# Astrana Health, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Astrana Health, Inc.](/companies/asth.md) (CIK 1083446)
- Form: 10-Q
- Filed: 2025-05-09
- Accepted by EDGAR: May 9, 2025, 17:02 ET
- Period: 2025-03-31
- Accession: 0000950170-25-068198
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1083446/000095017025068198/asth-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1083446/000095017025068198/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $620.4m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $20.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $7.3m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $3.4m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $6.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.14 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.14 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 48,850,666 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $16.6m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $3.1m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $5.5m | us-gaap:PaymentsOfDividendsCommonStock |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $10.6m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $258.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $613.3m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $1.33bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $361.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $813.5m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $403.9m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $12.5m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $745.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 28,319 characters.

*The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Condensed Consolidated Financial Statements” of this Quarterly Report on Form 10-Q. In addition, reference is made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025.*

*In this section, “we,” “our,” “ours,” and “us” refer to Astrana Health, Inc. (“Astrana”) and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”).*

### Overview

Astrana Health, Inc. (“Astrana”) is a leading physician-centric, technology-powered, risk-bearing healthcare management company. Leveraging its proprietary population health management and healthcare delivery platform, Astrana operates an integrated, value-based healthcare model. This model aims to empower the providers in its network to deliver the highest quality of care to its patients in a cost-effective manner. Together with our affiliated physician groups and consolidated entities, we cost-effectively provide coordinated outcomes-based medical care.

Through our risk-bearing organizations with more than 12,000 contracted physicians, we are responsible for coordinating care in value-based care arrangements for over 1.0 million patients as of March 31, 2025. These covered patients are comprised of managed care members whose health coverage is provided either through their employers, acquired directly from a health plan, or as a result of their eligibility for Medicaid or Medicare benefits. Our managed patients benefit from an integrated approach that places physicians at the center of patient care and utilizes sophisticated risk management techniques and clinical protocols to provide high-quality, cost-effective care.

### Recent Developments

#### Leadership Updates

Astrana announced several additions to its leadership team to support continued growth and execution. The Company welcomes Georgie Sam, Chief Data & Analytics Officer, who will oversee enterprise-wide data and analytics strategy to deliver even faster, more actionable insights to our stakeholders, and Glenn Sobotka, Chief Accounting Officer, who brings deep experience to support Astrana’s continued financial discipline and scalability. Rita Pew was promoted to the role of Chief People Officer, helping Astrana further invest in the talent and culture that drive Astrana forward.

#### Acquisition Updates

Astrana received Hart-Scott-Rodino (“HSR”) approval for its pending acquisition of Prospect Health, which remains on track to close this summer.

### Key Financial Measures and Indicators

#### Operating Revenues

Our revenue, which is recorded in the period in which services are rendered and earned, primarily consists of capitation revenue as well as risk pool settlements and incentives, management fee income, and fee-for-service (“FFS”) revenue. The form of billing and related risk of collection for such services may vary by type of revenue and the customer.

#### Operating Expenses

Our largest expenses consist of the cost of (i) patient care paid to contracted providers; (ii) information technology equipment and software; and (iii) staff to provide management and administrative support services to our affiliated physician groups, as further described in the following sections. These services include claims processing, utilization management, contracting, accounting, credentialing, and administrative oversight.

#### Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA margin are supplemental performance measures of our operations for financial and operational decision-making, and are used as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, and stock-based compensation. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.

### Results of Operations

### Condensed Consolidated Statements of Income

(In thousands)

(Unaudited)

| Revenue | Three Months Ended March 31, 2025 | 2024 | $ Change | PCT Change |
| --- | ---: | ---: | ---: | ---: |
| Capitation, net | $583,963 | $365,910 | $218,053 | 60% |
| Risk pool settlements and incentives | 14,491 | 17,377 | (2,886) | (17)% |
| Management fee income | 2,310 | 4,078 | (1,768) | (43)% |
| Fee-for-services, net | 14,890 | 15,937 | (1,047) | (7)% |
| Other revenue | 4,736 | 1,054 | 3,682 | 349% |
| Total revenue | 620,390 | 404,356 | 216,034 | 53% |
| **Operating expenses** |  |  |  |  |
| Cost of services, excluding depreciation and amortization | 549,061 | 330,399 | 218,662 | 66% |
| General and administrative expenses | 43,897 | 38,722 | 5,175 | 13% |
| Depreciation and amortization | 6,849 | 5,096 | 1,753 | 34% |
| Total expenses | 599,807 | 374,217 | 225,590 | 60% |
| **Income from operations** | 20,583 | 30,139 | (9,556) | (32)% |
| **Other expense** |  |  |  |  |
| (Loss) income from equity method investments | (867) | 632 | (1,499) | (237)% |
| Interest expense | (7,308) | (7,585) | 277 | (4)% |
| Interest income | 2,312 | 3,996 | (1,684) | (42)% |
| Unrealized (loss) gain on investments | (44) | 1,099 | (1,143) | (104)% |
| Other loss | (5,072) | (4,277) | (795) | 19% |
| Total other expense, net | (10,979) | (6,135) | (4,844) | 79% |
| **Income before provision for income taxes** | 9,604 | 24,004 | (14,400) | (60)% |
| Provision for income taxes | 3,383 | 7,142 | (3,759) | (53)% |
| **Net income** | 6,221 | 16,862 | (10,641) | (63)% |
| Net (loss) income attributable to non-controlling interest | (471) | 2,027 | (2,498) | (123)% |
| **Net income attributable to Astrana Health, Inc.** | $6,692 | $14,835 | $(8,143) | (55)% |

52

### Risk-Bearing Organizations and Patients

As of March 31, 2025 and 2024, we managed a total of 20 and 18 independent risk-bearing organizations, including both affiliated and non-affiliated, respectively. The total number of patients for whom we managed the delivery of healthcare services was over 1.0 million as of March 31, 2025 and 2024.

### Revenue

Total revenue for the three months ended March 31, 2025, was $620.4 million, as compared to $404.4 million for the three months ended March 31, 2024, an increase of $216.0 million, or 53%. The increase in revenue was primarily attributable to capitation revenue. Capitation revenue increased by $218.0 million primarily as a result of our recent acquisitions within our Care Partners segment, along with enrollees transitioning to full risk through the Company’s Restricted Knox-Keene plans.

### Cost of Services, Excluding Depreciation and Amortization

Expenses related to cost of services, excluding depreciation and amortization for the three months ended March 31, 2025 were $549.1 million as compared to $330.4 million for the same period in 2024, an increase of $218.7 million or 66%. The overall increase was primarily due to increased participation in a value-based Medicare FFS model and medical costs associated with both professional and institutional risk of our Restricted Knox-Keene licensed health plan as a result of our recent acquisitions within our Care Partners segment which were commensurate to our increase in revenue.

### General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2025 were $43.9 million, as compared to $38.7 million for the same period in 2024, an increase of $5.2 million or 13%. The increase was primarily due to increased general and administrative expenses to support operational growth such as stock-based compensation.

### Depreciation and Amortization

Depreciation and amortization expenses for the three months ended March 31, 2025 were $6.8 million, as compared to $5.1 million for the same period in 2024, an increase of $1.8 million or 34%. This amount includes depreciation of property and equipment and the amortization of intangible assets. The increase in depreciation and amortization was primarily related to the amortization of our acquired intangibles as a result of our recent business combinations.

### (Loss) Income From Equity Method Investments

Loss from equity method investments for the three months ended March 31, 2025 was $0.9 million as compared to income of $0.6 million for the same period in 2024, a decrease of $1.5 million or 237%. The decrease was primarily due to APC’s equity method investment in LMA.

### Interest Expense

Interest expense for the three months ended March 31, 2025 was $7.3 million as compared to $7.6 million for the same period in 2024, a decrease of $0.3 million 4%. The decrease in interest expense was primarily due to a decrease in interest rates on our floating-rate debt. The interest rate for the Revolver and Term Loan was 5.82% as of March 31, 2025 and 7.42% for the Revolver and 7.68% for the Term Loan, respectively, as of March 31, 2024. This was offset by an increase in borrowings under the Second Amended and Restated Credit Facility. As of March 31, 2025, the Company borrowed $412.0 million on the Second Amended and Restated Credit Facility compared to $391.3 million as of March 31, 2024.

### Interest Income

Interest income for the three months ended March 31, 2025 was $2.3 million as compared to $4.0 million for the three months ended March 31, 2024, a decrease of $1.7 million or 42%. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts, and the interest from our loan receivables. The decrease in interest income was primarily due to a decrease in our cash held in interest bearing bank accounts.

### Unrealized Loss (Gain) on Investments

Unrealized loss for the three months ended March 31, 2025 was $44,000 as compared to a gain of $1.1 million for the same period in 2024, a decrease in unrealized gain of $1.1 million or 104%. The decrease in unrealized gain on investments was primarily driven by changes in the fair value of the interest rate collar.

### Other Loss

Other loss for the three months ended March 31, 2025 was $5.1 million as compared to $4.3 million for the same period in 2024, a decrease of $0.8 million or 19%. The increase in other loss was primarily due to debt issuance costs that were expensed in connection with the Second Amended and Restated Credit Facility.

### Provision for Income Taxes

Provision for income taxes was $3.4 million for the three months ended March 31, 2025, as compared to $7.1 million for the same period in 2024, a decrease of $3.8 million. The decrease in provision for income taxes was primarily due to a decrease in pre-tax income.

### Net (Loss) Attributable to Non-controlling Interests

Net loss attributable to non-controlling interests for the three months ended March 31, 2025 was a loss of 0.5 million as compared to income of $2.0 million for the same period in 2024, a decrease of $2.5 million. The decrease was primarily driven by a decrease net income.

### Net Income Attributable to Astrana Health, Inc.

Our net income attributable to Astrana Health, Inc., for the three months ended March 31, 2025 was $6.7 million as compared to $14.8 million for the same period in 2024, a decrease of $8.1 million.

### Adjusted EBITDA

Adjusted EBITDA for the three months ended March 31, 2025 was $36.4 million, as compared to $42.2 million for the same period in 2024, a decrease of $5.8 million. The decrease was primarily due to a decrease in operating income as a result of higher utilization and increase in general and administrative expenses. See “Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin” below for additional information.

### Segment Financial Performance

The Company currently has three reportable segments consisting of Care Partners, Care Delivery, and Care Enablement. The Company evaluates the performance of its operating segments based on segment revenue growth as well as operating income. Management uses revenue growth and total segment operating income as a measure of the performance of operating businesses separate from non-operating factors. For more information about our segments, see Note 18 — “Segments” to our condensed consolidated financial statements under Item 1 in this Quarterly Report on Form 10-Q for additional information.

The following table sets forth our revenue and operating income by segment for the three months ended March 31, 2025 and 2024 (in thousands):

| Segment Revenue | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Care Partners | $600,951 | $382,318 | $218,633 | 57% |
| Care Delivery | $33,388 | $30,719 | $2,669 | 9% |
| Care Enablement | $39,562 | $33,274 | $6,288 | 19% |

| Segment Operating Income (Loss) | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Care Partners | $44,215 | $43,196 | $1,019 | 2% |
| Care Delivery | $(3,108) | $(238) | $(2,870) | \* |
| Care Enablement | $3,535 | $3,504 | $31 | 1% |

\*Percentage change of over 500%

### Care Partners Segment

Revenue for the three months ended March 31, 2025 was $601.0 million as compared to $382.3 million for the three months ended March 31, 2024, an increase of $218.6 million or 57%. Operating income for the three months ended March 31, 2025 was $44.2 million, as compared to $43.2 million for the three months ended March 31, 2024, an increase in operating income of $1.0 million or 2%. The increase in revenue and operating income was primarily due to recent acquisitions within our Care Partners segment.

### Care Delivery Segment

Revenue for the three months ended March 31, 2025 was $33.4 million as compared to $30.7 million for the three months ended March 31, 2024, an increase of $2.7 million or 9%. Operating loss for the three months ended March 31, 2025 was $3.1 million, as compared to a loss of $0.2 million for the three months ended March 31, 2024, an increase in operating loss of $2.9 million. The increase in revenue was primarily driven by increased volume in patient visits at our primary, multi-specialty, and ancillary Care Delivery entities. The increase in operating loss was due to an increase in expenses incurred related to our newer clinic locations that opened.

### Care Enablement Segment

Revenue for the three months ended March 31, 2025 was $39.6 million, as compared to $33.3 million for three months ended March 31, 2024, an increase of $6.3 million or 19%. Operating income for the three months ended March 31, 2025 was $3.5 million, as compared to operating income of $3.5 million for the three months ended March 31, 2024. The increase in revenue was primarily due to managing more IPAs in our Care Partners segment.

### Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

Set forth below are reconciliations of Net Income to EBITDA and Adjusted EBITDA, as well as the reconciliation to Adjusted EBITDA margin for the three months ended March 31, 2025 and 2024. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.

*(in thousands)*

|  | Three Months Ended March 31, 2025 |  | 2024 |  |
| --- | ---: | ---: | ---: | ---: |
| Net income | $6,221 |  | $16,862 |  |
| Interest expense | 7,308 |  | 7,585 |  |
| Interest income | (2,312) |  | (3,996) |  |
| Provision for income taxes | 3,383 |  | 7,142 |  |
| Depreciation and amortization | 6,849 |  | 5,096 |  |
| **EBITDA** | 21,449 |  | 32,689 |  |
| Loss (income) from equity method investments | 867 |  | (632) |  |
| Other, net | 6,259 | (1) | 4,440 | (2) |
| Stock-based compensation | 7,811 |  | 5,748 |  |
| **Adjusted EBITDA** | $36,386 |  | $42,245 |  |
| **Total revenue** | $620,390 |  | $404,356 |  |
| **Adjusted EBITDA margin** | 6% |  | 10% |  |

(1) Other, net for the three months ended March 31, 2025 relates to debt issuance costs expensed in connection with our Second Amended and Restated Credit Facility, transaction costs for our acquisition of Prospect, data transition costs for our recent acquisitions, certain costs associated with the CHS transaction, non-cash changes related to change in the fair value of our call option and Collar Agreement, and severance fees incurred.

(2) Other, net for the three months ended March 31, 2024 relates to financial guarantee via a letter of credit that we provided almost three years ago in support of two local provider-led ACOs, non-cash changes related to change in the fair value of our financing obligation to purchase the remaining equity interests in one of our investments, non-cash changes related to change in the fair value of the Company’s Collar Agreement, and transaction costs incurred for our investments and tax restructuring fees.

#### Use of Non-GAAP Financial Measures

This Quarterly Report on Form 10-Q contains the non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin, of which the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles (“GAAP”) is net income. These measures are not in accordance with, or alternatives to, GAAP, and may be calculated differently from similar non-GAAP financial measures used by other companies. The Company uses Adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, and stock-based compensation. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.

The Company believes the presentation of these non-GAAP financial measures provides investors with relevant and useful information, as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of non-core or non-recurring financial information. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company’s ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating operational performance, allocating resources, and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. Other companies may calculate both EBITDA and Adjusted EBITDA differently, limiting the usefulness of these measures for comparative purposes. To the extent this Form 10-Q contains historical or future non-GAAP financial measures, the Company has provided corresponding GAAP financial measures for comparative purposes. The reconciliation between certain GAAP and non-GAAP measures is provided above.

### Liquidity and Capital Resources

Cash, cash equivalents, and investment in marketable securities at March 31, 2025 totaled $260.9 million as compared to $290.8 million at December 31, 2024. Working capital totaled $252.0 million at March 31, 2025, as compared to $272.9 million at December 31, 2024, a decrease of $20.9 million.

We have historically financed our operations primarily through internally generated funds and borrowings on long-term debt. We generate cash primarily from capitation contracts, risk pool settlements and incentives, fees for medical management services provided to our affiliated physician groups, and FFS reimbursements. We generally invest cash in money market accounts and certificates of deposit, which are classified as cash and cash equivalents. In February 2025, the Company entered into the Second Amended and Restated Credit Agreement which amended and restated that certain amended credit agreement and provided for a five-year revolving credit facility of $300.0 million, a term loan of $250.0 million, and a delayed-draw term loan of $745.0 million, which were primarily used to refinance certain existing indebtedness and intended to be used primarily to fund the costs associated with closing the Transaction. In addition, we have a current shelf registration statement filed with the SEC under which we may issue common stock, preferred stock, debt securities, and other securities that may be offered in one or more offerings on terms to be determined at the time of the offering. We believe we have sufficient liquidity to fund our operations through at least the next 12 months and the foreseeable future.

### Cash Flow Activities

Our cash flows are summarized as follows (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Net cash provided by operating activities | $16,627 | $5,977 | $10,650 | 178% |
| Net cash used in investing activities | (2,394) | (71,039) | 68,645 | (97)% |
| Net cash (used in) provided by financing activities | (44,170) | 106,351 | (150,521) | (142)% |
| Net (decrease) increase in cash and cash equivalents and restricted cash | $(29,937) | $41,289 | $(71,226) | (173)% |

#### Operating Activities

Cash provided by operating activities for the three months ended March 31, 2025 was $16.6 million, as compared to cash provided by operating activities of $6.0 million for the three months ended March 31, 2024. The increase in cash provided by operating activities was primarily driven by adjusted net income and changes in working capital. For the three months ended March 31, 2025, net income, exclusive of depreciation and amortization, amortization of debt issuance cost, share-based compensation, non-cash lease expense, change in fair value of contingent consideration liabilities, loss on debt extinguishment, unrealized gains or losses on investments, loss from equity method investments, deferred tax, and other was $24.6 million compared to $29.1 million for the three months ended March 31, 2024. Working capital for the three months ended March 31, 2025, decreased operating cash flow by $8.0 million, compared to a $23.2 million decrease in operating cash flow for the three months ended March 31, 2024. The change in working capital for the three months ended March 31, 2025 was mainly driven by an increase in receivables, net, including amounts with related parties, primarily due to timing of our receivables, including risk pool settlements that occur approximately 18 months after the risk pool performance year is completed, and a decrease in fiduciary accounts payable as a result of paying our sub-IPAs and providers. The decrease to operating cash flow due to changes in working capital was partially offset by an increase in medical liabilities due to timing of payments and a decrease in other receivables attributable to collections on reimbursements.

#### Investing Activities

Cash used in investing activities during the three months ended March 31, 2025, was $2.4 million, primarily due to purchases of property and equipment of $3.1 million. The cash used in investing activities was partially offset by proceeds from repayment of a loan receivable of $0.6 million and distribution received from an equity method investment of $0.1 million. Cash used in investing activities during the three months ended March 31, 2024, was $71.0 million primarily due to payments for business and asset acquisitions, net of cash acquired of $50.6 million, issuances of loans of $20.0 million, and purchases of property and equipment of $0.4 million.

#### Financing Activities

Cash used in financing activities during the three months ended March 31, 2025, was $44.2 million, primarily due to repayments of debt of $428.2 million, payment of deferred financing costs of $17.2 million, tax payments from net share settlement of restricted stock awards and units of $4.1 million, dividend payments of $5.5 million, APC repurchase of their treasury shares of $1.3 million, and repayment of finance lease obligations of $0.1 million. This was partially offset by borrowings of long-term debt of $412.0 million and proceeds from ESPP purchases of $0.3 million. Cash provided by financing activities during the three months ended March 31, 2024, was $106.4 million, primarily due to borrowings on long-term debt totaling $110.0 million, partially offset by repayment of long term-debt of $3.5 million.

### Credit Facilities

The Company’s debt balance consisted of the following (in thousands):

|  | March 31, 2025 |
| --- | ---: |
| Term Loan | $250,000 |
| Revolver Loan | 162,000 |
| Promissory Note Payable | 9,875 |
| Total debt | 421,875 |
| Less: Current portion of debt | (12,500) |
| Less: Unamortized financing costs | (5,481) |
| Long-term debt | $403,894 |

The following are the future commitments of the Company’s debt for the years ending December 31 (in thousands) below:

|  | Amount |
| --- | ---: |
| 2025 (excluding the three months ended March 31, 2025) | $9,375 |
| 2026 | 12,500 |
| 2027 | 27,063 |
| 2028 | 18,750 |
| 2029 | 23,437 |
| Thereafter | 330,750 |
| Total | $421,875 |

### Second Amended and Restated Credit Agreement

The Second Amended and Restated Credit Agreement provides for (a) a five-year revolving credit facility to the Company of $300.0 million, which includes a letter of credit sub-facility of up to $100.0 million and a swingline loan sub-facility of $25.0 million, (b) a five-year term loan A credit facility to the Company of $250.0 million and (c) a five-year delayed draw term loan credit facility to the Company of $745.0 million, maturing on February 26, 2030. Refer to Note 9 — “Credit Facility, Bank Loans, and Lines of Credit” to our condensed consolidated financial statements under Item 1 in this quarterly report on Form 10-Q for additional information.

### Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires our management to make judgments, assumptions, and estimates that affect the amounts of revenue, expenses, income, assets, and liabilities reported in our condensed consolidated financial statements and accompanying notes. Actual results and the timing of recognition of such amounts could differ from those judgments, assumptions, and estimates. In addition, judgments, assumptions, and estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. Understanding our accounting policies and the extent to which our management uses judgment, assumptions, and estimates in applying these policies, therefore, is integral to understanding our financial statements. Critical accounting policies and estimates are defined as those that reflect significant judgments and uncertainties, potentially resulting in materially different results under different assumptions and conditions. We summarize our most significant accounting policies in relation to the accompanying condensed consolidated financial statements in Note 2 — “Basis of Presentation and Summary of Significant Accounting Policies” thereto. Please also refer to the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

### Off-Balance Sheet Arrangements

As of March 31, 2025, we had no off-balance sheet arrangements that are, or have been, reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.

## Market risk

As filed, 1,641 characters.

### Interest Rate Risk

Borrowings under the Term Loan and Revolver Loan provided for under our Second Amended and Restated Credit Agreement, as of March 31, 2025, were $250.0 million and $162.0 million, respectively. The Term Loan and Revolver Loan bear interest at an annual rate equal to either, at the Company’s option, (a) the rate for term SOFR published by the CME Group Benchmark Administration Limited two days prior to the first day of the applicable interest period, plus a spread of 1.25% to 2.50%, as determined on a quarterly basis based on the Company’s leverage ratio, or (b) a base rate, plus a spread of 0.25% to 1.50%, as determined on a quarterly basis based on the Company’s leverage ratio. Borrowings under the Promissory Note Payable with I Health, as of March 31, 2025, were $9.9 million. The promissory note has an interest rate of 4.30% per annum on the principal amount. The Company has entered into a collar agreement for its Revolver Loan to effectively convert its floating-rate debt to a fixed-rate basis. The interest rate collar sets a cap of 5.00% and a floor of 2.34% for the SOFR portion of the interest rate. The principal objective of the collar agreement is to eliminate or reduce the variability of the cash flows in interest payments associated with the Company’s floating-rate debt, thus reducing the impact of interest rate changes on future interest payment cash flows. A hypothetical 1% change in our interest rates for our outstanding borrowings would have increased our interest expense for the three months ended March 31, 2025, by $0.9 million or decreased our interest expense by $1.1 million.

## Controls and procedures

As filed, 1,802 characters.

### Evaluation of Disclosure Controls and Procedures

The Company maintains “disclosure controls and procedures,” as defined in Rule 13a-15(e) under the Exchange Act, designed to ensure that information required to be disclosed by a company in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.

As of March 31, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial and Operating Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial and Operating Officer, concluded that our disclosure controls and procedures were effective as of March 31, 2025.

### Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 1,457 characters.

Our business, financial condition, and operating results are affected by a number of factors, whether currently known or unknown, including risks specific to us or the healthcare industry, as well as risks that affect businesses in general. In addition to the information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 14, 2025. The risks disclosed in such Annual Report could materially adversely affect our business, financial condition, cash flows, or results of operations, and thus our stock price. We believe there have been no material changes in our risk factors from those disclosed in the Annual Report. However, additional risks and uncertainties not currently known or which we currently deem to be immaterial may also materially adversely affect our business, financial condition, or results of operations.

Because of such risk factors, as well as other factors affecting the Company’s financial condition and operating results, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods. In addition, the disclosure of any risk factor should not be interpreted to imply that the risk has not already materialized.

Filed May 9, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-068198. Last ingested by Listed: Oct 30, 2026, 13:39 ET. No prices; not investment advice.