10-Q 1 agl-20220630.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

 

For the quarterly period ended June 30, 2022

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

Commission file number 001-40332

 

 

agilon health, inc.

(Exact name of registrant as specified in its charter)

 

Delaware

37-1915147

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

6210 E Hwy 290, Suite 450

Austin, TX 78723

(Address of principal executive offices)

(562) 256-3800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common stock, $0.01 par value

AGL

New York Stock Exchange

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YesNo

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

  ☐

 

Accelerated Filer

  ☐

 

 

 

 

 

Non-accelerated Filer

  ☒

 

Smaller Reporting Company

 

 

 

 

 

 

 

 

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES NO ☒

At July 29, 2022, there were 410,936,377 shares of the registrant’s $0.01 par value common stock outstanding.

 

 


 

agilon health, inc.

INDEX

 

 

 

 

PART I. FINANCIAL INFORMATION

 

 

 

 

Item 1.

Unaudited Financial Statements:

 

 

 

 

 

Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021

3

 

 

 

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021

4

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021

5

 

 

 

 

Condensed Consolidated Statements of Contingently Redeemable Common Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021

6

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021

8

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

9

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

35

 

 

 

Item 4.

Controls and Procedures

35

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

Item 1.

Legal Proceedings

36

 

 

 

Item 1A.

Risk Factors

36

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

36

 

 

 

Item 6.

Exhibits

37

 

 

 

Signatures

38

 

2

 


 

agilon health, inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

June 30,
2022

 

 

December 31,
2021

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

668,574

 

 

$

1,040,039

 

Restricted cash and equivalents

 

 

15,085

 

 

 

14,781

 

Marketable securities

 

 

285,590

 

 

 

 

Receivables, net

 

 

607,632

 

 

 

293,407

 

Prepaid expenses and other current assets, net

 

 

24,528

 

 

 

18,968

 

Total current assets

 

 

1,601,409

 

 

 

1,367,195

 

Property and equipment, net

 

 

15,808

 

 

 

9,161

 

Intangible assets, net

 

 

62,505

 

 

 

55,398

 

Goodwill

 

 

41,540

 

 

 

41,540

 

Other assets, net

 

 

119,260

 

 

 

112,958

 

Total assets

 

$

1,840,522

 

 

$

1,586,252

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Medical claims and related payables

 

$

458,038

 

 

$

239,014

 

Accounts payable and accrued expenses

 

 

142,048

 

 

 

112,946

 

Current portion of long-term debt

 

 

5,000

 

 

 

5,000

 

Total current liabilities

 

 

605,086

 

 

 

356,960

 

Long-term debt, net of current portion

 

 

40,943

 

 

 

43,401

 

Other liabilities

 

 

91,122

 

 

 

94,295

 

Total liabilities

 

 

737,151

 

 

 

494,656

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

 

 

Common stock, $0.01 par value: 2,000,000 shares authorized;
   
408,204 and 400,095 shares issued and outstanding, respectively

 

 

4,082

 

 

 

4,001

 

Additional paid-in capital

 

 

2,076,329

 

 

 

2,045,572

 

Accumulated deficit

 

 

(977,096

)

 

 

(957,677

)

Accumulated other comprehensive income (loss)

 

 

513

 

 

 

 

Total agilon health, inc. stockholders' equity (deficit)

 

 

1,103,828

 

 

 

1,091,896

 

Noncontrolling interests

 

 

(457

)

 

 

(300

)

Total stockholders’ equity (deficit)

 

 

1,103,371

 

 

 

1,091,596

 

Total liabilities and stockholders’ equity (deficit)

 

$

1,840,522

 

 

$

1,586,252

 

 

The condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”) as agilon health, inc., together with its consolidated subsidiaries and variable interest entities (the “Company”), is the primary beneficiary of these VIEs. The condensed consolidated balance sheets include total assets that can only be used to settle obligations of the Company’s consolidated VIEs totaling $748.3 million and $420.5 million as of June 30, 2022 and December 31, 2021, respectively, and total liabilities of the Company’s consolidated VIEs for which creditors do not have recourse to the general credit of the primary beneficiary of $539.9 million and $282.0 million as of June 30, 2022 and December 31, 2021, respectively. See Note 13 for additional details.

See accompanying Notes to the Condensed Consolidated Financial Statements.

3

 


 

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Medical services revenue

 

$

669,184

 

 

$

497,678

 

 

$

1,321,607

 

 

$

910,090

 

Other operating revenue

 

 

950

 

 

 

1,278

 

 

 

1,972

 

 

 

1,970

 

Total revenues

 

 

670,134

 

 

 

498,956

 

 

 

1,323,579

 

 

 

912,060

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Medical services expense

 

 

587,140

 

 

 

442,483

 

 

 

1,153,348

 

 

 

802,837

 

Other medical expenses

 

 

49,080

 

 

 

33,694

 

 

 

93,853

 

 

 

57,355

 

General and administrative (including noncash stock-based
   compensation expense of $
6,553, $274,548, $10,523,
   and $
276,020, respectively)

 

 

51,924

 

 

 

317,561

 

 

 

91,758

 

 

 

355,338

 

Depreciation and amortization

 

 

3,042

 

 

 

3,581

 

 

 

6,415

 

 

 

7,008

 

Total expenses

 

 

691,186

 

 

 

797,319

 

 

 

1,345,374

 

 

 

1,222,538

 

Income (loss) from operations

 

 

(21,052

)

 

 

(298,363

)

 

 

(21,795

)

 

 

(310,478

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense), net

 

 

6,997

 

 

 

2,967

 

 

 

9,266

 

 

 

4,303

 

Gain (loss) on lease terminations

 

 

(5,458

)

 

 

 

 

 

(5,458

)

 

 

 

Interest expense

 

 

(945

)

 

 

(1,498

)

 

 

(1,816

)

 

 

(4,439

)

Income (loss) before income taxes

 

 

(20,458

)

 

 

(296,894

)

 

 

(19,803

)

 

 

(310,614

)

Income tax benefit (expense)

 

 

(580

)

 

 

(435

)

 

 

(509

)

 

 

(451

)

Income (loss) from continuing operations

 

 

(21,038

)

 

 

(297,329

)

 

 

(20,312

)

 

 

(311,065

)

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

321

 

 

 

(1,547

)

 

 

750

 

 

 

(2,898

)

Income tax benefit (expense)

 

 

(14

)

 

 

(65

)

 

 

(14

)

 

 

(129

)

Total discontinued operations

 

 

307

 

 

 

(1,612

)

 

 

736

 

 

 

(3,027

)

Net income (loss)

 

 

(20,731

)

 

 

(298,941

)

 

 

(19,576

)

 

 

(314,092

)

Noncontrolling interests’ share in (earnings) loss

 

 

82

 

 

 

96

 

 

 

157

 

 

 

169

 

Net income (loss) attributable to common shares

 

$

(20,649

)

 

$

(298,845

)

 

$

(19,419

)

 

$

(313,923

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share, basic and diluted

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.05

)

 

$

(0.79

)

 

$

(0.05

)

 

$

(0.88

)

Discontinued operations

 

$

 

 

$

 

 

$

 

 

$

(0.01

)

Weighted average shares outstanding, basic and diluted

 

 

407,339

 

 

 

377,445

 

 

 

404,666

 

 

 

351,695

 

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

4

 


 

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Net income (loss)

 

$

(20,731

)

 

$

(298,941

)

 

$

(19,576

)

 

$

(314,092

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Net unrealized gain (loss) on marketable securities,
   net of tax

 

 

513

 

 

 

 

 

 

513

 

 

 

 

Total comprehensive income (loss)

 

 

(20,218

)

 

 

(298,941

)

 

 

(19,063

)

 

 

(314,092

)

Comprehensive (income) loss attributable to
   noncontrolling interests

 

 

82

 

 

 

96

 

 

 

157

 

 

 

169

 

Total comprehensive income (loss) attributable to
   agilon health, inc.

 

$

(20,136

)

 

$

(298,845

)

 

$

(18,906

)

 

$

(313,923

)

 

See accompanying Notes to the Condensed Consolidated Financial Statements.

5

 


 

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

For the three months ended June 30, 2022:

 

 

Total Stockholders’ Equity

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

Noncontrolling

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (loss)

 

 

Interest

 

 

(Deficit)

 

April 1, 2022

 

 

405,727

 

 

$

4,057

 

 

$

2,064,242

 

 

$

(956,447

)

 

$

 

 

$

(375

)

 

$

1,111,477

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(20,649

)

 

 

 

 

 

(82

)

 

 

(20,731

)

Other comprehensive
   income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

513

 

 

 

 

 

 

513

 

Exercise of stock options

 

 

2,370

 

 

 

24

 

 

 

6,293

 

 

 

 

 

 

 

 

 

 

 

 

6,317

 

Vesting of restricted stock units

 

 

140

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to
   net share settlement

 

 

(33

)

 

 

 

 

 

(758

)

 

 

 

 

 

 

 

 

 

 

 

(758

)

Stock-based compensation
   expense

 

 

 

 

 

 

 

 

6,553

 

 

 

 

 

 

 

 

 

 

 

 

6,553

 

June 30, 2022

 

 

408,204

 

 

$

4,082

 

 

$

2,076,329

 

 

$

(977,096

)

 

$

513

 

 

$

(457

)

 

$

1,103,371

 

For the six months ended June 30, 2022:

 

 

Total Stockholders’ Equity

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Accumulated Other Comprehensive

 

 

Noncontrolling

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Income (loss)

 

 

Interest

 

 

(Deficit)

 

January 1, 2022

 

 

400,095

 

 

$

4,001

 

 

$

2,045,572

 

 

$

(957,677

)

 

$

 

 

$

(300

)

 

$

1,091,596

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

(19,419

)

 

 

 

 

 

(157

)

 

 

(19,576

)

Other comprehensive
   income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

513

 

 

 

 

 

 

513

 

Exercise of stock options

 

 

8,002

 

 

 

80

 

 

 

20,993

 

 

 

 

 

 

 

 

 

 

 

 

21,073

 

Vesting of restricted stock units

 

 

140

 

 

 

1

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Shares withheld related to
   net share settlement

 

 

(33

)

 

 

 

 

 

(758

)

 

 

 

 

 

 

 

 

 

 

 

(758

)

Stock-based compensation
   expense

 

 

 

 

 

 

 

 

10,523

 

 

 

 

 

 

 

 

 

 

 

 

10,523

 

June 30, 2022

 

 

408,204

 

 

$

4,082

 

 

$

2,076,329

 

 

$

(977,096

)

 

$

513

 

 

$

(457

)

 

$

1,103,371

 

 

6

 


 

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

 

For the three months ended June 30, 2021:

 

 

 

Contingently
Redeemable
 Common Stock

 

 

 

Total Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Noncontrolling

 

 

Total
Stockholders’
Equity

 

 

 

Shares

 

 

Amount

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interests

 

 

(Deficit)

 

April 1, 2021

 

 

76,201

 

 

$

309,500

 

 

 

 

249,474

 

 

$

2,494

 

 

$

265,603

 

 

$

(566,268

)

 

$

(73

)

 

$

(298,244

)

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(298,845

)

 

 

(96

)

 

 

(298,941

)

Reclassification of contingently
   redeemable common stock in
   connection with initial
   public offering ("IPO")

 

 

(76,201

)

 

 

(309,500

)

 

 

 

76,201

 

 

 

762

 

 

 

308,738

 

 

 

 

 

 

 

 

 

309,500

 

Issuance of common stock in
   connection with IPO,
   net of offering costs