Tivity Health, Inc. (TVTY) Tops Q2 EPS by 72c, Revenues Beat

Tivity Health, Inc. (NASDAQ: TVTY) reported Q2 EPS of $0.79, $0.72 better than the analyst estimate of $0.07. Revenue for the quarter came in at $262.6 million versus the consensus estimate of $225.73 million.

Second Quarter Highlights and Business Update:

• Healthcare division adjusted EBITDA increased by 16% compared to the prior year;
• Nutrisystem brand direct to consumer (DTC) revenue grew by 6% versus the prior year driven by new customer growth of 28%;
• Achieved a nearly six-fold expansion of digital engagement with virtual offerings to keep SilverSneakers members focused on health, activity, and social connectivity while cementing the Company's brand value;
• Executed substantial cost reduction actions to strengthen the Company's financial position and liquidity, including layoffs, furloughs, and a reduction of base salaries and board cash compensation. Many of these actions are expected to provide savings in future periods through permanent reductions in SG&A costs;
• Ended the quarter with $60.3 million in cash and in July 2020 prepaid $24.8 million of principal amortization on term loan debt, resulting in the Company's next quarterly installment being due in December 2021.

"Both our Healthcare and Nutrition businesses delivered strong earnings in the second quarter. Our results highlight continued momentum and solid performance in the Nutrisystem brand DTC channel and the resilient model of the Healthcare business. We have significantly expanded digital engagement to our SilverSneakers members and are seeing encouraging signs of members beginning to return to fitness centers. Our Nutrisystem brand drove historic customer growth through smart execution and ongoing transformation of our marketing strategy," said Richard Ashworth, President & Chief Executive Officer. "Our strong cash flow enabled us to improve our net debt by nearly $53 million during the quarter. I am encouraged by the strength and versatility of our trusted brands, the passion of our team, and by the numerous opportunities that lie ahead to enhance shareholder value. We are disciplined in our decision-making, strongly focused on overall company performance, while dedicated to providing meaningful experiences for our customers."

Mr. Ashworth continued, "In my first two months as CEO, my priority has been delivering improved performance with a more streamlined and nimble business. Going forward, our focus will be on the execution of the strategic plan while building our SilverSneakers and Prime Fitness business into experiential member-centric brands across multiple channels, moving beyond the fitness experience. My consumer and operational background coupled with the powerful value proposition of these extraordinary brands present a significant opportunity for organic growth. In addition, we remain 100% committed to the success of Nutrisystem. As a result of Nutrisystem's strong performance, we are continuing to focus our efforts around technology, quality, and personalization in our Nutrition division."

Outlook

Due to the evolving nature of the COVID-19 pandemic, the Company withdrew its 2020 financial guidance in May 2020. Given the expectation of continued volatility and uncertainty, the Company is not issuing updated financial guidance at this time.

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

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