Attached files
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| 8-K - MEDASSETS, INC. 8-K - MEDASSETS INC | a6085551.htm |
Exhibit 99.1
MedAssets Reports Third Quarter and Nine-Month 2009 Financial Results
ATLANTA--(BUSINESS WIRE)--October 28, 2009--MedAssets, Inc. (NASDAQ: MDAS) today announced results for its third quarter and nine-month period ended September 30, 2009, as summarized below:
| (In millions, except per share) | 3Q-09 | 3Q-08 | 9 mos-09 | 9 mos-08* | ||||||||||||||||
| Net Revenue: | ||||||||||||||||||||
| Revenue Cycle Management | $ | 51.6 | $ | 45.8 | $ | 149.4 | $ | 102.2 | ||||||||||||
| Spend Management | 30.8 | 30.2 | 96.2 | 93.7 | ||||||||||||||||
| Total Net Revenue | 82.4 | 76.0 | 245.6 | 196.0 | ||||||||||||||||
| Net Income | 5.9 | 3.7 | 10.0 | 4.8 | ||||||||||||||||
| Diluted earnings per share (EPS) | 0.10 | 0.07 | 0.17 | 0.09 | ||||||||||||||||
| Non-GAAP adjusted EBITDA | 28.5 | 25.2 | 75.4 | 60.3 | ||||||||||||||||
| Non-GAAP cash diluted EPS | $ | 0.22 | $ | 0.18 | $ | 0.54 | $ | 0.44 | ||||||||||||
| Weighted average shares – diluted | 57.9 | 56.1 | 57.2 | 51.0 | ||||||||||||||||
|
* Column amounts may not add to total amount due to rounding |
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Net Revenue
Third Quarter
Total net revenue for the third quarter of 2009 increased 8.5% to $82.4 million from $76.0 million in the third quarter of 2008. The Revenue Cycle Management segment growth was driven primarily by increased demand for the Company’s reimbursement and compliance technology tools, as well as growth from its revenue cycle services and decision support capabilities. The Spend Management segment experienced growth in its medical device consulting services as well as its analytics solutions.
Nine-month Period
Total net revenue for the nine-month period ended September 30, 2009 increased 25.3% to $245.6 million from $196.0 million in the first nine months of 2008. Comparing period-over-period organic growth, the Company’s total net revenue for the first nine months of 2009 increased 9.4% to $245.6 million from non-GAAP acquisition-affected total net revenue of $224.5 million in the same period of 2008.
Non-GAAP Adjusted EBITDA
Third Quarter
In the third quarter of 2009, non-GAAP total adjusted EBITDA was $28.5 million, or 34.6% of total net revenue, a 13.3% increase over non-GAAP total adjusted EBITDA of $25.2 million, or 33.2% of total net revenue, in the third quarter of 2008.
Nine-month Period
For the nine-month period ended September 30, 2009, non-GAAP total adjusted EBITDA increased 25.1% to $75.4 million, or 30.7% of total net revenue, versus non-GAAP total adjusted EBITDA of $60.3 million, or 30.8% of total net revenue, in the first nine months of 2008.
Comparing period-over-period organic growth, the nine-month 2009 non-GAAP total adjusted EBITDA of $75.4 million increased 7.1% from non-GAAP acquisition-affected adjusted EBITDA of $70.4 million, or 31.3% of non-GAAP acquisition-affected total net revenue, in the same period of 2008.
Net Income and Earnings per Share
Third Quarter
Net income in the third quarter of 2009 was $5.9 million, or $0.10 per diluted share, versus net income of $3.7 million, or $0.07 per diluted share, in the third quarter of 2008.
Non-GAAP cash EPS, which is defined as EPS excluding acquisition-related intangible amortization, share-based compensation expense and non-recurring expense items on a tax-adjusted basis, was $0.22 per diluted share in the third quarter of 2009, compared to non-GAAP cash EPS of $0.18 per diluted share in the third quarter of 2008.
Nine-month Period
For the first nine months of 2009, net income was $10.0 million, or $0.17 per diluted share, versus net income of $4.8 million, or $0.09 per diluted share, in the first nine months of 2008. Non-GAAP cash EPS was $0.54 per diluted share in the first nine months of 2009, compared to non-GAAP cash EPS of $0.44 per diluted share in the same period of 2008.
Cash Flow and Capital Resources
Net cash provided by operating activities in the first nine months of 2009 was $40.0 million, compared to net cash provided by operating activities of $31.1 million in the first nine months of last year. During the third quarter of 2009, the Company repaid $10.6 million of its long-term bank debt. The Company’s balance sheet as of September 30, 2009 included $230.8 million in total bank debt, which is leverage of approximately 2.2 times trailing 12-month non-GAAP adjusted EBITDA.
2009 Financial Guidance
The Company refined its 2009 financial guidance, as follows:
| (In millions, except EPS) | 12 Months ended 12/31/09 | ||||||||
| Net Revenue: | Updated | Previous | |||||||
| Revenue Cycle Management | $ 206 – 209 | $ 210 – 216 | |||||||
| Spend Management | 133 – 136 | 134 – 140 | |||||||
| Total Net Revenue | 341 – 345 | 346 – 354 | |||||||
| Diluted EPS | 0.31 - 0.37 | 0.29 - 0.37 | |||||||
| Non-GAAP adjusted EBITDA | 110 – 114 | 111 – 117 | |||||||
| Non-GAAP cash diluted EPS | $ 0.78 - 0.84 | $ 0.76 - 0.84 | |||||||
At September 30, 2009, the Company’s rolling 12-month non-GAAP contracted revenue was an estimated $356.0 million ($222.4 million from the Revenue Cycle Management segment and $133.6 million from the Spend Management segment). This is a year-over-year increase of 19.5% on a consolidated basis, and a 7.1% increase when compared to the rolling 12-month total of $332.4 million as of June 30, 2009.
Conference Call Information
Time/Date: 5:00 p.m. ET today, Wednesday, October 28, 2009
Phone: 866-811-1812 (or 702-696-4559 international/local), conference code 33693258
Webcast: http://ir.medassets.com, “Events & Presentations” page
Replay: Webcast will be archived for at least 30 days, or call 800-642-1687 (conf code 33693258)
The Company intends to file its Form 10-Q for the third quarter and nine-month period ended September 30, 2009 with the Securities and Exchange Commission on or before November 9, 2009, and this filing will contain additional information about the Company’s results of operations.
About MedAssets
MedAssets (NASDAQ: MDAS) partners with healthcare providers to improve their financial strength by implementing spend management and revenue cycle solutions that help control cost, improve margins and cash flow, increase regulatory compliance, and optimize operational efficiency. MedAssets serves more than 125 health systems, 3,300 hospitals and 30,000 non-acute care healthcare providers. 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 in its financial and operational decision-making, the Company supplements its consolidated financial statements presented on a GAAP basis with non-GAAP financial information, including: gross fees; revenue share obligation; EBITDA; adjusted EBITDA; cash diluted EPS; acquisition-affected net revenue; acquisition-affected EBITDA; acquisition-affected adjusted EBITDA; 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 these financial schedules for more information.
Safe Harbor Statement
This Press Release contains statements that constitute 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. Forward-looking statements contained in this Press Release 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: 2009 projections, costs and revenue growth, margin and other financial projections; contracted revenue forecasts; and the Company’s ability to successfully integrate and capitalize on synergies associated with its past acquisitions. Investors are cautioned that any such forward-looking statements are not guarantees of future performance, and involve risks and uncertainties, and that 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; client 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, 2008 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.
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||||||||||||||
| In 000s, except per share data | Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Administrative fees, net | $ | 25,631 | $ | 25,663 | -0.1 | % | $ | 78,495 | $ | 78,355 | 0.2 | % | |||||||||||||||||||||||
| Other service fees | 56,762 | 50,309 | 12.8 | % | 167,091 | 117,610 | 42.1 | % | |||||||||||||||||||||||||||
| Total net revenue | 82,393 | 75,972 | 8.5 | % | 245,586 | 195,965 | 25.3 | % | |||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of revenue | 21,472 | 17,101 | 55,830 | 36,252 | |||||||||||||||||||||||||||||||
| Product development expenses | 4,156 | 4,719 | 15,424 | 11,027 | |||||||||||||||||||||||||||||||
| Selling and marketing expenses | 10,038 | 9,641 | 36,529 | 32,096 | |||||||||||||||||||||||||||||||
| General and administrative expenses | 23,039 | 22,779 | 77,971 | 66,054 | |||||||||||||||||||||||||||||||
| Depreciation | 3,125 | 2,581 | 9,020 | 7,051 | |||||||||||||||||||||||||||||||
| Amortization of intangibles | 7,018 | 7,324 | 21,029 | 16,117 | |||||||||||||||||||||||||||||||
| Impairment of property and equipment, intangibles and in process research and development | |||||||||||||||||||||||||||||||||||
| - | - | - | 2,079 | ||||||||||||||||||||||||||||||||
| Total operating expenses | 68,848 | 64,145 | 7.3 | % | 215,803 | 170,676 | 26.4 | % | |||||||||||||||||||||||||||
| Operating income | 13,545 | 11,827 | 14.5 | % | 29,783 | 25,289 | 17.8 | % | |||||||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||
| Interest (expense ) | (4,259 | ) | (5,803 | ) | -26.6 | % | (14,015 | ) | (15,120 | ) | -7.3 | % | |||||||||||||||||||||||
| Other income (expense) | 223 | 228 | 404 | (2,101 | ) | ||||||||||||||||||||||||||||||
| Income before income taxes | 9,509 | 6,252 | 16,172 | 8,068 | |||||||||||||||||||||||||||||||
| Income tax expense | 3,613 | 2,566 | 6,196 | 3,259 | |||||||||||||||||||||||||||||||
| Net income | 5,896 | 3,686 | 60.0 | % | 9,976 | 4,809 | 107.4 | % | |||||||||||||||||||||||||||
| Basic net income per share | 0.11 | 0.07 | 0.18 | 0.10 | |||||||||||||||||||||||||||||||
| Diluted net income per share | $ | 0.10 | $ | 0.07 | 42.9 | % | $ | 0.17 | $ | 0.09 | 88.9 | % | |||||||||||||||||||||||
| Weighted average shares — basic | 54,792 | 53,715 | 54,589 | 48,493 | |||||||||||||||||||||||||||||||
| Weighted average shares — diluted | 57,855 | 56,136 | 3.1 | % | 57,223 | 51,035 | 12.1 | % | |||||||||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||
| September 30, | December 31, | ||||||||||
| In 000s, except shares | 2009 | 2008 | |||||||||
| Unaudited | Audited | ||||||||||
| ASSETS | |||||||||||
| Current | |||||||||||
| Cash and cash equivalents | $ | 4,675 | $ | 5,429 | |||||||
|
Accounts receivable, net of allowances of $1,898 and $2,247 as of |
|||||||||||
| 55,638 | 55,048 | ||||||||||
| Deferred tax asset, current | 13,780 | 13,780 | |||||||||
| Prepaid expenses and other current assets | 7,476 | 5,997 | |||||||||
| Total current assets | 81,569 | 80,254 | |||||||||
| Property and equipment, net | 53,123 | 42,417 | |||||||||
| Other long term assets | |||||||||||
| Goodwill | 511,861 | 508,748 | |||||||||
| Intangible assets, net | 102,756 | 124,340 | |||||||||
| Other | 19,586 | 18,101 | |||||||||
| Other long term assets | 634,203 | 651,189 | |||||||||
| Total assets | $ | 768,895 | $ | 773,860 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | 6,954 | $ | 6,725 | |||||||
| Accrued revenue share obligation and rebates | 24,700 | 29,698 | |||||||||
| Accrued payroll and benefits | 17,851 | 21,837 | |||||||||
| Other accrued expenses | 7,846 | 6,981 | |||||||||
| Deferred revenue, current portion | 25,886 | 24,280 | |||||||||
| Deferred purchase consideration | - | 19,361 | |||||||||
| Current portion of notes payable | 2,499 | 30,277 | |||||||||
| Current portion of finance obligation | 159 | 149 | |||||||||
| Total current liabilities | 85,895 | 139,308 | |||||||||
| Notes payable, less current portion | 228,287 | 215,349 | |||||||||
| Finance obligation, less current portion | 9,737 | 9,860 | |||||||||
| Deferred revenue, less current portion | 5,483 | 6,411 | |||||||||
| Deferred tax liability | 13,834 | 15,817 | |||||||||
| Other long term liabilities | 5,296 | 4,176 | |||||||||
| Total liabilities | 348,532 | 390,921 | |||||||||
| Stockholders’ equity | |||||||||||
|
Common stock, $0.01 par value, 150,000,000 shares authorized;
56,488,000 and 53,917,000 shares issued and outstanding as of September 30, 2009 and December 31, 2008, respectively |
|||||||||||
| 565 | 539 | ||||||||||
| Additional paid in capital | 632,631 | 605,340 | |||||||||
| Accumulated other comprehensive loss | (1,957 | ) | (2,088 | ) | |||||||
| Accumulated deficit | (210,876 | ) | (220,852 | ) | |||||||
| Total stockholders’ equity | 420,363 | 382,939 | |||||||||
| Total liabilities and stockholders’ equity | $ | 768,895 | $ | 773,860 | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
| (UNAUDITED) | |||||||||||
| Nine Months Ended | |||||||||||
| In 000s | September 30, | September 30, | |||||||||
| 2009 | 2008 | ||||||||||
| Operating activities: | |||||||||||
| Net income | $ | 9,976 | $ | 4,809 | |||||||
| Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | |||||||||||
| Bad debt expense | 3,823 | 1,457 | |||||||||
| Depreciation | 10,858 | 7,359 | |||||||||
| Amortization of intangibles | 21,585 | 16,806 | |||||||||
| Loss (gain) on sale of assets | 147 | (119 | ) | ||||||||
| Non-cash stock compensation expense | 12,911 | 6,591 | |||||||||
| Excess tax benefit from exercise of stock options | (6,073 | ) | (1,697 | ) | |||||||
| Amortization of debt issuance costs | 1,382 | 895 | |||||||||
| Noncash interest expense, net | 1,049 | 906 | |||||||||
| Deferred income tax (benefit) expense | (36 | ) | 937 | ||||||||
| Impairment of intangibles | - | 2,079 | |||||||||
| Changes in assets and liabilities | (15,671 | ) | (8,918 | ) | |||||||
| Cash provided by operating activities | 39,951 | 31,105 | |||||||||
| Investing activities: | |||||||||||
| Purchases of property, equipment, and software | (9,233 | ) | (3,891 | ) | |||||||
| Capitalized software development costs | (12,268 | ) | (8,378 | ) | |||||||
| Acquisitions, net of cash acquired | (18,275 | ) | (209,423 | ) | |||||||
| Cash used in investing activities | (39,776 | ) | (221,692 | ) | |||||||
| Financing activities: | |||||||||||
| Proceeds from notes payable | 71,797 | 142,629 | |||||||||
| Repayment of notes payable and capital lease obligations | (86,638 | ) | (85,615 | ) | |||||||
| Repayment of finance obligation | (494 | ) | (483 | ) | |||||||
| Debt issuance costs | - | (6,167 | ) | ||||||||
| Interest accrued on note receivable from stockholders | - | (18 | ) | ||||||||
| Payment on note receivable from stockholders | - | 69 | |||||||||
| Excess tax benefit from exercise of stock options | 6,073 | 1,697 | |||||||||
| Issuance of common stock, net of offering costs | 8,333 | 1,523 | |||||||||
| Cash (used in) provided by financing activities | (929 | ) | 53,635 | ||||||||
| Net decrease in cash and cash equivalents | (754 | ) | (136,952 | ) | |||||||
| Cash and cash equivalents, beginning of period | 5,429 | 136,952 | |||||||||
| Cash and cash equivalents, end of period | $ | 4,675 | $ | - | |||||||
| SUPPLEMENTAL SEGMENT REPORTING | |||||||||||||||
| RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| In 000s | Three Months Ended September 30, | ||||||||||||||
| 2009 | 2008 | % Change | |||||||||||||
| Net revenue | |||||||||||||||
| Revenue Cycle Management ("RCM") | $ | 51,635 | $ | 45,791 | 12.8 | % | |||||||||
| Spend Management | 30,758 | 30,181 | 1.9 | % | |||||||||||
| Total net revenue | 82,393 | 75,972 | 8.5 | % | |||||||||||
| Non-GAAP Adjusted EBITDA | % margin | % margin | |||||||||||||
| Revenue Cycle Management | $ | 17,964 | 34.8 | % | $ | 14,003 | 30.6 | % | 28.3 | % | |||||
| Spend Management | 15,710 | 51.1 | % | 15,207 | 50.4 | % | 3.3 | % | |||||||
| Corporate | (5,126 | ) | (4,009 | ) | 27.9 | % | |||||||||
| Total non-GAAP Adjusted EBITDA | $ | 28,548 | 34.6 | % | $ | 25,201 | 33.2 | % | 13.3 | % | |||||
| Nine Months Ended September 30, | |||||||||||||||
| 2009 | 2008 | % Change | |||||||||||||
| Net revenue | |||||||||||||||
| Revenue Cycle Management ("RCM") | $ | 149,425 | $ | 102,218 | 46.2 | % | |||||||||
| Spend Management | 96,161 | 93,747 | 2.6 | % | |||||||||||
| Total net revenue | 245,586 | 195,965 | 25.3 | % | |||||||||||
| Non-GAAP acquisition-related RCM adjustments a | - | 28,540 | |||||||||||||
| Total non-GAAP acquisition-affected net revenue | $ | 245,586 | $ | 224,505 | 9.4 | % | |||||||||
| Non-GAAP Adjusted EBITDA | % margin | % margin | |||||||||||||
| Revenue Cycle Management | $ | 44,785 | 30.0 | % | $ | 26,043 | 25.5 | % | 72.0 | % | |||||
| Spend Management | 46,135 | 48.0 | % | 46,547 | 49.7 | % | -0.9 | % | |||||||
| Corporate | (15,529 | ) | (12,323 | ) | 26.0 | % | |||||||||
| Total non-GAAP Adjusted EBITDA | $ | 75,391 | 30.7 | % | $ | 60,267 | 30.8 | % | 25.1 | % | |||||
| Non-GAAP acquisition-related RCM adjustments a | - | 10,103 | |||||||||||||
| Total non-GAAP acquisition-affected Adjusted EBITDA | $ | 75,391 | 30.7 | % | $ | 70,370 | 31.3 | % | 7.1 | % | |||||
| (a) Acquisition-related RCM adjustments include the historical results of Accuro's operations from January 1, 2008 through June 2, 2008 (the date of acquisition), inclusive of certain purchase accounting adjustments. | |||||||||||||||
| See "Use of Non-GAAP Financial Measures" following financial schedules for more information on non-GAAP measures. | |||||||||||||||
| SUPPLEMENTAL REVENUE REPORTING | |||||||||||||||
| RECONCILIATION OF GROSS FEES (A NON-GAAP MEASURE) TO NET REVENUE | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| In 000s | Three Months Ended | ||||||||||||||
| September 30, | |||||||||||||||
| ACTUAL | 2009 | 2008 | |||||||||||||
| Non-GAAP gross administrative fees | $ | 39,222 | $ | 39,867 | |||||||||||
| Other service fees | 56,762 | 50,309 | |||||||||||||
| Non-GAAP gross fees | 95,984 | RSO % | 90,176 | RSO % | |||||||||||
| Non-GAAP revenue share obligation (RSO) | (13,591 | ) | 34.7 | % | (14,204 | ) | 35.6 | % | |||||||
| Net revenue | $ | 82,393 | $ | 75,972 | |||||||||||
| Nine Months Ended | |||||||||||||||
| September 30, | |||||||||||||||
| ACTUAL | 2009 | 2008 | |||||||||||||
| Non-GAAP gross administrative fees | $ | 119,498 | $ | 117,634 | |||||||||||
| Other service fees | 167,091 | 117,610 | |||||||||||||
| Non-GAAP gross fees | 286,589 | RSO % | 235,244 | RSO % | |||||||||||
| Non-GAAP revenue share obligation (RSO) | (41,003 | ) | 34.3 | % | (39,279 | ) | 33.4 | % | |||||||
| Net revenue | $ | 245,586 | $ | 195,965 | |||||||||||
| NON-GAAP ACQUISITION-AFFECTED RESULTS | |||||||||||||||
| Non-GAAP gross administrative fees | $ | 117,634 | |||||||||||||
| Other service fees | 117,610 | ||||||||||||||
| Non-GAAP acquisition-related RCM adjustments b | 28,540 | ||||||||||||||
| Non-GAAP gross fees b | 263,784 | RSO % | |||||||||||||
| Non-GAAP revenue share obligation | (39,279 | ) | 33.4 | % | |||||||||||
| Net revenue b | $ | 224,505 | |||||||||||||
| (b) Non-GAAP, acquisition-affected adjustments include the historical results of Accuro's operations from January 1, 2008 through June 2, 2008 (the date of acquisition), inclusive of certain purchase accounting adjustments. | |||||||||||||||
| See "Use of Non-GAAP Financial Measures" following financial schedules for more information on non-GAAP measures. | |||||||||||||||
| SUPPLEMENTAL REPORTING OF ADJUSTED EBITDA | |||||||||||||||||
| RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES | |||||||||||||||||
| (UNAUDITED) | |||||||||||||||||
| In 000s | Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| ACTUAL RESULTS | 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Net Income | $ | 5,896 | $ | 3,686 | $ | 9,976 | $ | 4,809 | |||||||||
| Depreciation | 3,125 | 2,581 | 9,020 | 7,051 | |||||||||||||
| Amortization of intangibles | 7,018 | 7,324 | 21,029 | 16,117 | |||||||||||||
| Amortization of intangibles (included in cost of revenue) | 801 | 233 | 2,391 | 995 | |||||||||||||
| Interest expense, net | 4,255 | 5,761 | 13,994 | 13,715 | |||||||||||||
| Income tax expense | 3,613 | 2,566 | 6,196 | 3,259 | |||||||||||||
| Non-GAAP EBITDA | 24,708 | 22,151 | 62,606 | 45,946 | |||||||||||||
| Impairment of intangibles | - | - | - | 2,079 | |||||||||||||
| Share-based compensation | 3,951 | 2,452 | 12,911 | 6,591 | |||||||||||||
| Rental income from capitalized building lease | (110 | ) | (109 | ) | (329 | ) | (329 | ) | |||||||||
| Purchase accounting adjustments | (1 | ) | 707 | 203 | 2,066 | ||||||||||||
| Interest rate swap cancellation | - | - | - | 3,914 | |||||||||||||
| Non-GAAP Adjusted EBITDA | $ | 28,548 | $ | 25,201 | $ | 75,391 | $ | 60,267 | |||||||||
| NON-GAAP ACQUISITION-AFFECTED RESULTS | |||||||||||||||||
| Net Income | $ | 9,976 | $ | 4,809 | |||||||||||||
| Non-GAAP acquisition-related net income | - | (1,674 | ) | ||||||||||||||
| Non-GAAP acquisition-affected net income | 9,976 | 3,135 | |||||||||||||||
| Depreciation c | 9,020 | 7,673 | |||||||||||||||
| Amortization of intangibles c | 21,029 | 22,321 | |||||||||||||||
| Amortization of intangibles (included in cost of revenue) c | 2,391 | 995 | |||||||||||||||
| Interest expense, net c | 13,994 | 18,004 | |||||||||||||||
| Income tax expense c | 6,196 | 2,226 | |||||||||||||||
| Non-GAAP acquisition-affected EBITDA | 62,606 | 54,354 | |||||||||||||||
| Impairment of intangibles | - | 2,079 | |||||||||||||||
| Share-based compensation c | 12,911 | 7,108 | |||||||||||||||
| Rental income from capitalized building lease | (329 | ) | (329 | ) | |||||||||||||
| Purchase accounting adjustments c | 203 | 3,244 | |||||||||||||||
| Interest rate swap cancellation | - | 3,914 | |||||||||||||||
| Non-GAAP acquisition-affected Adjusted EBITDA | $ | 75,391 | $ | 70,370 | |||||||||||||
| (c) Non-GAAP, acquisition-affected adjustments include the historical results of Accuro's operations from January 1, 2008 through June 2, 2008 (the date of acquisition), inclusive of certain purchase accounting adjustments. | |||||||||||||||||
| See "Use of Non-GAAP Financial Measures" following financial schedules for more information on non-GAAP measures. | |||||||||||||||||
| SUPPLEMENTAL EARNINGS PER SHARE REPORTING | |||||||||||||||||||
| RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| Per share data | September 30, | September 30, | |||||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||||||
| Diluted EPS attributable to common stockholders | $ | 0.10 | $ | 0.07 | $ | 0.17 | $ | 0.09 | |||||||||||
| Non-cash, tax-adjusted acquisition-related intangible amortization | 0.08 | 0.08 | 0.23 | 0.20 | |||||||||||||||
| Non-cash, tax-adjusted share-based compensation | 0.04 | 0.03 | 0.14 | 0.08 | |||||||||||||||
| Tax-adjusted interest rate swap cancellation | - | - | - | 0.05 | |||||||||||||||
| Non-cash, tax-adjusted impairment of intangibles | - | - | - | 0.02 | |||||||||||||||
| Non-GAAP cash diluted EPS | $ | 0.22 | $ | 0.18 | $ | 0.54 | $ | 0.44 | |||||||||||
| Weighted average shares - diluted (in 000s) | 57,855 | 56,136 | 57,223 | 51,035 | |||||||||||||||
| SUPPLEMENTAL 2009 ADJUSTED EBITDA GUIDANCE | |||||||||||||||||||
| RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| Guidance Range for | |||||||||||||||||||
| Twelve Months Ending | |||||||||||||||||||
| In 000s | December 31, | ||||||||||||||||||
| 2009 | |||||||||||||||||||
| (Low) | (High) | ||||||||||||||||||
| Net Income | $ | 18,100 | $ | 21,200 | |||||||||||||||
| Depreciation | 12,700 | 12,300 | |||||||||||||||||
| Amortization of intangibles | 28,000 | 28,000 | |||||||||||||||||
| Amortization of intangibles (included in cost of revenue) | 3,200 | 3,200 | |||||||||||||||||
| Interest expense, net | 18,200 | 17,800 | |||||||||||||||||
| Income tax expense | 12,200 | 14,300 | |||||||||||||||||
| Non-GAAP EBITDA | 92,400 | 96,800 | |||||||||||||||||
| Share-based compensation | 17,500 | 17,100 | |||||||||||||||||
| Rental income from capitalized building lease | (400 | ) | (400 | ) | |||||||||||||||
| Purchase accounting adjustments | 500 | 500 | |||||||||||||||||
| Non-GAAP adjusted EBITDA | $ | 110,000 | $ | 114,000 | |||||||||||||||
| SUPPLEMENTAL 2009 EARNINGS PER SHARE GUIDANCE | |||||||||||||||||||
| RECONCILIATION OF SELECTED NON-GAAP MEASURES TO GAAP MEASURES | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| Guidance Range for | |||||||||||||||||||
| Twelve Months Ending | |||||||||||||||||||
| December 31, | |||||||||||||||||||
| In 000s, except per share data | 2009 | ||||||||||||||||||
| (Low) | (High) | ||||||||||||||||||
| Net Income | $ | 18,100 | $ | 21,200 | |||||||||||||||
| Diluted EPS | 0.31 | 0.37 | |||||||||||||||||
| Non-cash, tax-adjusted acquisition-related intangible amortization | 0.29 | 0.29 | |||||||||||||||||
| Non-cash, tax-adjusted share-based compensation | 0.18 | 0.18 | |||||||||||||||||
| Non-GAAP cash diluted EPS | $ | 0.78 | $ | 0.84 | |||||||||||||||
| Fully diluted weighted average shares outstanding | 57,400 | 57,400 | |||||||||||||||||
| See "Use of Non-GAAP Financial Measures" following financial schedules for more information on non-GAAP measures. | |||||||||||||||||||
| Use of Non-GAAP Financial Measures | |
| 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 condensed financial statements presented on a GAAP basis with the following non-GAAP financial information: gross fees, revenue share obligation, EBITDA, adjusted EBITDA; cash diluted EPS; acquisition-affected net revenue, acquisition-affected adjusted EBITDA and contracted revenue. | |
| These non-GAAP financial measures may have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. The Company compensates for such limitations by relying primarily on the Company’s GAAP results and using non-GAAP financial measures only supplementally. Where possible, the Company provides reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures. Investors are encouraged to carefully review those reconciliations. In addition, because these non-GAAP measures are not measures of financial performance under GAAP and are susceptible to varying calculations, these measures, as defined by the Company, may differ from and may not be comparable to similarly titled measures used by other companies. | |
| Gross fees include all administrative fees the Company receives pursuant to its vendor contracts and all other fees the Company receives from customers. The Company's revenue share obligation represents the portion of the administrative fees the Company is contractually obligated to share with certain of its GPO customers. Total net revenue (a GAAP measure) reflects the Company's gross fees net of its revenue share obligation. These non-GAAP measures assist management and the board of directors and may be helpful to investors in analyzing the Company's growth in its Spend Management segment given that administrative fees constitute a material portion of the Company's revenue and are paid to the Company by over 1,200 vendors contracted by its GPO, and that the Company's revenue share obligation constitutes a significant outlay to certain of its GPO customers. | |
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The Company defines: EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization; adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit), depreciation and amortization and other non-recurring, non-cash or non-operating items; and adjusted diluted EPS as earnings per share excluding non-cash acquisition-related intangible amortization and non-recurring expense items on a tax-adjusted basis. EBITDA, adjusted EBITDA and adjusted diluted EPS are used by the Company to facilitate a comparison of its operating performance on a consistent basis from period to period and provides for a more complete understanding of factors and trends affecting our business. These measures assist management and the board of directors and may be useful to investors in comparing the Company's operating performance consistently over time as it removes the impact of its capital structure (primarily interest charges and amortization of debt issuance costs), asset base (primarily depreciation and amortization) and items outside the control of the management team (taxes), as well as other non-cash (purchase accounting adjustments and imputed rental income) and non-recurring items, from the Company’s operational results. Adjusted EBITDA also removes the impact of non-cash share-based compensation expense. EBITDA, adjusted EBITDA and adjusted diluted EPS are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flow from continuing operating activities. |
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The Company defines cash diluted EPS as earnings per share excluding non-cash acquisition-related intangible amortization and non-recurring expense items on a tax-adjusted basis and non-cash tax-adjusted shared-based compensation expense. Cash diluted EPS is not a measure of liquidity under GAAP, or otherwise, and is not an alternative to cash flow from continuing operating activities. Cash diluted EPS growth is used by the Company as the financial performance metric tied to the vesting of certain equity awards granted pursuant to the Company’s Long-Term Performance Incentive Plan. Use of this measure for this purpose allows management and the board of directors to analyze the Company’s operating performance on a consistent basis by removing the impact of certain non-cash and non-recurring items from our operations, and by rewarding organic growth and accretive business transactions. As a significant portion of senior management’s incentive based compensation is based on the achievement of certain cash diluted EPS growth over time, investors may find such information useful. |
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Acquisition-affected results include the activity of Accuro prior to the Company’s actual ownership. The Accuro acquisition was consummated on June 2, 2008. These results assume the acquisition of Accuro occurred on January 1, 2008. Acquisition-affected net revenue and adjusted EBITDA are used by management and the board of directors to better understand the extent of growth of the Revenue Cycle Management segment. Given the significant impact that this transaction had on the Company during the fiscal year ended December 31, 2008 and the nine months ended September 30, 2009, the Company believes such acquisition-affected measures may be useful and meaningful to investors in their analysis of such growth. Non-GAAP acquisition-affected measures are for illustrative and informational purposes only and are not intended to represent or be indicative of what the Company's results of operations would have been if this transaction had occurred at the beginning of 2008. These measures also should not be considered representative of the Company's future results of operations. |
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Contracted revenue is a forward-looking operating measure used by management and the board of directors to better understand revenue growth trends within the Company's business segments as it reflects the Company’s current estimate of contractually committed revenue to be generated under existing customer contracts in the forward 12-month period. Such information may be useful to investors in their analysis of the Company's revenue growth trends. A reconciliation to the most directly comparable GAAP measure cannot be performed without unreasonable effort. |
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mdas/F
CONTACT:
MedAssets, Inc.
Robert P. Borchert, 678-248-8194
VP,
Investor Relations
rborchert@medassets.com