Q1 2022 Convey Health Solutions Holdings Inc Earnings Call
Good afternoon, and welcome to calm buoy Health solutions first quarter 2022 earnings conference call and webcast.
Good afternoon, and welcome to Convoy Health Solutions' first quarter 2022 Earnings Conference Call and Whip.
After today's presentation, there will be an opportunity to ask questions.
After todays presentation, there will be an opportunity to ask questions.
Leading the call today is Steven Farrell, Chief Executive Officer and Tim Fairbanks, Chief Financial Officer. John Steele, Convays Executive Vice President of Technology is also joining the call.
Leading the call today is Stephen Farrell, Chief Executive Officer.
Tim Fairbanks, Chief Financial Officer, John Steele, Homebase Executive Vice President of Technology is also joining the call.
Before we begin, we would like to remind you that certain statements made during this call, including during the Q&A, will be forward-looking statements pursuant to the safe harbor for provision and private securities
Before we begin.
To remind you that certain statements made during this call.
Including during the Q&A will be forward looking statements pursuant.
To the safe Harbor provision.
In private Securities Litigation Reform Act.
These forward-looking statements are subject to known and unknown risks and uncertainties and reflect our current expectations based on our beliefs, assumptions, and information currently available to us.
These forward looking statements are subject to known and unknown risks and uncertainties.
And reflect our current.
Expectations based on our beliefs assumptions and information currently available to us.
We caution you that forward-looking statements are not guaranteed a future performance or outcome.
Caution you that forward looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes may differ materially from those made in or suggested by such forward looking statements.
and that actual performance and outcomes may differ materially from those made or suggested by such forward-looking statements.
Factors that could cause actual results to differ materially from those reflected in forward-looking statements include the risk factor.
Factors that could cause actual results to differ materially from those reflected in forward looking statements include the risk factors section.
section of the company's Form 10-K for the period-ended December 31st, 2021, and its other filings and the Securities and Exchange Commission.
Section of the company's form 10 S K.
The period ending for the period ended December 31, 2021, and its other filings in the Securities and Exchange Commission.
expect as required by law we undertake no obligation to publicly update any forward-looking statements whether as a result
Expect as required by law, we undertake no obligation to publicly update any forward looking statements whether as a result.
of new information, future events, or otherwise. Additional information will also be set forth in Convay Health Solutions Quarterly report form
Of new information future events or otherwise additional information will also be set forth in combat.
Solutions quarterly report form.
On on Form 10-Q.
for the quarter ended March 31st, 2022, which is expected to be filed later today.
For the quarter ended March 31, 2022, which is expected to be filed later today.
In addition, please note that the company will be discussing certain non-GAAP financial measures that it believes are important in understanding and assessing its financial performance.
In addition, please note that the company will be discussing.
Certain non G. A a P financial measures that.
It believes are important in understanding and assessing its financial performance.
Details on the relations between these non G. A a P measures to most comparable G. A a P measures and reconciliation of historical non G. A a P financial measures can be found in the press release that is posted on the Companys website with that I'd like to turn the call.
Details on the relations between these non-GAAP measures to most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in the press release that is posted on the company's website. With that, I'd like to turn the call over to Convay Health Solutions CEO , Stephen Farrell. Stephen, please go ahead.
To accommodate health solutions CEO , Stephen Farrow Steven Please go ahead.
I'd like to thank you for joining us for our first quarter 2022 earnings call I'm joined today by Tim Fairbanks, Our Chief Financial Officer, and John Steele, Our executive Vice President of Technology, We just concluded our fourth quarter.
I'd like to thank you for joining us for our first quarter 2022 earnings call. I'm joined today by Tim Fairbanks, our Chief Financial Officer, and John Steele, our Executive Vice President of Technology. We just concluded our fourth quarter as a public company. We continue to perform well. It's been less than two months since our last update, so my comments on strategy and the business will be a bit abbreviated.
As a public company, we continue to perform well it's been less than two months since our last update so my comments on strategy and the business will be a bit abbreviated.
Today, we reported net revenues of $96 $7 million for the first quarter of 2022.
Today we reported net revenues of $96.7 million for the first quarter of 2022, an increase of 17 percent over last year.
An increase of 17% over last year.
and adjusted EBITDA of $15.3 million which is in line with our expectations outlined on our March call when we indicated that we expect the balance of 2022 to have higher margins than the first quarter.
And adjusted EBIT of $15 $3 million, which is in line with our expectations outlined on our March call. When we indicated that we expect the balance of 2022 to have higher margins than the first quarter.
We believe the recurring nature of our business makes our revenue, adjusted EBITDA, and cash flow generation attractive and generally predictable.
We believe the recurring nature of our business mix, our revenue adjusted EBITDA and cash flow generation attractive and generally predictable.
We expect to continue to achieve strong growth going forward as we have excellent technology, a strong management team, and we are a leader operating in growing markets.
We expect to continue to achieve strong growth going forward as we have excellent technology, a strong management team and we are a leader operating in growing markets.
We are not currently changing our guidance for 2022 that we just recently provided on March 23rd we continue to be confident in our ability to execute for the remainder of 2022.
We are not currently changing our guidance for 2022 that we just recently provided on March 23rd. We continue to be confident in our ability to execute for the remainder of 2022.
We successfully on boarded new clients in the first quarter and we believe we are on track for the year with our cross sell and upsell activities.
we successfully onboarded new clients in the first quarter, and we believe we are on track for the year with our cross-sell and up-sell activities.
As we mentioned in our call at the end of March like many other companies in the United States, we have experienced some supply chain challenges.
As we mentioned in our call at the end of March, like many other companies in the United States, we have experienced some supply chain challenges.
Those challenges cause some incremental labor and shipping costs in the first quarter.
Those challenges caused some incremental labor and shipping costs in the first quarter.
Let me take a minute to elaborate.
Our margin percentage pressure in the first quarter was not primarily caused by higher labor rates or by higher costs of specific inventory, although they were a small fact.
Our margin percentage pressure in the first quarter was not primarily caused by higher labor rates or by higher cost of specific inventory. Although they were a small factor we've done a really good job managing labor rates and inventory costs, partly by.
We've done a really good job managing labor rates and inventory costs, partly by leveraging our technology to drive efficiency, and partly because we are leveraging our offshore capability.
By leveraging our technology to drive efficiency and partly because we are leveraging our offshore capabilities.
In the future, we expect to leverage the supply chain expertise of our HealthSmart team which will improve inventory costs, although we experience very little of that benefit in the first quarter as we just closed on that acquisition.
In the future, we expect to leverage the supply chain expertise of our Healthsmart team, which will improve inventory costs, although we experienced very little of that benefit in the first quarter as we just closed on that acquisition.
Our margin pressure in the first quarter was primarily due to longer lead times for inventory.
Our margin pressure in the first quarter was primarily due to longer lead times for inventory.
Explain.
Lead times for inventory, the time between when we place an order and the time it is received by us were longer than we expected, which created an inventory shortage.
Lead times for inventory the time between when we place an order and the time. It is received by us were longer than we expected, which created an inventory shortage.
We didn't order enough to get the orders in house to meet the high demand we experienced.
We didnt order enough to get the orders in house to meet the high demand we experienced.
In order to meet our client needs.
We incurred incremental shipping charges to expedite deliveries, and we also incurred higher labor expenses related to both shipment and member engagement to manage the inventory shortfall.
We incurred incremental shipping charges to expedite deliveries and we also incurred higher labor expenses related to both shipment and member engagement to manage the inventory shortfall.
We believe we will be able to more effectively manage these supply chain challenges and that our health smart acquisition should help as we are now better positioned to leverage their manufacturer relationships to deliver high quality and cost effective products on time.
We believe we will be able to more effectively manage the supply chain challenges and there are health Smart acquisition should help as we are now better positioned to leverage the manufacturer relationships to deliver a high quality and cost effective products on time.
We are also leveraging our Philippines footprint and our work at home skill set at Safety Bell.
We are also leveraging our Philippines footprint and I'll work at home skill set as safety valves.
So although we may continue to have some short term headwinds due to the labor inflation and supply chain challenges. We continue to think it is manageable and importantly, we are seeing strong momentum in our technology and service offerings.
So, although we may continue to have some short-term headwinds due to the labor inflation and supply chain challenge.
We continue to think it is manageable. And importantly, we are seeing strong momentum in our technology and service offer.
Although early, our 2023 selling season is off to a good start and is tracking well so far.
Although early our 2023 selling season is off to a good start and is tracking well so far.
In closing, we delivered another solid quarter starting off the year with net revenues up 17% compared to last year.
In closing, we delivered another solid quarter, starting off the year with net revenues up 17% compared to last year and we believe continued revenue growth will translate into higher margins as the year progresses.
and we believe continued revenue growth will translate into higher margins as the year progresses.
We continue to help our health plan clients increase revenue, engage with members, and operate more efficiently.
We continue to help our health plan clients increase revenue engage with members and operate more efficiently. So our value proposition continues to be strong.
So our value proposition continues to be strong.
We will be attending the Bank of America Conference tomorrow and look forward to seeing many of you there.
We will be attending the bank of America Conference Tomorrow, and look forward to seeing many of you there.
Now I will turn the call over to Tim who will provide more details on our first quarter.
Now, I will turn the call over to Tim, who will provide more details on our first quarter. Then we will open the call-up.
Then we will open the call up to questions Tim.
Thank you, Steve, and thanks to everyone for joining the call today. We generated strong first quarter 2022 financial results with net revenues increasing 17 percent to 96.7 million compared to 82.6 million in the first quarter of 2021.
Thank you, Steve and thanks to everyone for joining the call today, we generated strong first quarter 2022 financial results with net revenues, increasing 17% to $96 7 million compared to $82 6 million in the first quarter of 2021.
Our technology-enabled solution segment revenue was $83.2 million, which is a 20% increase over $69.6 million during the first quarter of 2021.
Our technology enabled solutions segment revenue was $83 2 million, which is a 20% increase over $69 6 million during the first quarter of 2021.
The increase is primarily driven by growth in both supplemental benefit services and health plan management revenue.
The increase was primarily driven by growth in both supplemental benefit services and health plan management revenue.
Our advisory services segment revenue was approximately $13 $5 million during the first quarter of 2022 compared to $13 million in the first quarter of 2021, while we believe our advisory services business continues to grow nicely quarter over quarter comparison was impacted by our strong first quarter of 2021, which benefited from pent.
Our advisory services segment revenue was approximately $13.5 million during the first quarter of 2022, compared to $13 million in the first quarter of 2021. While we believe our advisory services business continues to grow nicely, the quarter-over-quarter comparison was impacted by a strong first quarter of 2021, which benefited from pent-up demand when our clients continued to return to their office after a pandemic lockdown.
Up demand when our clients continue to return to their office after pandemic lockdown.
We generated a net loss of $1.2 million during the quarter driven by $1.6 million of one-time expenses related to the HealthSmart acquisition that closed February 1.
We generated a net loss of $1 2 million during the quarter driven by $1 6 million of onetime expenses related to the health Smart acquisition that closed February one.
included in these costs is a 1.2 million non-cash inventory step-up needed for purchase accounting.
Included in these costs is a $1 2 million noncash inventory step up need for purchase accounting.
Note this one-time expense will impact year-over-year margin comparison but have no impact on cash or adjusted EBITDA.
Note. This onetime expense will impact year over year margin comparison, but have no impact on cash or adjusted EBITDA.
Adjusted EBITDA was $15 3 million for the first quarter of 2022 compared to $15 9 million in the first quarter of 2021, while our first quarter. Adjusted EBITDA was in line with our expectations, we experienced some margin pressure related to higher staffing inflation and supply chain challenges exacerbated by our first quarter revenue growth.
Adjusted EBITDA was $15.3 million for the first quarter of 2022 compared to $15.9 million in the first quarter of 2021. While our first quarter adjusted EBITDA was in line with our expectations, we experienced some margin pressure related to higher staffing, inflation, and supply chain challenges exacerbated by our first quarter revenue growth.
Interest expense is $3.7 million for the first quarter of 2022, compared to $5.5 million for the first quarter of 2021. This decrease reflects lower term loan balances following the second quarter of 2021 pay down using IPO process.
Interest expense was $3 7 million for the first quarter of 2022 compared to $5 5 million for the first quarter of 2021. This decrease reflects lower term loan balances. Following the second quarter of 2021 Paydown using IPO proceeds also.
Also, in July , we amended our credit agreement, which reduced our effective interest rate by approximately 75 basis points.
In July we amended our credit agreement, which reduced our effective interest rate by approximately 75 basis points.
Moving to balance sheet and cash flow items.
As of March 31st, 2022 cash and cash equivalents totaled approximately 20.9 million and we had 39.4 million available on our revolver.
As of March 31, 2022, cash and cash equivalents totaled approximately $20 9 million and we had $39 4 million available on our revolver.
Total debt, excluding unamortized costs of $5.4 million, was $270.6 million. This increase over last quarter reflects additional debt incurred in connection with the HealthSmart acquisition.
Total debt, excluding unamortized costs of $5 4 million was 276 million. This increase over last quarter reflects additional debt incurred in connection with the help smart acquisition.
Net cash used in operating activities during the quarter was $15.7 million driven by a net working capital use of $26.5 million.
Net cash used in operating activities during the quarter was $15 $7 million driven by a net working capital use of $26 5 million.
We typically see higher than normal networking capital cash use during the first quarter as we pay down prior year liability.
We typically see higher than normal net working capital cash used during the first quarter as we pay down prior year liabilities.
Finally, I'd like to thank our employees for their continued hard work and dedication. Operator, we are now ready to open
Finally, I'd like to thank our employees for their continued hard work and dedication.
Operator, we are now ready to open the call to questions.
Certainly.
If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star one.
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And as a reminder, if you're using a speaker phone, please remember to pick up your hands before asking your question. We'll pause here briefly as questions are registered.
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The first question comes from Sydney marks of Goldman Sachs.
The first question comes from Sidney Motz of Golden Facts.
Please proceed.
Hi, guys. Thanks for taking my questions I have two questions.
Hi guys, thanks for taking my questions. I have two questions. The first thing, in the first quarter with the margins, so I get with the supply chain a little bit with the,
The thing is the first quarter with the margins.
So I guess with the supply chain, you know a little bit with the.
some of the costs there, but you're keeping guidance the same, so we should expect to see, I would think, a pretty good ramp. Are you still comfortable with margins overall in the range? Around 20% EBITDA margins for the year, and then you're keeping also revenue the same, like I think it was the guidance with mid-range around $400 million, and then I just have one other housekeeping, but I'll stop there. Yes, indeed.
Some of the cost there, so but you're keeping guidance. The same so we should expect to see I would think a pretty good ramp.
Are you still comfortable like with margins overall in the range of around 20%.
EBITDA margins for the year and then Youre keeping also revenue the same like I think it was the guidance was mid range around $400 million and then I just have one other housekeeping but.
I'll stop there.
Yes indeed.
Yes.
Got it.
Great, Yes, so you're right, we're not changing that guidance.
Great, yeah. So Cindy, you're right. We're not changing that guidance.
If you remember from last quarter's call, we issued the guidance
If you remember from last quarter's call when we issued the guidance.
We indicated typically our first-quarter margins are a bit lower on average for the year and our fourth-quarter margins are a bit higher. The reasons for that first-quarter margin degradation
We indicated are typically our first quarter margins are a bit lower.
On average for the year and our fourth quarter margins are a bit higher the reasons for that first quarter margin.
<unk> typically is the implementation of.
typically is the implementation of new clients. This year it was a bit amplified because we did onboard a higher number of new logos number one and number two. We also had some integration expenses with the HealthSmart acquisition that closed on February .
New clients this year it was a bit.
Amplified.
Because we did onboard a higher number of new logos number one and number two we also had some integration expenses with the health Smart acquisition that closed on February one.
Okay, actually that makes sense, and that's good to hear about the new clients and everything. I just, one thing on the working capital shift, so you gave some color, so it is a seasonal thing because I was noticing, you know, the accounts receivable was up, the inventories were up, but like you were saying, there was sort of an issue, now you have plenty of inventory. So we should see that working capital shift go the other way in the second quarter, I would think, correct?
Okay actually that that makes sense and that's good to hear about the new clients everything I just one thing on the working capital shifts. So you gave some color. So it is a seasonal thing because I was noticing the accounts receivable is that the inventories were up but like you were saying there was sort of an issue now you have plenty of inventory. So we should see that working capital shift to go the other way in.
Second quarter I would think correct.
Correct, and really Q2 things I'll point out Theyre, sending number one is.
Correct. And really, two things I'll point out there. Cindy, number one is the March 31st balance sheet. Little tough to compare because now it does include the health smart acquisition. But number two, on the seasonal piece that you accurately pointed out, you'll really see that in the accounts payable and accrued liability line, where it was a use of cash of $26 million in this period.
The March 31 balance sheet little tough to compare because now it does include the health Smart acquisition, but number two on the seasonal piece that you accurately pointed out you'll really see that in the accounts payable and accrued liability line, where it was a use of cash of $26 million. This period. However, it is also a $22 million use of cash.
However, it was also a $22 million use of cash the prior year, and so we do have that seasonal AP pay down that should reverse itself as the year goes on.
The prior prior year and so we do have that seasonal.
Pay down that that should reverse itself as the year goes on.
Okay. Thanks, great.
Thank you.
The next question comes from Steven, finally quit.
The next question comes from Steven.
But I would quit.
Of Barclays.
Please proceed.
Alright, great.
Alright, great. Thanks. Good afternoon, everybody. So I guess just to pick up on one of the key topics of the conversation from the last quarterly conference call, I'm just wondering if you have any high-level updates just on your revenue mix by some of your largest, a couple of customers.
Thanks, Good afternoon, everybody so yeah.
I guess just to pick up on one of the key topics of conversation from the last quarterly conference call.
I'm wondering if you have any high level updates just on your revenue mix by some of your largest.
A couple of customers in the first quarter versus where you ended 21, not looking for any specific numbers unless you want to disclose anything but wondering if that mix just kind of shook out how you thought it would and early 'twenty two versus where you ended calendar 'twenty one.
first quarter versus where you ended 21. Now look at for any specific numbers unless you want to disclose anything but wondering if that mix just kind of shook out how you thought it would in early 22 versus where you ended counting.
Yes.
Yep, there's always a little bit of mix within Quarters Steve, but...
There is always a little bit of mix within quarter, Steve but.
It'll be roughly in line with with.
It'll be roughly in line with what you've seen. I mean, I can disclose specifics. This will be also included in our RQ, which will be released later today. But our largest customer is up for discussion.
With what you've seen I mean, I can disclose specifics. This will be also included in our Q, which will be released released later today.
But our largest customer.
Is up.
around 400 basis points to 28% of total revenue. Customer B is actually down about 300 basis points to around 17% of revenue. Again, those numbers vary a little bit by quarter. We provide so many different solutions to each of these customers.
Around 400 basis points to 28% of total revenue customer B is actually down about 300 basis points to around 17% of revenue again, those numbers vary a little bit by quarter. We provide so many different solutions to each of these customers.
that there will be a little bit of movement within the quarter base, but overall in terms of consolidating customer A and customer B, very similar portion of our revenue as it was 12 months ago.
That there'll be a little bit of movement within the cost within the quarter base, but overall in terms of consolidating customer a and customer b very similar portion of our revenue.
It was 12 months ago.
Sure Steven we do a good job with our with our largest customers. We tried to do a good job with all of them, but it's natural that there'll be some fluctuation year to year.
We do a good job with our largest customers. We try to do a good job with all of them, but it's natural that there'll be some fluctuation year to year, and it's really a dual-edge sword because we want to continue to grow with our large customers, and we do a good job with them, and they reward us with incremental business.
And it's really a dual edged sword, because we want to continue to grow with our with our large customers and we do a good job with them and they reward us with incremental business.
Yeah understood. Okay. That's it for me thanks.
Thanks, Steve.
Thank you. Our next question comes from Sandy Draper of Guggenheim.
Thank you. The next question comes from Sandy Draper of Guggenheim.
Please proceed.
Hi, it's Andy Yeah, Thanks, very much hey, how are you.
Hi Sandy. Yeah, thanks very much. Hey, how are you? Just a question on, I know it's still early, but you gave some comments on the selling season. Just curious, last year was a little bit lighter. I think you had called out that there was some issue around not having as much retail. Do you seem to fill that gap? Is that the primary driver that's driving it, or can you just comment here around sort of any specific lines of business that seem to be doing better?
Just a question on I know, it's still early but you gave some comments on the selling season, just curious last year was a little bit lighter.
You had called out that there was miss you around not having as much retail you seem to fill that gap is that is that the primary driver.
Driving it or can you just commentary around sort of any specific lines of business it seem to be doing better.
Sure. So we have, I think, a
Sure. So we have I think a.
<unk>.
good selling season last year in terms of incremental new accounts where the year-over-year analysis was less than we expected was in our same store growth, so to speak, our growth within our existing clients who didn't grow.
A good selling season last year in terms of.
Incremental new accounts.
The year over year analysis was less than we expected was in our our same store growth so to speak.
Growth within our existing existing clients who didn't grow.
quite as quickly as they have historically. So our large clients have had outstanding growth over the last 10 years. Last year was, for this year, was a bit of an exception to that and I fully expect that our largest clients will be on a good trajectory here going forward. In terms of,
Quite as quickly as they have historically, so our large clients have had outstanding growth over the last 10 years last year was for this year was.
<unk> of an exception to that and fully expect that our largest clients will be on a good trajectory here going forward.
In terms of.
of some of the challenges last year you brought up retail and that was certainly a challenge which we
Of some of the challenges last year, you brought up retail and that was certainly a challenge, which we fixed in.
fixed in the late summer of last year, early fall.
The late summer of last year early fall, but by the time, we fix that with our <unk> partnership.
But by the time we fix that with our income partnership,
a significant portion of the selling season had already passed us. So we enter this year's selling season with a good set of partners and an excellent set of partners.
A significant portion of the selling season had already passed us. So we enter this year's selling season with a good set of partners and.
An excellent set of products.
We are in full swing now, in the 2023 spelling season.
We are in full swing now in the 2023 selling season.
But that season, if you recall, we'll go through most of this year.
But that season, if you recall, we will we'll go through through most of this year.
Great. That's helpful. That's it for me thanks.
Thanks Sandy.
Thank you. Next question comes from Richard Close of Kanakord. Please proceed.
Thank you next question comes from Richard close of Canaccord.
Please proceed.
Yeah, Thanks for the questions.
Yeah, thanks for the questions, Tim. I was wondering if you could maybe provide a little bit more details with respect to the longer lead times in inventory, you know, maybe, you know, the degree in terms of basis points, headwind that created or something along those lines.
Tim I was wondering if you could maybe provide a little bit more details with respect to the longer lead times and inventory maybe.
The degree in terms of basis points headwind created or something along those lines.
Yes, Richard its tough to specifically nailed down exact impact.
Yeah, Richard, it's tough to specifically nail down exact impact.
You know on a dollar bridge basis, however, just to give you a sense
On a dollar bridge basis, However, just to just to give you a sense.
There's always margin pressure in Q1 as we onboard in the supplemental benefit portion of our business. As we onboard new clients, you really don't have any kind of order history or patterns to rely upon like you do your legacy customers. And so it's possible in the first quarter to get surprised by exactly the products that these new clients are ordering, what their ordering patterns are, when in the quarter they decide to order, et cetera, in a normal
There is always margin pressure in Q1, as we onboard eight in the supplemental benefit portion of our business as we onboard new clients you really don't have any kind of order history, where patterns to rely upon like you do your legacy your legacy customers.
And so it's possible in the first quarter.
Do you get surprised by exactly the products that these that these new clients are ordering what their ordering patterns are when in the quarter, They decided to order et cetera in a normal world.
many times you can scramble and catch up and quickly
Many times, you can scramble and catch up.
And quickly.
Shift inventory loads quickly because there's no supply chain issues in today's world you need a little bit more lead time for that and so what that does downstream is it creates uneven inventory loads, where the company is forced to incur more overnight shipping charges more labor more.
shift inventory loads quickly because there's no supply chain issues. In today's world, you need a little bit more lead time for that. And so what that does downstream is it creates uneven inventory loads where the company's forced to incur more overnight shipping charges, more labor, more distribution labor, et cetera, putting a little bit of more margin pressure on the business in that first quarter than you'd normally see.
Distribution labor et cetera are putting a little bit of more margin pressure on the business in that first quarter than you'd normally see that said I think the absolute dollar amount of our EBITDA was where we thought it would be we were pleasantly surprised with our revenue figure.
That said, I think the absolute dollar amount of our EBITDA was where we thought it would be. We were pleasantly surprised with our revenue figure.
And so that additional revenue
And so that that additional revenue.
Certainly had a little bit of a lower margin associated with it for the reasons we just discussed, but ultimately the EBITDA dollars ends up getting, I think, to where we thought they'd be.
Certainly had a little bit of a lower margin associated with it for the reasons, we just discussed.
But ultimately the EBITDA dollars ends up getting getting I think to where we thought they'd be.
Okay.
Yeah.
Richard I would just add to that it's an inexact science in terms of.
Richard, I'd just add to that it's an inexact science in terms of calculating exactly what the impact was, but it would be measured in the millions of dollars, not hundreds of thousands.
Calculating exactly what the impact was but it would be measured in the millions of dollars not hundreds of thousands.
Okay. And then just as it pertains to guidance, I guess you're reaffirming the guidance.
Okay.
And then just as it pertains to guidance.
I guess, you're reaffirming the guidance.
for this year, obviously, you don't give quarterly guidance, specific quarterly guidance. But how do you gauge your confidence level in that guidance, primarily on the adjusted EBITDA, as compared to, you know, a month ago when you set it?
For this year, obviously, you don't give quarterly.
Quarterly guidance specific quarterly guidance, but how.
How do you gauge your confidence level in that guidance, primarily on the adjusted EBITDA.
As compared to you know a month ago when you set it.
Yes, so Tim I'll ask you to jump in on the backend, but we had a solid Q1.
Yeah, so Tim, I'll ask you to jump in on the back end, but we had a solid Q1, which we anticipated on, I think, was March 23rd when we issued that guidance. So we had good insight into what the quarter was going to be. We're not changing our guidance at this time because we ended up really in line with where we expected it to be for Q1.
We anticipated on I think it was March 23rd when we issued that guidance. So we had good insight into what the quarter was going to be.
We're not changing our guidance at this time, because we ended up really.
In line with where we expected to be four for Q1.
And so.
We I think provided some color in terms of.
We, I think, provided some color in terms of the way we thought our quarters would grow in terms of the adjusted EBITDA line on our March 23rd call, and we continue to think that is accurate. And if we felt like there was a need to move that guidance
The way, we thought our COO.
Quarters would grow in terms of the adjusted EBITDA line.
March 23rd column, we continue to think that is as accurate and if we.
Felt like there was a need to move that guidance that we would have done so well.
We continue to feel good about it, and we have a very strong and powerful recurring
We continue to feel good about it and we have a very strong and powerful recurring.
a revenue model in our business which makes us continue to be confident in our ability to perform throughout the year. We do have a little bit of work to do on the labor side and on this inventory headwind.
Our revenue model and our business, which.
Makes us continue to be confident in our ability to perform throughout the year, we do have a little bit of work to do on a on the labor side and on the inventory headwind, but we believe its manageable, especially considering the safety valve that we have in our offshore operation and.
But we believe it's manageable, especially considering the safety valve that we have in our offshore operation and our newly acquired health smart acquisition. Anything to add to that?
Our newly acquired Healthsmart acquisition.
To add to that.
No.
Not for me thanks.
Okay.
And if I could flip one more in, Tim, maybe talk a little bit about how we should think about cash flow progression through the year. Obviously, you did comment some on the first quarter, but just how we think of second quarter through fourth quarter.
And if I could slip one more in Tim maybe talk a little bit about how we should think about cash flow progression through the year. Obviously, you did comment some on the first quarter, but just how.
How do we think of second quarter through fourth quarter.
Yeah, I would I think the one big outlier here.
Yeah, I would, I think the one big outlier here, when you have a chance to look at our quarterly cash flow.
When you have a chance to look at our quarterly <unk>.
Cash flow statement is the paydown of accounts payable.
is the pay down of accounts payable of $26 million in the quarter.
$26 million in the quarter.
you know, the vast, vast majority of that is seasonal. And so, you know, you wouldn't expect to see that sort of use of cash by paying down your payables.
You know the vast vast majority of that is seasonal and so.
You wouldn't expect to see that sort of use of cash by paying down your payables in quarters, two three and four and so that's really that's really the outlier there.
in quarters two three and four and so that's really that that's really the outlier there And then you know if you think about where the midpoint of our guidance is of 82 million of EBITDA Clearly that indicates also an increase in net income through the quarters as well and so while we haven't published yet
And then if you think about where the mid point of our guidance is of 82 million of EBITDA clearly that indicates also an increase in net income.
Through the quarters as well.
So while we haven't published quarterly guidance on cash flow I think I think youll certainly see improvement in both the.
quarterly guidance on cash flow, I think you'll certainly see improvement in both the
Sure.
use of cash of AP as well as net income.
Use of cash of of AP as well as net income.
Okay. Thank you.
Thank you. There are currently no questions registered at this time. As a reminder, it is star one on your telephone keypad to ask a question.
Thank you there are currently no questions registered at this time so as a reminder, it is star one on your telephone keypad to ask a question.
There are currently no further questions registered at this time, so I'll pass the conference back over to the management team for closing remarks.
There are currently no further questions registered at this time, so I will pass the conference back over to the management team for closing remarks.
Great. We appreciate you joining our first quarter 2022 call and hope to see some of you tomorrow at the Bank of America conference. So thank you.
Great. We appreciate you joining our first quarter 2022 call and I hope to see some of you tomorrow at the Bank of America Conference. So thank you.
That concludes Cambay Health Solutions first quarter 2022 earnings conference call. Thank you for your participation. You may now disconnect your line.
That concludes Comm Bay Health solutions first quarter 2022 earnings conference call. Thank you for your participation you may now disconnect your lines.
Okay.