Tivity Health, Inc. (NASDAQ: TVTY) reported Q4 EPS of $0.73, $0.15 better than the analyst estimate of $0.58. Revenue for the quarter came in at $153 million versus the consensus estimate of $154.02 million.

• Revenues increased by 9.8% to $153.0 million compared to revenues of $139.4 million for the fourth quarter of 2017.
• Income from continuing operations increased to $28.5 million, compared to $8.6 million for the fourth quarter of 2017. Results for the fourth quarter of 2018 include an effective tax rate of 10.1%, primarily due to positive tax benefits related to the vesting of stock-based compensation awards during the quarter. Adjusted income from continuing operations increased to $30.9 million, compared to $17.6 million for the fourth quarter of 2017. The fourth quarter of 2018 excludes $3.3 million of pre-tax project costs incurred in connection with potential and pending acquisitions. The fourth quarter of 2017 excluded $2.6 million in pre-tax restructuring charges and $7.4 million of income tax expense related to tax reform legislation. See pages 10-12 for a reconciliation of non-GAAPfinancial measures.
• Income from continuing operations per diluted share increased to $0.67, compared to $0.20 for the fourth quarter of 2017, and adjusted income from continuing operations per diluted share increased to $0.73, compared to $0.41 for the fourth quarter of 2017. The fourth quarter of 2018 excludes $0.06 per diluted share related to project costs incurred in connection with potential and pending acquisitions. The fourth quarter of 2017 excluded a restructuring charge of $0.04 per diluted share and a charge of $0.17 per diluted share resulting from the 2017 tax reform legislation. See pages 10-12 for a reconciliation of non-GAAP financial measures.
• Adjusted EBITDA was $37.0 million, or 24.2% of revenues, which excludes $3.3 million of project costs incurred in connection with potential and pending acquisitions, compared to $29.8 million, or 21.4% of revenues, for the fourth quarter of 2017, which excluded $2.6 million of restructuring expenses. See pages 10-12 for a reconciliation of non-GAAP financial measures.
• Cash flow from operations was $34.2 million, and free cash flow was $31.6 million. See pages 10-12 for a reconciliation of non-GAAP financial measures.

2019 Financial Guidance

Tivity Health announced today the following standalone financial guidance for 2019:

• Revenues in a range of $612 million to $627 million;
• Adjusted EBITDA in a range of $140 million to $145 million; and
• Free cash flow in a range of $95 million to $100 million.

"Last year we provided a preliminary outlook into 2019 that reflected a reduction in United Healthcare lives. We felt comfortable then with our projections of mid-to-high single digit revenue growth in 2019. However, as we received the final enrollment data in late January, we discovered that United Healthcare had pulled forward more lives," said Mr. Tramuto. "United Healthcare's removal of those additional lives a year ahead of our expectations account for nearly $20 million less revenue than we initially expected for 2019. And lastly, while we are excited about the many potential revenue synergies of the combined company, we have not built those into our guidance."

In addition, Nutrisystem separately announced standalone financial guidance for 2019. Based on this guidance, the Company announced the following preliminary combined 2019 financial guidance for Tivity Health and Nutrisystem:

• Revenues in a range of $1,146 million to $1,177 million;
• Adjusted EBITDA in a range of $240 million to $258 million; and
• Including cost synergies in a range of $9 million to $12 million.

This combined financial guidance for 2019 includes the full year 2019 expected results for Tivity Health and the expected results of Nutrisystem from the date immediately following the anticipated closing date of the proposed transaction (such closing date currently expected to be March 8, 2019) through December 31, 2019.

GUIDANCE:

Tivity Health, Inc. sees FY2019 revenue of $612-627 million, versus the consensus of $651.92 million.

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