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): |
(Exact name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
||
|
|
|
|
|
|
||||
|
||||
(Address of Principal Executive Offices) |
|
(Zip Code) |
||
Registrant’s Telephone Number, Including Area Code: |
|
(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:
|
|
Trading |
|
|
|
|
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, 2022, LifeStance Health Group, Inc. ("LifeStance Health Group" or "LifeStance") issued a press release announcing its results of operations for the third quarter ended September 30, 2022. 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 Securities and Exchange Commission (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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
|
Description |
99.1 |
|
|
99.2 |
|
|
104 |
|
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.
|
|
|
LifeStance Health Group, Inc. |
|
|
|
|
Date: |
November 8, 2022 |
By: |
/s/ J. Michael Bruff |
|
|
|
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 2022 Results
SCOTTSDALE, Ariz. – November 8, 2022 – LifeStance Health Group, Inc. (NASDAQ: LFST), one of the nation’s largest providers of outpatient mental healthcare, today announced financial results for the quarter ended September 30, 2022.
(All results compared to prior-year comparative period, unless otherwise noted)
Q3 2022 Highlights and FY 2022 Outlook
“While we are not yet fulfilling our potential, I am confident in our ability to better execute against the tremendous market opportunity in front of us,” said Ken Burdick, Chairman and CEO of LifeStance. “As our team establishes a strategic multi-year roadmap, we are focused on continuing our shift to organic growth, investing in strategic initiatives to build scalable infrastructure, and driving operating leverage and profitability.”
Financial Highlights |
|
|
|
|
|
|
|
|
|
|||
|
|
Q3 2022 |
|
|
Q3 2021 |
|
|
Y/Y |
|
|||
(in millions) |
|
|
|
|
|
|
|
|
|
|||
Total revenue |
|
$ |
217.6 |
|
|
$ |
173.8 |
|
|
|
25 |
% |
Loss from operations |
|
|
(38.8 |
) |
|
|
(124.7 |
) |
|
|
(69 |
%) |
Center Margin |
|
|
60.3 |
|
|
|
52.1 |
|
|
|
16 |
% |
Net loss |
|
|
(37.9 |
) |
|
|
(120.5 |
) |
|
|
(69 |
%) |
Adjusted EBITDA |
|
|
15.4 |
|
|
|
10.7 |
|
|
|
44 |
% |
As % of Total revenue: |
|
|
|
|
|
|
|
|
|
|||
Loss from operations |
|
|
(17.8 |
%) |
|
|
(71.7 |
%) |
|
|
|
|
Center Margin |
|
|
27.7 |
% |
|
|
29.9 |
% |
|
|
|
|
Net loss |
|
|
(17.4 |
%) |
|
|
(69.3 |
%) |
|
|
|
|
Adjusted EBITDA |
|
|
7.1 |
% |
|
|
6.2 |
% |
|
|
|
|
(All results compared to prior-year period, unless otherwise noted)
Strategy and Key Developments
During the third quarter, LifeStance took several actions to support the company’s strategy to expand into new markets, build market density and offer a technology-enabled experience for patients and clinicians, including:
Balance Sheet, Cash Flow and Capital Allocation
For the nine months ended September 30, 2022, LifeStance provided $16.9 million cash flow from operations, including $5.7 million during the third quarter of 2022. The company ended the third quarter with cash of $90.3 million and net long-term debt of $212.0 million.
2022 Guidance1
LifeStance now expects full year 2022 revenue of $845 to $850 million, Center Margin of $229 to $232 million, and Adjusted EBITDA of $50 to $53 million. The lower guidance ranges relative to prior expectations were primarily driven by lower than expected visit volume and higher than expected costs associated with the company’s employee health benefits program.
For the fourth quarter of 2022, the company expects revenue of $215 million to $220 million, Center Margin of $55 million to $58 million, and Adjusted EBITDA of $7.5 million to $10.5 million.
Footnotes:
Conference Call, Webcast Information, and Presentation
LifeStance will hold a conference call today, November 8, at 4:30 p.m. Eastern Time to discuss third quarter 2022 results. Investors who wish to participate in the call should dial 1-800-715-9871, domestically, or 1-646-307-1963, internationally, approximately 10 minutes before the call begins and provide conference ID number 6691997 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 approximately 5,400 psychiatrists, advanced practice nurses, psychologists and therapists and operates across 32 states and approximately 600 centers. To learn more, please visit www.LifeStance.com.
We routinely post information that may be important to investors on the “Investor Relations” section of our website at investor.lifestance.com. We encourage investors and potential investors to consult our website regularly for important information about us.
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 full-year and fourth-quarter guidance and management's related assumptions, 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; actual or anticipated changes or fluctuations in our results of operations; our existing indebtedness could adversely affect our business and growth prospects; and other risks and uncertainties set forth under “Risk Factors” included in the reports we have filed or will file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2021. 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 loss or loss from operations.
Center Margin and Adjusted EBITDA anticipated for the fourth quarter of 2022 and full year 2022 are calculated in a manner consistent with the historical presentation of these measures at the end of this release. Reconciliation for the forward-looking fourth quarter of 2022 and full year 2022 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. As such, 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)
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
CURRENT ASSETS |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
90,336 |
|
|
$ |
148,029 |
|
Patient accounts receivable, net |
|
|
113,284 |
|
|
|
76,078 |
|
Prepaid expenses and other current assets |
|
|
48,967 |
|
|
|
42,413 |
|
Total current assets |
|
|
252,587 |
|
|
|
266,520 |
|
NONCURRENT ASSETS |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
193,393 |
|
|
|
152,242 |
|
Intangible assets, net |
|
|
272,473 |
|
|
|
300,355 |
|
Goodwill |
|
|
1,249,793 |
|
|
|
1,204,544 |
|
Other noncurrent assets |
|
|
11,416 |
|
|
|
3,448 |
|
Total noncurrent assets |
|
|
1,727,075 |
|
|
|
1,660,589 |
|
Total assets |
|
$ |
1,979,662 |
|
|
$ |
1,927,109 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
CURRENT LIABILITIES |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
7,947 |
|
|
$ |
14,152 |
|
Accrued payroll expenses |
|
|
61,576 |
|
|
|
60,002 |
|
Other accrued expenses |
|
|
29,303 |
|
|
|
26,510 |
|
Current portion of contingent consideration |
|
|
10,816 |
|
|
|
14,123 |
|
Other current liabilities |
|
|
2,630 |
|
|
|
1,965 |
|
Total current liabilities |
|
|
112,272 |
|
|
|
116,752 |
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
||
Long-term debt, net |
|
|
212,042 |
|
|
|
157,416 |
|
Other noncurrent liabilities |
|
|
66,956 |
|
|
|
50,325 |
|
Contingent consideration, net of current portion |
|
|
1,481 |
|
|
|
3,307 |
|
Deferred tax liability, net |
|
|
55,408 |
|
|
|
54,281 |
|
Total noncurrent liabilities |
|
|
335,887 |
|
|
|
265,329 |
|
Total liabilities |
|
$ |
448,159 |
|
|
$ |
382,081 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
||
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Preferred stock – par value $0.01 per share; 25,000 shares authorized as of |
|
|
— |
|
|
|
— |
|
Common stock – par value $0.01 per share; 800,000 shares authorized as of |
|
|
3,761 |
|
|
|
3,743 |
|
Additional paid-in capital |
|
|
2,050,537 |
|
|
|
1,898,357 |
|
Accumulated other comprehensive income |
|
|
3,185 |
|
|
|
— |
|
Accumulated deficit |
|
|
(525,980 |
) |
|
|
(357,072 |
) |
Total stockholders' equity |
|
|
1,531,503 |
|
|
|
1,545,028 |
|
Total liabilities and stockholders’ equity |
|
$ |
1,979,662 |
|
|
$ |
1,927,109 |
|
consolidated statements of operations and comprehensive loss
(unaudited)
(In thousands, except for Net Loss per Share)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
TOTAL REVENUE |
|
$ |
217,560 |
|
|
$ |
173,835 |
|
|
$ |
630,182 |
|
|
$ |
477,516 |
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Center costs, excluding depreciation and |
|
|
157,267 |
|
|
|
121,783 |
|
|
|
455,857 |
|
|
|
330,258 |
|
General and administrative expenses |
|
|
81,248 |
|
|
|
162,943 |
|
|
|
288,176 |
|
|
|
281,073 |
|
Depreciation and amortization |
|
|
17,884 |
|
|
|
13,777 |
|
|
|
50,311 |
|
|
|
38,779 |
|
Total operating expenses |
|
$ |
256,399 |
|
|
$ |
298,503 |
|
|
$ |
794,344 |
|
|
$ |
650,110 |
|
LOSS FROM OPERATIONS |
|
$ |
(38,839 |
) |
|
$ |
(124,668 |
) |
|
$ |
(164,162 |
) |
|
$ |
(172,594 |
) |
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain (loss) on remeasurement of contingent |
|
|
1,176 |
|
|
|
(906 |
) |
|
|
562 |
|
|
|
(1,463 |
) |
Transaction costs |
|
|
(210 |
) |
|
|
(126 |
) |
|
|
(507 |
) |
|
|
(3,656 |
) |
Interest expense |
|
|
(4,189 |
) |
|
|
(3,503 |
) |
|
|
(14,763 |
) |
|
|
(35,309 |
) |
Other expense |
|
|
(144 |
) |
|
|
— |
|
|
|
(144 |
) |
|
|
(1,445 |
) |
Total other expense |
|
$ |
(3,367 |
) |
|
$ |
(4,535 |
) |
|
$ |
(14,852 |
) |
|
$ |
(41,873 |
) |
LOSS BEFORE INCOME TAXES |
|
|
(42,206 |
) |
|
|
(129,203 |
) |
|
|
(179,014 |
) |
|
|
(214,467 |
) |
INCOME TAX BENEFIT |
|
|
4,353 |
|
|
|
8,751 |
|
|
|
10,106 |
|
|
|
15,300 |
|
NET LOSS |
|
$ |
(37,853 |
) |
|
$ |
(120,452 |
) |
|
$ |
(168,908 |
) |
|
$ |
(199,167 |
) |
Accretion of Redeemable Class A units |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(36,750 |
) |
NET LOSS AVAILABLE TO COMMON |
|
$ |
(37,853 |
) |
|
$ |
(120,452 |
) |
|
$ |
(168,908 |
) |
|
$ |
(235,917 |
) |
NET LOSS PER SHARE, BASIC AND DILUTED |
|
|
(0.11 |
) |
|
|
(0.35 |
) |
|
|
(0.48 |
) |
|
|
(0.73 |
) |
Weighted-average shares used to compute basic and |
|
|
357,520 |
|
|
|
343,394 |
|
|
|
354,057 |
|
|
|
321,283 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
NET LOSS |
|
$ |
(37,853 |
) |
|
$ |
(120,452 |
) |
|
$ |
(168,908 |
) |
|
$ |
(199,167 |
) |
OTHER COMPREHENSIVE INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gains on cash flow hedge, net of tax |
|
|
3,185 |
|
|
|
— |
|
|
|
3,185 |
|
|
|
— |
|
COMPREHENSIVE LOSS |
|
$ |
(34,668 |
) |
|
$ |
(120,452 |
) |
|
$ |
(165,723 |
) |
|
$ |
(199,167 |
) |
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(In thousands)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net loss |
|
$ |
(168,908 |
) |
|
$ |
(199,167 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
50,311 |
|
|
|
38,779 |
|
Stock and unit-based compensation |
|
|
152,235 |
|
|
|
150,809 |
|
Loss on debt extinguishment |
|
|
3,380 |
|
|
|
5,620 |
|
Amortization of discount and debt issue costs |
|
|
1,351 |
|
|
|
1,498 |
|
(Gain) loss on remeasurement of contingent consideration |
|
|
(562 |
) |
|
|
1,463 |
|
Loss on disposal of assets |
|
|
144 |
|
|
|
— |
|
Endowment of shares to LifeStance Health Foundation |
|
|
— |
|
|
|
9,000 |
|
Change in operating assets and liabilities, net of businesses acquired: |
|
|
|
|
|
|
||
Patient accounts receivable, net |
|
|
(34,606 |
) |
|
|
(20,711 |
) |
Prepaid expenses and other current assets |
|
|
(5,811 |
) |
|
|
(32,888 |
) |
Accounts payable |
|
|
1,109 |
|
|
|
(4,613 |
) |
Accrued payroll expenses |
|
|
(588 |
) |
|
|
15,910 |
|
Other accrued expenses |
|
|
18,816 |
|
|
|
13,085 |
|
Net cash provided by (used in) operating activities |
|
$ |
16,871 |
|
|
$ |
(21,215 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(68,871 |
) |
|
|
(55,815 |
) |
Acquisitions of businesses, net of cash acquired |
|
|
(40,294 |
) |
|
|
(58,699 |
) |
Net cash used in investing activities |
|
$ |
(109,165 |
) |
|
$ |
(114,514 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from initial public offering, net of underwriters |
|
|
— |
|
|
|
548,905 |
|
Issuance of common units to new investors |
|
|
— |
|
|
|
1,000 |
|
Proceeds from long-term debt, net of discount |
|
|
237,474 |
|
|
|
98,800 |
|
Payments of debt issue costs |
|
|
(7,266 |
) |
|
|
(2,360 |
) |
Payments of long-term debt |
|
|
(181,230 |
) |
|
|
(311,060 |
) |
Prepayment for debt paydown |
|
|
(1,609 |
) |
|
|
— |
|
Payments of contingent consideration |
|
|
(12,290 |
) |
|
|
(6,262 |
) |
Taxes related to net share settlement of equity awards |
|
|
(478 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
$ |
34,601 |
|
|
$ |
329,023 |
|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(57,693 |
) |
|
|
193,294 |
|
Cash and Cash Equivalents - Beginning of period |
|
|
148,029 |
|
|
|
18,829 |
|
CASH AND CASH EQUIVALENTS – END OF PERIOD |
|
$ |
90,336 |
|
|
$ |
212,123 |
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
9,518 |
|
|
$ |
28,217 |
|
Cash paid for taxes, net of refunds |
|
$ |
1,780 |
|
|
$ |
908 |
|
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND |
|
|
|
|
|
|
||
Equipment financed through capital leases |
|
$ |
264 |
|
|
$ |
14 |
|
Contingent consideration incurred in acquisitions of businesses |
|
$ |
7,719 |
|
|
$ |
5,514 |
|
Acquisition of property and equipment included in liabilities |
|
$ |
8,607 |
|
|
$ |
8,936 |
|
Issuance of common units for acquisitions of businesses |
|
$ |
— |
|
|
$ |
1,486 |
|
RECONCILIATION OF loss FROM OPERATIONS TO CENTER MARGIN
(unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
$ |
(38,839 |
) |
|
$ |
(124,668 |
) |
|
$ |
(164,162 |
) |
|
$ |
(172,594 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization |
|
|
17,884 |
|
|
|
13,777 |
|
|
|
50,311 |
|
|
|
38,779 |
|
General and administrative expenses (1) |
|
|
81,248 |
|
|
|
162,943 |
|
|
|
288,176 |
|
|
|
281,073 |
|
Center Margin |
|
$ |
60,293 |
|
|
$ |
52,052 |
|
|
$ |
174,325 |
|
|
$ |
147,258 |
|
RECONCILIATION OF NET loss TO ADJUSTED EBITDA
(unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
(37,853 |
) |
|
$ |
(120,452 |
) |
|
$ |
(168,908 |
) |
|
$ |
(199,167 |
) |
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
4,189 |
|
|
|
3,503 |
|
|
|
14,763 |
|
|
|
35,309 |
|
Depreciation and amortization |
|
|
17,884 |
|
|
|
13,777 |
|
|
|
50,311 |
|
|
|
38,779 |
|
Income tax benefit |
|
|
(4,353 |
) |
|
|
(8,751 |
) |
|
|
(10,106 |
) |
|
|
(15,300 |
) |
(Gain) loss on remeasurement of contingent |
|
|
(1,176 |
) |
|
|
906 |
|
|
|
(562 |
) |
|
|
1,463 |
|
Stock and unit-based compensation expense |
|
|
34,870 |
|
|
|
120,689 |
|
|
|
152,235 |
|
|
|
150,809 |
|
Management fees (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,445 |
|
Loss on disposal of assets |
|
|
144 |
|
|
|
— |
|
|
|
144 |
|
|
|
— |
|
Transaction costs (2) |
|
|
210 |
|
|
|
126 |
|
|
|
507 |
|
|
|
3,656 |
|
Offering related costs (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
8,747 |
|
Endowment to the LifeStance Health Foundation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,000 |
|
CEO transition costs |
|
|
494 |
|
|
|
— |
|
|
|
494 |
|
|
|
— |
|
Litigation costs (4) |
|
|
104 |
|
|
|
— |
|
|
|
104 |
|
|
|
— |
|
Other expenses (5) |
|
|
866 |
|
|
|
896 |
|
|
|
3,511 |
|
|
|
2,072 |
|
Adjusted EBITDA |
|
$ |
15,379 |
|
|
$ |
10,694 |
|
|
$ |
42,493 |
|
|
$ |
37,813 |
|
Q3 2022 Earnings Presentation November 8, 2022 Exhibit 99.2
Forward-Looking Statements 2 DISCLAIMERS Cautionary Note Regarding Forward-Looking Statements This presentation and related oral statements, including during any question and answer portion of the presentation, contain forward-looking statements about LifeStance Health Group, Inc. and its subsidiaries (“LifeStance”) and the industry in which LifeStance operates, including statements regarding full-year and fourth quarter guidance and management’s related assumptions, 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; actual or anticipated changes or fluctuations in our results of operations; 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 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. Forecasts, assumptions, expectations, beliefs, estimates and projections involve risk and uncertainties and are subject to change based on various factors.
Mission-driven Increasing access to personalized, trusted and affordable mental healthcare LifeStance at a Glance* Hybrid Virtual and in-person care model 10+ Integrated care programs States 32 ~600 Centers Clinicians $820M 5,431 TTM revenues1 Building the Nation’s Leading Outpatient Mental Health Platform 3 *Note: Unless otherwise stated, data is as of September 30, 2022; 1Trailing twelve months
Q3 Financial Highlights 4 Q3 Revenue of $217.6 million increased 25% year-over-year Q3 Center Margin of $60.3 million, or 27.7% as a percentage of revenue Q3 Adjusted EBITDA of $15.4 million, or 7.1% as a percentage of revenue Ended Q3 with a cash position of $90.3 million; for the nine months ended September 30, 2022, provided $16.9 million cash flow from operations, including $5.7 million during Q3 Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation.
Q3 2022 Strategy & Key Developments 5 Total clinicians of 5,431, +24% Y/Y; 205 net clinician adds in Q3 Completed 3 acquisitions in Q3, bringing the total since inception to 86 Opened 13 de novo centers in Q3 to support the company’s differentiated hybrid model offering both in-person and virtual care Continued to deploy proprietary online booking and intake experience (“OBIE”) across the country, which is now live in 14 states Ken Burdick appointed company's new Chief Executive Officer and Chairman, effective September 7; Burdick is an accomplished industry veteran with over 40 years of healthcare experience and a track record of driving profitable growth Michael Lester, who served as the company's founding Chief Executive Officer and Chairman since 2017 retired in September; Lester will continue to serve as a Strategic Advisor to the company Danish Qureshi appointed to President, in addition to his role as Chief Operating Officer Subsequent to the end of Q3, J. Michael Bruff appointed to new role as Business Transformation Officer, effective November 10; David Bourdon will join LifeStance and succeed Bruff as Chief Financial Officer
Adjusted EBITDA (in $M) Center Margin (in $M) Clinicians Revenue (in $M) Q3 2022 Results Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation. 6.2% 7.1% Adj. EBITDA (% of total revenue) 29.9% 27.7% Center Margin (% of total revenue) +16% +25% +24% +44%
Clinicians Adjusted EBITDA (in $M) 6.2% 6.0% 6.2% 7.0% 7.1% Adj. EBITDA (% of total revenue) Center Margin (in $M) Revenue (in $M) Quarterly Trends Note: See reconciliation of GAAP to non-GAAP measures in the Appendix to this presentation. 29.9% 28.5% 26.7% 28.5% 27.7% Center Margin (% of total revenue)
8 $17M $69M Operating Cash Flow (YTD) Capital Expenditures (YTD) 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 307 de novos opened since inception, including 13 in Q3 Acquisitions Disciplined investments to drive growth 86 acquisitions since inception, including 3 in Q3 Balance Sheet, Cash Flow & Capital Allocation Balance Sheet & Cash Flow Capital Allocation $90M $212M Cash and Cash Equivalents Net Long-term Debt
2022 Guidance 9 (All $ in M) FY 2022 Q4 2022 Revenue $845 – $850 Guidance range lowered due to lower visit volume expectations $215 – $220 Center Margin $229 – $232 Guidance range lowered due to lower revenue expectations and higher than expected costs associated with employee health benefits program $55 – $58 Adj. EBITDA $50 – $53 See drivers above $7.5 – $10.5 Note: Center Margin and Adjusted EBITDA anticipated for fourth quarter of 2022 and full year 2022 are calculated in a manner consistent with the historical presentation of these measures in the Appendix to this presentation. Reconciliation for the forward- looking fourth quarter of 2022 and full year 2022 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. Planning Assumptions Assumes ~90 de novo center openings, which were weighted heavily toward the first half of the year Assumes M&A spend of ~$60M Assumes no further COVID-related impacts or changes in the labor market environment
Appendix
Quarterly Statements of Operations and Comprehensive Loss 2022 2021 ($M) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Total Revenue $217.6 $209.5 $203.1 $190.1 $173.8 $160.5 $143.1 Operating expenses Center costs, excluding depreciation and amortization 157.3 149.7 148.9 135.8 121.8 109.3 99.1 General and administrative 81.2 103.6 103.4 152.7 162.9 85.5 32.7 Depreciation and amortization 17.9 16.7 15.7 15.4 13.8 12.8 12.2 Loss from operations (38.8) (60.5) (64.9) (113.8) (124.7) (47.0) (0.9) Other income (expense) Gain (loss) on remeasurement of contingent consideration 1.2 (0.2) (0.4) (1.1) (0.9) (0.3) (0.3) Transaction costs (0.2) (0.0) (0.3) (0.1) (0.1) (2.0) (1.5) Interest expense (4.2) (7.1) (3.4) (3.6) (3.5) (23.2) (8.6) Other expense (0.1) — — (0.0) — (1.4) (0.1) Total other expense (3.4) (7.3) (4.2) (4.9) (4.5) (26.8) (10.6) Loss before taxes (42.2) (67.8) (69.0) (118.6) (129.2) (73.8) (11.4) Income tax benefit (provision) 4.4 (0.9) 6.7 10.6 8.8 3.8 2.8 Net loss ($37.9) ($68.7) ($62.3) ($108.0) ($120.5) ($70.0) ($8.7) Other comprehensive income Unrealized gains on cash flow hedge, net of tax 3.2 — — — — — — Comprehensive loss ($34.7) ($68.7) ($62.3) ($108.0) ($120.5) ($70.0) ($8.7) Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited.
GAAP to Non-GAAP Reconciliations – Center Margin 2022 2021 2021 ($M) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Loss from operations ($38.8) ($60.5) ($64.9) ($113.8) ($124.7) ($47.0) ($0.9) Adjusted for: Depreciation and amortization 17.9 16.7 15.7 15.4 13.8 12.8 12.2 General and administrative (1) 81.2 103.6 103.4 152.7 162.9 85.5 32.7 Center Margin $60.3 $59.8 $54.2 $54.2 $52.1 $51.2 $44.0 Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited. 1 - Represents salaries, wages and employee benefits for our executive leadership, finance, human resources, marketing, billing and credentialing support and technology infrastructure and stock and unit-based compensation for all employees.
GAAP to Non-GAAP Reconciliations – Adjusted EBITDA 2022 2021 2021 ($M) Q3 Q2 Q1 Q1 Q4 Q3 Q2 Q1 Net loss ($37.9) ($68.7) ($62.3) ($62.3) ($108.0) ($120.5) ($70.0) ($8.7) Adjusted for: Interest expense 4.2 7.1 3.4 3.4 3.6 3.5 23.2 8.6 Depreciation and amortization 17.9 16.7 15.7 15.7 15.4 13.8 12.8 12.2 Income tax (benefit) provision (4.4) 0.9 (6.7) (6.7) (10.6) (8.8) (3.8) (2.8) (Gain) loss on remeasurement of contingent consideration (1.2) 0.2 0.4 0.4 1.1 0.9 0.3 0.3 Stock and unit-based compensation 34.9 57.5 59.9 59.9 108.6 120.7 29.5 0.6 Management fees (1) — — - — — — 1.4 0.1 Loss on disposal of assets 0.1 — - — 0.0 — — — Transaction costs (2) 0.2 0.0 0.3 0.3 0.1 0.1 2.0 1.5 Offering related costs (3) — — - — — — 8.7 — Endowment to the LifeStance Health Foundation — — - — — — 10.0 — CEO transition costs 0.5 — - — — — — — Litigation costs (4) 0.1 — - — — — — — Other expenses (5) 0.9 0.9 1.8 1.8 1.1 0.9 0.5 0.6 Adjusted EBITDA $15.4 $14.6 $12.5 $12.5 $11.4 $10.7 $14.5 $12.6 Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited. 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 Inc. ( the “TPG Acquisition”). During the year ended December 31, 2021, the management services agreement terminated in connection with the IPO and we were required to pay a one-time fee of $1.2 million to such parties. 2 - Primarily includes capital markets advisory, consulting, accounting and legal expenses related to our acquisitions. 3 - Primarily includes non-recurring incremental professional services, such as accounting and legal, and directors' and officers' insurance incurred in connection with the IPO. 4 - Litigation costs include only those costs which are considered non-recurring and outside of the ordinary course of business based on the following considerations, which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) the complexity of the case, (iii) the nature of the remedy(ies) sought, including the size of any monetary damages sought, (iv) the counterparty involved, and (v) our overall litigation strategy. 5 - Primarily includes costs incurred to consummate or integrate acquired centers, certain of which are wholly-owned and certain of which are affiliated practices, in addition to the compensation paid to former owners of acquired centers and related expenses that are not reflective of the ongoing operating expenses of our centers. Acquired center integration and other are components of general and administrative expenses included in our unaudited consolidated statements operations and comprehensive loss. Former owner fees is a component of center costs, excluding depreciation and amortization included in our unaudited consolidated statements of operations and comprehensive loss.
Quarterly Non-GAAP Financial Metrics 2022 2021 2021 ($M) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Key Metrics Clinicians 5,431 5,226 4,989 4,790 4,375 3,975 3,301 Total Revenue $217.6 $209.5 $203.1 $190.1 $173.8 $160.5 $143.1 Center costs, excluding depreciation and amortization 157.3 149.7 148.9 135.8 121.8 109.3 99.1 Center Margin (Non-GAAP) $60.3 $59.8 $54.2 $54.2 $52.1 $51.2 $44.0 % Margin 27.7% 28.5% 26.7% 28.5% 29.9% 31.9% 30.7% General and administrative 81.2 103.6 103.4 152.7 162.9 85.5 32.7 Depreciation and amortization 17.9 16.7 15.7 15.4 13.8 12.8 12.2 Loss from operations (38.8) (60.5) (64.9) (113.8) (124.7) (47.0) (0.9) Other income (expenses) Other income (expenses) 1.0 (8.3) 2.5 5.7 4.2 (23.0) (7.8) Net loss ($37.9) ($68.7) ($62.3) ($108.0) ($120.5) ($70.0) ($8.7) Other comprehensive income Unrealized gains on cash flow hedge, net of tax 3.2 — — — — — — Comprehensive loss ($34.7) ($68.7) ($62.3) ($108.0) ($120.5) ($70.0) ($8.7) Adjusted EBITDA build Net loss (37.9) (68.7) (62.3) (108.0) (120.5) (70.0) (8.7) Interest expense 4.2 7.1 3.4 3.6 3.5 23.2 8.6 Depreciation and amortization 17.9 16.7 15.7 15.4 13.8 12.8 12.2 Income tax (benefit) provision (4.4) 0.9 (6.7) (10.6) (8.8) (3.8) (2.8) (Gain) loss on remeasurement of contingent consideration (1.2) 0.2 0.4 1.1 0.9 0.3 0.3 Stock and unit-based compensation 34.9 57.5 59.9 108.6 120.7 29.5 0.6 Management fees — — — — — 1.4 0.1 Loss on disposal of assets 0.1 — — 0.0 — — — Transaction costs 0.2 0.0 0.3 0.1 0.1 2.0 1.5 Offering related costs — — — — — 8.7 — Endowment to the LifeStance Health Foundation — — — — — 10.0 — CEO transition expenses 0.5 — — — — — — Litigation costs 0.1 — — — — — — Other expenses 0.9 0.9 1.8 1.1 0.9 0.5 0.6 Adjusted EBITDA (Non-GAAP) $15.4 $14.6 $12.5 $11.4 $10.7 $14.5 $12.6 % Margin 7.1% 7.0% 6.2% 6.0% 6.2% 9.1% 8.8% Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited.
Quarterly Balance Sheets 2022 2021 2021 ($M) Q3 Q2 Q1 Q4 Q3 Q2 Q1 Cash and cash equivalents 90.3 96.7 114.0 148.0 212.1 276.2 39.5 Patient accounts receivable, net 113.3 99.7 95.0 76.1 70.1 60.1 47.8 Prepaid expenses and other current assets 49.0 47.9 54.3 42.4 46.1 27.8 22.3 Total current assets 252.6 244.3 263.3 266.5 328.3 364.1 109.6 Property and equipment, net 193.4 190.7 170.9 152.2 115.1 91.8 70.8 Intangible assets, net 272.5 282.1 291.2 300.4 308.0 316.5 323.3 Goodwill 1,249.8 1,243.7 1,229.3 1,204.5 1,160.0 1,138.7 1,099.7 Other noncurrent assets 11.4 7.9 3.7 3.5 3.4 3.3 2.9 Total noncurrent assets 1,727.1 1,724.4 1,695.1 1,660.6 1,586.4 1,550.4 1,496.7 Total assets $1,979.7 $1,968.7 $1,958.4 $1,927.1 $1,914.8 $1,914.4 $1,606.3 Accounts payable 7.9 12.9 15.1 14.2 3.1 10.0 5.9 Accrued payroll expenses 61.6 61.2 73.2 60.0 57.6 50.4 45.4 Other accrued expenses 29.3 26.2 21.8 26.5 28.3 38.8 25.7 Current portion of contingent consideration 10.8 9.0 13.5 14.1 14.0 10.9 14.9 Other current liabilities 2.6 2.2 2.0 2.0 2.2 2.6 4.9 Total current liabilities 112.3 111.5 125.6 116.8 105.2 112.6 96.8 Long-term debt, net 212.0 203.4 177.4 157.4 157.5 157.1 387.3 Other noncurrent liabilities 67.0 64.5 57.5 50.3 22.9 15.7 14.2 Contingent consideration, net of current portion 1.5 3.7 1.1 3.3 3.1 3.2 1.1 Deferred tax liability, net 55.4 54.3 54.3 54.3 81.2 81.2 81.2 Total noncurrent liabilities 335.9 325.8 290.3 265.3 264.7 257.2 483.8 Total liabilities $448.2 $437.4 $415.9 $382.1 $369.9 $369.8 $580.5 Redeemable units — — — — — — 71.8 Common stock/units 3.8 3.8 3.7 3.7 3.7 3.7 1,010.5 Additional paid-in capital 2,050.5 2,015.7 1,958.2 1,898.4 1,790.2 1,669.5 2.1 Accumulated other comprehensive income 3.2 — — — — — — Accumulated deficit (526.0) (488.1) (419.4) (357.1) (249.0) (128.6) (58.6) Total stockholders'/members’ equity 1,531.5 1,531.3 1,542.5 1,545.0 1,544.9 1,544.6 954.0 Total liabilities, redeemable units and stockholders’/members’ equity $1,979.7 $1,968.7 $1,958.4 $1,927.1 $1,914.8 $1,914.4 $1,606.3 Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited.
Statements of Cash Flows Subtotals in the schedule above may not foot due to rounding. Amounts are unaudited. ($M) Nine Months Ended Q3’22 Six Months Ended Q2’22 Q1’22 Nine Months Ended Q3’21 Six Months Ended Q2’21 Q1’21 2021 FY CASH FLOWS FROM OPERATING ACTIVITIES Net loss (168.9) (131.1) (62.3) (199.2) (78.7) (8.7) (307.2) Adjustments to reconcile net loss to net cash provided by (used by) operating activities: Depreciation and amortization 50.3 32.4 15.7 38.8 25.0 12.2 54.1 Stock and unit-based compensation 152.2 117.4 59.9 150.8 30.1 0.6 259.4 Deferred income taxes — — — — — — (26.9) Loss on debt extinguishment 3.4 3.4 — 5.6 5.6 — 14.4 Amortization of discount and debt issue costs 1.4 0.7 0.3 1.5 1.1 0.4 1.8 (Gain) loss on remeasurement of contingent consideration (0.6) 0.6 0.4 1.5 0.6 0.3 2.6 Loss on disposals of assets 0.1 — — — — — — Endowment of shares to LifeStance Health Foundation — — — 9.0 9.0 — 9.0 Change in operating assets and liabilities, net of businesses acquired: Patient accounts receivable, net (34.6) (21.9) (18.1) (20.7) (11.8) (3.1) (24.2) Prepaid expenses and other current assets (5.8) (5.4) (12.1) (32.9) (15.0) (8.0) (29.1) Accounts payable 1.1 1.7 1.9 (4.6) 2.3 3.0 0.6 Accrued payroll expenses (0.6) (0.3) 12.8 15.9 9.6 7.3 15.3 Other accrued expenses 18.8 13.5 4.9 13.1 15.3 5.9 39.6 Net cash provided by (used by) operating activities $16.9 $11.1 $3.3 ($21.2) (7.0) $9.9 $9.4 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment (68.9) (53.8) (27.9) (55.8) (31.8) (11.1) (94.5) Acquisitions of businesses, net of cash acquired (40.3) (35.1) (22.9) (58.7) (39.1) (0.8) (99.6) Net cash used in investing activities ($109.2) ($88.9) ($50.9) ($114.5) ($70.9) ($11.8) ($194.1) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from initial public offering, net of underwriters discounts and commissions and deferred offering costs — — — 548.9 554.2 — 548.9 Payments of deferred offering costs — — — — — (0.3) — Issuance of common units to new investors — — — 1.0 1.0 — 1.0 Proceeds from long-term debt, net of discount 237.5 228.0 20.0 98.8 98.8 26.2 98.8 Payments of debt issue costs (7.3) (7.2) — (2.4) (2.4) (1.0) (2.4) Payments of long-term debt (181.2) (181.2) (0.3) (311.1) (310.7) (0.8) (311.4) Prepayment for debt paydown (1.6) (1.6) — — — — (8.8) Payments of contingent consideration (12.3) (11.1) (5.7) (6.3) (5.6) (1.5) (12.3) Taxes related to net share settlement of equity awards (0.5) (0.5) (0.4) — — — — Net cash provided by financing activities $34.6 $26.4 $13.5 $329.0 $335.3 $22.6 $313.9 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ($57.7) ($51.3) ($34.0) $193.3 $257.4 $20.7 $129.2 Cash and Cash Equivalents - Beginning of period 148.0 148.0 148.0 18.8 18.8 18.8 18.8 CASH AND CASH EQUIVALENTS – END OF PERIOD $90.3 $96.7 $114.0 $212.1 $276.2 $39.5 $148.0