MultiPlan Corporation

Good day and thank you for standing by. Welcome to the Multiplane Corporation first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Shana Gassick. AVP of Investor Relations, thank you. Please go ahead.

Thank you, Casey. Good morning, and welcome to Multiplan's first quarter 2021 earnings call. Joining me today is Mark Pabek, Chairman and Chief Executive Officer, Dale White, President of the Payer Markets, and David Redman, Chief Financial Officer. This call is being webcast and can be accessed through the Investor Relations section of our website at www.multiplan.com. During our call, we will refer to the supplemental slide deck that is available on the investor relations portion of our website along with the first quarter 2021 earnings press release issued earlier this morning. We will refer to the supplemental slide deck during our discussion this morning. Before we begin, I would like to remind you that our remarks and responses to questions may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those stated or implied by forward-looking statements due to risks and uncertainties associated with our business, which are discussed in the risk factors included in our annual report on Form 10-K for the fiscal year ended December 31st, 2020, and other documents filed or to be filed with the SEC. Any such forward-looking statements represent management's expectations, beliefs, and forecasts based on assumptions and information available as of the date of this call. While we may elect to update such forward-looking statements at some point in the future, please note that we assume no obligation to do so. Certain financial measures we will discuss on this call are non-GAAP financial measures. We believe that providing these measures help investors gain a more helpful and complete understanding of our financial results and is consistent with how management views our financial results. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measure to the extent available without unreasonable effort is available in the earnings press release and in the slides included in the investor relations portion of our company's website. And now I would like to turn our call over to our Chief Executive Officer, Mark Tabak. Mark.

Thank you, Shawna. Welcome, everyone. Let me join in welcoming you to our first quarter of 2021 earnings call. Amid the ongoing public health crisis, we hope everyone is staying healthy and safe. I'd like to thank our stockholders for their continued support. Multiplan has a long history of delivering returns for investors of the private company, and I'm pleased to say that in our first few quarters as a public company, we've continued to deliver solid operating results. As this quarter's results attest, even in the face of an accelerated pressure related to the COVID-19 pandemic, our business continues to perform. This is a testament to Multiplan's many competitive advantages. As detailed on page three of our supplemental slide deck, These start with our unique operating assets and a relentless focus on operational excellence that allows us to configure and reconfigure our resources and create lasting value for our customers, their members, and ourselves. These assets underpin our leading position with our payer customers, many of whom view us as a strategic partner. We are operationally embedded in our customers' workflow and IT processes, providing very limited customer turnover, long tenure relationships, and ongoing opportunities to increase the level and scope of services we provide to them. In turn, the strength of these relationships underpins our durable financial model, which features persistent and recurring revenues of high revenue retention rates, high EBITDA margins, and attractive conversion of EBITDA to free cash flow. And finally, our financial strengths support the strategic investments we have made to grow our business and drive further value for our customers establishing a virtuous cycle. Both revenue and EBITDA for the first quarter were in line with Q4 2020 and with the expectations we communicated earlier this year. As shown on page four of our supplemental slide deck, in the first quarter, total revenues were $254.9 million, representing an increase of 1.1% over the prior year first quarter and a decrease of 0.2 tenths of 1% from Q4 2020. These revenues were achieved despite modest typical Q1 seasonal softness and the effects on our claim receipts related to COVID-19 case trends, which surged at the end of the fourth quarter of 2020 and remained elevated through the first quarter of 2021. Referring to page five of our supplemental slide deck, adjusted EBITDA for the first quarter was $191.1 million, a decrease of 2.5%, from Q1 of 2020, and a decrease of 2% from Q4 of 2020. The EBITDA margin in Q1 2021 was 75%, down from Q4 of 2020, which was 76.4%. Approximately 1% of the decline was attributable to the lower incremental margins for newly acquired businesses, HST and Discovery. The remainder was primarily due to additional public company costs and some selected investments in sales and information technology. Our business continues to exhibit strong cash flow conversion with Q1 2021 cash flow from operations of $170.9 million, increase of 16% from Q1 2020 cash flow from operations of $147.4 million, and the strongest operating cash flow quarter for Multiplan ever. Our confidence in the business remains strong. Even through the pandemic, we enhanced our services and continue to provide exceptional customer service which has led to strong customer retention. While we expect COVID-19 to continue to affect our business through much of this year and the impact when our revenues remain difficult to precisely forecast, we are optimistic that the worst of the pandemic is behind us. We are hopeful the adverse effects of COVID will recede somewhat as the year progresses. We believe we have sufficient visibility to provide an outlet for the full year 2021, which was included in this morning's press release, which Dave will discuss momentarily. Multiplan's unique operating assets, which include 1.2 million provider network, our proprietary data and algorithms, a team of more than 350 negotiators, our capacity for high throughput claims processing, and our enterprise-level platform equip us with the unmatched scale and scope of services and position us to develop and implement customized solutions that help our customers identify and address opportunities to make healthcare more affordable, efficient, and fair. We continue to be excited about our plans for 2021 and beyond. We are strategically engaged with our customers in planning and implementing service offerings that generate meaningful reductions in the cost of healthcare, help our customers sustain their competitive positioning, and improve their performance and support our growth as a company. We are investing in our business to drive growth. This includes our investments in machine learning and artificial intelligence to identify more clinical aberrations to leverage data to generate incremental cost savings for healthcare payers, as well as the recent acquisitions of HST and Discovery. The integration of HST into our analytics-based solution offering is well underway, and our cross-selling activities are already beginning to yield positive results. Our acquisition of Discovery closed at the end of February. We are excited about the complementary capabilities the transaction adds to our payment and our revenue integrity service offerings. We are working hard to leverage the to expand our footprint in the government payer markets, as well as in addressing payment integrity issues within the payers and our clients in network claims. In summary, we're off to an excellent start in 2021. We are encouraged by the underlying trajectory of our business. We believe we are poised to resume our growth as an ongoing COVID pandemic abates and business conditions return to normal. Finally, I'd like to express my appreciation for those of whom our continued success depends. That includes our customers for their enduring trust and partnership, and our more than 2,200 outstanding multi-plan colleagues whose tireless effort make it possible to create the value that keeps the company flowing and our customers loyal. With that, I'd like to turn the call over to Dale White, President of Payer Markets, who will provide a business update. Dale.