (loss) is not reflected in the Condensed Consolidated Financial Statements because net loss and comprehensive loss are the same. Restricted Cash Under our Master Agreement with the Centers for Medicare and Medicaid Services (“CMS”), we were required to place certain funds in escrow for the benefit of CMS. These amounts, known as a Secondary Repayment Source (“SRS”), were primarily based on the size of our participation in the legacy CMS Bundled Payments for Care Improvement (“BPCI”) program, the predecessor program of the Bundled Payments for Care Improvement - Advanced initiative (“BPCI-A”). These funds were available to CMS as a supplemental payment source if we failed to pay amounts owed to CMS. Under the agreement, the funds are returned to us 18 months after the conclusion of the effective period of the CMS Master Agreement, or when all financial obligations to CMS are fulfilled. As of December 31, 2021, there was $0.5 million in the SRS account included in restricted cash on the Condensed Consolidated Balance Sheets related to BPCI-A, all of which was released in the first quarter 2022. We also withhold a portion of shared savings to customers in a “holding pool” to cover any potential subsequent negative adjustments through CMS’s subsequent reconciliation true-up process. These funds are distributed to customers following the final true-up if there is no negative adjustment. These amounts represent consideration payable to the customer and therefore have reduced revenue in the period earned. The funds have been received by us from CMS and are held in a separate cash account, included as restricted cash on the Condensed Consolidated Balance Sheets. Since the funds are payable to the customer at the point the final CMS true-up is made or a negative adjustment is due to us, the amounts are also included in accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets. As of March 31, 2022 and December 31, 2021, there was $1.8 million and $5.2 million of restricted cash in the holding pool, respectively. In addition, as of March 31, 2022 we hold $0.5 million in a separate cash account, included as restricted cash on the Condensed Consolidated Balance Sheets, in relation to an accountable care organization (“ACO”) owned by Caravan Health. This ACO is part of a risk model under the CMS Medicare Shared Savings Program (“MSSP”) program where it shares in both the savings and losses. The ACO has a master letter of credit with CMS as the recipient where the letter of credit is used as protection against unpaid losses, should the ACO fail to remit payment in the event that losses occur. The letter of credit is collateralized by the ACO members, by either cash remitted or subordinated letters of credit. This restricted cash will only be used if an ACO member fails to remit payment in connection with a subordinated letter of credit. The following table reconciles cash, cash equivalents, and restricted cash per the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets: March 31, 2022 December 31, 2021 (in millions) Cash and cash equivalents $ 451.3 $ 678.5 Restricted cash 2.3 5.7 Total cash, cash equivalents, and restricted cash $ 453.6 $ 684.2 Accounts Receivable Accounts receivable primarily consist of amounts due from customers and CMS and are stated at their net realizable value. Management evaluates all accounts periodically and an allowance is established based on the latest information available to management. Management considers historical realization data, accounts receivable aging trends and other operational trends to estimate the collectability of receivables. After all reasonable attempts to collect a receivable have been exhausted, the receivable is written off against the allowance for doubtful accounts. As of March 31, 2022 and December 31, 2021, we had an allowance for doubtful accounts of $9.7 million and $7.9 million, respectively. Advertising and Marketing Costs Advertising and marketing costs are included in selling, general and administrative expenses (“SG&A”) and are expensed as incurred. Advertising and marketing costs totaled $0.2 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. Accounting for Leases We lease various property and equipment, with the majority of our leases consisting of real estate leases. Effective January 1, 2022, we adopted ASC Topic 842 Leases (“ASC 842”). Under ASC 842, a lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Our contracts determined to be or contain a lease include explicitly or implicitly identified assets where we have the right to substantially all of the economic benefits of the assets and we have the ability to direct how and for what purpose the assets are used during the lease term. Leases are classified as either operating or financing. All of our leases meet the criteria to be classified as operating leases. For operating leases, we recognize a lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject to certain adjustments, such as prepaid rents, initial direct costs and lease incentives received from the lessor. We use the incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate is the rate of interest that we would have to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. Certain of our leases include variable lease costs to reimburse the lessor for real estate tax and insurance expenses and certain non-lease components that transfer a distinct service to us, such as common area maintenance services. We have elected not to separate the accounting for lease components and non-lease components for all leased assets. We sublease portions of our office space where we do not use the entire space for our operations. Sublease income is recorded as a reduction of lease expense. Recent Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) which requires lessees to recognize leases on the balance sheet by recording a right-of-use asset and lease liability. This guidance is effective for non-public entities for annual reporting period s beginning after December 15, 2021. We adopted this new guidance as of January 1, 2022 and applied the transition option, whereby prior comparative periods will not be retrospectively presented in the consolidated financial statements. We elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for all asset classes. We made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. See Note 8 Leases . In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We elected to early adopt this new guidance for interim periods in 2022 beginning with the Caravan Health acquisition on March 1, 2022. We measured the acquired contract assets and liabilities in accordance with Topic 606. See Note 4 Business Combinations . In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance (“ASU 2021-10”) which requires annual disclosures that increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. ASU 2021-10 is effective for all entities for fiscal years beginning after December 31, 2021. We adopted this new guidance as of January 1, 2022. There was no material impact on our condensed consolidated financial statements upon adoption. Pending Adoption We are an “emerging growth company” under the Jumpstart Our Business Startups Act (“JOBS Act”). Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We intend to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. The effective dates below are the effective dates we expect to adopt the new accounting pronouncements, which are those permitted for a company that is not an issuer. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”) which introduced the current expected credit losses methodology for estimating allowances for credit losses. ASU 2016-13 applies to all financial instruments carried at amortized cost and off-balance-sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credit, and financial guarantees. The new accounting standard does not apply to trading assets, loans held for sale, financial assets for which the fair value option has been elected, or loans and receivables between entities under common control. ASU 2016-13 is effective for non-public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this new guidance on our condensed consolidated financial statements. |
The COVID-19 Pandemic
The COVID-19 Pandemic | 3 Months Ended |
Mar. 31, 2022 | |
Unusual or Infrequent Items, or Both [Abstract] | |
The COVID-19 Pandemic | The COVID-19 Pandemic Our operations in our Home & Community Services segment were significantly affected by the COVID-19 pandemic early in 2020. However, as the COVID-19 pandemic has evolved, we have been able to pivot and flex the volume of virtual IHEs (“vIHEs”) if needed and as a result we have not experienced a material impact to our results of operation in our Home & Community Services segment as a result of the ongoing pandemic since the second quarter of 2020. Our Episodes of Care Services segment has experienced a prolonged negative impact related to the pandemic. At certain times during the pandemic, governmental authorities recommended, and in certain cases required, that elective, specialty and other procedures and appointments, including certain acute and post-acute care services, be suspended or canceled to avoid non-essential patient exposure to medical environments and potential infection with the COVID-19 virus. In addition, the temporary suspension or cancellation of services was put in place to focus limited resources and personnel capacity toward the prevention of, and care for patients with, COVID-19. This resulted in fewer elective procedures and a general reduction in individuals seeking medical care starting at the end of the first quarter of 2020, which contributed to a substantially lower number of episodes being managed in 2020 and 2021. Due to the nature of the BPCI-A program, however, there is a significant lag between when the episodes are initiated and when CMS reconciles those services and we recognize revenue over a 13 month period encompassing both of those points in time. As such, there was no immediate impact to our revenues in early 2020 when the pandemic began. However, the specific impact of the lower volumes on our program size and revenues has resulted in a decline in weighted average program size and savings rates. In addition, in the third quarter of 2020 and in response to the COVID-19 pandemic, CMS announced that all episodes with a COVID-19 diagnosis irrespective of the impact on the outcome of the episode, would be excluded from reconciliation, and this exclusion has extended into 2022, resulting in a negative impact to our program size. W e expect this impact on the program size to decrease once the COVID-19 pandemic subsides or CMS removes this rule. Initially, the reduction in the number of episodes managed was offset by a higher savings rate achieved due to a combination of improved performance by some of our partners as well as certain partners that were underperforming choosing to exclude some or all of their episodes from reconciliation in 2020. However, beginning with the reconciliation results received from CMS during the second quarter of 2021, we saw a negative impact on our savings rate as a result of the COVID-19 pandemic, primarily related to the under-diagnosis of co-morbidities and the use of higher cost next site of care facilities, both of which drove costs higher and in turn, lowered our savings rates. Due to the passage of time between when we perform our services and the confirmation of results and subsequent cash settlement by CMS, COVID-19 and the aforementioned negative impacts have also negatively impacted our semi-annual cash flows related to the BPCI-A program. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Caravan Health Acquisition On February 9, 2022, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Caravan Health, Inc., pursuant to which we acquired Caravan Health on March 1, 2022. Caravan Health is a leader in assisting ACOs to excel in population health management and value-based payment programs. The initial purchase price was approximately $250.0 million, subject to certain customary adjustments, and included approximately $190.0 million in cash and approximately $60.0 million in our Class A common stock, comprised of 4,726,134 shares at $12.5993 per share, which represents the volume-weighted average price per share of our common stock for the five three In addition to the initial purchase price, the transaction included contingent additional payments of up to $50.0 million based on certain future performance criteria of Caravan Health, which if conditions are met, may be paid in the second half of 2023. The preliminary fair value of the contingent consideration as of the acquisition date was estimated to be approximately $30.5 million, which was estimated using a Black-Scholes option pricing model. See Note 13 Fair Value Measurements. Therefore, the total purchase consideration of the transaction was determined to be $287.4 million, which consisted of cash consideration, stock consideration, and potential contingent consideration. We allocated the purchase price to the identifiable net assets acquired, based on the estimated fair values at the date of acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities was recorded as goodwill. Goodwill represents the value of the acquired assembled workforce and specialized processes and procedures and operating synergies, none of which qualified as separate intangible assets. All of the goodwill was assigned to our Episodes of Care Services segment. None of the goodwill is expected to be deductible for tax purposes. We estimated the fair value of intangible assets acquired using estimates of future discounted cash flows to be generated by the business over the expected duration of those cash flows. We based the estimated cash flows on projections of future revenue, operating expenses, capital expenditures, working capital needs and tax rates. We estimated the duration of the cash flows based on the projected useful lives of the assets acquired. The discount rate was determined based on specific business risk, cost of capital and other factors. The purchase price allocation is preliminary and subject to change up to one year after the date of acquisition and could result in changes to the amounts recorded below. The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows: Cash $ 6.8 Restricted cash 0.5 Accounts receivable 1.6 Contract assets 9.1 Prepaid expenses and other current assets 1.7 Property and equipment 0.3 Intangible assets 93.9 Other assets 0.1 Total identifiable assets acquired 114.0 Accounts payable and accrued liabilities 2.9 Other current liabilities 0.6 Deferred tax liabilities 22.4 Total liabilities assumed 25.9 Net identifiable assets acquired 88.1 Goodwill 199.3 Total of assets acquired and liabilities assumed $ 287.4 The $93.9 million of acquired intangible assets consists of customer relationships of $69.8 million (10-year useful life), acquired technology of $23.4 million (5-year useful life) and a tradename of $0.7 million (3-year useful life). The acquisition was not material to our Condensed Consolidated Statements of Operations. Therefore, pro forma results of operations related to this acquisition have not been presented. The financial results of Caravan Health have been included in our Condensed Consolidated Financial Statements since the date of the acquisition. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities We consolidate our affiliates when we are the primary beneficiary. The primary beneficiary of a VIE is the party that has both the decision-making authority to direct the activities that most significantly impact the VIE’s economic performance and the right to absorb losses or receive benefits that could potentially be significant to the VIE. Consolidated VIEs at March 31, 2022 and December 31, 2021 include seven physician practices that require an individual physician to legally own the equity interests as certain state laws and regulations prohibit non-physician owned business entities from practicing medicine or employing licensed healthcare providers. We have determined we are the primary beneficiary of these VIEs as we have the obligation to absorb the losses from and direct activities of these operations. As a result, these VIEs are consolidated and any non-controlling interest is not presented. Recourse of creditors to these VIEs is limited to the assets of the VIE entities, which totaled $31.3 million and $25.2 million at March 31, 2022 and December 31, 2021, respectively. The carrying amount and classification of the VIEs’ assets and liabilities included in the Condensed Consolidated Balance Sheets, net of intercompany amounts, are as follows: March 31, 2022 December 31, 2021 (in millions) ASSETS Current assets Cash and cash equivalents $ 12.0 $ 10.6 Accounts receivable, net 19.3 14.6 Total current assets 31.3 25.2 Total assets $ 31.3 $ 25.2 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued expenses $ — $ 3.4 Contract liabilities 0.5 — Other current liabilities 1.1 — Total current liabilities 1.6 3.4 Total liabilities 1.6 3.4 Company capital 37.9 29.3 Accumulated deficit (8.2) (7.5) Total equity 29.7 21.8 Total liabilities and equity $ 31.3 $ 25.2 As of March 31, 2022, Caravan Health is the sole member of four ACOs, which we have determined are VIEs. CMS offers an MSSP to ACOs, where the goal of the program is to reward the AC O participants when specific quality metrics are met and expenditures are lowered. The MSSPs have different risk models where the ACOs can either share in both savings and losses or share in only the savings. The governance structure of the VIEs does not provide Caravan Health with the ultimate decision-making authority to direct the activities that most significantly impact the VIEs’ economic performance. Based on these ACOs’ operating agreements, the power to direct the VIEs’ operations is shared among the entities that make up the ACO Board of Directors, which is required to consist of at least 75% ACO participants (hospitals, clinics, etc.). As such, we have determined we are not the primary beneficiary of these VIEs, and therefore we do not consolidate the results of these entities. Caravan Health is ultimately liable for losses incurred by one out of the four ACOs owned by them. As of March 31, 2022 there was $0.5 million included in restricted cash on our Condensed Consolidated Balance Sheets which relates to this VIE. The ACO has a master letter of credit with CMS as the recipient where the letter of credit is used as protection against unpaid losses, should the ACO fail to remit payment in the event that losses occur. The letter of credit is collateralized by the ACO members, by either cash remitted or subordinated letters of credit. This restricted cash will only be used if an ACO member fails to remit payment in connection with a subordinated letter of credit. Two of the four VIEs are ACOs that are not part of an MSSP risk model where the losses are shared and the remaining VIE has a guarantor that has taken full responsibility of indebtedness of the ACO, and therefore, Caravan Health is not liable for its losses. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue We earn revenue from our two operating segments, Home & Community Services and Episodes of Care Services, under contracts that contain various fee structures. Through our Home & Community Services segment, we offer health evaluations performed either within the patient’s home, virtually or at a healthcare provider facility, primarily to Medicare Advantage health plans (and to some extent, Medicaid). Additionally, we offer certain diagnostic screening and other ancillary services, and through our Signify Community solution, we offer access to services to address healthcare concerns related to social determinants of health. Through our Episodes of Care Services segment, we primarily provide services designed to improve the quality and efficiency of healthcare delivery by developing and managing episodic payment programs in partnership with healthcare providers, primarily under the BPCI-A program with CMS. We also provide ACO services through our Caravan Health subsidiary, acquired in March 2022. Additionally, we provide certain complex care management services. All of our revenue is generated in the United States. We are dependent on a concentrated number of payors and provider partners with whom we contract to provide our services, S ee Note 22 Concentrations . The following table summarizes disaggregated revenue from contracts with customers by source of revenue, which we believe best presents the nature, amount and timing of revenue. Three months ended March 31, 2022 2021 (in millions) Evaluations $ 186.2 $ 150.3 Other 0.7 2.1 Home & Community Services Total Revenue 186.9 152.4 Episodes 24.1 25.4 Other 5.5 2.2 Episodes of Care Services Total Revenue 29.6 27.6 Consolidated Revenue Total $ 216.5 $ 180.0 Performance Obligations Episodes of Care Services There have been no material changes to our revenue recognition and estimates, other than as described below related to the acquisition of Caravan Health. Caravan Health enters into contracts with customers to provide multiple services around the management of the ACO model. These include, but are not limited to, population health software, analytics, practice improvement, compliance, marketing, governance, surveys and licensing. The overall objective of the services provided is to help the customer receive shared savings from CMS. Caravan Health enters into arrangements with customers wherein we receive a contracted percentage of each customer’s portion of shared savings if earned. We recognize shared savings revenue as performance obligations are satisfied over time, commensurate with the recurring ACO services provided to the customer over a 12-month calendar year period. The shared savings transaction price is variable, and therefore, we estimate an amount we expect to receive for each 12-month calendar year performance obligation period. In order to estimate this variable consideration, management initially uses estimates of historical performance of the ACOs. We consider inputs such as attributed patients, expenditures, benchmarks and inflation factors. We adjust our estimates at the end of each reporting period to the extent new information indicates a change is needed. We apply a constraint to the variable consideration estimate in circumstances where we believe the data received is incomplete or inconsistent, so as not to have the estimates result in a significant revenue reversal in future periods. Although our estimates are based on the information available to us at each reporting date, new and material information may cause actual revenue earned to differ from the estimates recorded each period. These include, among others, Hierarchical Conditional Category (“HCC”) coding information, quarterly reports from CMS, unexpected changes in attributed patients and other limitations of the program beyond our control. We receive final reconciliations from CMS and collect the cash related to shared savings earned annually in the third or fourth quarter of each year for the preceding calendar year. The remaining sources of Caravan Health revenue in our Episodes of Care Services segment are recognized over time when, or as, the performance obligations are satisfied and are primarily based on a fixed fee or per member per month fee. Therefore, they do not require significant estimates and assumptions by management. Related Balance Sheet Accounts The following table provides information about accounts included on the Condensed Consolidated Balance Sheets. March 31, 2022 December 31, 2021 Episodes of Care Services Home & Community Services Total Episodes of Care Services Home & Community Services Total (in millions) Assets Accounts receivable, net (1) $ 39.8 $ 180.9 $ 220.7 $ 100.1 $ 117.1 $ 217.2 Contract assets (2) $ 128.1 $ 4.4 $ 132.5 $ 82.8 $ 1.5 $ 84.3 Liabilities Shared savings payable (3) $ 37.4 $ — $ 37.4 $ 63.4 $ — $ 63.4 Contract liabilities (4) $ 39.2 $ 4.8 $ 44.0 $ 27.8 $ 5.1 $ 32.9 Deferred revenue (5) $ 1.0 $ 1.6 $ 2.6 $ 0.1 $ 3.5 $ 3.6 (1) Accounts receivable, net for Episodes of Care Services included $1.6 million due from CMS as of March 31, 2022 primarily related to amounts not yet collected for the fifth reconciliation period of the BPCI-A program. As of December 31, 2021, accounts receivable, net for Episodes of Care Services included $56.2 million due from CMS primarily related to the fifth reconciliation period of the BPCI-A program. Accounts receivable, net for Home & Community Services included $51.1 million and $3.7 million in amounts not yet billed to customers, as of March 31, 2022 and December 31, 2021, respectively. The remaining amount of accounts receivable for both Episodes of Care Services and Home & Community Services represent amounts to be received from customers. Home & Community Services accounts receivable as of March 31, 2022 reflected strong IHE volume in the first quarter and a higher mix of in-person IHEs compared to vIHEs. (2) Contract assets primarily represent management’s estimate of amounts we expect to receive under the BPCI-A program related to the next two reconciliation periods. As of March 31, 2022, contract assets covered episodes of care commencing in the period from April 2021 through March 2022. Estimates for program size and savings rate are based on information available as of the date of the financial statements. We record an estimate of revenue related to these performance obligations over the 13-month period starting in the period the related episodes of care commence and through the estimated receipt of the semi-annual CMS reconciliation file. Any changes to these estimates based on new information will be recorded in the period such information is received. Total savings generated and revenue earned for the episodes of care in which a component of the contract asset recorded as of March 31, 2022 relates to, will be included in the semi-annual reconciliation expected from CMS during the second quarter of 2022. Contract assets for Episodes of Care Services segment also included $10.5 million related to estimated shared savings under the Caravan Health ACO services programs. Contract assets in the Home & Community Services segment of $4.4 million as of March 31, 2022 represent management’s estimate of amounts to be received from clients as a result of certain service levels being achieved during the contractual period. (3) Total shared savings payable is included in accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets. Shared savings payable for Episodes of Care Services included $23.9 million due to CMS as of December 31, 2021, all of which was settled with CMS in the first quarter of 2022. Shared savings payable included $35.6 million as of March 31, 2022 primarily related to the fifth reconciliation received in December 2021, which is expected to be paid to customers related to their portion of savings earned under the BPCI-A program. Additionally, there is $1.8 million included in shared savings payable at March 31, 2022, which represents amounts withheld from customers under the BPCI-A program based on contractual withholding percentages. This amount has been received by us from CMS and is held as restricted cash. We expect to remit these amounts to customers at the conclusion of the program, at which time both restricted cash and the liability will be reduced. (4) Contract liabilities in our Episodes of Care Services segment represent management’s estimate of savings amounts we expect to share with our customers based on contractual shared savings percentages related to the amounts we expect to be entitled to receive under the BPCI-A program for the next two reconciliation periods. As of March 31, 2022, contract liabilities of $39.2 million cover episodes of care commencing in the period from April 2021 through March 2022. These amounts offset the gross amount we expect to receive for the same period included in contract assets as of March 31, 2022. Contract liabilities in the Home & Community Services segment of $4.8 million as of March 31, 2022 represent management’s estimate of potential refund liabilities due to certain clients as a result of certain service levels not being achieved during the contractual periods primarily due to COVID-19. (5) Deferred revenue is included in other current liabilities on the Condensed Consolidated Balance Sheets and primarily relates to advance payments received from certain customers. The table below summarizes the activity recorded in the contract asset and liability accounts for the periods presented. Three months ended March 31, Contract Assets 2022 2021 (in millions) Balance at beginning of period $ 84.3 $ 27.8 Acquired in Caravan Health Acquisition 9.1 — Estimated revenue recognized related to performance obligations satisfied at a point-in-time 2.9 — Estimated revenue recognized related to performance obligations satisfied over time 36.2 33.5 Balance at end of period $ 132.5 $ 61.3 Three months ended March 31, Contract Liabilities 2022 2021 (in millions) Balance at beginning of period $ 32.9 $ 6.2 Payments made to customer — (0.6) Estimated amounts due to customer related to performance obligations satisfied at a point-in-time (0.3) 1.1 Estimated amounts due to customer related to performance obligations satisfied over time 11.4 14.1 Balance at end of period $ 44.0 $ 20.8 Three months ended March 31, Deferred Revenue 2022 2021 (in millions) Balance at beginning of period $ 3.6 $ 3.8 Acquired in Caravan Health Acquisition 0.5 — Payments received from customers 0.6 7.5 Revenue recognized upon completion of performance obligation (2.1) (4.3) Balance at end of period $ 2.6 $ 7.0 Three months ended March 31, Shared Savings Payable 2022 2021 (in millions) Balance at beginning of period $ 63.4 $ 80.8 Amounts paid to customer and/or CMS (67.8) (22.0) Amounts due to customer upon completion of performance obligation 41.8 15.6 Balance at end of period $ 37.4 $ 74.4 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net were as follows as of each of the dates presented: March 31, 2022 December 31, 2021 (in millions) Computer equipment $ 23.7 $ 22.0 Leasehold improvements 18.6 18.5 Furniture and fixtures 6.7 6.5 Software 2.4 2.5 Projects in progress 0.5 0.7 Property and equipment, gross 51.9 50.2 Less: Accumulated depreciation and amortization (28.5) (26.5) Property and equipment, net $ 23.4 $ 23.7 Depreciation and amortization expense for property and equipment, inclusive of amounts subsequently written off or disposed from accumulated depreciation, was $2.2 million and $2.0 million for the three months ended March 31, 2022 and 2021, respectively. There was no impairment of property and equipment during the three months ended March 31, 2022 or 2021. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases New Lease Guidance Adoption and Practical Expedients We adopted ASC 842 as of January 1, 2022 using the optional transition method. Therefore, we did not restate comparative periods. Under this transition provision, we applied the legacy leases guidance, including its disclosure requirements, for the comparative periods presented. ASC 842 includes practical expedient and policy election choices. We have elected the practical expedient transition package available in ASC Topic 842 and, as a result, did not reassess the lease classification of existing contracts or leases or the initial direct costs associated with existing leases. We made an accounting policy election not to recognize right of use assets and lease liabilities for leases with a lease term of 12 months or less, including renewal options that are reasonably certain to be exercised, that also do not include an option to purchase the underlying asset that is reasonably certain of exercise. Instead, lease payments for these leases are recognized as lease expense on a straight-line basis over the lease term. We did not elect the hindsight practical expedient, and therefore we did not reassess our historical conclusions with regards to whether renewal option periods should be included in the terms of our leases. Upon adoption on January 1, 2022, we recognized right-of-use assets and lease liabilities for operating leases of $23.0 million and $35.6 million, respectively. The difference between the right-of-use asset and lease liability primarily represents the net book value of deferred rent and tenant improvement allowances recognized as of December 31, 2021, which was adjusted against the right-of-use asset upon adoption. In addition, there was $0.4 million recorded as a reduction of retained earnings upon adoption. This primarily related to an asset that we ceased using prior to the adoption of ASC 842 and do not have the intent and ability to sublease since the remaining lease term is less than one year. We recognized a lease liability equal to the present value of the remaining lease payments under the contract; however, we did not recognize a corresponding right-of-use asset. The previously recognized cease-use liability as of December 31, 2021 was recognized as a reduction to the carrying amount of the right-of-use asset. As the cease-use liability balance was less than the carrying amount of the right-of-use asset, the remaining portion of the right-of-use asset not offset by the cease-use liability was written off as an adjustment to retained earnings since the cease-use date of the asset occurred prior to adoption. The following is a summary of the impact of ASC 842 adoption on our Condensed Consolidated Balance Sheet: December 31, 2021 ASC 842 Adjustments January 1, 2022 (in millions) Assets Operating lease right-of-use assets $ — $ 23.0 $ 23.0 Liabilities Current portion of operating lease liabilities — 8.5 8.5 Operating lease liability, net of current portion — 27.1 27.1 Deferred rent and tenant improvement allowances 12.2 (12.2) — Retained Earnings 19.7 (0.4) 19.3 Right-of-use Assets and Lease Liabilities The following table presents our operating lease right-of-use assets and lease liabilities as of March 31, 2022. Current lease liabilities are included in other current liabilities on the Condensed Consolidated Balance Sheets. March 31, 2022 (in millions) Operating lease right-of-use assets $ 21.3 Current portion of operating lease liabilities 8.1 Non-current operating lease liabilities 25.2 Total Lease Liabilities $ 33.3 For the three months ended March 31, 2022, cash paid for amounts included in the measurement of operating lease liabilities was $2.7 million. Our operating lease expense is recorded as a component of SG&A in our Condensed Consolidated Statements of Operations. The components of lease expense for the three months ended March 31, 2022 were as follows: Three months ended March 31, 2022 (in millions) Operating lease cost $ 2.1 Variable lease cost 0.7 Sublease income (0.7) Total Lease Cost (1) $ 2.1 (1) Excludes short-term lease expense, which is not material The following table presents the weighted average remaining lease term and discount rate of our operating leases as of March 31, 2022: Weighted Average Lease Term (Years) 5.8 Weighted Average Discount Rate 4.6 % We enter into contracts to lease office space and equipment with terms that expire at various dates through 2030. The lease term at the lease commencement date is determined based on the non-cancellable period for which we have the right to use the underlying asset, together with any periods covered by an option to extend the lease if we are reasonably certain to exercise that option, periods covered by an option to terminate the lease if we are reasonably certain not to exercise that option, and periods covered by an option to extend (or not to terminate) the lease in which the exercise of the option is controlled by the lessor. We considered a number of factors when evaluating whether the options in our lease contracts were reasonably certain of exercise, such as length of time before option exercise, expected value of the leased asset at the end of the initial lease term, importance of the lease to overall operations, costs to negotiate a new lease, and any contractual or economic penalties. As of March 31, 2022, maturities of our operating lease liabilities are as follows: Remainder of 2022 $ 7.2 2023 8.3 2024 4.8 2025 4.1 2026 3.4 Thereafter 10.6 Total lease payments 38.4 Less: imputed interest (5.1) Present value of operating lease liabilities $ 33.3 Effective October 1, 2021, we entered into a lease agreement for a facility in Oklahoma City, OK. The lease term is 7.25 years, with two 5-year options to renew, and total lease payments are expected to be approximately $4.2 million. The lessor and its agents are currently building this retail space and the lease is expected to commence once the construction of the asset has been completed. We expect commencement in the second quarter of 2022. As the lease has not yet commenced, it is not included in the right-of-use asset or lease liabilities recorded as of March 31, 2022. In addition, we entered into a lease agreement for a facility in New York, NY which is expected to commence February 1, 2024, once our current lease for this facility expires on January 31, 2024. The lease term is 5.75 years, with one 5-year option to renew, and total lease payments are expected to be approximately $22.7 million. Disclosures Related to Periods Prior to Adoption of ASC 842 As of December 31, 2021, future minimum lease payments under non-cancellable operating leases were as follows: 2022 $ 10.2 2023 8.7 2024 6.1 2025 9.3 2026 8.6 Thereafter 21.5 $ 64.4 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets were as follows as of each of the dates presented: March 31, 2022 December 31, 2021 Estimated Useful Life (years) Gross Carrying Amount Accumulated amortization Net Carrying Value Gross Carrying Amount Accumulated amortization Net Carrying Value (in millions) Customer relationships 3 - 20 $ 600.3 $ (137.7) $ 462.6 $ 530.5 $ (129.1) $ 401.4 Acquired and capitalized software 3 - 6 164.5 (87.6) 76.9 134.3 (80.4) 53.9 Tradename 3 0.7 — 0.7 — — — Total $ 765.5 $ (225.3) $ 540.2 $ 664.8 $ (209.5) $ 455.3 We capitalized $6.8 million and $5.7 million of internally-developed software costs for the three months ended March 31, 2022 and 2021, respectively. During the three months ended March 31, 2022, we acquired $93.9 million of intangible assets in connection with the acquisition of Caravan Health ( see Note 4. Business Combinations ), which included preliminary values for customer relationships of $69.8 million (10-year useful life), acquired technology of $23.4 million (5-year useful life) and a tradename of $0.7 million (3-year useful life). There was no impairment of intangible assets for the three months ended March 31, 2022 or 2021. Amortization expense for intangible assets, inclusive of amounts subsequently written off from accumulated amortization, was $15.8 million and $14.7 million for the three months ended March 31, 2022 and 2021, respectively. Expected amortization expense as of March 31, 2022 related to intangible assets, including internal-use software development costs, was as follows: (in millions) Remainder of 2022 $ 53.4 2023 65.4 2024 50.6 2025 43.8 2026 43.1 Thereafter 283.9 $ 540.2 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The change in the carrying amount of goodwill for each reporting unit is as follows: Home & Community Services Episodes of Care Services Total (in millions) Balance at December 31, 2021 $ 170.4 $ 426.7 $ 597.1 Business combinations — 199.3 199.3 Balance at March 31, 2022 $ 170.4 $ 626.0 $ 796.4 There was no impairment related to goodwill during the three months ended March 31, 2022 or 2021. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: March 31, December 31, 2022 2021 (in millions) Shared savings payable $ 37.4 $ 63.4 Accrued payroll and payroll-related expenses 28.6 46.5 Other accrued expenses 25.2 19.6 Accrued income taxes 7.8 1.6 Accounts payable 6.5 5.6 Total accounts payable and accrued liabilities $ 105.5 $ 136.7 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-Term Debt Long-term debt was as follows: March 31, December 31, 2022 2021 (in millions) Revolving Facility $ — $ — 2021 Term Loan 348.3 349.1 Total debt 348.3 349.1 Unamortized debt issuance costs (5.8) (6.0) Unamortized discount on debt (4.5) (4.7) Total debt, net 338.0 338.4 Less current maturities (3.5) (3.5) Total long-term debt $ 334.5 $ 334.9 As of March 31, 2022 and December 31, 2021, the effective interest rate on the 2021 Term Loan borrowings was 4.26% and 3.75%, respectively. The 2021 Credit Agreement is secured by substantially all of the assets of Signify and its subsidiaries. The 2021 Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants and events of default. Negative covenants include, among others (and in each case subject to certain exceptions), limitations on incurrence of liens by Signify and its restricted subsidiaries, limitations on incurrence of indebtedness by Signify and its restricted subsidiaries, limitations on making dividends and other distributions, limitations on engaging in asset sales, limitation on making investments, limitations on engaging in transactions with affiliates. As a result of these restrictions, substantially all of the subsidiary net assets are deemed restricted as of December 31, 2021. Additionally, the 2021 Credit Agreement includes a requirement that the consolidated first lien net leverage ratio (as defined in the 2021 Credit Agreement) as of the end of any fiscal quarter is not greater than 4.50 to 1.00 if on the last day of such fiscal quarter the Revolving Facility and letters of credit outstanding exceeds 35% of the total amount of Revolving Facility commitments at such time. As of March 31, 2022, we were in compliance with all financial covenants. We currently have no borrowings outstanding under the Revolving Facility. As of March 31, 2022, we had $172.8 million available borrowing capacity under the Revolving Facility, as the borrowing capacity is reduced by outstanding letters of credit. The aggregate principal maturities of long-term debt due subsequent to March 31, 2022 are as follows: (in millions) Remainder of 2022 $ 2.6 2023 3.5 2024 3.5 2025 3.5 2026 3.5 Thereafter 331.7 $ 348.3 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2022 Balance Sheet Classification Type of Instrument Level 1 Level 2 Level 3 Total (in millions) Cash equivalents Money market funds $ 200.0 $ — $ — $ 200.0 Customer EAR liability Customer equity appreciation rights — — 82.7 82.7 Customer EAR liability EAR letter agreement — — 1.3 1.3 Contingent consideration Consideration due to sellers — — 30.6 30.6 December 31, 2021 Balance Sheet Classification Type of Instrument Level 1 Level 2 Level 3 Total (in millions) Cash equivalents Money market funds $ 400.1 $ — $ — $ 400.1 Customer EAR liability Customer equity appreciation rights — — 48.6 48.6 Contingent consideration Consideration due to sellers — — — — There were no transfers between Level 1 and Level 2, or into or out of Level 3, during the three months ended March 31, 2022 or 2021. Fair value of assets measured on a non-recurring basis include intangible assets when there is an impairment triggering event. S ee Note 8 Intangible Assets . The changes in Level 3 liabilities measured at fair value on a recurring basis were as follows: Contingent Consideration Three months ended March 31, 2022 2021 (in millions) Beginning of period $ — $ 15.2 Payment of contingent consideration — — Initial measurement of contingent consideration due to sellers 30.5 — Remeasurement of contingent consideration included in selling, general and administrative expense 0.1 0.2 Balance at end of period $ 30.6 $ 15.4 Customer equity appreciation rights Three months ended March 31, 2022 2021 (in millions) Beginning of period $ 48.6 $ 21.6 Grant date fair value estimate recorded as reduction to revenue 4.9 4.9 Grant date fair value estimate of EAR letter agreement recorded as reduction to revenue 1.6 — Remeasurement of fair value of customer EAR agreements included in other expense (income), net 29.2 56.8 Remeasurement of fair value of EAR letter agreement, included in other expense (income), net (0.3) — Balance at end of period $ 84.0 $ 83.3 The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows as of March 31, 2022: Fair Value (in millions) Valuation Technique Significant Unobservable Inputs Assumption Customer equity appreciation rights $ 82.7 Monte Carlo Volatility 55.0% Dividend yield 0% Risk-free rate 2.43% Expected term (years) 3.25 EAR Letter Agreement $ 1.3 Monte Carlo Volatility 55.0% Dividend yield 0% Risk-free rate 2.43% Expected term (years) 3.25 Consideration due to sellers $ 30.6 Black-Scholes Volatility 13.5% Discount Rate 2.30% Risk Free Rate 0.51% Credit Spread 4.90% Expected term (years) 1.58 Consideration due to sellers $ — Discounted approach Discount Rate 5.0% Fair value of the contingent consideration related to the Caravan Health acquisition (s ee Note 4. Business Combinations) was measured using the Black-Scholes option pricing model, which uses certain assumptions to estimate the fair value, including long-term financial forecasts, expected term until payout, volatility, discount rate, credit spread, and risk-free rate. The expected volatility and discount rate as of the acquisition date were calculated using comparable peer companies, adjusted for Caravan Health’s operational leverage. The risk-free interest rate is based on the U.S. Treasury rates that are commensurate with the term of the contingent consideration. As of March 31, 2022, the amount recognized for the contingent consideration arrangement, the range of outcomes, and the assumptions used to develop the estimates did not change compared to those used to estimate Caravan Health’s initial fair value. The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows as of December 31, 2021: Fair Value (in millions) Valuation Technique Significant Unobservable Inputs Assumption Customer equity appreciation rights $ 48.6 Monte Carlo Volatility 50.0% Dividend yield 0% Risk-free rate 1.05% Expected term (years) 3.5 Fair Value Valuation Technique Significant Unobservable Inputs Discount Rate Consideration due to sellers $ — Discounted approach Discount Rate 5.0% The fair value of our debt is measured at Level 3 and is determined based on fluctuations in current interest rates, the trends in market yields of debt instruments with similar credit ratings, general economic conditions and other quantitative and qualitative factors. The carrying value of our debt approximates its fair value as it is variable-rate debt. The carrying amounts of accounts receivable and accounts payable approximate their fair value because of the relatively short-term maturity of these instruments. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity See Note 1 Nature of Operations for details of the Reorganization Transactions effective in February 2021 in connection with our IPO. Initial Public Offering On February 16, 2021, Signify Health closed an IPO of 27,025,000 shares of its Class A common stock at a public offering price of $24 per share, which included 3,525,000 shares issued pursuant to the full exercise of the underwriters’ over-allotment option. Signify Health received gross proceeds of $648.6 million, which resulted in net cash proceeds of $609.7 million after deducting underwriting discounts and commissions of $38.9 million and before fees and expenses incurred in connection with the IPO incurred and paid for by Cure TopCo. Signify Health used the proceeds to purchase newly-issued membership interests from Cure TopCo at a price per interest equal to the IPO price of its Class A common stock, net of the underwriting discounts and commissions. Amendment and Restatement of Certificate of Incorporation In connection with the Reorganization Transactions and IPO, our certificate of incorporation was amended and restated to, among other things, authorize the issuance of two classes of common stock: Class A common stock and Class B common stock. The Amended and Restated Certificate of Incorporation authorizes 1,000,000,000 shares of Class A common stock, par value $0.01 per share and 75,000,000 shares of Class B common stock, par value $0.01 per share. The Amended and Restated Certificate of Incorporation also authorizes up to 50,000,000 shares of preferred stock, par value of $0.01 per shares, none of which have been issued. Class A Common Stock Holders of shares of Class A common stock are entitled to one vote for each share held of record on all matters on which stockholders are entitled to vote generally, including the election or removal of directors. The holders of Class A common stock do not have cumulative voting rights in the election of directors. Holders of shares of Class A common stock are entitled to receive dividends when and if declared by the board of directors out of funds legally available, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock. Upon liquidation, dissolution or winding up and after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of Class A common stock will be entitled to receive pro rata our remaining assets available for distribution. All shares of Class A common stock outstanding are fully paid and non-assessable. The Class A common stock are not subject to further calls or assessments. The rights, powers and privileges of Class A common stock are subject to those of the holders of any shares of preferred stock. Class B Common Stock Each share of Class B common stock entitles its holder to one vote per share on all matters submitted to a vote of the stockholders. If at any time the ratio at which LLC Units are redeemable or exchangeable for shares of Class A common stock changes from one-for-one, the number of votes to which Class B common stockholders are entitled will be adjusted accordingly. The holders of Class B common stock do not have cumulative voting rights in the election of directors. Except for transfers to Signify Health pursuant to the Cure TopCo Amended LLC Agreement or to certain permitted transferees, the LLC Units and corresponding shares of Class B common stock may not be sold, transferred or otherwise disposed of. Holders of shares of Class B common stock will vote together with holders of Class A common stock as a single class on all matters on which stockholders are entitled to vote, except as otherwise required by law. The Class B common stock is not entitled to economic interests in Signify Health. Holders of Class B common stock do not have any right to receive dividends or to receive a distribution upon a liquidation or winding up of Signify Health. However, if Cure TopCo makes distributions to Signify Health, the other holders of LLC Units, including the Continuing Pre-IPO LLC Members, will be entitled to receive distributions pro rata in accordance with the percentages of their respective LLC Units. The Class B common stock is not subject to further calls or assessment. Cure TopCo, LLC Recapitalization As noted above, in connection with our IPO, the limited liability company agreement of Cure TopCo was amended and restated (the “Cure TopCo LLCA”) to, among other things, convert all outstanding equity interests into LLC Units and appoint us as the sole managing member of Cure TopCo. Under the Cure TopCo LLCA, holders of LLC Units have the right to require Cure TopCo to redeem all or a portion of their LLC Units for newly issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to the volume-weighted average market price of one share of our Class A common stock for each LLC Unit redeemed. This will result in the recognition of a contingently redeemable noncontrolling interest in Cure TopCo held by the Continuing Pre-IPO LLC Members, which will be redeemable, at the election of Signify Health, for shares of Class A common stock on a one-for-one basis or a cash payment in accordance with the terms of the Cure TopCo LLCA and which, if the redeeming member is an affiliate, the decision to redeem in cash or shares will be approved by the disinterested members of the Audit Committee. Cure TopCo Membership Units |
Noncontrolling Interest
Noncontrolling Interest | 3 Months Ended |
Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling InterestWe are the sole manager of Cure TopCo and, as a result of this control, and because we have a substantial financial interest in Cure TopCo, we consolidate the financial results of Cure TopCo into our Condensed Consolidated Financial Statements. The contingently redeemable noncontrolling interest represents the economic interests of Cure TopCo held by the holders of LLC Units other than the membership units held by us. Income or loss is attributed to the noncontrolling interests based on the relative percentages of LLC Units held by us and the other holders of LLC Units during the period. As such, future redemptions or direct exchanges of LLC Units will result in a change in ownership and reduce or increase the amount recorded as noncontrolling interests and increase or decrease additional paid-in capital in the Condensed Consolidated Balance Sheets. The following table summarizes the ownership interests in Cure TopCo as of March 31, 2022: LLC Units Ownership Percentage Number of LLC Units held by Signify Health, Inc. 176,232,513 75.5% Number of LLC Units held by noncontrolling interests 57,313,051 24.5% Total LLC Units outstanding 233,545,564 100.0% LLC Units held by the Continuing Pre-IPO LLC Members are redeemable or exchangeable for, at our election and with appropriate approvals, newly issued shares of Class A common stock on a one-for-one basis or a cash payment in accordance with the terms of the Cure TopCo LLCA. During the three months ended March 31, 2022, 18,076 LLC units were exchanged by Continuing Pre-IPO LLC Members, and shares of Class A common stock were issued on a one-for-one basis. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation On March 1, 2022, our Board of Directors approved amendments to certain outstanding equity award agreements subject to performance-based vesting criteria . The equity awards were amended with an effective date of March 7, 2022, and include 3,572,469 outstanding LLC Incentive Units and 817,081 outstanding stock options. The amendments added an alternative two-year service-vesting condition to the performance-vesting criteria, which, through the effective date of the amendment, were considered not probable of occurring and therefore we had not previously recorded any expense related to these awards. The amended equity awards will now vest based on the satisfaction of the earlier to occur of 1) a two year service condition, with 50% vesting in each of March 2023 and March 2024 or 2) the achievement of the original performance vesting criteria. As a result of this amendment, which results in vesting that is considered probable of occurring, we began to record equity-based compensation expense for these amended equity awards in March 2022. The equity-based compensation expense related to these amended awards is based on the fair value as of the effective date of the amended equity awards and will be recorded over the two year service period. 2021 Long-Term Incentive Plan In January 2021, our Board of Directors adopted the 2021 Long-Term Incentive Plan (the “2021 LTIP”) which became effective in connection with the IPO and provides for the grant of equity-based awards to employees, consultants, service providers and non-employee directors. At inception, there were 16,556,298 shares of Class A common stock available for issuance under the 2021 LTIP. The share pool will be increased on the first day of each year by the least of (i) 14,191,113 shares of Class A common stock, (ii) 3% of the aggregate number of shares of Class A common stock and shares of Class B common stock outstanding (on a fully diluted basis) on the last day of the immediately preceding fiscal year and (iii) an amount determined by the Board of Directors. Any shares underlying substitute awards, shares remaining available for grant under a plan of an acquired company and awards (including pre-IPO awards (as defined in the 2021 LTIP)) that are forfeited, cancelled, expired, terminated or are otherwise lapsed, in whole or in part, or are settled in cash or withheld in respect of taxes, will become available for future grants under the 2021 LTIP. As of December 31, 2021 the total number of shares available for future issuance under the 2021 LTIP was 15,246,831. On January 1, 2022, the share pool was increased by 3% of the aggregate number of Class A common stock and Class B common stock outstanding, or 7,255,410 shares of Class A common stock pursuant to the automatic increase provision described herein. Stock Options The total fair value on March 7, 2022, the amendment effective date, based on a Black-Scholes value of $8.49, for the March 2022 amended stock options as described above, was $6.9 million, of which we recorded $0.2 million during the three months ended March 31, 2022. Subsequent to these amendments, there are no longer any stock options outstanding that are subject only to performance-based vesting conditions that are not probable of occurring. The following is a summary of stock option activity for awards subject to time-based vesting for the three months ended March 31, 2022: Outstanding Options Weighted average exercise price per share Outstanding at December 31, 2021 4,926,357 $ 9.98 Granted 4,375,060 $ 14.72 Converted to time-based vesting 817,081 $ 8.46 Forfeited (201,710) $ 16.65 Exercised (407,287) $ 3.86 Expired (1,295) $ 7.39 Outstanding at March 31, 2022 9,508,206 $ 12.15 Restricted Stock Units (“RSUs”) A summary of restricted stock unit activity for the period presented is as follows: Restricted Stock Units Weighted Avg. Grant Date FMV Outstanding at December 31, 2021 602,745 $ 18.37 Granted 2,936,040 $ 14.13 Vested (57,822) $ 23.84 Forfeited (66,725) $ 16.77 Outstanding at March 31, 2022 3,414,238 $ 14.66 Stock-based compensation expense During the three months ended March 31, 2022, we recognized $3.1 million and $0.2 million, of equity-based compensation expense included in SG&A expense and Service expense, respectively, on the Condensed Consolidated Statements of Operations related to stock options and RSUs. During the three months ended March 31, 2021, we recognized $1.1 million of equity-based compensation expense included in SG&A expense on the Condensed Consolidated Statements of Operations related to stock options and RSUs. As of March 31, 2022, we had total unrecognized compensation expense of $89.8 million related to 9,914,736 unvested time-based stock options and RSUs which we expect to recognize over a weighted average period of 1.9 years. Employee Stock Purchase Plan During the three months ended March 31, 2022, we recognized $0.1 million of equity-based compensation expense included in SG&A expense on the Condensed Consolidated Statements of Operations related to the ESPP. LLC Incentive Units The total fair value on the amendment date for the March 2022 amended LLC Incentive Units as described above was based on the closing stock price on the amendment date of $14.19, resulting in total fair value of $50.7 million, of which we recorded $1.7 million in equity-based compensation expense during the three months ended March 31, 2022. As of March 31, 2022, 6,941,723 of the outstanding LLC units are unvested. This includes 2,279,916 that were not amended and remain subject to performance-based vesting criteria which were not probable of occurring as of March 31, 2022. In addition to the expense noted above related to those awards amended in March 2022, during the three months ended March 31, 2022 and 2021, we recognized $1.3 million and $1.4 million, respectively, of equity-based compensation expense related to LLC Units included in SG&A expense on the Condensed Consolidated Statements of Operations, respectively. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per ShareBasic loss per share of Class A common stock is computed by dividing net loss attributable to Signify Health by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted loss per share of Class A common stock is computed by dividing net loss attributable to Signify Health by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock for the three months ended March 31, 2022 and 2021. The basic and diluted loss per share for the three months ended March 31, 2021 only includes the period from February 12, 2021 to March 31, 2021, which represents the period wherein we had outstanding Class A common stock. Three months ended March 31, 2022 2021 (in millions) Net loss $ (16.3) $ (51.7) Less: Net loss attributable to pre-Reorganization Transactions — (17.2) Less: Net loss attributable to the noncontrolling interest (5.4) (11.3) Net loss attributable to Signify Health, Inc. $ (10.9) $ (23.2) Weighted average shares of Class A common stock outstanding - Basic 172,761,665 165,486,015 Earnings (loss) per share of Class A common stock - Basic $ (0.06) $ (0.14) Earnings (loss) per share of Class A common stock - Diluted $ (0.06) $ (0.14) Shares of Class B common stock do not participate in our earnings or losses and are therefore not participating securities. As such, separate presentation of basic and diluted loss per share of Class B common stock under the two-class method has not been presented. Shares of our Class B common stock and the corresponding LLC Units are, however, considered potentially dilutive shares of Class A common stock. LLC Units of Cure TopCo participate in the earnings of Cure TopCo and therefore, our portion of Cure TopCo’s earnings (loss) per share has been included in the net loss attributable to Signify Health in the calculation above. LLC Units held by the Continuing Pre-IPO LLC Members are redeemable in accordance with the Cure TopCo LLCA, at the election of Signify Health, for shares of Class A common stock on a one-for-one basis or a cash payment. The potential dilutive effect of LLC Units are evaluated under the if-converted method. The potential dilutive effect of stock options and RSUs are evaluated under the treasury stock method. The following table summarizes the stock options, RSUs and LLC Units that were anti-dilutive for the periods indicated. The effects of each would have been anti-dilutive as we recorded a net loss in each of the periods. As a result, these shares, which were outstanding, were excluded from the computation of diluted loss per share for the periods indicated. Three months ended March 31, 2022 2021 Antidilutive Shares: Stock Options 9,508,206 6,903,584 RSUs 3,414,238 66,328 LLC Units 57,313,051 57,622,302 |
Transaction-related Expenses
Transaction-related Expenses | 3 Months Ended |
Mar. 31, 2022 | |
Other Income and Expenses [Abstract] | |
Transaction-related Expenses | Transaction-related ExpensesDuring the three months ended March 31, 2022, we incurred $3.2 million of transaction-related expenses in connection with the acquisition of Caravan Health and other corporate development activities, such as potential mergers and acquisitions, strategic investments and other similar activities. These transaction-related expenses primarily related to consulting and other professional services expenses, as well as certain integration-related expenses following the acquisition of Caravan Health.For the three months ended March 31, 2021, we incurred $0.9 million of transaction-related expenses related to expenses incurred in connection with corporate development activities, such as potential mergers and acquisitions, strategic investments and other similar activities. These transaction-related expenses related to consulting, compensation, and integration-type expenses. Additionally, for the three months ended March 31, 2021, we incurred $4.7 million of costs in connection with our IPO. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letters of Credit As of March 31, 2022, we had outstanding letters of credit totaling $12.2 million, including $3.0 million related to leased properties and $9.2 million in favor of CMS, which are required in the event of a negative outcome on certain episodes of care within the BPCI-A program and we do not settle the related amounts owed to CMS. This amount reduces the borrowing amount available to us under our Revolving Facility as of March 31, 2022 . See Note 12 Long-Term Debt for the total value of letters of credit under this facility. However, the terms of BPCI-A also require that certain partners provide a related reciprocal letter of credit for the majority of this amount. In February 2022, the entire $8.8 million of the reciprocal letters of credit were released as a result of collateral being available under the new credit agreement. Contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable a liability has been incurred and the amount of the liability can be reasonably estimated. We are involved in various lawsuits, claims and administrative proceedings arising in the normal course of business. In management’s opinion, the ultimate resolution of these matters will not materially adversely affect our financial position, results of operations or cash flows. Sales Tax Reserve During the year ended December 31, 2019, it was determined that certain Episodes of Care Services may be subject to sales tax in certain jurisdictions. Historically, we had not collected sales tax from our Episodes of Care Services customers as we believed the services were not taxable. As of March 31, 2022 and December 31, 2021, we had a liability of $1.8 million and $1.6 million, respectively, for potential sales tax exposure related to services performed in 2016 through the second quarter of 2020, included in other current liabilities on the Condensed Consolidated Balance Sheets. During the three months ended March 31, 2022, we received final audit settlement with certain states that led to $0.2 million recorded as an increase to SG&A expense on the Condensed Consolidated Statement of Operation. We are in the process of settling the remaining potential exposure with the various states and we began collecting sales tax from customers in the second quarter of 2021 for 2020 services. Equity Appreciation Rights As of March 31, 2022, there was approximately $14.8 million of original grant date fair value unrecognized related to the original customer EAR agreements, which we expect to record as a reduction of revenue through the end of 2022. We remeasure the fair value of the outstanding EAR agreements at the end of each reporting period and record any changes in fair value to other expense (income), net in our Condensed Consolidated Statement of Operations. See Note 13 Fair Value Measurements for changes in estimated fair value and valuation techniques used to estimate the EAR. In December 2021, we and our customer agreed to extend our existing commercial arrangements through the middle of 2026 and established targets for the minimum number of IHEs to be performed on behalf of the customer each year (the “Volume Targets”). We also entered into a letter agreement (the “EAR Letter Agreement”) with the customer that provides that, in the event of a change in control of the Company or certain other corporate transactions, and subject to achievement of the Volume Targets, if the aggregate amount paid under the EARs prior to and in connection with such event (the “Aggregate EAR Value”) is less than $118.5 million, then the customer will be paid the difference between $118.5 million and the Aggregate EAR Value. The EAR Letter Agreement is a separate equity value-linked instrument, independent from the original EARs. The grant date fair value is determined based on an option pricing model. Similar to the original EARs, we will record the initial grant date fair value as a reduction to revenue over the performance period, beginning in 2022. Estimated changes in fair market value will be recorded each accounting period based on management’s current assumptions related to the underlying valuation approaches as other (income) expense, net on the Condensed Consolidated Statement of Operations. The grant date fair value of the EAR Letter Agreement was estimated to be $76.2 million and will be recorded as a reduction of revenue through June 30, 2026, coinciding with the service period. As of March 31, 2022, there was approximately $74.6 million of original grant date fair value unrecognized related to the EAR Letter Agreement, which we expect to record as a reduction of revenue as follows: Remainder of 2022 $ 4.7 2023 20.0 2024 20.0 2025 19.9 2026 10.0 Total $ 74.6 We remeasure the fair value of the outstanding EAR Letter Agreement at the end of each reporting period and record any changes in fair value to other expense (income), net in our Condensed Consolidated Statement of Operations. See Note 13 Fair Value Measurements for changes in estimated fair value and valuation techniques used to estimate the fair value of the EAR Letter Agreement. Synthetic Equity Plan In connection with our IPO in February 2021, the Synthetic Equity Plan (“SEP”) was amended to, among other things, remove the change in control payment condition and provide for cash settlement upon each vesting event based on a 30 trading day volume weighted average price of our Class A common shares. Prior to this amendment, the vesting criteria were not probable of occurring and we had not recognized any compensation expense related to these awards. Concurrent with the February 2021 amendment, we began to record compensation expense and a current liability beginning in the first quarter of 2021 related to outstanding synthetic equity awards (“SEUs”) subject to time-based vesting. The liability and expense are adjusted each reporting period based upon actual cash settlements and the underlying value of our Class A common stock. The SEU liability is included in accounts payable and accrued expenses on our Condensed Consolidated Balance Sheet. We have not recorded any expense related to the outstanding SEUs subject to performance-based vesting as the vesting criteria were not probable of occurring as of March 31, 2022. Most of the outstanding SEUs subject to performance-based vesting were amended in March 2022, to add a time-based vesting component and therefore, we began recognizing compensation expense related to these outstanding SEUs over the amended service period. As of March 31, 2022, 198,668 SEUs were subject to time-based vesting and 9,152 synthetic equity units outstanding are subject to performance-based vesting. The following table summarizes the change in the SEU liability: Three months ended March 31, 2022 2021 (in millions) Balance at beginning of period $ 0.2 $ — SEU expense included in service expense — 0.5 SEU expense included in SG&A expense 0.1 1.0 Cash payments (0.1) (0.8) Balance at end of period $ 0.2 $ 0.7 As of March 31, 2022, we recorded $30.6 million in long-term contingent consideration on our Condensed Consolidated Balance Sheets related to potential payments due upon the completion of certain performance targets in connection with our acquisition of Caravan Health in March 2022. See Note 4 Business Combinations |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit for the three months ended March 31, 2022 and 2021, was $6.0 million and $9.9 million, respectively. Our effective tax rate for the three months ended March 31, 2022 was 27.0% compared to 16.1% for the three months ended March 31, 2021. Our effective tax rate for the three months ended March 31, 2022 is higher than the U.S. Federal statutory rate of 21% primarily due to state taxes and non-deductible items partially offset by amounts not subject to income taxes related to the non-controlling interest. Our effective tax rate for the three months ended March 31, 2021 was less than the U.S. Federal statutory rate of 21% primarily due to not being subject to income taxes on the portion of earnings that are attributable to the non-controlling interest and loss in the pre-reorganization period partially offset by state taxes. Uncertain Tax Provisions We evaluate and account for uncertain tax positions taken or expected to be taken on an income tax return using a two-step approach. Step one, recognition, occurs when we conclude that a tax position, based solely on its technical merits, is more-likely-than-not to be sustainable upon examination. Step two, measurement, determines the amount of benefit that is greater than 50% likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Derecognition of a tax position that was previously recognized would occur when we subsequently determine that a tax position no longer meets the more likely-than-not threshold of being sustained. We record interest (and penalties where applicable), net of any applicable related income tax benefit, on potential income tax contingencies as a component of the income tax provision. We have evaluated our tax positions and have identified uncertain tax positions for which a reserve should be recorded. Accordingly, a provision for uncertainties in income taxes of $0.3 million has been recorded and is included in other noncurrent liabilities on our Condensed Consolidated Balance Sheet as of March 31, 2022. Tax Receivable Agreement In February 2021, in connection with the Reorganization Transactions and IPO, we entered into the Tax Receivable Agreement (the “TRA”), which obligates us to make payments to the Continuing Pre-IPO LLC Members, the Reorganization Parties, Optionholders (as defined in the TRA) of the Blocker Companies at the time of the Mergers, holders of synthetic equity units and any future party to the TRA (collectively, the “TRA Parties”) in the aggregate generally equal to 85% of the applicable cash savings that we actually realize as a result of (i) certain favorable tax attributes acquired from the Blocker Companies in the Mergers (including net operating losses, the Blocker Companies’ allocable share of existing tax basis and refunds of Blocker Company taxes attributable to pre-Merger tax periods), (ii) increases in our allocable share of existing tax basis and tax basis adjustments that may result from (x) future redemptions or exchanges of LLC Units by Continuing Pre-IPO LLC Members for cash or Class A common stock, (y) the IPO Contribution and (z) certain payments made under the TRA and (iii) deductions in respect of interest and certain compensatory payments made under the TRA. We will retain the benefit of the remaining 15% of these tax savings. As of March 31, 2022, we had a liability of $56.3 million related to the projected obligations under the TRA. TRA related liabilities are classified as current or noncurrent based on the expected date of payment. During the three months ended March 31, 2022, we recorded an immaterial increase in the TRA liability. As of March 31, 2022, there are no amounts due within 12 months and therefore the entire liability is included in Tax receivable agreement liability within noncurrent liabilities on our Condensed Consolidated Balance Sheet. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Operating segments are components of an enterprise for which separate financial information is available and evaluated regularly by our Chief Operating Decision Maker in deciding how to allocate resources and in assessing financial performance. Management views our operating performance in two reportable segments: Home & Community Services and Episodes of Care Services. We evaluate the performance of each segment based on segment revenue and adjusted EBITDA. The operating results of the reportable segment are based on segment adjusted EBITDA, which includes revenue and expenses incurred by the segment, as well as an allocation of shared expenses. Shared expenses are generally allocated to each segment based on the segments’ proportionate employee headcount. Certain costs are not allocated to the segments, as described below, as these items are not considered in evaluating the segment’s overall performance. See Note 6 Revenue Recognition for a summary of segment revenue by product type for the three months ended March 31, 2022 and 2021. Our operating segment results for the periods presented were as follows: Three months ended March 31, 2022 2021 (in millions) Revenue Home & Community Services $ 186.9 $ 152.4 Episodes of Care Services 29.6 27.6 Segment Adjusted EBITDA Home & Community Services 55.9 41.1 Episodes of Care Services (10.9) (6.7) Less: reconciling items to loss before income taxes: Unallocated costs (1) 45.3 72.5 Depreciation and amortization 18.0 16.7 Interest expense 4.0 6.8 Loss before income taxes $ (22.3) $ (61.6) (1) Unallocated costs as follows: Other (income) expense, net (2) 28.8 56.7 Equity-based compensation 6.5 2.5 SEU Expense 0.1 1.5 Customer equity appreciation rights 6.5 4.9 Transaction-related expenses 3.2 5.6 Non-allocated costs (3) 0.2 1.3 Total unallocated costs $ 45.3 $ 72.5 (2) Other (income) expense, net includes the remeasurement of the fair value of the outstanding customer EARs and EAR Letter Agreement as well as interest and dividends earned on cash and cash equivalents. (3) Non-allocated costs included remeasurement of contingent consideration and certain non-recurring expenses, including those associated with the closure of certain facilities, the sale of certain assets, one-time expenses related to the COVID-19 pandemic and the early termination of certain contracts. These costs are not considered by our Chief Operating Decision Maker in making resource allocation decisions. |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations During the normal course of operations, we maintain cash in bank accounts which exceed federally insured amounts. We have not experienced any losses in such accounts and do not believe we are exposed to any significant credit risk related to cash. Accounts receivable potentially subject us to concentrations of credit risk. Management believes that its contract acceptance, billing and collection policies are adequate to minimize potential credit risk. We continuously evaluate the credit worthiness of our customers’ financial condition and generally do not require collateral. We are dependent on a concentrated number of payors and provider partners with whom we contract to provide IHEs and other services. A significant portion of our revenues are generated from a small number of customers. Our largest customers accounted for the following percentages of total net revenue: Three months ended March 31, 2022 2021 Customer A 35 % 26 % Customer B 29 % 30 % Customer C * 10 % *Revenue from this customer was less than 10% of total net revenue during the period noted. In addition, the revenue from our top ten customers accounted for approximately 84% of our total revenue for the three months ended March 31, 2022. As of March 31, 2022, we had three customers which accounted for approximately 27%, 19% and 10%, respectively, of accounts receivable. As of March 31, 2021, we had three customers which accounted for approximately 18%, 12%, and 10%, respectively, of accounts receivable. While CMS is not our customer, a majority of the revenue generated by Episodes of Care Services is under the CMS administered BPCI-A program and payments are received under this program in certain cases from CMS rather than directly from the customer. During the three months ended March 31, 2022, approximately 10% of total consolidated revenue was generated from the BPCI-A program. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In connection with the Reorganization Transactions, we entered into several agreements with various parties including Cure TopCo, New Mountain Capital and its affiliates, certain members of management and other shareholders. These include the Reorganization Agreement, the Cure TopCo, LLC Agreement, the TRA, the Registration Rights Agreement and the Stockholders' Agreement, all of which are fully described in our 2021 Annual Report on Form 10-K. See Note 1 Nature of Operations for further details on the Reorganization Transactions. See Note 14 Shareholders' Equity for additional information on the Cure TopCo, LLC Recapitalization. See Note 20 Income Taxes for additional information on the TRA. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Effective April 1, 2022, we entered into a new lease agreement for a facility in Galway, Ireland. The lease term is 15 years with an option to terminate after 10 years, and total lease payments are expected to be approximately $7.0Â million over 10 years, or $11.1Â million over 15 years. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation These Condensed Consolidated Financial Statements are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and following the rules and regulations of the Securities and Exchange Commission (the “SEC”). The financial statements included in this report should be read in conjunction with the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. In our opinion, they reflect all adjustments, including normal recurring items, that are necessary to present fairly the results of interim periods. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted as permitted by such rules and regulations; however, we believe that the disclosures are adequate to make the information presented not misleading. Operating results for the periods presented herein are not necessarily indicative of the results that may be expected for future interim periods or the entire fiscal year. Our quarterly results of operations, including our revenue, income from operations, net loss and cash flows, have varied and may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, our interim results should not be relied upon as an indication of future performance. |
Consolidation | For the periods subsequent to the Reorganization Transactions effective February 12, 2021, the Condensed Consolidated Financial Statements represent Signify Health and our consolidated subsidiaries, including Cure TopCo. For the periods prior to the Reorganization Transactions, the condensed consolidated financial statements represent Cure TopCo and its consolidated subsidiaries, see Note 1 Nature of Operations . Signify Health was formed for the purpose of the IPO, which was effective in February 2021 and had no activities of its own prior to such date. We are a holding company and our sole material asset is a controlling ownership interest in Cure TopCo. The Condensed Consolidated Financial Statements include the accounts and financial statements of our wholly-owned subsidiaries and variable interest entities (“VIE”s) where we are the primary beneficiary. See Note 5 Variable Interest Entities. Results of operations of VIEs are included from the dates we became the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The accompanying Condensed Consolidated Financial Statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions affecting the reported amounts in our Condensed Consolidated Financial Statements and accompanying notes. These estimates are based on information available as of the date of the Condensed Consolidated Financial Statements; therefore, actual results could differ from those estimates. The significant estimates underlying our Condensed Consolidated Financial Statements include revenue recognition; allowance for doubtful accounts; recoverability of long-lived assets, intangible assets and goodwill; loss contingencies; accounting for business combinations, including amounts assigned to definite and indefinite lived intangible assets and contingent consideration; customer equity appreciation rights; and equity-based compensation. As of March 31, 2022, the COVID-19 pandemic continues to evolve and impact our Episodes of Care Services segment due to the passage of time between episode initiation and the performance and subsequent recognition of revenue for our services; See Note 3 The COVID-19 Pandemic . As a result, many of our estimates and assumptions have required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in the future. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) We have not identified any incremental items that would be considered a component of comprehensive income (loss) and accordingly a statement of comprehensive income (loss) is not reflected in the Condensed Consolidated Financial Statements because net loss and comprehensive loss are the same. |
Restricted Cash | Restricted Cash Under our Master Agreement with the Centers for Medicare and Medicaid Services (“CMS”), we were required to place certain funds in escrow for the benefit of CMS. These amounts, known as a Secondary Repayment Source (“SRS”), were primarily based on the size of our participation in the legacy CMS Bundled Payments for Care Improvement (“BPCI”) program, the predecessor program of the Bundled Payments for Care Improvement - Advanced initiative (“BPCI-A”). These funds were available to CMS as a supplemental payment source if we failed to pay amounts owed to CMS. Under the agreement, the funds are returned to us 18 months after the conclusion of the effective period of the CMS Master Agreement, or when all financial obligations to CMS are fulfilled. As of December 31, 2021, there was $0.5 million in the SRS account included in restricted cash on the Condensed Consolidated Balance Sheets related to BPCI-A, all of which was released in the first quarter 2022. We also withhold a portion of shared savings to customers in a “holding pool” to cover any potential subsequent negative adjustments through CMS’s subsequent reconciliation true-up process. These funds are distributed to customers following the final true-up if there is no negative adjustment. These amounts represent consideration payable to the customer and therefore have reduced revenue in the period earned. The funds have been received by us from CMS and are held in a separate cash account, included as restricted cash on the Condensed Consolidated Balance Sheets. Since the funds are payable to the customer at the point the final CMS true-up is made or a negative adjustment is due to us, the amounts are also included in accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets. As of March 31, 2022 and December 31, 2021, there was $1.8 million and $5.2 million of restricted cash in the holding pool, respectively. In addition, as of March 31, 2022 we hold $0.5 million in a separate cash account, included as restricted cash on the Condensed Consolidated Balance Sheets, in relation to an accountable care organization (“ACO”) owned by Caravan Health. This ACO is part of a risk model under the CMS Medicare Shared Savings Program (“MSSP”) program where it shares in both the savings and losses. The ACO has a master letter of credit with CMS as the recipient where the letter of credit is used as protection against unpaid losses, should the ACO fail to remit payment in the event that losses occur. The letter of credit is collateralized by the ACO members, by either cash remitted or subordinated letters of credit. This restricted cash will only be used if an ACO member fails to remit payment in connection with a subordinated letter of credit. |
Accounts Receivable | Accounts ReceivableAccounts receivable primarily consist of amounts due from customers and CMS and are stated at their net realizable value. Management evaluates all accounts periodically and an allowance is established based on the latest information available to management. Management considers historical realization data, accounts receivable aging trends and other operational trends to estimate the collectability of receivables. After all reasonable attempts to collect a receivable have been exhausted, the receivable is written off against the allowance for doubtful accounts. |
Advertising and Marketing Cost | Advertising and Marketing CostsAdvertising and marketing costs are included in selling, general and administrative expenses (“SG&A”) and are expensed as incurred. |
Accounting for Leases | Accounting for Leases We lease various property and equipment, with the majority of our leases consisting of real estate leases. Effective January 1, 2022, we adopted ASC Topic 842 Leases (“ASC 842”). Under ASC 842, a lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Our contracts determined to be or contain a lease include explicitly or implicitly identified assets where we have the right to substantially all of the economic benefits of the assets and we have the ability to direct how and for what purpose the assets are used during the lease term. Leases are classified as either operating or financing. All of our leases meet the criteria to be classified as operating leases. For operating leases, we recognize a lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject to certain adjustments, such as prepaid rents, initial direct costs and lease incentives received from the lessor. We use the incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate is the rate of interest that we would have to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. Certain of our leases include variable lease costs to reimburse the lessor for real estate tax and insurance expenses and certain non-lease components that transfer a distinct service to us, such as common area maintenance services. We have elected not to separate the accounting for lease components and non-lease components for all leased assets. We sublease portions of our office space where we do not use the entire space for our operations. Sublease income is recorded as a reduction of lease expense. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) which requires lessees to recognize leases on the balance sheet by recording a right-of-use asset and lease liability. This guidance is effective for non-public entities for annual reporting period s beginning after December 15, 2021. We adopted this new guidance as of January 1, 2022 and applied the transition option, whereby prior comparative periods will not be retrospectively presented in the consolidated financial statements. We elected the package of practical expedients not to reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs and the lessee practical expedient to combine lease and non-lease components for all asset classes. We made a policy election to not recognize right-of-use assets and lease liabilities for short-term leases for all asset classes. See Note 8 Leases . In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805) Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”) which requires that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. ASU 2021-08 is effective for public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. We elected to early adopt this new guidance for interim periods in 2022 beginning with the Caravan Health acquisition on March 1, 2022. We measured the acquired contract assets and liabilities in accordance with Topic 606. See Note 4 Business Combinations . In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance (“ASU 2021-10”) which requires annual disclosures that increase the transparency of transactions with a government accounted for by applying a grant or contribution accounting model, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity’s financial statements. ASU 2021-10 is effective for all entities for fiscal years beginning after December 31, 2021. We adopted this new guidance as of January 1, 2022. There was no material impact on our condensed consolidated financial statements upon adoption. Pending Adoption We are an “emerging growth company” under the Jumpstart Our Business Startups Act (“JOBS Act”). Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by FASB or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We intend to take advantage of the exemption for complying with new or revised accounting standards within the same time periods as private companies. The effective dates below are the effective dates we expect to adopt the new accounting pronouncements, which are those permitted for a company that is not an issuer. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”) which introduced the current expected credit losses methodology for estimating allowances for credit losses. ASU 2016-13 applies to all financial instruments carried at amortized cost and off-balance-sheet credit exposures not accounted for as insurance, including loan commitments, standby letters of credit, and financial guarantees. The new accounting standard does not apply to trading assets, loans held for sale, financial assets for which the fair value option has been elected, or loans and receivables between entities under common control. ASU 2016-13 is effective for non-public entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are evaluating the impact of this new guidance on our condensed consolidated financial statements. |
Revenue Recognition | Disaggregation of Revenue We earn revenue from our two operating segments, Home & Community Services and Episodes of Care Services, under contracts that contain various fee structures. Through our Home & Community Services segment, we offer health evaluations performed either within the patient’s home, virtually or at a healthcare provider facility, primarily to Medicare Advantage health plans (and to some extent, Medicaid). Additionally, we offer certain diagnostic screening and other ancillary services, and through our Signify Community solution, we offer access to services to address healthcare concerns related to social determinants of health. Through our Episodes of Care Services segment, we primarily provide services designed to improve the quality and efficiency of healthcare delivery by developing and managing episodic payment programs in partnership with healthcare providers, primarily under the BPCI-A program with CMS. We also provide ACO services through our Caravan Health subsidiary, acquired in March 2022. Additionally, we provide certain complex care management services. All of our revenue is generated in the United States. Performance Obligations Episodes of Care Services There have been no material changes to our revenue recognition and estimates, other than as described below related to the acquisition of Caravan Health. Caravan Health enters into contracts with customers to provide multiple services around the management of the ACO model. These include, but are not limited to, population health software, analytics, practice improvement, compliance, marketing, governance, surveys and licensing. The overall objective of the services provided is to help the customer receive shared savings from CMS. Caravan Health enters into arrangements with customers wherein we receive a contracted percentage of each customer’s portion of shared savings if earned. We recognize shared savings revenue as performance obligations are satisfied over time, commensurate with the recurring ACO services provided to the customer over a 12-month calendar year period. The shared savings transaction price is variable, and therefore, we estimate an amount we expect to receive for each 12-month calendar year performance obligation period. In order to estimate this variable consideration, management initially uses estimates of historical performance of the ACOs. We consider inputs such as attributed patients, expenditures, benchmarks and inflation factors. We adjust our estimates at the end of each reporting period to the extent new information indicates a change is needed. We apply a constraint to the variable consideration estimate in circumstances where we believe the data received is incomplete or inconsistent, so as not to have the estimates result in a significant revenue reversal in future periods. Although our estimates are based on the information available to us at each reporting date, new and material information may cause actual revenue earned to differ from the estimates recorded each period. These include, among others, Hierarchical Conditional Category (“HCC”) coding information, quarterly reports from CMS, unexpected changes in attributed patients and other limitations of the program beyond our control. We receive final reconciliations from CMS and collect the cash related to shared savings earned annually in the third or fourth quarter of each year for the preceding calendar year. The remaining sources of Caravan Health revenue in our Episodes of Care Services segment are recognized over time when, or as, the performance obligations are satisfied and are primarily based on a fixed fee or per member per month fee. Therefore, they do not require significant estimates and assumptions by management. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table reconciles cash, cash equivalents, and restricted cash per the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets: March 31, 2022 December 31, 2021 (in millions) Cash and cash equivalents $ 451.3 $ 678.5 Restricted cash 2.3 5.7 Total cash, cash equivalents, and restricted cash $ 453.6 $ 684.2 |
Schedule of Restricted Cash | The following table reconciles cash, cash equivalents, and restricted cash per the Condensed Consolidated Statements of Cash Flows to the Condensed Consolidated Balance Sheets: March 31, 2022 December 31, 2021 (in millions) Cash and cash equivalents $ 451.3 $ 678.5 Restricted cash 2.3 5.7 Total cash, cash equivalents, and restricted cash $ 453.6 $ 684.2 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Fair Value of Net Assets Acquired | The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows: Cash $ 6.8 Restricted cash 0.5 Accounts receivable 1.6 Contract assets 9.1 Prepaid expenses and other current assets 1.7 Property and equipment 0.3 Intangible assets 93.9 Other assets 0.1 Total identifiable assets acquired 114.0 Accounts payable and accrued liabilities 2.9 Other current liabilities 0.6 Deferred tax liabilities 22.4 Total liabilities assumed 25.9 Net identifiable assets acquired 88.1 Goodwill 199.3 Total of assets acquired and liabilities assumed $ 287.4 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The carrying amount and classification of the VIEs’ assets and liabilities included in the Condensed Consolidated Balance Sheets, net of intercompany amounts, are as follows: March 31, 2022 December 31, 2021 (in millions) ASSETS Current assets Cash and cash equivalents $ 12.0 $ 10.6 Accounts receivable, net 19.3 14.6 Total current assets 31.3 25.2 Total assets $ 31.3 $ 25.2 LIABILITIES AND EQUITY Current liabilities Accounts payable and accrued expenses $ — $ 3.4 Contract liabilities 0.5 — Other current liabilities 1.1 — Total current liabilities 1.6 3.4 Total liabilities 1.6 3.4 Company capital 37.9 29.3 Accumulated deficit (8.2) (7.5) Total equity 29.7 21.8 Total liabilities and equity $ 31.3 $ 25.2 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes disaggregated revenue from contracts with customers by source of revenue, which we believe best presents the nature, amount and timing of revenue. Three months ended March 31, 2022 2021 (in millions) Evaluations $ 186.2 $ 150.3 Other 0.7 2.1 Home & Community Services Total Revenue 186.9 152.4 Episodes 24.1 25.4 Other 5.5 2.2 Episodes of Care Services Total Revenue 29.6 27.6 Consolidated Revenue Total $ 216.5 $ 180.0 |
Schedule of Contract Assets and Contract Liabilities | The following table provides information about accounts included on the Condensed Consolidated Balance Sheets. March 31, 2022 December 31, 2021 Episodes of Care Services Home & Community Services Total Episodes of Care Services Home & Community Services Total (in millions) Assets Accounts receivable, net (1) $ 39.8 $ 180.9 $ 220.7 $ 100.1 $ 117.1 $ 217.2 Contract assets (2) $ 128.1 $ 4.4 $ 132.5 $ 82.8 $ 1.5 $ 84.3 Liabilities Shared savings payable (3) $ 37.4 $ — $ 37.4 $ 63.4 $ — $ 63.4 Contract liabilities (4) $ 39.2 $ 4.8 $ 44.0 $ 27.8 $ 5.1 $ 32.9 Deferred revenue (5) $ 1.0 $ 1.6 $ 2.6 $ 0.1 $ 3.5 $ 3.6 (1) Accounts receivable, net for Episodes of Care Services included $1.6 million due from CMS as of March 31, 2022 primarily related to amounts not yet collected for the fifth reconciliation period of the BPCI-A program. As of December 31, 2021, accounts receivable, net for Episodes of Care Services included $56.2 million due from CMS primarily related to the fifth reconciliation period of the BPCI-A program. Accounts receivable, net for Home & Community Services included $51.1 million and $3.7 million in amounts not yet billed to customers, as of March 31, 2022 and December 31, 2021, respectively. The remaining amount of accounts receivable for both Episodes of Care Services and Home & Community Services represent amounts to be received from customers. Home & Community Services accounts receivable as of March 31, 2022 reflected strong IHE volume in the first quarter and a higher mix of in-person IHEs compared to vIHEs. (2) Contract assets primarily represent management’s estimate of amounts we expect to receive under the BPCI-A program related to the next two reconciliation periods. As of March 31, 2022, contract assets covered episodes of care commencing in the period from April 2021 through March 2022. Estimates for program size and savings rate are based on information available as of the date of the financial statements. We record an estimate of revenue related to these performance obligations over the 13-month period starting in the period the related episodes of care commence and through the estimated receipt of the semi-annual CMS reconciliation file. Any changes to these estimates based on new information will be recorded in the period such information is received. Total savings generated and revenue earned for the episodes of care in which a component of the contract asset recorded as of March 31, 2022 relates to, will be included in the semi-annual reconciliation expected from CMS during the second quarter of 2022. Contract assets for Episodes of Care Services segment also included $10.5 million related to estimated shared savings under the Caravan Health ACO services programs. Contract assets in the Home & Community Services segment of $4.4 million as of March 31, 2022 represent management’s estimate of amounts to be received from clients as a result of certain service levels being achieved during the contractual period. (3) Total shared savings payable is included in accounts payable and accrued expenses on the Condensed Consolidated Balance Sheets. Shared savings payable for Episodes of Care Services included $23.9 million due to CMS as of December 31, 2021, all of which was settled with CMS in the first quarter of 2022. Shared savings payable included $35.6 million as of March 31, 2022 primarily related to the fifth reconciliation received in December 2021, which is expected to be paid to customers related to their portion of savings earned under the BPCI-A program. Additionally, there is $1.8 million included in shared savings payable at March 31, 2022, which represents amounts withheld from customers under the BPCI-A program based on contractual withholding percentages. This amount has been received by us from CMS and is held as restricted cash. We expect to remit these amounts to customers at the conclusion of the program, at which time both restricted cash and the liability will be reduced. (4) Contract liabilities in our Episodes of Care Services segment represent management’s estimate of savings amounts we expect to share with our customers based on contractual shared savings percentages related to the amounts we expect to be entitled to receive under the BPCI-A program for the next two reconciliation periods. As of March 31, 2022, contract liabilities of $39.2 million cover episodes of care commencing in the period from April 2021 through March 2022. These amounts offset the gross amount we expect to receive for the same period included in contract assets as of March 31, 2022. Contract liabilities in the Home & Community Services segment of $4.8 million as of March 31, 2022 represent management’s estimate of potential refund liabilities due to certain clients as a result of certain service levels not being achieved during the contractual periods primarily due to COVID-19. (5) Deferred revenue is included in other current liabilities on the Condensed Consolidated Balance Sheets and primarily relates to advance payments received from certain customers. The table below summarizes the activity recorded in the contract asset and liability accounts for the periods presented. Three months ended March 31, Contract Assets 2022 2021 (in millions) Balance at beginning of period $ 84.3 $ 27.8 Acquired in Caravan Health Acquisition 9.1 — Estimated revenue recognized related to performance obligations satisfied at a point-in-time 2.9 — Estimated revenue recognized related to performance obligations satisfied over time 36.2 33.5 Balance at end of period $ 132.5 $ 61.3 Three months ended March 31, Contract Liabilities 2022 2021 (in millions) Balance at beginning of period $ 32.9 $ 6.2 Payments made to customer — (0.6) Estimated amounts due to customer related to performance obligations satisfied at a point-in-time (0.3) 1.1 Estimated amounts due to customer related to performance obligations satisfied over time 11.4 14.1 Balance at end of period $ 44.0 $ 20.8 Three months ended March 31, Deferred Revenue 2022 2021 (in millions) Balance at beginning of period $ 3.6 $ 3.8 Acquired in Caravan Health Acquisition 0.5 — Payments received from customers 0.6 7.5 Revenue recognized upon completion of performance obligation (2.1) (4.3) Balance at end of period $ 2.6 $ 7.0 Three months ended March 31, Shared Savings Payable 2022 2021 (in millions) Balance at beginning of period $ 63.4 $ 80.8 Amounts paid to customer and/or CMS (67.8) (22.0) Amounts due to customer upon completion of performance obligation 41.8 15.6 Balance at end of period $ 37.4 $ 74.4 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, net | Property and equipment, net were as follows as of each of the dates presented: March 31, 2022 December 31, 2021 (in millions) Computer equipment $ 23.7 $ 22.0 Leasehold improvements 18.6 18.5 Furniture and fixtures 6.7 6.5 Software 2.4 2.5 Projects in progress 0.5 0.7 Property and equipment, gross 51.9 50.2 Less: Accumulated depreciation and amortization (28.5) (26.5) Property and equipment, net $ 23.4 $ 23.7 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Summary of Impact of ASC 842 Adoption | The following is a summary of the impact of ASC 842 adoption on our Condensed Consolidated Balance Sheet: December 31, 2021 ASC 842 Adjustments January 1, 2022 (in millions) Assets Operating lease right-of-use assets $ — $ 23.0 $ 23.0 Liabilities Current portion of operating lease liabilities — 8.5 8.5 Operating lease liability, net of current portion — 27.1 27.1 Deferred rent and tenant improvement allowances 12.2 (12.2) — Retained Earnings 19.7 (0.4) 19.3 |
Operating Lease Right-of-Use Assets and Lease Liabilities | The following table presents our operating lease right-of-use assets and lease liabilities as of March 31, 2022. Current lease liabilities are included in other current liabilities on the Condensed Consolidated Balance Sheets. March 31, 2022 (in millions) Operating lease right-of-use assets $ 21.3 Current portion of operating lease liabilities 8.1 Non-current operating lease liabilities 25.2 Total Lease Liabilities $ 33.3 |
Lease, Cost | The components of lease expense for the three months ended March 31, 2022 were as follows: Three months ended March 31, 2022 (in millions) Operating lease cost $ 2.1 Variable lease cost 0.7 Sublease income (0.7) Total Lease Cost (1) $ 2.1 (1) Excludes short-term lease expense, which is not material The following table presents the weighted average remaining lease term and discount rate of our operating leases as of March 31, 2022: Weighted Average Lease Term (Years) 5.8 Weighted Average Discount Rate 4.6 % |
Schedule of Maturities of Operating Lease Liabilities | As of March 31, 2022, maturities of our operating lease liabilities are as follows: Remainder of 2022 $ 7.2 2023 8.3 2024 4.8 2025 4.1 2026 3.4 Thereafter 10.6 Total lease payments 38.4 Less: imputed interest (5.1) Present value of operating lease liabilities $ 33.3 |
Schedule of Future Minimum Lease Payments | As of December 31, 2021, future minimum lease payments under non-cancellable operating leases were as follows: 2022 $ 10.2 2023 8.7 2024 6.1 2025 9.3 2026 8.6 Thereafter 21.5 $ 64.4 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets were as follows as of each of the dates presented: March 31, 2022 December 31, 2021 Estimated Useful Life (years) Gross Carrying Amount Accumulated amortization Net Carrying Value Gross Carrying Amount Accumulated amortization Net Carrying Value (in millions) Customer relationships 3 - 20 $ 600.3 $ (137.7) $ 462.6 $ 530.5 $ (129.1) $ 401.4 Acquired and capitalized software 3 - 6 164.5 (87.6) 76.9 134.3 (80.4) 53.9 Tradename 3 0.7 — 0.7 — — — Total $ 765.5 $ (225.3) $ 540.2 $ 664.8 $ (209.5) $ 455.3 |
Schedule of Expected Amortization Expense | Expected amortization expense as of March 31, 2022 related to intangible assets, including internal-use software development costs, was as follows: (in millions) Remainder of 2022 $ 53.4 2023 65.4 2024 50.6 2025 43.8 2026 43.1 Thereafter 283.9 $ 540.2 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in Carrying Amount of Goodwill | The change in the carrying amount of goodwill for each reporting unit is as follows: Home & Community Services Episodes of Care Services Total (in millions) Balance at December 31, 2021 $ 170.4 $ 426.7 $ 597.1 Business combinations — 199.3 199.3 Balance at March 31, 2022 $ 170.4 $ 626.0 $ 796.4 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: March 31, December 31, 2022 2021 (in millions) Shared savings payable $ 37.4 $ 63.4 Accrued payroll and payroll-related expenses 28.6 46.5 Other accrued expenses 25.2 19.6 Accrued income taxes 7.8 1.6 Accounts payable 6.5 5.6 Total accounts payable and accrued liabilities $ 105.5 $ 136.7 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt was as follows: March 31, December 31, 2022 2021 (in millions) Revolving Facility $ — $ — 2021 Term Loan 348.3 349.1 Total debt 348.3 349.1 Unamortized debt issuance costs (5.8) (6.0) Unamortized discount on debt (4.5) (4.7) Total debt, net 338.0 338.4 Less current maturities (3.5) (3.5) Total long-term debt $ 334.5 $ 334.9 |
Future Principal Maturities of Long-Term Debt | The aggregate principal maturities of long-term debt due subsequent to March 31, 2022 are as follows: (in millions) Remainder of 2022 $ 2.6 2023 3.5 2024 3.5 2025 3.5 2026 3.5 Thereafter 331.7 $ 348.3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis | Assets and liabilities measured at fair value on a recurring basis were as follows: March 31, 2022 Balance Sheet Classification Type of Instrument Level 1 Level 2 Level 3 Total (in millions) Cash equivalents Money market funds $ 200.0 $ — $ — $ 200.0 Customer EAR liability Customer equity appreciation rights — — 82.7 82.7 Customer EAR liability EAR letter agreement — — 1.3 1.3 Contingent consideration Consideration due to sellers — — 30.6 30.6 December 31, 2021 Balance Sheet Classification Type of Instrument Level 1 Level 2 Level 3 Total (in millions) Cash equivalents Money market funds $ 400.1 $ — $ — $ 400.1 Customer EAR liability Customer equity appreciation rights — — 48.6 48.6 Contingent consideration Consideration due to sellers — — — — |
Changes in Level 3 Liabilities Measured at Fair Value on a Recurring Basis | The changes in Level 3 liabilities measured at fair value on a recurring basis were as follows: Contingent Consideration Three months ended March 31, 2022 2021 (in millions) Beginning of period $ — $ 15.2 Payment of contingent consideration — — Initial measurement of contingent consideration due to sellers 30.5 — Remeasurement of contingent consideration included in selling, general and administrative expense 0.1 0.2 Balance at end of period $ 30.6 $ 15.4 Customer equity appreciation rights Three months ended March 31, 2022 2021 (in millions) Beginning of period $ 48.6 $ 21.6 Grant date fair value estimate recorded as reduction to revenue 4.9 4.9 Grant date fair value estimate of EAR letter agreement recorded as reduction to revenue 1.6 — Remeasurement of fair value of customer EAR agreements included in other expense (income), net 29.2 56.8 Remeasurement of fair value of EAR letter agreement, included in other expense (income), net (0.3) — Balance at end of period $ 84.0 $ 83.3 |
Schedule of Valuation Techniques and Significant Unobservable Inputs | The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows as of March 31, 2022: Fair Value (in millions) Valuation Technique Significant Unobservable Inputs Assumption Customer equity appreciation rights $ 82.7 Monte Carlo Volatility 55.0% Dividend yield 0% Risk-free rate 2.43% Expected term (years) 3.25 EAR Letter Agreement $ 1.3 Monte Carlo Volatility 55.0% Dividend yield 0% Risk-free rate 2.43% Expected term (years) 3.25 Consideration due to sellers $ 30.6 Black-Scholes Volatility 13.5% Discount Rate 2.30% Risk Free Rate 0.51% Credit Spread 4.90% Expected term (years) 1.58 Consideration due to sellers $ — Discounted approach Discount Rate 5.0% Fair value of the contingent consideration related to the Caravan Health acquisition (s ee Note 4. Business Combinations) was measured using the Black-Scholes option pricing model, which uses certain assumptions to estimate the fair value, including long-term financial forecasts, expected term until payout, volatility, discount rate, credit spread, and risk-free rate. The expected volatility and discount rate as of the acquisition date were calculated using comparable peer companies, adjusted for Caravan Health’s operational leverage. The risk-free interest rate is based on the U.S. Treasury rates that are commensurate with the term of the contingent consideration. As of March 31, 2022, the amount recognized for the contingent consideration arrangement, the range of outcomes, and the assumptions used to develop the estimates did not change compared to those used to estimate Caravan Health’s initial fair value. The valuation techniques and significant unobservable inputs used in recurring Level 3 fair value measurements were as follows as of December 31, 2021: Fair Value (in millions) Valuation Technique Significant Unobservable Inputs Assumption Customer equity appreciation rights $ 48.6 Monte Carlo Volatility 50.0% Dividend yield 0% Risk-free rate 1.05% Expected term (years) 3.5 Fair Value Valuation Technique Significant Unobservable Inputs Discount Rate Consideration due to sellers $ — Discounted approach Discount Rate 5.0% |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Summary of Ownership Interests in Cure TopCo | The following table summarizes the ownership interests in Cure TopCo as of March 31, 2022: LLC Units Ownership Percentage Number of LLC Units held by Signify Health, Inc. 176,232,513 75.5% Number of LLC Units held by noncontrolling interests 57,313,051 24.5% Total LLC Units outstanding 233,545,564 100.0% |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Options Activity | The following is a summary of stock option activity for awards subject to time-based vesting for the three months ended March 31, 2022: Outstanding Options Weighted average exercise price per share Outstanding at December 31, 2021 4,926,357 $ 9.98 Granted 4,375,060 $ 14.72 Converted to time-based vesting 817,081 $ 8.46 Forfeited (201,710) $ 16.65 Exercised (407,287) $ 3.86 Expired (1,295) $ 7.39 Outstanding at March 31, 2022 9,508,206 $ 12.15 |
Schedule of Restricted Stock Units Activity | A summary of restricted stock unit activity for the period presented is as follows: Restricted Stock Units Weighted Avg. Grant Date FMV Outstanding at December 31, 2021 602,745 $ 18.37 Granted 2,936,040 $ 14.13 Vested (57,822) $ 23.84 Forfeited (66,725) $ 16.77 Outstanding at March 31, 2022 3,414,238 $ 14.66 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Loss Per Share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted loss per share of Class A common stock for the three months ended March 31, 2022 and 2021. The basic and diluted loss per share for the three months ended March 31, 2021 only includes the period from February 12, 2021 to March 31, 2021, which represents the period wherein we had outstanding Class A common stock. Three months ended March 31, 2022 2021 (in millions) Net loss $ (16.3) $ (51.7) Less: Net loss attributable to pre-Reorganization Transactions — (17.2) Less: Net loss attributable to the noncontrolling interest (5.4) (11.3) Net loss attributable to Signify Health, Inc. $ (10.9) $ (23.2) Weighted average shares of Class A common stock outstanding - Basic 172,761,665 165,486,015 Earnings (loss) per share of Class A common stock - Basic $ (0.06) $ (0.14) Earnings (loss) per share of Class A common stock - Diluted $ (0.06) $ (0.14) |
Schedule of Antidilutive Shares Outstanding Excluded from Computation of Diluted Earnings Per Share | The following table summarizes the stock options, RSUs and LLC Units that were anti-dilutive for the periods indicated. The effects of each would have been anti-dilutive as we recorded a net loss in each of the periods. As a result, these shares, which were outstanding, were excluded from the computation of diluted loss per share for the periods indicated. Three months ended March 31, 2022 2021 Antidilutive Shares: Stock Options 9,508,206 6,903,584 RSUs 3,414,238 66,328 LLC Units 57,313,051 57,622,302 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of EAR Letter Agreement | As of March 31, 2022, there was approximately $74.6 million of original grant date fair value unrecognized related to the EAR Letter Agreement, which we expect to record as a reduction of revenue as follows: Remainder of 2022 $ 4.7 2023 20.0 2024 20.0 2025 19.9 2026 10.0 Total $ 74.6 |
Summary of SEU Activity | The following table summarizes the change in the SEU liability: Three months ended March 31, 2022 2021 (in millions) Balance at beginning of period $ 0.2 $ — SEU expense included in service expense — 0.5 SEU expense included in SG&A expense 0.1 1.0 Cash payments (0.1) (0.8) Balance at end of period $ 0.2 $ 0.7 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segment Results | Our operating segment results for the periods presented were as follows: Three months ended March 31, 2022 2021 (in millions) Revenue Home & Community Services $ 186.9 $ 152.4 Episodes of Care Services 29.6 27.6 Segment Adjusted EBITDA Home & Community Services 55.9 41.1 Episodes of Care Services (10.9) (6.7) Less: reconciling items to loss before income taxes: Unallocated costs (1) 45.3 72.5 Depreciation and amortization 18.0 16.7 Interest expense 4.0 6.8 Loss before income taxes $ (22.3) $ (61.6) (1) Unallocated costs as follows: Other (income) expense, net (2) 28.8 56.7 Equity-based compensation 6.5 2.5 SEU Expense 0.1 1.5 Customer equity appreciation rights 6.5 4.9 Transaction-related expenses 3.2 5.6 Non-allocated costs (3) 0.2 1.3 Total unallocated costs $ 45.3 $ 72.5 (2) Other (income) expense, net includes the remeasurement of the fair value of the outstanding customer EARs and EAR Letter Agreement as well as interest and dividends earned on cash and cash equivalents. (3) Non-allocated costs included remeasurement of contingent consideration and certain non-recurring expenses, including those associated with the closure of certain facilities, the sale of certain assets, one-time expenses related to the COVID-19 pandemic and the early termination of certain contracts. These costs are not considered by our Chief Operating Decision Maker in making resource allocation decisions. |
Concentrations (Tables)
Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedules of Customer Concentration Risk | Our largest customers accounted for the following percentages of total net revenue: Three months ended March 31, 2022 2021 Customer A 35 % 26 % Customer B 29 % 30 % Customer C * 10 % |
Nature of Operations (Details)
Nature of Operations (Details) $ / shares in Units, $ in Millions | Feb. 16, 2021USD ($)$ / sharesshares | Mar. 31, 2022segment |
Subsidiary, Sale of Stock [Line Items] | ||
Number of operating segments | segment | 2 | |
Cure TopCo | ||
Subsidiary, Sale of Stock [Line Items] | ||
Economic ownership interest by parent (as a percent) | 75.50% | |
Economic ownership interest by noncontrolling interest (as a percent) | 24.50% | |
IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Gross proceeds from IPO | $ 648.6 | |
Net proceeds from IPO | 609.7 | |
Underwriting discounts and commissions | $ 38.9 | |
IPO | Class A Common Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Sale of stock, number of shares issued in transaction (in shares) | shares | 27,025,000 | |
Sale of stock, price per share (in dollars per share) | $ / shares | $ 24 | |
Over-Allotment Option | Class A Common Stock | ||
Subsidiary, Sale of Stock [Line Items] | ||
Sale of stock, number of shares issued in transaction (in shares) | shares | 3,525,000 |
Significant Accounting Polici_4
Significant Accounting Policies - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | |
Cash and Cash Equivalents [Line Items] | |||
Number of operating segments | segment | 2 | ||
Return of funds following conclusion of effective period of CMS master agreement, period | 18 months | ||
Restricted cash | $ 2.3 | $ 5.7 | |
Restricted cash | 2.3 | 5.7 | |
Allowance for doubtful accounts | 9.7 | 7.9 | |
Advertising and marketing costs | 0.2 | $ 0.3 | |
Caravan | |||
Cash and Cash Equivalents [Line Items] | |||
Restricted cash | 0.5 | ||
Secondary Repayment Source | |||
Cash and Cash Equivalents [Line Items] | |||
Restricted cash | 0.5 | ||
Holding Pool | |||
Cash and Cash Equivalents [Line Items] | |||
Restricted cash | $ 1.8 | $ 5.2 |
Significant Accounting Polici_5
Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 451.3 | $ 678.5 | ||
Restricted cash | 2.3 | 5.7 | ||
Total cash, cash equivalents, and restricted cash | $ 453.6 | $ 684.2 | $ 760.9 | $ 77 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - Caravan | Feb. 09, 2022USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Initial purchase price | $ 250,000,000 |
Payments of cash consideration | 190,000,000 |
Payment of contingent consideration | 50,000,000 |
Contingent consideration | 30,500,000 |
Recognition of total consideration at acquisition date | 287,400,000 |
Expected deductible goodwill for tax purposes | 0 |
Intangible assets | 93,900,000 |
Customer relationships | |
Business Acquisition [Line Items] | |
Intangible assets | $ 69,800,000 |
Estimated Useful Life (years) | 10 years |
Acquired and capitalized software | |
Business Acquisition [Line Items] | |
Intangible assets | $ 23,400,000 |
Estimated Useful Life (years) | 5 years |
Tradename | |
Business Acquisition [Line Items] | |
Intangible assets | $ 700,000 |
Estimated Useful Life (years) | 3 years |
Class A Common Stock | |
Business Acquisition [Line Items] | |
Common stock issued | $ 60,000,000 |
Issuance of common units (in shares) | shares | 4,726,134 |
Purchase price (in dollars per share) | $ / shares | $ 12.5993 |
Number of trading days | 5 days |
Number of business days prior to business combination | 3 days |
Business Combinations - Schedul
Business Combinations - Schedule of Preliminary Fair Value of Net Assets Acquired (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Feb. 09, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 796.4 | $ 597.1 | |
Caravan | |||
Business Acquisition [Line Items] | |||
Cash | $ 6.8 | ||
Restricted cash | 0.5 | ||
Accounts receivable | 1.6 | ||
Contract assets | 9.1 | ||
Prepaid expenses and other current assets | 1.7 | ||
Property and equipment | 0.3 | ||
Intangible assets | 93.9 | ||
Other assets | 0.1 | ||
Total identifiable assets acquired | 114 | ||
Accounts payable and accrued liabilities | 2.9 | ||
Other current liabilities | 0.6 | ||
Deferred tax liabilities | 22.4 | ||
Total liabilities assumed | 25.9 | ||
Net identifiable assets acquired | 88.1 | ||
Goodwill | 199.3 | ||
Total of assets acquired and liabilities assumed | $ 287.4 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2022USD ($)physicianPracticeaccountable_care_organization | Dec. 31, 2021USD ($)physicianPractice | |
Variable Interest Entity [Line Items] | ||
Number of physician practices | physicianPractice | 7 | 7 |
Assets | $ 2,271.4 | $ 2,127.2 |
Number of accountable care organizations | accountable_care_organization | 4 | |
Minimum requirement of ACO participants (as a percent) | 75.00% | |
Number of accountable care organizations liable for losses | accountable_care_organization | 1 | |
Restricted cash | $ 2.3 | 5.7 |
Number of accountable care organizations not part of MSSP model | accountable_care_organization | 2 | |
Minimum shared loss rate (as a percent) | 2.00% | |
Minimum shared loss rate exceeded, minimum shared loss rate (as a percent) | 40.00% | |
Maximum shared loss rate (as a percent) | 75.00% | |
Updated benchmark (as a percent) | 15.00% | |
Percent of potential losses bearing risk (as a percent) | 1.00% | |
MSSP maximum (as a percent) | 15.00% | |
Caravan | ||
Variable Interest Entity [Line Items] | ||
Restricted cash | $ 0.5 | |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | $ 31.3 | $ 25.2 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Variable Interest Entities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets | ||||
Cash and cash equivalents | $ 451.3 | $ 678.5 | ||
Accounts receivable, net | 220.7 | 217.2 | ||
Total current assets | 825.9 | 1,000.6 | ||
Total assets | 2,271.4 | 2,127.2 | ||
Current liabilities | ||||
Accounts payable and accrued expenses | 105.5 | 136.7 | ||
Contract liabilities | 44 | 32.9 | $ 20.8 | $ 6.2 |
Other current liabilities | 18.3 | 10 | ||
Total current liabilities | 171.3 | 183.1 | ||
Total liabilities | 725.5 | 634.3 | ||
Company capital | 1,160 | 1,101.3 | ||
Accumulated deficit | 8.4 | 19.7 | ||
Total liabilities and stockholders' equity | 2,271.4 | 2,127.2 | ||
Variable Interest Entity, Primary Beneficiary | ||||
Current assets | ||||
Cash and cash equivalents | 12 | 10.6 | ||
Accounts receivable, net | 19.3 | 14.6 | ||
Total current assets | 31.3 | 25.2 | ||
Total assets | 31.3 | 25.2 | ||
Current liabilities | ||||
Accounts payable and accrued expenses | 0 | 3.4 | ||
Contract liabilities | 0.5 | 0 | ||
Other current liabilities | 1.1 | 0 | ||
Total current liabilities | 1.6 | 3.4 | ||
Total liabilities | 1.6 | 3.4 | ||
Company capital | 37.9 | 29.3 | ||
Accumulated deficit | (8.2) | (7.5) | ||
Total equity | 29.7 | 21.8 | ||
Total liabilities and stockholders' equity | $ 31.3 | $ 25.2 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Revenue from Contract with Customer [Abstract] | |
Number of operating segments | 2 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 216.5 | $ 180 |
Home & Community Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 186.9 | 152.4 |
Episodes of Care Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 29.6 | 27.6 |
Evaluations | Home & Community Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 186.2 | 150.3 |
Other | Home & Community Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 0.7 | 2.1 |
Other | Episodes of Care Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 5.5 | 2.2 |
Episodes | Episodes of Care Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 24.1 | $ 25.4 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Related Balance Sheets Account (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||||
Accounts receivable, net | $ 220.7 | $ 217.2 | ||
Contract assets | 132.5 | 84.3 | $ 61.3 | $ 27.8 |
Liabilities | ||||
Shared savings payable | 37.4 | 63.4 | 74.4 | 80.8 |
Contract liabilities | 44 | 32.9 | 20.8 | 6.2 |
Contract liabilities | 2.6 | 3.6 | $ 7 | $ 3.8 |
Third Reconciliation Period of BPCI-A Program | ||||
Liabilities | ||||
Shared savings payable | 35.6 | |||
Amounts Withheld Under BPCI-A Program | ||||
Liabilities | ||||
Shared savings payable | 1.8 | |||
Episodes of Care Services | ||||
ASSETS | ||||
Accounts receivable, net | 39.8 | 100.1 | ||
Contract assets | 128.1 | 82.8 | ||
Liabilities | ||||
Shared savings payable | 37.4 | 63.4 | ||
Contract liabilities | 39.2 | 27.8 | ||
Contract liabilities | 1 | 0.1 | ||
Episodes of Care Services | Centers for Medicare and Medicaid Services | ||||
ASSETS | ||||
Accounts receivable, net | 1.6 | 56.2 | ||
Liabilities | ||||
Shared savings payable | 23.9 | |||
Home & Community Services | ||||
ASSETS | ||||
Accounts receivable, net | 180.9 | 117.1 | ||
Contract assets | 4.4 | 1.5 | ||
Liabilities | ||||
Shared savings payable | 0 | 0 | ||
Contract liabilities | 4.8 | 5.1 | ||
Contract liabilities | 1.6 | 3.5 | ||
Unbilled receivables | 51.1 | $ 3.7 | ||
Home & Community Services | ACO Services | ||||
ASSETS | ||||
Contract assets | $ 10.5 |
Revenue Recognition - Contract
Revenue Recognition - Contract Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contract with Customer, Asset [Roll Forward] | ||
Beginning balance | $ 84.3 | $ 27.8 |
Acquired in Caravan Health Acquisition | 9.1 | 0 |
Estimated revenue recognized related to performance obligations satisfied at a point-in-time | 2.9 | 0 |
Estimated revenue recognized related to performance obligations satisfied over time | 36.2 | 33.5 |
Ending balance | $ 132.5 | $ 61.3 |
Revenue Recognition - Contrac_2
Revenue Recognition - Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contract with Customer, Refund Liability [Roll Forward] | ||
Beginning balance | $ 32.9 | $ 6.2 |
Payments made to customer | 0 | (0.6) |
Estimated amounts due to customer related to performance obligations satisfied at a point-in-time | (0.3) | 1.1 |
Estimated amounts due to customer related to performance obligations satisfied over time | 11.4 | 14.1 |
Ending balance | $ 44 | $ 20.8 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contract with Customer, Liability [Roll Forward] | ||
Beginning balance | $ 3.6 | $ 3.8 |
Acquired in Caravan Health Acquisition | 0.5 | 0 |
Payments received from customers | 0.6 | 7.5 |
Revenue recognized upon completion of performance obligation | (2.1) | (4.3) |
Ending balance | $ 2.6 | $ 7 |
Revenue Recognition - Shared Sa
Revenue Recognition - Shared Savings Payable (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Shared Savings Payable [Roll Forward] | ||
Beginning balance | $ 63.4 | $ 80.8 |
Amounts paid to customer and/or CMS | (67.8) | (22) |
Amounts due to customer upon completion of performance obligation | 41.8 | 15.6 |
Ending balance | $ 37.4 | $ 74.4 |
Property and Equipment - Proper
Property and Equipment - Property and Equipment, net (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 51.9 | $ 50.2 |
Less: Accumulated depreciation and amortization | (28.5) | (26.5) |
Property and equipment, net | 23.4 | 23.7 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 23.7 | 22 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 18.6 | 18.5 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 6.7 | 6.5 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2.4 | 2.5 |
Projects in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 0.5 | $ 0.7 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 2,200,000 | $ 2,000,000 |
Impairment of property and equipment | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2022USD ($) | Jan. 01, 2022USD ($) | Dec. 31, 2021USD ($) | Oct. 01, 2021USD ($)renewal | Mar. 31, 2021USD ($) | Jan. 01, 2021USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Operating lease right-of-use assets | $ 21.3 | $ 23 | $ 0 | |||
Operating lease liability | 33.3 | $ 35.6 | ||||
Stockholders' equity | (1,545.9) | (1,492.9) | $ (1,431) | $ (894) | ||
Cash paid for amounts included in measurement of operating lease liabilities | 2.7 | |||||
Total lease payments | 38.4 | |||||
Oklahoma City, OK | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 7 years 3 months | |||||
Number of lease renewal options | renewal | 2 | |||||
Lease renewal term | 5 years | |||||
Total lease payments | $ 4.2 | |||||
New York, NY | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Lease term | 5 years 9 months | |||||
Number of lease renewal options | renewal | 1 | |||||
Lease renewal term | 5 years | |||||
Total lease payments | $ 22.7 | |||||
Retained earnings (Accumulated deficit) | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Stockholders' equity | $ (8.4) | (19.7) | $ 23.2 | $ 0 | ||
Cumulative Effect, Period of Adoption, Adjustment | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease right-of-use assets | 23 | |||||
Stockholders' equity | 0.4 | |||||
Cumulative Effect, Period of Adoption, Adjustment | Retained earnings (Accumulated deficit) | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Stockholders' equity | $ 0.4 |
Leases - Summary of Impact of A
Leases - Summary of Impact of ASC 842 Adoption (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
ASSETS | |||
Operating lease right-of-use assets | $ 21.3 | $ 23 | $ 0 |
Liabilities | |||
Current portion of operating lease liabilities | 8.1 | 0 | |
Operating lease liability, net of current portion | 25.2 | 0 | |
Deferred rent and tenant improvement allowances | 12.2 | ||
Retained earnings | $ 8.4 | 19.7 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
ASSETS | |||
Operating lease right-of-use assets | 23 | ||
Liabilities | |||
Current portion of operating lease liabilities | 8.5 | ||
Operating lease liability, net of current portion | 27.1 | ||
Deferred rent and tenant improvement allowances | (12.2) | ||
Retained earnings | (0.4) | ||
Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ASSETS | |||
Operating lease right-of-use assets | 23 | ||
Liabilities | |||
Current portion of operating lease liabilities | 8.5 | ||
Operating lease liability, net of current portion | 27.1 | ||
Deferred rent and tenant improvement allowances | 0 | ||
Retained earnings | $ 19.3 |
Leases - Operating Lease Right-
Leases - Operating Lease Right-of-Use Assets and Lease Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 21.3 | $ 23 | $ 0 |
Current portion of operating lease liabilities | 8.1 | 0 | |
Noncurrent operating lease liabilities | 25.2 | $ 0 | |
Total Lease Liabilities | $ 33.3 | $ 35.6 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 2.1 |
Variable lease cost | 0.7 |
Sublease income | (0.7) |
Total Lease Cost | $ 2.1 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate of Operating Leases (Details) | Mar. 31, 2022 |
Leases [Abstract] | |
Weighted Average Lease Term (Years) | 5 years 9 months 18 days |
Weighted Average Discount Rate (as a percent) | 4.60% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Jan. 01, 2022 |
Leases [Abstract] | ||
Remainder of 2022 | $ 7.2 | |
2023 | 8.3 | |
2024 | 4.8 | |
2025 | 4.1 | |
2026 | 3.4 | |
Thereafter | 10.6 | |
Total lease payments | 38.4 | |
Less: imputed interest | (5.1) | |
Present value of operating lease liabilities | $ 33.3 | $ 35.6 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) $ in Millions | Dec. 31, 2021USD ($) |
Leases [Abstract] | |
2022 | $ 10.2 |
2023 | 8.7 |
2024 | 6.1 |
2025 | 9.3 |
2026 | 8.6 |
Thereafter | 21.5 |
Total | $ 64.4 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 765.5 | $ 664.8 |
Accumulated amortization | (225.3) | (209.5) |
Net Carrying Value | 540.2 | 455.3 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 600.3 | 530.5 |
Accumulated amortization | (137.7) | (129.1) |
Net Carrying Value | $ 462.6 | 401.4 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 20 years | |
Acquired and capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 164.5 | 134.3 |
Accumulated amortization | (87.6) | (80.4) |
Net Carrying Value | $ 76.9 | 53.9 |
Acquired and capitalized software | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 3 years | |
Acquired and capitalized software | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Life (years) | 6 years | |
Tradename | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 0.7 | 0 |
Accumulated amortization | 0 | 0 |
Net Carrying Value | $ 0.7 | $ 0 |
Estimated Useful Life (years) | 3 years |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) | Feb. 09, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | |||
Capitalization of internally-developed software costs | $ 6,800,000 | $ 5,700,000 | |
Amortization of intangible assets | 15,800,000 | 14,700,000 | |
Caravan | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 93,900,000 | ||
Software | PatientBlox | |||
Finite-Lived Intangible Assets [Line Items] | |||
Impairment of finite-lived intangible assets | $ 0 | $ 0 | |
Tradename | Caravan | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 700,000 | ||
Estimated Useful Life (years) | 3 years | ||
Customer relationships | Caravan | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 69,800,000 | ||
Estimated Useful Life (years) | 10 years | ||
Acquired and capitalized software | Caravan | |||
Finite-Lived Intangible Assets [Line Items] | |||
Intangible assets | $ 23,400,000 | ||
Estimated Useful Life (years) | 5 years |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Expected Amortization Expense (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
Remainder of 2022 | $ 53.4 | |
2023 | 65.4 | |
2024 | 50.6 | |
2025 | 43.8 | |
2026 | 43.1 | |
Thereafter | 283.9 | |
Net Carrying Value | $ 540.2 | $ 455.3 |
Goodwill - Change in Carrying A
Goodwill - Change in Carrying Amount of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 597.1 |
Business combinations | 199.3 |
Ending balance | 796.4 |
Home & Community Services | |
Goodwill [Roll Forward] | |
Beginning balance | 170.4 |
Business combinations | 0 |
Ending balance | 170.4 |
Episodes of Care Services | |
Goodwill [Roll Forward] | |
Beginning balance | 426.7 |
Business combinations | 199.3 |
Ending balance | $ 626 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill impairment | $ 0 | $ 0 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||||
Shared savings payable | $ 37.4 | $ 63.4 | $ 74.4 | $ 80.8 |
Accrued payroll and payroll-related expenses | 28.6 | 46.5 | ||
Other accrued expenses | 25.2 | 19.6 | ||
Accrued income taxes | 7.8 | 1.6 | ||
Accounts payable | 6.5 | 5.6 | ||
Total accounts payable and accrued liabilities | $ 105.5 | $ 136.7 |
Long-Term Debt - Schedule of Lo
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total debt | $ 348.3 | $ 349.1 |
Unamortized debt issuance costs | (5.8) | (6) |
Unamortized discount on debt | (4.5) | (4.7) |
Total debt, net | 338 | 338.4 |
Less current maturities | (3.5) | (3.5) |
Total long-term debt | 334.5 | 334.9 |
Revolving Facility | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 0 | 0 |
2021 Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Total debt | $ 348.3 | $ 349.1 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Credit Agreement, Term Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Effective interest rate (as a percent) | 4.26% | 3.75% |
Credit Agreement | ||
Debt Instrument [Line Items] | ||
Maximum net leverage ratio | 4.50 | |
Total amount revolving credit commitments (as a percent) | 35.00% | |
Credit Agreement | Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Borrowings outstanding | $ 0 | |
Remaining borrowing capacity | $ 172.8 |
Long-Term Debt - Future Princip
Long-Term Debt - Future Principal Maturities of Long-Term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Long-term Debt, Fiscal Year Maturity [Abstract] | ||
Remainder of 2022 | $ 2.6 | |
2023 | 3.5 | |
2024 | 3.5 | |
2025 | 3.5 | |
2026 | 3.5 | |
Thereafter | 331.7 | |
Total debt | $ 348.3 | $ 349.1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | $ 84 | |
Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | $ 48.6 | |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 200 | 400.1 |
Contingent consideration | 30.6 | 0 |
Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 82.7 | 48.6 |
Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 1.3 | |
Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 200 | 400.1 |
Contingent consideration | 0 | 0 |
Level 1 | Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 0 | 0 |
Level 1 | Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 0 | |
Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Contingent consideration | 0 | 0 |
Level 2 | Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 0 | 0 |
Level 2 | Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 0 | |
Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Contingent consideration | 30.6 | $ 0 |
Level 3 | Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | 82.7 | |
Level 3 | Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer EAR liability | $ 1.3 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Contingent Consideration and Customer Equity Appreciation Rights (Details) - Level 3 - Fair Value, Recurring - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 0 | $ 15.2 |
Payment of contingent consideration | 0 | 0 |
Initial measurement of contingent consideration due to sellers | 30.5 | 0 |
Remeasurement of fair value | 0.1 | 0.2 |
Ending balance | 30.6 | 15.4 |
Customer equity appreciation rights | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 48.6 | 21.6 |
Ending balance | 84 | 83.3 |
Customer equity appreciation rights | Revenue from Contract with Customer, Excluding Assessed Tax | Customer equity appreciation rights | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Remeasurement of fair value | 4.9 | 4.9 |
Customer equity appreciation rights | Revenue from Contract with Customer, Excluding Assessed Tax | EAR letter agreement | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Remeasurement of fair value | 1.6 | 0 |
Customer equity appreciation rights | Other Nonoperating Income (Expense) | Customer equity appreciation rights | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Remeasurement of fair value | 29.2 | 56.8 |
Customer equity appreciation rights | Other Nonoperating Income (Expense) | EAR letter agreement | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Remeasurement of fair value | $ (0.3) | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Valuation Techniques and Significant Unobservable Inputs (Details) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($)yr | Dec. 31, 2021USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | $ 84 | |
Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | $ 48.6 | |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, fair value | 30.6 | 0 |
Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | 82.7 | 48.6 |
Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | 1.3 | |
Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, fair value | 30.6 | 0 |
Level 3 | Fair Value, Recurring | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | 82.7 | |
Level 3 | Fair Value, Recurring | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | 1.3 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | 82.7 | $ 48.6 |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, fair value | $ 1.3 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Volatility | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0.550 | 0.500 |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Volatility | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0.550 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Dividend Yield | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0 | 0 |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Dividend Yield | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Risk-free rate | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0.0243 | 0.0105 |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Risk-free rate | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, measurement input | 0.0243 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Expected term (years) | Customer equity appreciation rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, term | 3 years 3 months | 3 years 6 months |
Level 3 | Fair Value, Recurring | Valuation Technique, Monte Carlo | Expected term (years) | EAR letter agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Customer equity appreciation rights, term | 3 years 3 months | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, fair value | $ 30.6 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | 0.135 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | Risk-free rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | 0.0051 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | Expected term (years) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | yr | 1.58 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | Discount Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | 0.0230 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Black-Scholes | Credit Spread | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | 0.0490 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Discounted Cash Flow | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, fair value | $ 0 | |
Level 3 | Fair Value, Recurring | Valuation Technique, Discounted Cash Flow | Discount Rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Consideration due to sellers, measurement input | 0.050 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, $ in Millions | Feb. 16, 2021USD ($)classvote$ / sharesshares | Mar. 31, 2022$ / shares | Dec. 31, 2021$ / shares |
Class of Stock [Line Items] | |||
Number of classes of common stock | class | 2 | ||
Preferred stock authorized (in shares) | 50,000,000 | ||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | ||
IPO | |||
Class of Stock [Line Items] | |||
Gross proceeds from IPO | $ | $ 648.6 | ||
Net proceeds from IPO | $ | 609.7 | ||
Underwriting discounts and commissions | $ | $ 38.9 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock authorized (in shares) | 1,000,000,000 | ||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Number of votes per share | vote | 1 | ||
Conversion ratio | 1 | ||
Class A Common Stock | IPO | |||
Class of Stock [Line Items] | |||
Sale of stock, number of shares issued in transaction (in shares) | 27,025,000 | ||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 24 | ||
Class A Common Stock | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Sale of stock, number of shares issued in transaction (in shares) | 3,525,000 | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock authorized (in shares) | 75,000,000 | ||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 |
Number of votes per share | vote | 1 | ||
Conversion ratio | 1 |
Noncontrolling Interest - Summa
Noncontrolling Interest - Summary of Ownership Interests in Cure TopCo (Details) | Mar. 31, 2022shares |
Cure TopCo | |
Ownership Percentage | |
Number of LLC Units held by Signify Health, Inc. (as a percent) | 75.50% |
Number of LLC Units held by non-controlling interests (as a percent) | 24.50% |
Total LLC Units outstanding (as a percent) | 100.00% |
Cure TopCo | |
LLC Units | |
LLC Units (in shares) | 233,545,564 |
Cure TopCo | Parent | |
LLC Units | |
LLC Units (in shares) | 176,232,513 |
Cure TopCo | Non-controlling interest | |
LLC Units | |
LLC Units (in shares) | 57,313,051 |
Noncontrolling Interest - Narra
Noncontrolling Interest - Narrative (Details) | Feb. 16, 2021 | Mar. 31, 2022shares |
Class A Common Stock | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Conversion ratio | 1 | |
LLC Units Exchanged for Shares of Class A Common Stock | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Units exchanged (in shares) | 18,076 | |
LLC Units Exchanged for Shares of Class A Common Stock | Class A Common Stock | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Conversion ratio | 1 | 1 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 07, 2022 | Mar. 01, 2022 | Jan. 01, 2022 | Jan. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
2021 LTIP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Increase in shares authorized (as a percent) | 3.00% | ||||||
Unrecognized compensation expense | $ 89.8 | ||||||
Units outstanding (in shares) | 9,914,736 | ||||||
Performance period of award | 1 year 10 months 24 days | ||||||
2021 LTIP | Selling, General and Administrative Expenses | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation | $ 3.1 | $ 1.1 | |||||
2021 LTIP | Service Expense | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation | 0.2 | ||||||
2021 LTIP | Class A Common Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares available for issuance (in shares) | 16,556,298 | 15,246,831 | |||||
Number of additional shares authorized (in shares) | 7,255,410 | 14,191,113 | |||||
Increase in shares authorized (as a percent) | 3.00% | ||||||
LLC Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding units amended (in shares) | 3,572,469 | ||||||
Vesting period of award | 2 years | ||||||
Award vesting (as a percent) | 50.00% | ||||||
Equity-based compensation | $ 1.7 | ||||||
Fair value of awards outstanding (in dollars per share) | $ 14.19 | ||||||
Fair value of awards outstanding | $ 50.7 | ||||||
Units outstanding (in shares) | 6,941,723 | ||||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Outstanding options amended (in shares) | 817,081 | ||||||
Vesting period of award | 2 years | ||||||
Award vesting (as a percent) | 50.00% | ||||||
Fair value of additional options outstanding (in dollars per share) | $ 8.49 | ||||||
Fair value of additional options outstanding | $ 6.9 | ||||||
Equity-based compensation | $ 0.2 | ||||||
RSUs | 2021 LTIP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Units outstanding (in shares) | 3,414,238 | 602,745 | |||||
RSUs | ESPP | Selling, General and Administrative Expenses | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation | $ 0.1 | ||||||
Incentive Units, Performance-based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Units outstanding (in shares) | 2,279,916 | ||||||
Original grant date fair value unrecognized | $ 4.3 | ||||||
Incentive Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Equity-based compensation | $ 1.3 | $ 1.4 | |||||
Incentive Units, Time-based | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Performance period of award | 1 year | ||||||
Original grant date fair value unrecognized | $ 53 |
Equity-Based Compensation - Sch
Equity-Based Compensation - Schedule of Stock Options Activity (Details) - 2021 LTIP | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Outstanding Options | |
Beginning balance, outstanding (in shares) | shares | 4,926,357 |
Granted (in shares) | shares | 4,375,060 |
Converted to time-based vesting (in shares) | shares | 817,081 |
Forfeited (in shares) | shares | (201,710) |
Exercised (in shares) | shares | (407,287) |
Expired (in shares) | shares | (1,295) |
Ending balance, outstanding (in shares) | shares | 9,508,206 |
Weighted average exercise price per share | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 9.98 |
Granted (in dollars per share) | $ / shares | 14.72 |
Converted to time-based vesting (in dollars per share) | $ / shares | 8.46 |
Forfeited (in dollars per share) | $ / shares | 16.65 |
Exercised (in dollars per share) | $ / shares | 3.86 |
Expired (in dollars per share) | $ / shares | 7.39 |
Ending balance, outstanding (in dollars per share) | $ / shares | $ 12.15 |
Equity-Based Compensation - S_2
Equity-Based Compensation - Schedule of Restricted Stock Units Activity (Details) - 2021 LTIP | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted Stock Units | |
Ending balance, outstanding (in shares) | 9,914,736 |
RSUs | |
Restricted Stock Units | |
Beginning balance, outstanding (in shares) | 602,745 |
Granted (in shares) | 2,936,040 |
Vested (in shares) | (57,822) |
Forfeited (in shares) | (66,725) |
Ending balance, outstanding (in shares) | 3,414,238 |
Weighted Avg. Grant Date FMV | |
Beginning balance, outstanding (in dollars per share) | $ / shares | $ 18.37 |
Granted (in dollars per share) | $ / shares | 14.13 |
Vested (in dollars per share) | $ / shares | 23.84 |
Forfeited (in dollars per share) | $ / shares | 16.77 |
Ending balance, outstanding (in dollars per share) | $ / shares | $ 14.66 |
Loss Per Share - Schedule of Ea
Loss Per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | |||
Mar. 31, 2021 | Feb. 15, 2021 | Feb. 15, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |||||
Net loss | $ (34.5) | $ (17.2) | $ (17.2) | $ (16.3) | $ (51.7) |
Less: Net loss attributable to the noncontrolling interest | (11.3) | (5.4) | |||
Net income (loss) attributable to parent | $ (23.2) | $ (17.2) | $ (10.9) | ||
Weighted average shares of Class A common stock outstanding - Basic (in shares) | 172,761,665 | 165,486,015 | |||
Earnings (loss) per share of Class A common stock - Basic (in dollars per share) | $ (0.06) | $ (0.14) | |||
Earnings (loss) per share of Class A common stock - Diluted (in dollars per share) | $ (0.06) | $ (0.14) |
Loss Per Share - Narrative (Det
Loss Per Share - Narrative (Details) - Class A Common Stock | Feb. 16, 2021 | Mar. 31, 2022 |
Class of Stock [Line Items] | ||
Conversion ratio | 1 | |
LLC Units Exchanged for Shares of Class A Common Stock | ||
Class of Stock [Line Items] | ||
Conversion ratio | 1 | 1 |
Loss Per Share - Anti-Dilutive
Loss Per Share - Anti-Dilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Stock Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 9,508,206 | 6,903,584 |
RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,414,238 | 66,328 |
LLC Units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 57,313,051 | 57,622,302 |
Transaction-related Expenses (D
Transaction-related Expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | ||
Transaction-related expenses, corporate development activities | $ 3.2 | $ 0.9 |
Transaction-related expenses | $ 3.2 | 5.6 |
IPO | ||
Subsidiary, Sale of Stock [Line Items] | ||
Transaction-related expenses | $ 4.7 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Feb. 28, 2022 | Feb. 28, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | |
Other Commitments [Line Items] | ||||||
Outstanding letters of credit | $ 12.2 | |||||
Sales tax reserve liability | 1.8 | $ 1.6 | ||||
Contingent consideration | 30.6 | 0 | ||||
Customer equity appreciation rights | Share-based Payment Arrangement, Nonemployee | ||||||
Other Commitments [Line Items] | ||||||
Original grant date fair value unrecognized | 14.8 | |||||
Maximum aggregate value of award | 118.5 | |||||
Grant date fair value | 74.6 | 76.2 | ||||
Synthetic Equity Units | ||||||
Other Commitments [Line Items] | ||||||
Original grant date fair value unrecognized | $ 0.2 | $ 0.2 | $ 0.7 | $ 0 | ||
Weighted average price volume period | 30 days | |||||
Synthetic Equity Units, Time-Based Vesting | ||||||
Other Commitments [Line Items] | ||||||
Units outstanding (in shares) | 198,668 | |||||
Synthetic Equity Units, Performance-Based Vesting | ||||||
Other Commitments [Line Items] | ||||||
Units outstanding (in shares) | 9,152 | |||||
Selling, General and Administrative Expenses | ||||||
Other Commitments [Line Items] | ||||||
Settlement of sales and excise taxes | $ 0.2 | |||||
Related Reciprocal Letter of Credit Provided | ||||||
Other Commitments [Line Items] | ||||||
Letters of credit released | $ 8.8 | |||||
Leased Properties | ||||||
Other Commitments [Line Items] | ||||||
Outstanding letters of credit | 3 | |||||
Leased Properties | Centers for Medicare and Medicaid Services | ||||||
Other Commitments [Line Items] | ||||||
Outstanding letters of credit | $ 9.2 |
Commitment and Contingencies _2
Commitment and Contingencies - Summary of EAR Letter Agreement (Details) - Customer equity appreciation rights - Share-based Payment Arrangement, Nonemployee - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Remainder of 2022 | $ 4.7 | |
2023 | 20 | |
2024 | 20 | |
2025 | 19.9 | |
2026 | 10 | |
Total | $ 74.6 | $ 76.2 |
Commitment and Contingencies _3
Commitment and Contingencies - Summary of SEU Activity (Details) - Synthetic Equity Units - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount [Roll Forward] | ||
Beginning balance | $ 0.2 | $ 0 |
Cash payments | (0.1) | (0.8) |
Ending balance | 0.2 | 0.7 |
Service Expense | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount [Roll Forward] | ||
SEU expense | 0 | 0.5 |
Selling, General and Administrative Expenses | ||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount [Roll Forward] | ||
SEU expense | $ 0.1 | $ 1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Feb. 28, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (6) | $ (9.9) | ||
Effective tax rate (as a percent) | 27.00% | 16.10% | ||
Provision for uncertainties in income taxes | $ 0.3 | |||
Applicable cash savings payable (as a percent) | 85.00% | |||
Applicable cash savings retainable (as a percent) | 15.00% | |||
Tax receivable agreement liability | $ 56.3 | $ 56.3 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Operating Segment Results (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 216.5 | $ 180 |
Less: reconciling items to loss before income taxes: | ||
Unallocated costs | 45.3 | 72.5 |
Depreciation and amortization | 18 | 16.7 |
Interest expense | 4 | 6.8 |
Loss before income taxes | (22.3) | (61.6) |
Unallocated costs as follows: | ||
Other (income) expense | 28.8 | 56.7 |
Transaction-related expenses | 3.2 | 5.6 |
Non-allocated costs | 0.2 | 1.3 |
Total unallocated costs | 45.3 | 72.5 |
Equity-based compensation | ||
Unallocated costs as follows: | ||
Equity-based compensation | 6.5 | 2.5 |
SEU Expense | ||
Unallocated costs as follows: | ||
Equity-based compensation | 0.1 | 1.5 |
Customer equity appreciation rights | ||
Unallocated costs as follows: | ||
Equity-based compensation | 6.5 | 4.9 |
Home & Community Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 186.9 | 152.4 |
Home & Community Services | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 186.9 | 152.4 |
Segment Adjusted EBITDA | 55.9 | 41.1 |
Episodes of Care Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 29.6 | 27.6 |
Episodes of Care Services | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Revenue | 29.6 | 27.6 |
Segment Adjusted EBITDA | $ (10.9) | $ (6.7) |
Concentrations - Schedule of Cu
Concentrations - Schedule of Customer Concentration Risk (Details) - Revenue from Contract with Customer Benchmark - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Customer A | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 35.00% | 26.00% |
Customer B | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 29.00% | 30.00% |
Customer C | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% |
Concentrations - Narrative (Det
Concentrations - Narrative (Details) - Customer Concentration Risk | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer Benchmark | Top Ten Customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 84.00% | |
Accounts Receivable | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 27.00% | 18.00% |
Accounts Receivable | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 19.00% | 12.00% |
Accounts Receivable | Customer Three | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Apr. 01, 2022 | Mar. 31, 2022 |
Subsequent Event [Line Items] | ||
Total lease payments | $ 38.4 | |
IRELAND | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Lease term | 15 years | |
Lease termination period | 10 years | |
Lease payments to be paid prior to termination period | $ 7 | |
Total lease payments | $ 11.1 |
Uncategorized Items - sgfy-2022
Label | Element | Value |
Adjustments to Additional Paid in Capital, Subscription Fee Receivable | sgfy_AdjustmentsToAdditionalPaidInCapitalSubscriptionFeeReceivable | $ 600,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 604,900,000 |
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | 0 |
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | $ 1,600,000 |
Accounting Standards Update [Extensible Enumeration] | us-gaap_AccountingStandardsUpdateExtensibleList | Accounting Standards Update 2016-02 [Member] |
Adjustments to Additional Paid in Capital, Contributions | sgfy_AdjustmentsToAdditionalPaidInCapitalContributions | $ 26,000,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 400,000 |
Limited Liability Company (LLC) Members' Equity, Unit-based Payment Arrangement | us-gaap_LimitedLiabilityCompanyLLCMembersEquityUnitBasedCompensation | 900,000 |
Adjustments to Additional Paid in Capital, Deferred Tax Adjustment | sgfy_AdjustmentsToAdditionalPaidInCapitalDeferredTaxAdjustment | 6,300,000 |
Noncontrolling Interest [Member] | ||
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 125,300,000 |
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | 254,900,000 |
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 700,000 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (11,300,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 369,600,000 |
Member Units [Member] | ||
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | (877,700,000) |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (17,200,000) |
Members' Equity | us-gaap_MembersEquity | 894,000,000 |
Members' Equity | us-gaap_MembersEquity | 0 |
Limited Liability Company (LLC) Members' Equity, Unit-based Payment Arrangement | us-gaap_LimitedLiabilityCompanyLLCMembersEquityUnitBasedCompensation | 900,000 |
Retained Earnings [Member] | ||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | (23,200,000) |
Additional Paid-in Capital [Member] | ||
Adjustments to Additional Paid in Capital, Subscription Fee Receivable | sgfy_AdjustmentsToAdditionalPaidInCapitalSubscriptionFeeReceivable | 600,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | 479,300,000 |
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | 620,800,000 |
Shares Issued, Value, Share-based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodValueShareBasedCompensation | 900,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 1,082,300,000 |
Adjustments to Additional Paid in Capital, Contributions | sgfy_AdjustmentsToAdditionalPaidInCapitalContributions | 26,000,000 |
Stock Issued During Period, Value, Stock Options Exercised | us-gaap_StockIssuedDuringPeriodValueStockOptionsExercised | 400,000 |
Adjustments to Additional Paid in Capital, Deferred Tax Adjustment | sgfy_AdjustmentsToAdditionalPaidInCapitalDeferredTaxAdjustment | $ 6,300,000 |
Common Class A [Member] | Common Stock [Member] | ||
Stock Issued During Period, Shares, New Issues | us-gaap_StockIssuedDuringPeriodSharesNewIssues | 27,025,000 |
Stock Issued During Period, Value, New Issues | us-gaap_StockIssuedDuringPeriodValueNewIssues | $ 300,000 |
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | 1,400,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | 1,700,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 0 |
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 167,967,856 |
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 0 |
Stock Issued During Period, Shares, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodSharesEffectOfReorganizationTransactions | 140,758,464 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | us-gaap_StockIssuedDuringPeriodSharesStockOptionsExercised | 184,392 |
Common Class B [Member] | Common Stock [Member] | ||
Stock Issued During Period, Value, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodValueEffectOfReorganizationTransactions | $ 600,000 |
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture | us-gaap_StockIssuedDuringPeriodSharesShareBasedCompensation | 8,626 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterest | $ 600,000 |
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 0 |
Common Stock, Shares, Outstanding | us-gaap_CommonStockSharesOutstanding | 57,622,302 |
Stock Issued During Period, Shares, Effect of Reorganization Transactions | sgfy_StockIssuedDuringPeriodSharesEffectOfReorganizationTransactions | 57,613,676 |