Tivity Health, Inc. announced financial results for the first quarter ended March 31, 2021.
Richard Ashworth, President and Chief Executive Officer, commented, “We delivered strong results for the first quarter of 2021, allowing us to tighten the ranges on revenue and Adjusted EBITDA guidance for the full year. We successfully expanded our SilverSneakers virtual offerings by launching a new Roku application for viewing on-demand content and are on track to deploy our omni-channel capabilities by the start of the third quarter. These strategic initiatives combined with the continued momentum in the number of in-person visits give us optimism for the remainder of the year. The recent additions of our new Chief Information Officer (CIO) and Chief Experience and Innovation Officer (CXIO) underline our commitment to quickly expand our member-centric engagement through a robust platform which includes digital and in-person experiences.”
First Quarter Highlights
First Quarter 2021 Financial Information
Dollars in millions, except per-share data
See pages 9-13 for a reconciliation of non-GAAP financial measures.
Three Months Ended March 31, |
|||
2021 |
2020 |
||
Revenues from Continuing Operations |
$108.1 |
$159.7 |
|
Income from Continuing Operations |
$19.9 |
$8.3 |
|
Income from Continuing Operations Margin |
18.5% |
5.2% |
|
Adjusted EBITDA from Continuing Operations |
$41.2 |
$30.2 |
|
Adjusted EBITDA from Continuing Operations Margin |
38.1% |
18.9% |
|
Diluted Earnings Per Share from Continuing Operations |
$0.40 |
$0.17 |
|
Adjusted Diluted Earnings Per Share from Continuing Operations |
$0.40 |
$0.25 |
|
Cash Flows from Operating Activities – former Healthcare segment (1) |
$22.6 |
$25.7 |
|
Free Cash Flow – former Healthcare segment (1) |
$19.4 |
$22.5 |
(1) |
For comparability, figures for 2020 represent cash flows from the Company’s former Healthcare segment. |
Revenues in the first quarter of 2021 of $108.1 million decreased $51.6 million, or approximately 32%, compared to the first quarter of 2020, primarily as a result of a significant decrease in SilverSneakers revenue of $41.8 million resulting from fewer revenue-generating visits due to the COVID-19 pandemic. Additionally, Prime Fitness revenue decreased by $10.2 million primarily due to terminations and suspensions.
The mix of SilverSneakers revenue during the first quarter of 2021 remained different from the mix during the first quarter of 2020 due to the reduction in fitness location visits resulting from the COVID-19 pandemic. Revenue from per-member-per-month fees represented 53% of the Company’s SilverSneakers revenue in the first quarter of 2021, compared to 36% in the same quarter of 2020.
Income from continuing operations for the first quarter of 2021 was $19.9 million, an increase of $11.7 million compared to the first quarter of 2020. Adjusted EBITDA was $41.2 million for the first quarter, or 38.1% of revenues, compared to $30.2 million for the first quarter of 2020, or 18.9% of revenues. This improvement is primarily due to the mix of per-member-per-month fees for SilverSneakers driven by a reduction in fitness location visits and related costs for SilverSneakers and Prime, and also reflects a reduction in advertising expense and employee-related expenses.
During the first quarter, the Company prepaid $63.6 million of principal amortization on its term loan debt, and net debt (total debt less cash and cash equivalents) improved to $353 million, resulting in a net leverage ratio of 2.11. The Company’s next quarterly installment is not due until December 2022.
Updated 2021 Financial Guidance
Tivity Health announced today that, based on first-quarter results and the Company’s outlook for the remainder of 2021, it has updated its financial guidance as follows:
Dollars in millions, except per-share data
February 24, 2021 (Prior Guidance) |
May 5, 2021 (Updated Guidance) |
|
Revenues |
$455 – $485 |
$465 – $485 |
Income from Continuing Operations |
$70.5 – $74.3 |
$71.3 – $74.3 |
Adjusted EBITDA (1) |
$150 – $155 |
$151 – $155 |
Depreciation Expense |
Approximately $14 |
Unchanged |
Interest Expense |
Approximately $37, including $6 of non-cash |
Unchanged |
Effective Tax Rate |
Approximately 25% |
Unchanged |
Weighted Average Diluted Shares Outstanding |
50.0 million – 50.5 million |
Unchanged |
Earnings per Diluted Share |
$1.40 – $1.49 |
$1.41 – $1.49 |
Adjusted Earnings per Diluted Share (1) |
$1.47 – $1.56 |
$1.49 – $1.56 |
Cash Flows from Operating Activities |
$81 – $85 |
Unchanged |
Free Cash Flow (1) |
$50 – $60 |
Unchanged |
Capital Expenditures |
$20 – $25 |
Unchanged |
Tivity Health’s detailed guidance considerations for 2021 may be found in the supplemental information posted on the Company’s website at http://investors.tivityhealth.com.
(1) |
Adjusted EBITDA, adjusted earnings per diluted share, and free cash flow are non-GAAP financial measures. See pages 9-13 for a reconciliation of non-GAAP financial measures. |
About Tivity Health
Tivity Health® Inc. is a leading provider of healthy life-changing solutions, including SilverSneakers®, Prime® Fitness, WholeHealth Living® and Wisely Well™. We are focused on becoming the modern destination for healthy living. We will expand beyond fitness by establishing an engagement platform that enables personalized member interaction with all of our offerings, and we will partner with other payors and service providers to aggregate services to seniors under the SilverSneakers umbrella. The continued development of our suite of digital offerings will enable a more tailored, interactive, and impactful experience across a variety of areas, including fitness, social connection, community involvement, volunteering, and enrichment. Learn more at www.tivityhealth.com.