R1 RCM Inc. (RCM) shares lost 4.09% in the after-market session on Tuesday, May 25, 2021, and closed at $24.37 per share. Earlier, in the morning session, RCM’s stock gained 0.47% to close the session at $25.41 per share. RCM shares have risen 144.33% over the last 12 months, and they have moved up 3.88% in the past week. Over the past three months, the stock has lost 11.46%, while over the past six months, it has added 25.36%.
Let’s see is there any reason behind its mixed performance on Tuesday?
Commencing Secondary Offering of stock selling
On May 25, 2021, R1 RCM Inc commenced the underwritten offering of an aggregate of 15,000,000 shares of its common stock by selling stockholders.
The selling stockholders are TCP-ASC ACHI Series LLLP (“TCP-ASC”), a Delaware series limited liability limited partnership jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook Capital Partners, L.P., and Joseph Flanagan, the President and Chief Executive Officer of the Company.
R1 RCM will not receive any of the proceeds from the sale of common stock because it’s not selling any shares in the offering.
R1 RCM Inc and Mednax agreement
On May 17, 2021, R1 RCM Inc and Mednax, Inc. entered into an agreement that will make R1 the primary provider of enterprise revenue cycle management services for Mednax.
R1’s end-to-end revenue cycle model will improve the overall patient experience and will enhance clinical, financial, and operational performance for Mednax and its hospital partners.
Financial results announcement
On May 04, 2021, R1 RCM Inc reported its financial results for the three months ended March 31, 2021.
Q1 2021 financial results
- R1 RCM reported revenue of $342.6 million for Q1 2021 compared to $320.5 million in Q1 2020.
- The company spent $305.8 million in operating expenses in Q1 2021 compared to $288.1 million in Q1 2020.
- In Q1 2021, GAAP net income was $25.8 million compared to $18.2 million in Q1 2020.
- Net income (loss) per common share was $2.37 for a basic and diluted share in Q1 2021 compared to $0.06 basic and $0.05 diluted in Q1 2020
- Adjusted EBITDA was $80.4 million in Q1 2021 compared to $18.2 million in Q1 2020.
- As of March 31, 2021, R1 RCM had cash and cash equivalents of $103.5 million, compared to $173.8 million on December 31, 2020.
FY-2021 financial outlook
For 2021, R1 is expecting
- Revenue of between $1,410 million and $1,460 million
- GAAP operating income of $135 million to $155 million
- Adjusted EBITDA of $315 million to $330 million
Acquisition of VisitPay
On May 04, 2021, R1 RCM Inc entered into a definitive agreement to acquire VisitPay, for approximately $300 million in cash.
VisitPay is the leading digital payment solution provider and the nation’s largest and most innovative health systems used its cloud-based platform to transform the payment experience and drive both improved patient satisfaction and higher collection yield.
The secondary offering of stock selling could be the reason behind its fluctuation on Tuesday. We have no other recent news to justify its mixed performance on Tuesday.