Tivity Health, Inc. (TVTY) Misses Q1 EPS by 2c, Revenues Beat; Provides FY19 EPS/Revenue Guidance Above Consensus

Tivity Health, Inc. (NASDAQ: TVTY) reported Q1 EPS of $0.51, $0.02 worse than the analyst estimate of $0.53. Revenue for the quarter came in at $214.1 million versus the consensus estimate of $153.92 million.

"I am pleased with Tivity Health\'s first quarter financial results. Additionally, the combination of our first-ever SilverSneakers® national television advertising campaign, coupled with our digital strategy, contributed to an increase in total visits. We also saw increased subscriptions in Prime® Fitness," said Donato Tramuto, Tivity Health's Chief Executive Officer. "We closed our acquisition of Nutrisystem on March 8, 2019 and the Nutrition segment benefited from strong adjusted EBITDA, due to better than expected March program starts and timing of marketing spend. As a result of the successful media and digital strategy in the first quarter, we plan to leverage Nutrisystem\'s media and marketing expertise to further increase enrollment and engagement in SilverSneakers and Prime Fitness."

Tramuto continued, "We are pleased that Medicare Advantage plans will soon be able to provide coverage for a wider variety of benefits that are not primarily health-related as CMS adds coverage for social determinants of health. As Dr. William Shrank, Chief Medical Officer of Humana, Inc., has stated, "Addressing food insecurity, social isolation and loneliness is at the heart of our Bold Goal initiative. To improve the health of the communities we serve, we need partners like Tivity Health who share our commitment to improve overall health with solutions that address social determinants."

"Our integration efforts are going well and we are on track to deliver the $9 million to $12 million of cost synergies for 2019 as previously discussed," said Adam Holland, Tivity Health's Chief Financial Officer.

GUIDANCE:

Tivity Health, Inc. sees FY2019 EPS of $2.24-$2.52, versus the consensus of $2.39. Tivity Health, Inc. sees FY2019 revenue of $1.146-1.177 billion, versus the consensus of $619.99 billion.

• revenues in a range of $1,146 million to $1,177 million;
• adjusted EBITDA in a range of $240 million to $258 million;
• including cost synergies in a range of $9 million to $12 million;
• earnings per diluted share in a range of $1.35 to $1.67; and
• adjusted earnings per diluted share in a range of $2.24 to $2.52.

The guidance for adjusted EBITDA and adjusted earnings per diluted share reflects the exclusion of:

• expected pre-tax acquisition, integration, and restructuring expenses in a range of $33 million to $35 million, which includes both cash and non-cash expenses;
• expected amortization expense of approximately $17 million related to intangible assets; and
• tax adjustments during the first quarter of 2019 of $2.7 million related to the acquisition.

The Company's guidance for 2019 also includes:

• depreciation expense of approximately $17 million;
• interest expense in a range of $79 million to $81 million, of which approximately $11 million is non-cash expense;
• an effective tax rate of approximately 28% for each of the three remaining quarters of 2019;
• weighted average diluted shares outstanding of approximately 47 million;
• free cash flow, including cash paid for interest, in a range of $70 million to $80 million; and
• capital expenditures in a range of $22 million to $24 million.

For earnings history and earnings-related data on Tivity Health, Inc. (TVTY) click here.

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