The president of Tivity Health’s health care business will leave the Franklin-based company at the end of this month, about 20 months after moving into the job when the owner of the SilverSneakers brand acquired Nutrisystem.
Steve Janicak has been with Tivity since September 2016, when he was hired to be chief growth officer of the company as it was transitioning from its former iteration as Healthways to Tivity. He had been chief sales and marketing officer at home health company CareCentrix before that and held those same titles for the former MedSolutions from 2006 to 2013.
Janicak has led Tivity’s health care business unit, which comprises Prime Fitness and WholeHealth Living in addition to SilverSneakers, since early last year. Per an agreement he and Tivity signed Thursday, Janicak will receive a full year of his $450,000 salary as well as medical and other benefits when he leaves the company Aug. 31.
A Tivity spokeswoman said members of the health care business will report to President and CEO Richard Ashworth while he mulls the company’s organizational chart going forward.
“We are in the early phases of organizing for growth, and our ultimate goal is to ensure we have the appropriate organizational structure and processes in place to succeed in the future,” Ashworth said on a Wednesday conference call detailing Tivity’s second-quarter results. “To do so, we are running multiple scenarios. We are a focused, accountable organization enabling a clear line of sight in our core business performance and value-building activities.”
In the three months ended June 30, Tivity posted a net profit of $28.5 million, an increase of 57 percent from the mark of the same period of 2019. Revenues fell to $263 million from $340 million but the company’s cost of services fell by two-thirds as thousands of gyms around the country were closed for much of Q2.
Janicak’s health care group’s revenues were nearly cut in half to $81.9 million, but its adjusted EBITDA climbed to $41.5 million from $35.7 million in 2019’s Q2 thanks to those lower gym services costs and other expense savings. Revenues and adjusted EBITDA from the nutrition segment anchored by Nutrisystem fell only slightly to nearly $181 million and $33.4 million, respectively. Nutrition division President Tommy Lewis said the business is capitalizing on earlier investments in digital marketing and seeing customers increase their engagement with the brand: New customer starts rose by 28 percent from the number of a year ago.
The Tivity board in May said it had launched a review of the strategic options for the nutrition business. On Wednesday, Ashworth and Chairman Anthony Sanfilippo said they are still sorting through options and looking for a deal that meets their goals. But Ashworth also added that, “personally, I’m happy to continue to run this brand and this business. I think it is fantastic.”
Shares of Tivity (Ticker: TVTY) popped 24 percent to $16.91 in pre-market trading Thursday. If the stock holds onto those gains, it will be at its highest point since February, when many investors fled after former CEO Donato Tramuto stepped down and the company booked a massive writedown related to Nutrisystem.