UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Securities registered pursuant to Section 12(b) of the Act:
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| Item 8.01 | Other Events. |
For informational purposes only, to assist in the evaluation of the operational performance of Alight, Inc., this Current Report presents selected data for total and segment level results for the quarters ended March 31, 2021 and June 30, 2021 and the year ended December 31, 2020 and each quarter therein. The following table sets forth certain selected data for Tempo Holding Company, LLC and its consolidated subsidiaries prior to the consummation of the business combination on July 2, 2021 with Foley Trasimene Acquisition Corp. (the “Company” and such combination, the “Business Combination”). A reconciliation of Net Loss to Adjusted EBITDA is also included below.
| 2020 | 2021 | |||||||||||||||||||||||||||
| ($ in millions) | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |||||||||||||||||||||
| Revenue |
$ | 693 | $ | 647 | $ | 668 | $ | 720 | $ | 2,728 | $ | 689 | $ | 672 | ||||||||||||||
| Gross Profit |
$ | 218 | $ | 187 | $ | 227 | $ | 202 | $ | 834 | $ | 218 | $ | 217 | ||||||||||||||
| Gross Margin |
31.5 | % | 28.9 | % | 34.0 | % | 28.1 | % | 30.6 | % | 31.7 | % | 32.3 | % | ||||||||||||||
| Operating Income |
$ | 38 | $ | 18 | $ | 42 | $ | 49 | $ | 147 | $ | 46 | $ | 56 | ||||||||||||||
| Loss Before Income Tax (Benefit) Expense |
$ | (21 | ) | $ | (30 | ) | $ | (22 | ) | $ | (21 | ) | $ | (94 | ) | $ | (24 | ) | $ | (6 | ) | |||||||
| Net Loss |
$ | (21 | ) | $ | (25 | ) | $ | (39 | ) | $ | (18 | ) | $ | (103 | ) | $ | (21 | ) | $ | (4 | ) | |||||||
| Adjusted EBITDA |
$ | 148 | $ | 136 | $ | 132 | $ | 148 | $ | 564 | $ | 133 | $ | 145 | ||||||||||||||
| Adjusted EBITDA margin |
21.4 | % | 21.0 | % | 19.8 | % | 20.6 | % | 20.7 | % | 19.3 | % | 21.6 | % | ||||||||||||||
The following table sets out certain selected data for the quarters ended March 31, 2021 and June 30, 2021 and the year ended December 31, 2020 and each quarter therein. For further description of operational performance and reportable segments, refer to Alight, Inc.’s Current Reports on Form 8-K and 8-K/A filed with the Securities and Exchange Commission on July 12, 2021 and August 12, 2021, respectively. A reconciliation of Segment Adjusted EBITDA to Loss Before Income Tax is also included below.
| 2020 | 2021 | |||||||||||||||||||||||||||
| ($ in millions) | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |||||||||||||||||||||
| Employer Solutions |
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| Recurring revenue |
$ | 529 | $ | 489 | $ | 498 | $ | 535 | $ | 2,051 | $ | 533 | $ | 516 | ||||||||||||||
| Project revenue |
50 | 51 | 61 | 75 | 237 | 54 | 53 | |||||||||||||||||||||
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| Total revenue |
$ | 579 | $ | 540 | $ | 559 | $ | 610 | $ | 2,288 | $ | 587 | $ | 569 | ||||||||||||||
| Gross Profit |
$ | 193 | $ | 160 | $ | 197 | $ | 175 | $ | 725 | $ | 201 | $ | 191 | ||||||||||||||
| Gross Margin |
33.3 | % | 29.6 | % | 35.2 | % | 28.7 | % | 31.7 | % | 34.2 | % | 33.6 | % | ||||||||||||||
| Adjusted EBITDA |
$ | 142 | $ | 127 | $ | 120 | $ | 144 | $ | 533 | $ | 136 | $ | 138 | ||||||||||||||
| Adjusted EBITDA margin |
24.5 | % | 23.5 | % | 21.5 | % | 23.6 | % | 23.3 | % | 23.2 | % | 24.3 | % | ||||||||||||||
| Professional Services |
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| Recurring revenue |
$ | 24 | $ | 26 | $ | 28 | $ | 30 | $ | 108 | $ | 29 | $ | 31 | ||||||||||||||
| Project revenue |
66 | 63 | 65 | 66 | 260 | 63 | 61 | |||||||||||||||||||||
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| Total revenue |
$ | 90 | $ | 89 | $ | 93 | $ | 96 | $ | 368 | $ | 92 | $ | 92 | ||||||||||||||
| Gross Profit |
$ | 21 | $ | 26 | $ | 30 | $ | 29 | $ | 106 | $ | 20 | $ | 26 | ||||||||||||||
| Gross Margin |
23.3 | % | 29.2 | % | 32.3 | % | 30.2 | % | 28.8 | % | 21.8 | % | 28.3 | % | ||||||||||||||
| Adjusted EBITDA |
$ | 2 | $ | 9 | $ | 12 | $ | 8 | $ | 31 | $ | — | $ | 7 | ||||||||||||||
| Adjusted EBITDA margin |
2.2 | % | 10.1 | % | 12.9 | % | 8.3 | % | 8.4 | % | 0.0 | % | 7.6 | % | ||||||||||||||
| Hosted |
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| Recurring revenue |
$ | 24 | $ | 18 | $ | 16 | $ | 14 | $ | 72 | $ | 10 | $ | 11 | ||||||||||||||
| Gross Profit |
$ | 4 | $ | 1 | $ | — | $ | (2 | ) | $ | 3 | $ | (3 | ) | $ | — | ||||||||||||
| Gross Margin |
16.7 | % | 5.6 | % | 0.0 | % | -14.3 | % | 4.2 | % | -30.0 | % | 0.0 | % | ||||||||||||||
| Adjusted EBITDA |
$ | 4 | $ | — | $ | — | $ | (4 | ) | $ | — | $ | (3 | ) | $ | — | ||||||||||||
| Adjusted EBITDA margin |
16.7 | % | 0.0 | % | 0.0 | % | -28.6 | % | 0.0 | % | -30.0 | % | 0.0 | % | ||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA
| 2020 | 2021 | |||||||||||||||||||||||||||
| ($ in millions) | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |||||||||||||||||||||
| Net Loss |
$ | (21 | ) | $ | (25 | ) | $ | (39 | ) | $ | (18 | ) | $ | (103 | ) | $ | (21 | ) | $ | (4 | ) | |||||||
| Interest expense |
58 | 53 | 61 | 62 | 234 | 62 | 61 | |||||||||||||||||||||
| Income tax (benefit) expense |
— | (5 | ) | 17 | (3 | ) | 9 | (3 | ) | (2 | ) | |||||||||||||||||
| Depreciation |
19 | 23 | 24 | 25 | 91 | 24 | 25 | |||||||||||||||||||||
| Intangible amortization |
50 | 50 | 51 | 49 | 200 | 50 | 50 | |||||||||||||||||||||
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| EBITDA |
106 | 96 | 114 | 115 | 431 | 112 | 130 | |||||||||||||||||||||
| Share-based compensation |
2 | 2 | 1 | — | 5 | 2 | 3 | |||||||||||||||||||||
| Non-recurring professional expenses(1) |
— | — | — | — | — | 9 | 9 | |||||||||||||||||||||
| Transformation initiatives(2) |
3 | 8 | — | (3 | ) | 8 | — | — | ||||||||||||||||||||
| Restructuring |
25 | 22 | 10 | 20 | 77 | 7 | 2 | |||||||||||||||||||||
| Other(3) |
12 | 8 | 7 | 16 | 43 | 3 | 1 | |||||||||||||||||||||
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| Adjusted EBITDA |
$ | 148 | $ | 136 | $ | 132 | $ | 148 | $ | 564 | $ | 133 | $ | 145 | ||||||||||||||
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| (1) | Non-recurring professional expenses primarily includes external advisor costs related to the Company’s Business Combination completed on July 2, 2021. |
| (2) | Transformation initiatives in fiscal year 2020 includes expenses related to enhancing our data center. |
| (3) | Other primarily includes long-term incentive expenses and expenses related to acquisitions in fiscal year 2020. |
Reconciliation of Segment Adjusted EBITDA to Loss Before Income Tax Benefit
| 2020 | 2021 | |||||||||||||||||||||||||||
| ($ in millions) | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |||||||||||||||||||||
| Employer Solutions |
$ | 142 | $ | 127 | $ | 120 | $ | 144 | $ | 533 | $ | 136 | $ | 138 | ||||||||||||||
| Professional Services |
2 | 9 | 12 | 8 | 31 | — | 7 | |||||||||||||||||||||
| Hosted Business |
4 | — | — | (4 | ) | — | (3 | ) | — | |||||||||||||||||||
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| Total of all reportable segments |
148 | 136 | 132 | 148 | 564 | 133 | 145 | |||||||||||||||||||||
| Share-based compensation |
2 | 2 | 1 | — | 5 | 2 | 3 | |||||||||||||||||||||
| Non-recurring professional expenses(1) |
— | — | — | — | — | 9 | 9 | |||||||||||||||||||||
| Transformation initiatives(2) |
3 | 8 | — | (3 | ) | 8 | — | — | ||||||||||||||||||||
| Restructuring |
25 | 22 | 10 | 20 | 77 | 7 | 2 | |||||||||||||||||||||
| Other(3) |
11 | 13 | 4 | 8 | 36 | (5 | ) | — | ||||||||||||||||||||
| Depreciation |
19 | 23 | 24 | 25 | 91 | 24 | 25 | |||||||||||||||||||||
| Intangible amortization |
50 | 50 | 51 | 49 | 200 | 50 | 50 | |||||||||||||||||||||
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| Operating Income |
38 | 18 | 42 | 49 | 147 | 46 | 56 | |||||||||||||||||||||
| Interest expense |
58 | 53 | 61 | 62 | 234 | 62 | 61 | |||||||||||||||||||||
| Other expense (income), net |
1 | (5 | ) | 3 | 8 | 7 | 8 | 1 | ||||||||||||||||||||
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| Loss Before Income Tax (Benefit) Expense |
$ | (21 | ) | $ | (30 | ) | $ | (22 | ) | $ | (21 | ) | $ | (94 | ) | $ | (24 | ) | $ | (6 | ) | |||||||
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| (1) | Non-recurring professional expenses primarily includes external advisor costs related to the Company’s Business Combination completed on July 2, 2021. |
| (2) | Transformation initiatives in fiscal year 2020 includes expenses related to enhancing our data center. |
| (3) | Other primarily includes long-term incentive expenses and expenses related to acquisitions in fiscal year 2020, offset by Other expense, net. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Alight, Inc. | ||
| By: | /s/ Paulette R. Dodson | |
| Name: Paulette R. Dodson | ||
| Title: General Counsel and Corporate Secretary | ||
Date: September 7, 2021