Performant Financial Corporation (Nasdaq: PFMT), a leading provider of technology-enabled audit, recovery, and related analytics services in the United States, with a focus in the healthcare payment integrity industry, today reported the following financial results for its fourth quarter and full year ended December 31, 2022:

Fourth Quarter Financial Highlights

• Total revenues of $29.2 million, compared to $31.6 million in the prior year period
• Healthcare revenues of $26.0 million, compared to $25.6 million in the prior year period
• Net loss of $0.2 million or $(0.003) per diluted share, compared to a net loss of $2.6 million, or $(0.04) per diluted share, in the prior year period
• Adjusted EBITDA of $2.3 million, compared to $5.0 million in the prior year period
• Adjusted net income of $442 thousand, or $0.01 per diluted share, compared to adjusted net loss of $35 thousand or $(0.001) per diluted share, in the prior year period

Full Year 2022 Financial Highlights

• Total revenues of $109.2 million, compared to $124.4 million in the prior year period
• Healthcare revenues of $94.7 million, compared to $77.5 million in the prior year period
• Net loss of $6.5 million, or $(0.09) per diluted share, compared to net loss of $10.3 million, or $(0.17) per diluted share in the prior year period
• Adjusted EBITDA of $0.9 million, compared to $11.9 million in the prior year period
• Adjusted net loss of $5.2 million, or $(0.07) per diluted share, compared to adjusted net loss of $3.1 million, or $(0.05) per diluted share, in the prior year period

Fourth Quarter 2022 Results

Healthcare revenues in the fourth quarter of 2022 were $26.0 million, up from $25.6 million in the prior year period. Recovery revenues in the fourth quarter were $0.1 million, compared to $2.3 million in the prior year period. Revenues from Customer Care / Outsourced Services in the fourth quarter were $3.1 million, compared to $3.7 million in the prior year period.

Net loss for the fourth quarter of 2022 was $0.2 million, or $(0.003) per share on a fully diluted basis, compared to a net loss of $2.6 million, or $(0.04) per share, on a fully diluted basis in the prior year period. Adjusted EBITDA for the fourth quarter was $2.3 million compared to $5.0 million in the prior year period. Adjusted net income for the fourth quarter was $442 thousand, or $0.01 per share on a fully diluted basis, compared to adjusted net loss of $35 thousand, or $(0.001) per fully diluted share, in the prior year period.

Full Year 2022 Results

Revenues for the full year ended December 31, 2022 were $109.2 million, compared to revenues of $124.4 million in the prior year. Healthcare revenues were $94.7 million, compared to $77.5 million in the prior year. Recovery revenues were $0.2 million, compared to $33.4 million in the prior year. Revenues from Customer Care / Outsourced Services were $14.3 million compared to $13.5 million in the prior year.

Net loss for the full year ended December 31, 2022 was $6.5 million, or $(0.09) per share on a fully diluted basis, compared to net loss of $10.3 million, or $(0.17) per share on a fully diluted basis, in the prior year. Adjusted EBITDA was $0.9 million, compared to $11.9 million in the prior year. Adjusted net loss was $5.2 million, or $(0.07) per fully diluted share, compared to adjusted net loss of $3.1 million, or $(0.05) per fully diluted share in the prior year.

“2022 was a strong year, as Performant achieved numerous strategic milestones. These milestones started with the Health and Human Services, Office of the Inspector General claim audit and consultative services award, followed by the CMS RAC Region 2 award, and culminated with our successful recompete of the CMS Medicare Secondary Payer Commercial Repayment Center contract,” commented Simeon Kohl, President of Performant. “2022 was also a breakthrough year for our work in the commercial payer market, as we added 21 new implementations and made meaningful progress in our efforts to further scale our operations. We anticipate that our sales pipeline will support a similar cadence in 2023.”

As of December 31, 2022, the Company had cash, cash equivalents and restricted cash of approximately $23.5 million.

Business Commentary

“We are quite pleased with our operational results for 2022, particularly in consideration of the transition we have completed into a healthcare driven company over the past few years,” added Rohit Ramchandani, Senior Vice President of Finance and Strategy at Performant. “Looking ahead to 2023, we are excited to keep building upon the momentum of our historical and current pipeline of implementations, whilst investing into speed to revenue and margin expansion opportunities. We are introducing full year 2023 healthcare revenue guidance to be in the range of $105M to $110M. In terms of EBITDA, we anticipate full year 2023 EBITDA in the range of $2 - $5 million, which is inclusive of $10M to $14M of expected investment spend, consistent with our investment in growth initiatives and improving our operational efficiencies.”

Amendment to Credit Agreement

The Company recently completed an amendment to its existing Credit Agreement with MUFG Union Bank, N.A. in response to certain macroeconomic factors and the Company’s current growth initiatives. The details of this amendment will be contained in the Company’s Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission expected to be filed on or before March 16, 2022.

Note Regarding Use of Non-GAAP Financial Measures

In this press release, to supplement our consolidated financial statements, the Company presents adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per diluted share. These measures are not in accordance with accounting principles generally accepted in the United States of America (US GAAP) and accordingly reconciliations of adjusted EBITDA and adjusted net income (loss) to net income (loss) determined in accordance with US GAAP are included in the “Reconciliation of Non-GAAP Results” table at the end of this press release. We have included adjusted EBITDA and adjusted net income (loss) in this press release because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. Accordingly, we believe that adjusted EBITDA and adjusted net income (loss) provide useful information to investors and analysts in understanding and evaluating our operating results in the same manner as our management and board of directors. Our use of adjusted EBITDA and adjusted net income (loss) has limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under US GAAP. In particular, many of the adjustments to our US GAAP financial measures reflect the exclusion of items, specifically interest, tax and depreciation and amortization expenses, equity-based compensation expense and certain other non-operating expenses, that are recurring and will be reflected in our financial results for the foreseeable future. In addition, these measures may be calculated differently from similarly titled non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes.

Earnings Conference Call

The Company will hold a conference call to discuss its fourth quarter and full year 2022 results today at 5:00 p.m. Eastern. A live webcast of the call may be accessed on the Investor Relations section of the Company’s website at investors.performantcorp.com. The conference call is also available by dialing 877-704-4453 (domestic) or 201-389-0920 (international).

A replay of the call will be available on the Company's website or by dialing 844-512-2921 (domestic) or 412-317-6671 (international) and entering the passcode 13736959. The telephonic replay will be available approximately three hours after the call, through March 22, 2023.

About Performant Healthcare Solutions

Performant provides technology-enabled audit, recovery, and analytics services in the United States to the healthcare industry. Performant works with healthcare payers through claims auditing and eligibility-based (also known as coordination-of-benefits, or COB) services to identify improper payments. The Company engages clients in both government and commercial markets. The Company also has a call center which serves clients with complex consumer engagement needs. Clients of the Company typically operate in complex and highly regulated environments and contract for their payment integrity needs in order to reduce losses on improper healthcare payments.

To learn more, please visit http://www.performanthealth.com.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's outlook for revenues, net income (loss), and adjusted EBITDA in 2023 and beyond. These forward-looking statements are based on current expectations, estimates, assumptions, and projections that are subject to change and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the Company’s ability to generate revenue following long implementation periods associated with new customer contracts; client relationships and the Company’s ability to maintain such client relationships; downturns in domestic or global economic conditions and other macroeconomic factors; the Company’s ability to generate sufficient cash flows to fund our ongoing operations and other liquidity needs; the Company’s ability to hire and retain employees with specialized skills that are required for its healthcare business; anticipated trends and challenges in our business and competition in the markets in which the Company operates; the impact of COVID-19 on the Company’s business and operations, opportunities and expectations for the markets in which the Company operates; the Company’s indebtedness and compliance, or failure to comply, with restrictive covenants in the Company’s credit agreement; opportunities and expectations for growth in the various markets in which the Company operates; anticipated trends and challenges in the Company’s business and competition in the markets in which it operates; the adaptability of the Company’s technology platform to new markets and processes; the Company’s ability to invest in and utilize our data and analytics capabilities to expand its capabilities; the Company’s growth strategy of expanding in existing markets and considering strategic alliances or acquisitions; the Company’s ability to meet liquidity and working capital needs; expectations regarding future expenses; expected future financial performance; and the Company’s ability to comply with and adapt to industry regulations and compliance demands.

More information on potential factors that could affect the Company's financial condition and operating results is included from time to time in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's annual report on Form 10-K for the year ended December 31, 2022 and subsequently filed reports on Forms 10-Q and 8-K. The forward-looking statements are made as of the date of this press release and the Company does not undertake to update any forward-looking statements to conform these statements to actual results or revised expectations.

We are providing the following preliminary estimates of our financial results for the year ending December 31, 2022:

We are providing the following historical breakdown of the quarterly and annual revenue contributions under the new contribution breakdowns of the Company's healthcare revenue results for the years ended December 31, 2022, 2021, and 2020:

View source version on businesswire.com: https://www.businesswire.com/news/home/20230314005846/en/