UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition.
On November 8, 2021, LifeStance Health Group, Inc. (“LifeStance Health Group”) issued a press release announcing its results of operations for the third quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1. The information furnished under Item 2.02 of this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by
reference into LifeStance Health Group's filings with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
A slide presentation, which includes supplemental information related to LifeStance Health Group, is furnished as Exhibit 99.2. The information furnished under Item 7.01 of this Current Report on Form 8-K, including the exhibit, shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into LifeStance Health Group's filings with the SEC under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
A copy of the press release is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
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Description |
99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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LifeStance Health Group, Inc. |
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Date: |
November 8, 2021 |
By: |
/s/ J. Michael Bruff |
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J. Michael Bruff |
Exhibit 99.1
Investor Relations Contact
Monica Prokocki
VP of Investor Relations
602-767-2100
investor.relations@lifestance.com
LifeStance Reports Third Quarter 2021 Results
Third Quarter 2021 Highlights
(All results compared to prior-year comparative period, unless otherwise noted)
SCOTTSDALE, Ariz. – November 8, 2021 – LifeStance Health Group, Inc. (NASDAQ: LFST), one of the nation’s largest providers of outpatient mental health care, today announced financial results for the quarter ended September 30, 2021.
"Our strong third quarter results demonstrate continued execution of our long-term strategic vision that is transforming the way mental health care is delivered,” said Michael Lester, Chairman and CEO of LifeStance. “Despite the labor challenges faced by the healthcare industry and others, our ability to attract high quality clinical talent—the heart of our organization—is a testament to our mission and commitment to a positive societal impact. We continue to prioritize the mental health of our patients, clinicians and team members."
Financial Highlights |
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Successor |
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Three Months Ended September 30 |
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2021 |
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2020 |
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Change |
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(in thousands) |
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Total revenue |
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$ |
173.8 |
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$ |
102.0 |
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70.5 |
% |
(Loss) income from operations |
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(124.7 |
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2.7 |
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(4,732.8 |
%) |
Center Margin |
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52.1 |
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33.1 |
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57.1 |
% |
Net loss |
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(120.5 |
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(3.3 |
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3,556.7 |
% |
Adjusted EBITDA |
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10.7 |
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15.0 |
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(28.6 |
%) |
As % of Total Revenue: |
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(Loss) income from operations |
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(71.7 |
%) |
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2.6 |
% |
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Center Margin |
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29.9 |
% |
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32.5 |
% |
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Net loss |
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(69.3 |
%) |
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(3.2 |
%) |
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Adjusted EBITDA |
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6.2 |
% |
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14.7 |
% |
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(All results compared to prior-year period, unless otherwise noted)
Strategy and Key Developments
During the third quarter, LifeStance took several actions in support of its three-pronged strategy to expand into new markets, build market density and offer a tech-enabled platform to patients and clinicians, including:
Balance Sheet, Cash Flow and Capital Allocation
For the nine months ended September 30, 2021, cash flow used in operations was $21.2 million, which includes $22.7 million for IPO-related payments and $19.4 million in interest payments on long-term debt.
The company ended the third quarter with cash of $212.1 million, net long-term debt of $157.4 million and full availability of its $20.0 million revolving credit facility.
Full Year 2021 Guidance
LifeStance is reiterating its full year 2021 guidance ranges for revenue, Center Margin and Adjusted EBITDA.
The company expects full year revenue toward the lower end of the previously guided $668 million to $678 million range, primarily due to the expectation that clinicians will take additional time off at the holidays due to fatigue from COVID. The company supports clinician flexibility and well-being, including incremental time off as needed, in an industry environment in which many clinicians are experiencing burnout.
For the full year, the company continues to expect Center Margin in the range of $198 million to $208 million and Adjusted EBITDA in the range of $47 million to $53 million.
“As we look forward, we have a strong foundation of dedicated clinicians and unmatched capabilities and reach which have allowed us to bring our strategy to life at an unprecedented time,” said Lester. “I am extremely proud of the efforts of our purpose-led organization to help people lead healthier, more fulfilling lives by improving access to trusted, affordable and personalized mental healthcare.”
Conference Call, Webcast Information, and Presentations
LifeStance will hold a conference call today, November 8, at 4:30 p.m. Eastern Time to discuss third quarter 2021 results. Investors who wish to participate in the call should dial 1-888-660-0230, domestically, or 1-409-217-8218, internationally, approximately 10 minutes before the call begins and provide conference ID number 4267376 or ask to be joined into the LifeStance call. A real-time audio webcast can be accessed via the Events and Presentations section of the LifeStance Investor Relations website (https://investor.lifestance.com), where related materials will be posted prior to the conference call.
About LifeStance Health Group, Inc.
Founded in 2017, LifeStance (NASDAQ: LFST) is reimagining mental health. We are one of the nation’s largest providers of virtual and in-person outpatient mental health care for children, adolescents and adults experiencing a variety of mental health conditions. Our mission is to help people lead healthier, more fulfilling lives by improving access to trusted, affordable, and personalized mental healthcare. LifeStance employs 4,375 psychiatrists, advanced practice nurses, psychologists and therapists and operates across 31 states and approximately 500 centers. To learn more, please visit www.LifeStance.com.
Forward-Looking Statements
Statements in this press release and on the related teleconference that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements. These statements include, but are not limited to, statements about the company’s financial position; business plans and objectives; general economic and industry trends; operating results; and working capital and liquidity and other statements contained in this presentation that are not historical facts. When used in this press release and on the related teleconference, words such as “may,” “will,” “should,” “could,” “intend,” “potential,” “continue,” “anticipate,” “believe,” “estimate,” “expect,” “plan,” “target,” “predict,” “project,” “seek” and similar expressions as they relate to us are intended to identify forward-looking statements. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: we may not grow at the rates we historically have achieved or at all, even if our key metrics may imply future growth, including if we are unable to successfully execute on our growth initiatives and business strategies; if we fail to manage our growth effectively, our expenses could increase more than expected, our revenue may not increase proportionally or at all, and we may be unable to execute on our business strategy; our ability to recruit new clinicians and retain existing clinicians; if reimbursement rates paid by third-party payors are reduced or if third-party payors otherwise restrain our ability to obtain or deliver care to patients, our business could be harmed; we conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, results of operations and financial condition; we are dependent on our relationships with affiliated practices, which we do not own, to provide health care services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities became subject to legal challenges; we operate in a competitive industry, and if we are not able to compete effectively, our business, results of operations and financial condition would be harmed; the impact of health care reform legislation and other changes in the healthcare industry and in health care spending on us is currently unknown, but may harm our business; if our or our vendors’ security measures fail or are breached and unauthorized access to our employees’, patients’ or partners’ data is obtained, our systems may be perceived as insecure, we may incur significant liabilities, including through private litigation or regulatory action, our reputation may be harmed, and we could lose patients and partners; our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems; our existing indebtedness could adversely affect our business and growth prospects; and other risks and uncertainties set forth under “Risk Factors” in the final prospectus, dated June 9, 2021, for the company’s initial public offering. LifeStance does not undertake to update any forward-looking statements made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based, except as otherwise required by law.
Non-GAAP Financial Information
This press release contains certain non-GAAP financial measures, including Center Margin, Adjusted EBITDA, and Adjusted EBITDA margin. Tables showing the reconciliation of these non-GAAP financial measures to the comparable GAAP
measures are included at the end of this release. Management believes these non-GAAP financial measures are useful in evaluating the company’s operating performance, and may be helpful to securities analysts, institutional investors and other interested parties in understanding the company’s operating performance and prospects. These non-GAAP financial measures, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. Therefore, the company’s non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, such as net income (loss) or income (loss) from operations.
Center Margin and Adjusted EBITDA anticipated for full year 2021 are calculated in a manner consistent with the historical presentation of these measures at the end of this release. Reconciliation for the forward-looking full year 2021 Center Margin and Adjusted EBITDA guidance is not being provided, as LifeStance does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation. LifeStance management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.
Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results.
# # # #
Consolidated Financial Information and Reconciliations
CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except for par value)
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Successor |
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September 30, 2021 |
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December 31, 2020 |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
212,123 |
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$ |
18,829 |
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Patient accounts receivable |
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70,059 |
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43,706 |
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Prepaid expenses and other current assets |
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46,144 |
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13,745 |
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Total current assets |
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328,326 |
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76,280 |
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NONCURRENT ASSETS |
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Property and equipment, net |
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115,049 |
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59,349 |
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Intangible assets, net |
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307,982 |
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332,796 |
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Goodwill |
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1,160,011 |
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1,098,659 |
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Deposits |
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3,388 |
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2,647 |
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Total noncurrent assets |
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1,586,430 |
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1,493,451 |
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Total assets |
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$ |
1,914,756 |
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$ |
1,569,731 |
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LIABILITIES, REDEEMABLE UNITS AND STOCKHOLDERS'/MEMBERS’ EQUITY |
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CURRENT LIABILITIES |
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Accounts payable |
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$ |
3,074 |
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$ |
7,688 |
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Accrued payroll expenses |
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57,603 |
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38,024 |
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Other accrued expenses |
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28,331 |
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14,685 |
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Current portion of contingent consideration |
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14,012 |
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10,563 |
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Other current liabilities |
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2,185 |
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4,961 |
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Total current liabilities |
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105,205 |
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75,921 |
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NONCURRENT LIABILITIES |
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Long-term debt, net |
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157,447 |
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362,534 |
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Other noncurrent liabilities |
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22,892 |
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11,363 |
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Contingent consideration, net of current portion |
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3,117 |
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5,851 |
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Deferred tax liability, net |
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81,226 |
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81,226 |
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Total noncurrent liabilities |
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264,682 |
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460,974 |
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Total liabilities |
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$ |
369,887 |
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$ |
536,895 |
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COMMITMENT AND CONTINGENCIES (see Note 16) |
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REDEEMABLE UNITS |
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Redeemable Class A units – 0 and 35,000 units authorized, issued and outstanding as of September 30, |
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— |
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35,000 |
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STOCKHOLDERS’/MEMBERS’ EQUITY |
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Common units A-1 – 0 and 959,563 units authorized, issued and outstanding as of September 30, 2021 |
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— |
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959,563 |
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Common units A-2 – 0 and 49,946 units authorized, issued and outstanding as of September 30, 2021 |
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— |
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49,946 |
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Common units B – 0 and 179,000 units authorized as of September 30, 2021 and December 31, 2020, |
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— |
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— |
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Preferred stock – par value $0.01 per share; 25,000 and 0 shares authorized as of September 30, 2021 |
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— |
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— |
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Common stock – par value $0.01 per share; 800,000 and 0 shares authorized as of September 30, 2021 |
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3,742 |
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— |
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Additional paid-in capital |
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1,790,169 |
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1,452 |
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Accumulated deficit |
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(249,042 |
) |
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(13,125 |
) |
Total stockholders'/members’ equity |
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1,544,869 |
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997,836 |
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Total liabilities, redeemable units and stockholders’/members’ equity |
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$ |
1,914,756 |
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$ |
1,569,731 |
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CONSOLIDATED STATEMENTS OF INCOME/(LOSS) AND COMPREHENSIVE INCOME/(LOSS)
(unaudited)
(In thousands, except for Net Loss per Share)
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Successor |
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Predecessor |
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Three Months Ended |
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Three Months Ended |
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Nine Months Ended |
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April 13 to |
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January 1 to |
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TOTAL REVENUE |
$ |
173,835 |
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$ |
101,982 |
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$ |
477,516 |
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$ |
147,435 |
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$ |
111,661 |
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OPERATING EXPENSES |
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Center costs, excluding |
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121,783 |
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68,847 |
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330,258 |
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100,122 |
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78,777 |
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General and administrative |
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162,943 |
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19,534 |
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281,073 |
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28,176 |
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20,854 |
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Depreciation and amortization |
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13,777 |
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10,910 |
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38,779 |
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16,342 |
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3,335 |
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Total operating expenses |
$ |
298,503 |
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$ |
99,291 |
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$ |
650,110 |
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$ |
144,640 |
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$ |
102,966 |
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(LOSS) INCOME FROM |
$ |
(124,668 |
) |
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$ |
2,691 |
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$ |
(172,594 |
) |
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$ |
2,795 |
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$ |
8,695 |
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OTHER INCOME (EXPENSE) |
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(Loss) gain on remeasurement |
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(906 |
) |
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|
89 |
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(1,463 |
) |
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38 |
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|
322 |
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Transaction costs |
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(126 |
) |
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(683 |
) |
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(3,656 |
) |
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(864 |
) |
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(33,247 |
) |
Interest expense |
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(3,503 |
) |
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(6,421 |
) |
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(35,309 |
) |
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(11,983 |
) |
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(3,020 |
) |
Other expense |
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— |
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(44 |
) |
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(1,445 |
) |
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(66 |
) |
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(14 |
) |
Total other expense |
$ |
(4,535 |
) |
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$ |
(7,059 |
) |
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$ |
(41,873 |
) |
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$ |
(12,875 |
) |
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$ |
(35,959 |
) |
LOSS BEFORE INCOME |
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(129,203 |
) |
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|
(4,368 |
) |
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(214,467 |
) |
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(10,080 |
) |
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(27,264 |
) |
INCOME TAX BENEFIT |
|
8,751 |
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|
1,074 |
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|
15,300 |
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|
2,444 |
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|
|
|
2,319 |
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NET LOSS AND |
$ |
(120,452 |
) |
|
$ |
(3,294 |
) |
|
$ |
(199,167 |
) |
|
$ |
(7,636 |
) |
|
|
$ |
(24,945 |
) |
Accretion of Redeemable Class |
|
— |
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— |
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(36,750 |
) |
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— |
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— |
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Accretion of Series A-1 |
|
— |
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|
— |
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|
|
— |
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|
— |
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|
|
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(272,582 |
) |
Cumulative dividend on Series |
|
— |
|
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|
— |
|
|
|
— |
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|
— |
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|
|
|
(662 |
) |
NET LOSS AVAILABLE TO |
$ |
(120,452 |
) |
|
$ |
(3,294 |
) |
|
$ |
(235,917 |
) |
|
$ |
(7,636 |
) |
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|
$ |
(298,189 |
) |
NET LOSS PER SHARE, BASIC |
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(0.35 |
) |
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(0.01 |
) |
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(0.73 |
) |
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(0.03 |
) |
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|
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Weighted-average shares used to |
|
343,394 |
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|
|
302,657 |
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|
|
321,283 |
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|
|
300,799 |
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|
|
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|
* For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the "TPG Acquisition"), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
|
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Successor |
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Predecessor |
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Nine Months Ended |
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April 13 to |
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January 1 to |
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CASH FLOWS FROM OPERATING ACTIVITIES |
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Net loss |
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$ |
(199,167 |
) |
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$ |
(7,636 |
) |
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|
$ |
(24,945 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating |
|
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Depreciation and amortization |
|
|
38,779 |
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|
|
16,342 |
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|
|
|
3,335 |
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Stock and unit-based compensation |
|
|
150,809 |
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|
|
865 |
|
|
|
|
— |
|
Deferred income taxes |
|
|
— |
|
|
|
2,866 |
|
|
|
|
(2,345 |
) |
Loss on debt extinguishment |
|
|
5,620 |
|
|
|
3,066 |
|
|
|
|
— |
|
Amortization of debt issue costs |
|
|
1,498 |
|
|
|
358 |
|
|
|
|
215 |
|
Loss (gain) on remeasurement of contingent consideration |
|
|
1,463 |
|
|
|
(38 |
) |
|
|
|
(322 |
) |
Endowment of shares to LifeStance Health Foundation |
|
|
9,000 |
|
|
|
— |
|
|
|
|
— |
|
Change in operating assets and liabilities, net of businesses acquired: |
|
|
|
|
|
|
|
|
|
|
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Patient accounts receivable |
|
|
(20,711 |
) |
|
|
(4,939 |
) |
|
|
|
(5,122 |
) |
Prepaid expenses and other current assets |
|
|
(32,888 |
) |
|
|
(6,468 |
) |
|
|
|
(4,526 |
) |
Accounts payable |
|
|
(4,613 |
) |
|
|
1,056 |
|
|
|
|
(1,638 |
) |
Accrued payroll expenses |
|
|
15,910 |
|
|
|
1,529 |
|
|
|
|
8,753 |
|
Other accrued expenses |
|
|
13,085 |
|
|
|
(33,130 |
) |
|
|
|
40,031 |
|
Net cash (used in) provided by operating activities |
|
|
(21,215 |
) |
|
|
(26,129 |
) |
|
|
|
13,436 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
Purchases of property and equipment |
|
|
(55,815 |
) |
|
|
(14,653 |
) |
|
|
|
(12,804 |
) |
Acquisition of Predecessor, net of cash acquired |
|
|
— |
|
|
|
(646,694 |
) |
|
|
|
— |
|
Acquisitions of businesses, net of cash acquired |
|
|
(58,699 |
) |
|
|
(30,100 |
) |
|
|
|
(12,274 |
) |
Net cash used in investing activities |
|
|
(114,514 |
) |
|
|
(691,447 |
) |
|
|
|
(25,078 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|||
Proceeds from initial public offering, net of underwriters discounts and |
|
|
548,905 |
|
|
|
— |
|
|
|
|
— |
|
Issuance of common units to new investors |
|
|
1,000 |
|
|
|
21,000 |
|
|
|
|
— |
|
Contributions from Members related to acquisition of Predecessor |
|
|
— |
|
|
|
633,585 |
|
|
|
|
— |
|
Repurchase of Series A redeemable convertible preferred units |
|
|
— |
|
|
|
— |
|
|
|
|
(1,000 |
) |
Proceeds from long-term debt |
|
|
98,800 |
|
|
|
235,900 |
|
|
|
|
74,350 |
|
Payments of debt issue costs |
|
|
(2,360 |
) |
|
|
(6,411 |
) |
|
|
|
(650 |
) |
Payments of long-term debt |
|
|
(311,060 |
) |
|
|
(139,130 |
) |
|
|
|
(18,222 |
) |
Payments of contingent consideration |
|
|
(6,262 |
) |
|
|
(2,300 |
) |
|
|
|
(19,093 |
) |
Net cash provided by financing activities |
|
|
329,023 |
|
|
|
742,644 |
|
|
|
|
35,385 |
|
NET INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
193,294 |
|
|
|
25,068 |
|
|
|
|
23,743 |
|
Cash and Cash Equivalents - Beginning of period |
|
|
18,829 |
|
|
|
— |
|
|
|
|
3,481 |
|
CASH AND CASH EQUIVALENTS – END OF PERIOD |
|
$ |
212,123 |
|
|
$ |
25,068 |
|
|
|
$ |
27,224 |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest and prepayment premium |
|
$ |
28,217 |
|
|
$ |
8,555 |
|
|
|
$ |
2,857 |
|
Cash paid for taxes |
|
$ |
908 |
|
|
$ |
144 |
|
|
|
$ |
25 |
|
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND |
|
|
|
|
|
|
|
|
|
|
|||
Unpaid deferred offering costs included in accounts payable and |
|
$ |
— |
|
|
$ |
— |
|
|
|
$ |
— |
|
Equipment financed through capital leases |
|
$ |
14 |
|
|
$ |
7 |
|
|
|
$ |
415 |
|
Contingent consideration incurred in acquisitions of businesses |
|
$ |
5,514 |
|
|
$ |
4,226 |
|
|
|
$ |
3,788 |
|
Acquisition of property and equipment included in liabilities |
|
$ |
8,936 |
|
|
$ |
2,562 |
|
|
|
$ |
2,718 |
|
Issuance of common units for convertible promissory note conversion |
|
$ |
— |
|
|
$ |
511 |
|
|
|
$ |
— |
|
Issuance of common units for acquisitions of businesses |
|
$ |
1,486 |
|
|
$ |
4,500 |
|
|
|
$ |
— |
|
* For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the TPG Acquisition, which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
RECONCILIATION OF (LOSS) INCOME FROM OPERATIONS TO CENTER MARGIN
|
|
Successor |
|
|
|
Predecessor |
|
||||||||||||||
|
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
April 13 to |
|
|
|
January 1 to |
|
|||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(Loss) income from operations |
|
$ |
(124,668 |
) |
|
$ |
2,691 |
|
|
$ |
(172,594 |
) |
|
$ |
2,795 |
|
|
|
$ |
8,695 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation and amortization |
|
|
13,777 |
|
|
|
10,910 |
|
|
|
38,779 |
|
|
|
16,342 |
|
|
|
|
3,335 |
|
General and administrative |
|
|
162,943 |
|
|
|
19,534 |
|
|
|
281,073 |
|
|
|
28,176 |
|
|
|
|
20,854 |
|
Center Margin |
|
$ |
52,052 |
|
|
$ |
33,135 |
|
|
$ |
147,258 |
|
|
$ |
47,313 |
|
|
|
$ |
32,884 |
|
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
|
Successor |
|
|
|
Predecessor |
|
||||||||||||||
|
Three Months Ended |
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
April 13 to |
|
|
|
January 1 to |
|
|||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss |
$ |
(120,452 |
) |
|
$ |
(3,294 |
) |
|
$ |
(199,167 |
) |
|
$ |
(7,636 |
) |
|
|
$ |
(24,945 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
3,503 |
|
|
|
6,421 |
|
|
|
35,309 |
|
|
|
11,983 |
|
|
|
|
3,020 |
|
Depreciation and amortization |
|
13,777 |
|
|
|
10,910 |
|
|
|
38,779 |
|
|
|
16,342 |
|
|
|
|
3,335 |
|
Income tax benefit |
|
(8,751 |
) |
|
|
(1,074 |
) |
|
|
(15,300 |
) |
|
|
(2,444 |
) |
|
|
|
(2,319 |
) |
Loss (gain) on |
|
906 |
|
|
|
(89 |
) |
|
|
1,463 |
|
|
|
(38 |
) |
|
|
|
(322 |
) |
Stock and unit-based |
|
120,689 |
|
|
|
573 |
|
|
|
150,809 |
|
|
|
865 |
|
|
|
|
— |
|
Management fees (1) |
|
— |
|
|
|
44 |
|
|
|
1,445 |
|
|
|
60 |
|
|
|
|
14 |
|
Loss on disposal of assets |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6 |
|
|
|
|
— |
|
Transaction costs (2) |
|
126 |
|
|
|
683 |
|
|
|
3,656 |
|
|
|
864 |
|
|
|
|
33,247 |
|
Offering related costs (3) |
|
— |
|
|
|
— |
|
|
|
8,747 |
|
|
|
— |
|
|
|
|
— |
|
Endowment to the LifeStance |
|
— |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
|
|
|
— |
|
Other expenses (4) |
|
896 |
|
|
|
810 |
|
|
|
2,072 |
|
|
|
992 |
|
|
|
|
635 |
|
Adjusted EBITDA |
$ |
10,694 |
|
|
$ |
14,984 |
|
|
$ |
37,813 |
|
|
$ |
20,994 |
|
|
|
$ |
12,665 |
|
Q3 2021 Earnings Presentation November 8, 2021 Exhibit 99.2
Forward-Looking Statements DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements about LifeStance Health Group, Inc. and its subsidiaries (“LifeStance”) and the industry in which LifeStance operates, including statements regarding future results of operations and financial position of LifeStance, which are subject to known and unknown uncertainties and contingencies outside of LifeStance's control and which are largely based on our current expectations and projections about future events and financial trends that we believe may affect LifeStance's financial condition, results of operations, business strategy, and prospects. LifeStance's actual results, events, or circumstances may differ materially from these statements. Forward-looking statements include all statements that are not historical facts. Words such as “anticipate,” “believe,” “envision,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” “contemplate” and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties, factors and assumptions, including, among other things: we may not grow at the rates we historically have achieved or at all, even if our key metrics may imply future growth, including if we are unable to successfully execute on our growth initiatives and business strategies; if we fail to manage our growth effectively, our expenses could increase more than expected, our revenue may not increase proportionally or at all, and we may be unable to execute on our business strategy; our ability to recruit new clinicians and retain existing clinicians; if reimbursement rates paid by third-party payors are reduced or if third-party payors otherwise restrain our ability to obtain or deliver care to patients, our business could be harmed; we conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, results of operations and financial condition; we are dependent on our relationships with affiliated practices, which we do not own, to provide health care services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities became subject to legal challenges; we operate in a competitive industry, and if we are not able to compete effectively, our business, results of operations and financial condition would be harmed; the impact of health care reform legislation and other changes in the healthcare industry and in health care spending on us is currently unknown, but may harm our business; if our or our vendors' security measures fail or are breached and unauthorized access to our employees' patients' or partners' data is obtained, our systems may be perceived as insecure, we may incur significant liabilities, including through private litigation or regulatory action, our reputation may be harmed, and we could lose patients and partners; our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems; our existing indebtedness could adversely affect our business and growth prospects; and the other factors set forth in our filings with the Securities and Exchange Commission. The forward-looking statements, together with statements relating to our past performance, should not be regarded as a reliable indicator of our future performance. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, except as may be required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. Use of Non-GAAP Financial Measures In addition to financial measures presented in accordance with U.S. generally accepted accounting principles (“GAAP”), this presentation includes certain non-GAAP financial measures, including Center Margin and Adjusted EBITDA. These non-GAAP measures are in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. The non-GAAP financial measures used by LifeStance may differ from the non-GAAP financial measures used by other companies. A reconciliation of these measures to the most directly comparable U.S. GAAP measure is included in the Appendix to these slides or as otherwise described in these slides. Market and Industry Data This presentation also contains information regarding our market and industry that is derived from third-party research and publications. This information involves a number of assumptions and limitations. While we believe the information in this presentation is generally reliable, forecasts, assumptions, expectations, beliefs, estimates and projections involve risk and uncertainties and are subject to change based on various factors.
Building the Nation’s Leading Outpatient Mental Health Platform LifeStance at a Glance* *Note: Data as of September 30, 2021. 70 acquisitions since inception 31 states ~500 centers 250+ in-network payor contracts $596M TTM revenues 4,375 employed clinicians Hybrid virtual and in-person model Mission-Driven Increasing access to personalized, trusted and affordable mental healthcare
Q3 2021 Financial Highlights Revenue of $173.8 million increased $71.8 million or 70% year over year Center Margin of $52.1 million increased 57% year over year; Center Margin as a percentage of revenue of 29.9% Adjusted EBITDA of $10.7 million compared to Adjusted EBITDA of $15.0 million in the prior year; Adjusted EBITDA as a percentage of revenue of 6.2% Strong balance sheet with a cash position of $212 million Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation.
Q3 2021 Strategy & Key Developments Total clinicians of 4,375, up 72% year over year, including 400 net clinician adds in the quarter Opened 29 de novo centers and achieved milestone of opening 200th de novo location, bringing total centers to approximately 500 Completed six acquisitions, bringing the total since inception to 70; continuing to build market density and expand virtual and in-person presence in 31 states Appointed Seema Verma, a new independent director and leading national health policy expert, to Board of Directors
Clinicians Revenue (in $M) Center Margin (in $M) Adjusted EBITDA (in $M) Q3 2021 Results +57% +70% +72% Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation.
Clinicians Revenue (in $M) Center Margin (in $M) Adjusted EBITDA (in $M) Quarterly Trends Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation.
Balance Sheet, Cash Flow & Capital Allocation Percentage description with ctetur ad ipisc ing elite 75% Cash and Cash Equivalents $212M Percentage description with ctetur ad ipisc ing elite 75% Net Long-term Debt $157M Percentage description with ctetur ad ipisc ing elite 75% Operating Cash Flow (YTD) ($21M) Percentage description with ctetur ad ipisc ing elite 75% Capital Expenditures (YTD) $56M Continue to deploy capital in a disciplined manner to grow our clinician base and expand our footprint De Novos Highly efficient model with predictable profitability 212 de novos opened since inception, including 29 in Q3 Capital Allocation Acquisitions Disciplined investments to drive growth 70 acquisitions since inception, including 6 in Q3 Balance Sheet & Cash Flow
2021 Guidance Update (All $ in M) FY 2021 Revenue $668 – $678 Expecting full year revenue toward the lower end of range Anticipated incremental clinician holiday time off modestly impacting revenue projection; supporting employee self-care and well-being during this acutely stressful time as a result of COVID fatigue is aligned with the company’s mission Center Margin $198 – $208 Unchanged Adj. EBITDA $47 – $53 Unchanged Note: Center Margin and Adjusted EBITDA anticipated for full year 2021 are calculated in a manner consistent with the historical presentation of these measures in the Appendix to this presentation. Reconciliation for the forward-looking full year 2021 Center Margin and Adjusted EBITDA guidance is not being provided, as LifeStance does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation. LifeStance management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.
Appendix
Quarterly Income Statement (GAAP) 2021 2020 ($M) Q3 Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Total Revenues $173.8 $160.5 $143.1 $118.1 $102.0 $45.4 $38.6 $73.1 Operating expenses Center costs, excluding depreciation and amortization 121.8 109.3 99.1 79.1 68.8 31.3 27.1 51.6 General and administrative 162.9 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Depreciation and amortization 13.8 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income (loss) from operations (124.7) (47.0) (0.9) 3.9 2.7 0.1 3.1 5.6 Other income (expense) Gain (loss) on remeasurement of contingent consideration (0.9) (0.3) (0.3) (0.6) 0.1 - - 0.4 Transaction costs (0.1) (2.0) (1.5) (3.1) (0.7) (0.2) (32.3) (1.0) Interest expense (3.5) (23.2) (8.6) (7.1) (6.4) (5.6) (1.3) (1.7) Other expense - (1.4) (0.1) (0.2) - - - - Total other expense (4.5) (26.8) (10.6) (11.0) (7.1) (5.8) (33.7) (2.3) Loss (income) before taxes (129.2) (73.8) (11.4) (7.1) (4.4) (5.7) (30.6) 3.4 Income tax benefit (provision) 8.8 3.8 2.8 1.6 1.1 1.4 3.0 (0.7) Net (loss) income and comprehensive (loss) income ($120.5) ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7 Subtotals in the schedule above may not foot due to rounding. 1 - Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020 For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the “TPG Acquisition”), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
GAAP to Non-GAAP Reconciliations – Center Margin 2021 2020 ($M) Q3 Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Income (loss) from operations ($124.7) ($47.0) ($0.9) $3.9 $2.7 $0.1 $3.1 $5.6 Adjusted for: Depreciation and amortization 13.8 12.8 12.2 11.4 10.9 5.4 1.2 2.2 General and administrative 162.9 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Center Margin $52.1 $51.2 $44.0 $39.0 $33.1 $14.1 $11.4 $21.5 Subtotals in the schedule above may not foot due to rounding. 1 - Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020 For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the “TPG Acquisition”), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
GAAP to Non-GAAP Reconciliations – Adjusted EBITDA 2021 2020 ($M) Q3 Q2 Q1 Q4 Q3 Successor5 Predecessor5 Q1 Net income (loss) ($120.5) ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7 Adjusted for: Interest expense 3.5 23.2 8.6 7.1 6.4 5.6 1.3 1.7 Depreciation and amortization 13.8 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income tax (benefit) provision (8.8) (3.8) (2.8) (1.6) (1.1) (1.4) (3.0) 0.7 Loss (gain) on remeasurement of contingent consideration 0.9 0.3 0.3 0.6 (0.1) - - (0.4) Share/unit-based compensation 120.7 29.5 0.6 0.6 0.6 0.3 - - Management fees (1) - 1.4 0.1 0.1 - - - - Loss on disposal of assets - - - 0.1 - - - - Transaction costs (2) 0.1 2.0 1.5 3.1 0.7 0.2 32.3 1.0 Offering related costs (3) - 8.7 - - - - - - Endowment to the LifeStance Health Foundation - 10.0 - - - - - - Other expenses (4) 0.9 0.5 0.6 0.6 0.8 0.2 0.2 0.4 Adjusted EBITDA $10.7 $14.5 $12.6 $16.5 $15.0 $6.0 $4.4 $8.2 Subtotals in the schedule above may not foot due to rounding. 1 - Represents management fees paid to certain of our executive officers and affiliates of our principal stockholders pursuant to the management services agreement entered into in connection with the acquisition of LifeStance by affiliates of TPG Global, LLC ( the “TPG Acquisition”). The management services agreement terminated in connection with the IPO and we were required to pay a one-time fee of $1.2 million to such parties. 2 - Primarily includes capital markets advisory, consulting, accounting and legal expenses related to our acquisitions and costs related to the TPG Acquisition. Of the transaction costs incurred in the period from January 1, 2020 to May 14, 2020 (Predecessor), $32.9 million relate to the TPG Acquisition. 3 - Primarily includes non-recurring incremental professional services, such as accounting and legal, and directors' and officers' insurance incurred in connection with the IPO. 4 - Primarily includes costs incurred to consummate or integrate acquired centers, certain of which are wholly-owned and certain of which are affiliated practices, in addition to the compensation paid to former owners of acquired centers and related expenses that are not reflective of the ongoing operating expenses of our centers. Acquired center integration, former owner fees, and other are components of general and administrative expenses included in our consolidated statement of income (loss). Impairment on loans is a component of center costs, excluding depreciation and amortization included in our consolidated statement of income (loss). 5 - Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020. For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the “TPG Acquisition”), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
Quarterly Non-GAAP Financial Metrics 2021 2020 ($M) Q3 Q2 Q1 Q4 Q3 Successor¹ Predecessor¹ Q1 Key Metrics Clinicians 4,375 3,975 3,301 3,097 2,539 2,046 nq 1,734 Total Revenues $173.8 $160.5 $143.1 $118.1 $102.0 $45.4 $38.6 $73.1 Center costs 121.8 109.3 99.1 79.1 68.8 31.3 27.1 51.6 Center Margin (Non-GAAP) $52.1 $51.2 $44.0 $39.0 $33.1 $14.1 $11.4 $21.5 % Margin 29.9% 31.9% 30.7% 33.0% 32.5% 31.1% 29.6% 29.4% General and administrative 162.9 85.5 32.7 23.7 19.5 8.6 7.2 13.7 Depreciation and amortization 13.8 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income (loss) from operations (124.7) (47.0) (0.9) 3.9 2.7 0.1 3.1 5.6 Other income (expenses) Other income (expenses) 4.2 (23.0) (7.8) (9.4) (6.0) (4.4) (30.7) (3.0) Net (loss) income ($120.5) ($70.0) ($8.7) ($5.5) ($3.3) ($4.3) ($27.6) $2.7 Adjusted EBITDA build Net (loss) income (120.5) (70.0) (8.7) (5.5) (3.3) (4.3) (27.6) 2.7 Interest expense 3.5 23.2 8.6 7.1 6.4 5.6 1.3 1.7 Depreciation and amortization 13.8 12.8 12.2 11.4 10.9 5.4 1.2 2.2 Income tax (benefit) provision (8.8) (3.8) (2.8) (1.6) (1.1) (1.4) (3.0) 0.7 Loss (gain) on remeasurement of contingent consideration 0.9 0.3 0.3 0.6 (0.1) - - (0.4) Share/unit-based compensation 120.7 29.5 0.6 0.6 0.6 0.3 - - Management fees - 1.4 0.1 0.1 - - - - Loss on disposal of assets - - - 0.1 - - - - Transaction costs 0.1 2.0 1.5 3.1 0.7 0.2 32.3 1.0 Offering related costs - 8.7 - - - - - - Endowment to the LifeStance Health Foundation - 10.0 - - - - - - Other expenses 0.9 0.5 0.6 0.6 0.8 0.2 0.2 0.4 Adjusted EBITDA (Non-GAAP) $10.7 $14.5 $12.6 $16.5 $15.0 $6.0 $4.4 $8.2 % Margin 6.2% 9.1% 8.8% 13.9% 14.7% 13.1% 11.5% 11.2% Subtotals in the schedule above may not foot due to rounding. 1 - Successor Period is April 13 to June 30, 2020, Predecessor Period is April 1 to May 14, 2020 For the period from April 13, 2020 through May 14, 2020, the operations of LifeStance TopCo, L.P. (Successor) were limited to those incident to its formation and the acquisition of LifeStance by affiliates of TPG Global, LLC (the “TPG Acquisition”), which were not significant. Earnings from April 13 to May 14 were reflected in the Predecessor 2020 Period.
Quarterly Balance Sheet 2021 2020 ($M) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Cash and cash equivalents 212.1 276.2 39.5 18.8 25.1 13.8 20.3 Patient accounts receivable 70.1 60.1 47.8 43.7 34.3 31.0 25.2 Prepaid expenses and other current assets 46.1 27.8 22.3 13.7 16.1 14.0 9.0 Total current assets 328.3 364.1 109.6 76.3 75.4 58.8 54.5 Property and equipment, net 115.1 91.8 70.8 59.3 47.5 39.7 31.2 Intangible assets, net 308.0 316.5 323.3 332.8 334.0 342.8 15.8 Goodwill 1,160.0 1,138.7 1,099.7 1,098.7 963.0 951.3 224.3 Deposits 3.4 3.3 2.9 2.6 2.1 2.0 1.7 Total noncurrent assets 1,586.4 1,550.4 1,496.7 1,493.5 1,346.5 1,335.8 273.0 Total assets $1,914.8 $1,914.4 $1,606.3 $1,569.7 $1,422.0 $1,394.6 $327.5 Accounts payable 3.1 10.0 5.9 7.7 4.4 4.3 3.5 Accrued payroll expenses 57.6 50.4 45.4 38.0 30.5 23.9 21.4 Other accrued expenses 28.3 38.8 25.7 14.7 12.5 12.4 13.5 Current portion of contingent consideration 14.0 10.9 14.9 10.6 8.1 7.1 23.5 Other current liabilities 2.2 2.6 4.9 5.0 2.8 2.8 1.0 Total current liabilities 105.2 112.6 96.8 75.9 58.2 50.5 62.9 Long-term debt, net 157.5 157.1 387.3 362.5 227.1 227.4 113.5 Other noncurrent liabilities 22.9 15.7 14.2 11.4 12.9 11.1 9.0 Contingent consideration, net of current portion 3.1 3.2 1.1 5.9 3.7 3.9 3.0 Deferred tax liability, net 81.2 81.2 81.2 81.2 85.4 85.4 0.9 Total noncurrent liabilities 264.7 257.2 483.8 461.0 329.1 327.8 126.4 Total liabilities $369.9 $369.8 $580.5 $536.9 $387.3 $378.3 $189.3 Redeemable units - - 71.8 35.0 35.0 35.0 - Stockholders' / Members' equity 3.7 3.7 1,010.5 1,009.5 1,006.4 985.4 302.4 Additional paid-in capital 1,790.2 1,669.5 2.1 1.5 0.9 0.3 - Accumulated deficit (249.0) (128.6) (58.6) (13.1) (7.6) (4.3) (164.2) Total stockholders'/members’ equity 1,544.9 1,544.6 954.0 997.8 999.6 981.4 138.2 Total liabilities, redeemable units and stockholders’/members’ equity $1,914.8 $1,914.4 $1,606.3 $1,569.7 $1,422.0 $1,394.6 $327.5 Subtotals in the schedule above may not foot due to rounding.
Successor Predecessor ($M) Nine months ended September 30, 2021 April 13 to September 30, 2020 Six months ended June 30, 2021 April 13 to June 30, 2020 January 1 to May 14, 2020 2019 FY CASH FLOWS FROM OPERATING ACTIVITIES Net loss (199.2) (7.6) (78.7) (4.3) (24.9) 5.7 Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 38.8 16.3 25.0 5.4 3.3 6.1 Stock and unit-based compensation 150.8 0.9 30.1 0.3 - 0.1 Deferred income taxes - 2.9 - 2.9 (2.3) 1.8 Loss on debt extinguishment 5.6 3.1 5.6 3.1 - - Amortization of debt issue costs 1.5 0.4 1.1 0.1 0.2 0.7 Loss (gain) on remeasurement of contingent consideration 1.5 (0.0) 0.6 0.1 (0.3) (0.2) Endowment of shares to LifeStance Health Foundation 9.0 - 9.0 - Change in operating assets and liabilities, net of businesses acquired: Patient accounts receivable (20.7) (4.9) (11.8) (2.5) (5.1) (5.8) Prepaid expenses and other current assets (32.9) (6.5) (15.0) (4.4) (4.5) (2.2) Accounts payable (4.6) 1.1 2.3 0.9 (1.6) 2.5 Accrued payroll expenses 15.9 1.5 9.6 (3.8) 8.8 5.2 Other accrued expenses 13.1 (33.1) 15.3 (35.0) 40.0 3.2 Net cash (used in) provided by operating activities ($21.2) ($26.1) ($7.0) ($37.3) $13.4 $17.0 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (55.8) (14.7) (31.8) (5.1) (12.8) (14.3) Acquisition of Predecessor, net of cash acquired - (646.7) - (643.7) - - Acquisitions of businesses, net of cash acquired (58.7) (30.1) (39.1) (22.4) (12.3) (59.1) Net cash used in investing activities ($114.5) ($691.5) ($70.9) ($671.2) ($25.1) ($73.4) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from initial public offering, net of underwriters discounts and commissions and deferred offering costs 548.9 - 554.2 - - - Issuance of common units to new investors 1.0 21.0 1.0 - - - Contributions from Members related to acquisition of Predecessor - 633.6 - 633.6 - - Repurchase of Series A redeemable convertible preferred units - - - - (1.0) - Proceeds from long-term debt 98.8 235.9 98.8 235.9 74.4 55.9 Payments of debt issue costs (2.4) (6.4) (2.4) (6.4) (0.7) (2.0) Payments of long-term debt (311.1) (139.1) (310.7) (138.5) (18.2) (0.5) Payments of contingent consideration (6.3) (2.3) (5.6) (2.2) (19.1) (5.0) Net cash provided by financing activities $329.0 $742.6 $335.3 $722.3 $35.4 $48.5 NET INCREASE IN CASH AND CASH EQUIVALENTS $193.3 $25.1 $257.4 $13.8 $23.7 ($7.9) Cash and Cash Equivalents - Beginning of period 18.8 - 18.8 - 3.5 11.3 CASH AND CASH EQUIVALENTS – END OF PERIOD $212.1 $25.1 $276.2 $13.8 $27.2 $3.5 GAAP Statement of Cash Flows