August 2, 2023 — MultiPlan Corporation (“MultiPlan” or the “Company”) (NYSE: MPLN), a leading value-added provider of data analytics and technology-enabled end-to-end cost management, payment, and revenue integrity solutions to the U.S. healthcare industry, today reported financial results for the second quarter ended June 30, 2023.
“The second quarter marked an inflection point for MultiPlan,” said Dale White, CEO of MultiPlan. “We executed on several key initiatives within our Growth Plan. These included the acquisition of Benefits Science Technologies (“BST”), which accelerates our new Data & Decision Science service line, and our new partnership with ECHO Health, which adds a B2B healthcare payments service to our suite of solutions. These actions, along with further progress we have made toward the launch of several new products to enhance our core business, position us for growth in 2024 and set us on a path of transformation over the next several years.”
“Also, a normalizing volume environment and favorable savings mix helped us deliver second quarter results at the high end of our expectations and in-line with our prior quarter, providing a solid baseline for the second half of 2023,” Mr. White continued. “Based on our second quarter results and our expectations for the second half, we are modestly increasing the midpoint of our revenue guidance range for full-year 2023, before the contribution of BST.”
Mr. White concluded, “As we move forward, we remain laser-focused on executing the plan we outlined at our Investor Day in June: leveraging the enormous strength of our platform; transforming our business by expanding our products and services; and unlocking the value of our franchise by accelerating our growth, diversifying our revenues, and improving our capital structure.”
Business and Financial Highlights
- Revenues of $238.0 million for Q2 2023, a decrease of 18.0%, compared to revenues of $290.1 million for Q2 2022. BST contributed $2.1 million to revenues in Q2 2023, reflecting a partial quarter since the close of the acquisition on May 8, 2023.
- Net loss of $36.4 million for Q2 2023, compared to net income of $13.5 million for Q2 2022.
- Adjusted EBITDA of $152.7 million for Q2 2023, compared to Adjusted EBITDA of $209.6 million for Q2 2022.
- Net cash provided by operating activities of $7.7 million for Q2 2023, compared to net cash provided by operating activities of $40.7 million for Q2 2022.
- Free Cash Flow of $(24.3) million for Q2 2023, compared to Free Cash Flow of $21.8 million for Q2 2022.
- In Q2 2023, the Company used $141.3 million of cash for the acquisition of Benefits Science LLC (“Benefits Science Technologies” or “BST”) and used $7.4 million to repurchase shares of its common stock in the open market.
- The Company ended Q2 2023 with $89.8 million of cash and cash equivalents on the balance sheet.
- The Company processed approximately $43.1 billion in claim charges during the second quarter of 2023, identifying potential medical cost savings of approximately $5.7 billion.
2023 Financial Guidance [1]
The Company is updating its Full Year 2023 guidance, as detailed in the table below:
| Financial Metric | Prior FY 2023 Guidance (excluded BST) | Updated FY 2023 Guidance (includes BST) | ||
| Revenues | $925 million to $975 million | $950 million to $980 million | ||
| Adjusted EBITDA1 | $600 million to $650 million | $615 million to $635 million | ||
| Interest expense | $325 million to $340 million | $325 million to $335 million | ||
| Cash flow from operations2 | $175 million to $215 million | $160 million to $190 million | ||
| Capital expenditures | $100 million to $115 million | $110 million to $120 million | ||
| Depreciation | $70 million to $75 million | $70 million to $75 million | ||
| Amortization of intangible assets | $335 million to $345 million | $340 million to $345 million | ||
| Effective tax rate | 25% to 28% | 25% to 28% |
Our updated FY 2023 guidance includes approximately $12 million of revenues and adjusted EBITDA of $(2) million from the contribution of BST post-closing of the transaction.
The Company anticipates Q3 2023 revenues between $235 million and $250 million and Adjusted EBITDA1 between $150 million and $160 million.
Conference Call Information
The Company will host a conference call today, Wednesday, August 2, 2023 at 10:00 a.m. U.S. Eastern Time (ET) to discuss its financial results. Investors and analysts are encouraged to pre-register for the conference call by using the link below. Participants who pre-register will receive access details via email. Pre-registration may be completed at any time up to and following the call start time.
To pre-register, go to: https://www.netroadshow.com/events/login?show=1b7fdc10&confId=52126.
A live webcast of the conference call can be accessed through the Investor Relations section of the Company’s website at investors.multiplan.com/events-and-presentations. Participants should join the webcast ten minutes prior to the start of the conference call. The earnings press release and a supplemental slide deck will also be available on this section of the Company’s website.
For those unable to listen to the live conference call, a replay will be available approximately two hours after the call through the archived webcast on the Investor Relations section of the Company’s website or by dialing (866) 813-9403 or (929) 458-6194. The replay access code is 964758.
About MultiPlan
MultiPlan is committed to helping healthcare payors manage the cost of care, improve their competitiveness, and inspire positive change. Leveraging sophisticated technology, data analytics, and a team rich with industry experience, MultiPlan interprets customers’ needs and customizes innovative solutions that combine its payment and revenue integrity, network-based, and analytics-based services. MultiPlan is a trusted partner to over 700 healthcare payors in the commercial health, government, and property and casualty markets. For more information, visit www.multiplan.com.
[1] We have not reconciled the forward-looking Adjusted EBITDA guidance included above to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), transaction-related expenses, and certain fair value measurements, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.
2 Cash flow from operations guidance includes the impact of approximately $22 million that MultiPlan paid in Q1 2023 in connection with the settlement of our previously disclosed Delaware stockholder litigation.
