MedAssets Reports First Quarter 2013 Financial Results

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MedAssets Reports First Quarter 2013 Financial Results

ATLANTA--(BUSINESS WIRE)-- MedAssets, Inc. (NAS: MDAS) today announced results for its first quarter ended March 31, 2013. First quarter results are summarized in the table below:

 

($ in millions, except per share)

  1Q'13  1Q'12  % Change
Net Revenue:
Spend and Clinical Resource Mgmt (SCM)$109.5$93.317.4%
Revenue Cycle Management (RCM)63.356.6 11.8
Total Net Revenue172.8149.915.3%
Net income (loss)7.7(0.2)nm
Earnings (loss) per share (EPS) - diluted0.13(0.00)nm
Non-GAAP adjusted EBITDA61.646.432.8%
Non-GAAP adjusted EPS - diluted$0.41$0.2470.8
Weighted average shares - diluted a60.457.05.9%
(a) Given the Company's net loss for the three months ended March 31, 2012, basic and fully diluted weighted average shares are the same for EPS and non-GAAP adjusted EPS in that period.

Net Revenue


Total net revenue for the first quarter of 2013 increased 15.3% to $172.8 million from $149.9 million for the first quarter of 2012. Net revenue in the SCM segment increased 17.4% to $109.5 million from net revenue of $93.3 million for the first quarter of 2012, due primarily to a better-than-expected, year-over-year increase in performance-related fees, and group purchasing net administrative fee growth. Net revenue in the RCM segment increased 11.8% to $63.3 million from $56.6 million for the first quarter of 2012 as services-related revenue increased 20.8% while technology-related revenue grew 8.2%.

Non-GAAP Adjusted EBITDA

Total non-GAAP adjusted EBITDA was $61.6 million, or 35.7% of total net revenue, for the first quarter of 2013, a 32.8% increase from total non-GAAP adjusted EBITDA of $46.4 million, or 31.0% of total net revenue, for the first quarter of 2012. This growth was due to a year-over-year increase in performance-related fees as well as operating leverage from group purchasing net administrative fees and fully-ramped RCM Services clients.

Net Income and Non-GAAP Adjusted Earnings Per Share (EPS)

The Company reported net income for the first quarter of 2013 of $7.7 million, or $0.13 per share, compared to a net loss of $0.2 million, or a loss of $0.00 per share, for the first quarter of 2012.

Non-GAAP adjusted EPS (defined as EPS excluding non-cash acquisition-related intangible amortization and depreciation, non-cash share-based compensation, certain acquisition and integration-related expenses and non-recurring items on a tax-adjusted basis) increased 70.8% to $0.41 per share for the first quarter of 2013, versus non-GAAP adjusted EPS of $0.24 per share for the first quarter of 2012.

Cash Flow and Capital Resources

For the first quarter of 2013, cash provided by operating activities was $17.5 million versus $18.8 million in the same period of 2012. Non-GAAP free cash flow (defined as cash provided by operating activities less purchases of property, equipment and software and capitalized software development costs) increased 89.7% to $8.5 million versus $4.5 million for the first quarter of 2012. The Company prepaid $15.0 million of its Term Loan B in the first quarter of 2013 along with its scheduled principal payments. Its balance sheet at March 31, 2013 included $857.6 million in total bank and bond debt, net of cash and cash equivalents. Total net debt equates to leverage of approximately 3.9 times non-GAAP adjusted EBITDA for the trailing twelve-month period.

Non-GAAP Contracted Revenue

At March 31, 2013, MedAssets rolling 12-month non-GAAP contracted revenue estimate was $601.7 million (SCM segment - $374.0 million; RCM segment - $227.7 million), a year-over-year increase of 3.9%. Non-GAAP contracted revenue is the Company's estimate of contractually committed revenue to be generated under existing client contracts in the forward 12-month period.

2013 Financial Guidance

MedAssets confirmed its full-year 2013 financial guidance, as follows:

($ in millions, except per share)

 

FY 2013

  

Y-Y % change

Net Revenue:
SCM segment$414.0 - 422.05.2 - 7.2%
RCM segment

255.0 - 263.0

3.4 - 6.7

Total Net Revenue670.0 - 684.04.7 - 6.9
Non-GAAP adjusted EBITDA215.0 - 225.03.7 - 8.5%
GAAP EPS - diluted0.32 - 0.42nm
Non-GAAP adjusted EPS - diluted$1.22 - 1.328.0-16.8%
 

Conference Call Information

Time/Date: 5:00 p.m. ET today, Wednesday, May 1, 2013
Phone:855-410-0553 (or 646-583-7389 for international/local callers), PIN code 466302
Webcast:

http://ir.medassets.com, "Events & Presentations" page; Archive will be available for at least 30 days

Replay:Call 877-764-8714 or 646-583-7395 (PIN code 337482)

Note:The live webcast will include a slide presentation, a copy of which is available onhttp://ir.medassets.comin the "Events & Presentations" section in conjunction with today's event.

About MedAssets

MedAssets (NAS: MDAS) partners with healthcare providers to improve their financial strength by implementing revenue cycle, spend and clinical resource management solutions that help capture revenue, control cost, improve margins and cash flow, increase regulatory compliance, and optimize operational efficiency. MedAssets serves more than 4,200 hospitals and 122,000 non-acute healthcare providers. The company currently manages more than $50 billion in supply spend and touches over $365 billion in gross patient revenue annually through its revenue cycle solutions. For more information, go to www.medassets.com.

Use of Non-GAAP Financial Information

In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management and the board of directors in their financial and operational decision-making, the Company supplements its consolidated financial statements presented on a GAAP basis herein with the following non-GAAP financial information: gross fees; gross administrative fees; revenue share obligation; EBITDA; adjusted EBITDA; adjusted EBITDA margin; adjusted net income; diluted adjusted EPS; free cash flow; and contracted revenue.Reconciliations of these non-GAAP measures to their most directly comparable GAAP measures, where possible, are included in the accompanying financial schedules. Also, see "Use of Non-GAAP Financial Measures" following the financial schedules for more information.

Safe Harbor Statement

This Press Release contains forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, and include the intent, belief or current expectations of the Company and its management team with respect to the Company's future business operations that include, but are not limited to:2013 financial guidance, revenue growth and other financial projections and forecasts; and the Company's ability to successfully integrate and capitalize on synergies associated with acquisitions. Any forward-looking statements are not guarantees of future performance, involve risks and uncertainties, and actual results may differ materially from those contemplated by such forward-looking statements. Important factors currently known to management that could cause actual results to differ materially from those contemplated by the forward-looking statements in this Press Release include, but are not limited to:failure to realize improvements in performance, efficiency and profitability; failure to complete anticipated sales under negotiations; failure to successfully implement revenue backlog; lack of revenue growth; customer losses; and adverse developments with respect to the operation or performance of the Company's business units or the market price of its common stock. Additional factors that could cause actual results to differ materially from those contemplated within this Press Release can also be found in the Company's Risk Factor disclosures in its Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission and available at http://ir.medassets.com. The Company disclaims any responsibility to update any forward-looking statements.

mdas/F

 
 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
     
In 000s, except per share dataThree Months Ended
March 31,
20132012% Change
Revenue:
Administrative fees, net$76,519$65,41617.0%
Other service fees 96,318 84,47414.0%
 
Total net revenue 172,837 149,89015.3%
 
Operating expenses:
Cost of revenue34,26831,2839.5%
Product development expenses8,5016,92222.8%
Selling and marketing expenses13,74214,548-5.5%
General and administrative expenses58,62053,8368.9%
Acquisition and integration-related expenses8,0301,249542.9%
Depreciation9,1776,41443.1%
Amortization of intangibles 16,501 18,930-12.8%
 
Total operating expenses 148,839 133,18211.8%
 
Operating income23,99816,70843.6%
Other income (expense):
Interest expense(11,349)(17,179)-33.9%
Other income 41 107nm
 
Income (loss) before income taxes12,690(364)nm
Income tax expense (benefit) 4,986 (125)nm
 
Net income (loss)7,704(239)nm
 
Basic net income (loss) per share 0.13 (0.00)nm
 
Diluted net income (loss) per share$0.13$(0.00)nm
 
Weighted average shares — basic59,00657,029
Weighted average shares — diluted60,40457,0295.9%
 
 

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
     
March 31,December 31,
In 000s, except share and per share amounts20132012
 
ASSETS
Current assets
Cash and cash equivalents$8,532$13,734

Accounts receivable, net of allowances of $2,685 and $3,046 as of March 31, 2013 and December 31, 2012, respectively

93,66096,346
Deferred tax asset, current10,79511,126
Prepaid expenses and other current assets 25,589 21,791
 
Total current assets138,576142,997
 
Property and equipment, net141,369134,361
Other long term assets
Goodwill1,027,8471,027,847
Intangible assets, net313,662330,163
Other 41,846 42,869
Other long term assets 1,383,355 1,400,879
 
Total assets$1,663,300$1,678,237
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable$19,144$25,487
Accrued revenue share obligation and rebates72,87874,274
Accrued payroll and benefits17,14340,085
Other accrued expenses21,80114,145
Current portion of deferred revenue52,32955,756
Current portion of notes payable15,50015,500
Current portion of finance obligation 238 233
 
Total current liabilities199,033225,480
 
Notes payable, less current portion525,625544,500
Bonds payable325,000325,000
Finance obligation, less current portion8,9829,046
Deferred revenue, less current portion15,53714,393
Deferred tax liability124,720125,394
Other long term liabilities 15,368 801
 
Total liabilities1,214,2651,244,614
 
Stockholders' equity

Common stock, $0.01 par value, 150,000,000 shares authorized; 60,901,000 and 59,324,000 shares issued and outstanding as of March 31, 2013 and December 31, 2012, respectively

609593
Additional paid in capital696,123688,431
Accumulated deficit (247,697) (255,401)
 
Total stockholders' equity 449,035 433,623
 
Total liabilities and stockholders' equity$1,663,300$1,678,237
 
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
 Three Months Ended
In 000sMarch 31,  March 31,
20132012
 
Operating activities:
Net income (loss)$7,704$(239)
 
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities:
Bad debt expense-150
Depreciation9,7756,824
Amortization of intangibles16,50119,069
Impairment of assets2,015-
Loss on sale of assets46-
Non-cash stock compensation expense3,4112,559
Excess tax benefit from exercise of equity awards(2,612)(269 Read Full Story

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