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MedAssets Reports Fourth Quarter and Full-Year 2011 Financial Results

MedAssets Reports Fourth Quarter and Full-Year 2011 Financial Results

MedAssets, Inc. has announced results for its fourth quarter and full-year ended December 31, 2011. Fourth quarter results are summarized in the table below:

($ in millions, except per share)

4Q-11

4Q-10 a

4Q-10 a,b

Net Revenue:

Recast

Non-GAAP Acquisition-
Affected and Recast

Spend and Clinical Resource Mgmt (SCM)

$

103.1

$

53.5

$

89.0

Revenue Cycle Management (RCM)

53.7

53.4

53.4

Total Net Revenue

156.8

106.9

142.4

Non-GAAP acquisition-related purchase

accounting revenue adjustment c

--

13.4

--

Total non-GAAP Net Revenue

156.8

120.3

142.4

Net income (loss)

4.1

(49.4

)

(50.9

)

Earnings (loss) per share (EPS) — diluted

0.07

(0.87

)

NA

Non-GAAP adjusted EBITDA

53.7

41.3

$

47.5

Non-GAAP adjusted EPS — diluted

$

0.32

$

0.18

NA

Weighted average shares — diluted d

58.5

57.0

NA

(a) The Company moved its Decision Support Services (DSS) operating unit from the RCM segment to the SCM segment on January 1, 2011. Recast results assume the DSS operating unit was part of the SCM segment on January 1, 2010.

(b) Non-GAAP acquisition-affected results assume The Broadlane Group (Broadlane) acquisition occurred on January 1, 2010.

(c) Non-GAAP acquisition-related purchase accounting revenue adjustment reflects net revenue that would have been recognized after completion of the Broadlane acquisition if not for the GAAP-related purchase accounting adjustment. A detailed explanation is provided under "Use of Non-GAAP Financial Measures" following the accompanying financial schedules.

(d) Given the Company's net loss in the fourth quarter ended December 31, 2010, basic and diluted weighted average shares are the same.

Net Revenue

Fourth Quarter

Total net revenue for the fourth quarter of 2011 increased 46.6% to $156.8 million from $106.9 million in the fourth quarter of 2010, due primarily to the acquisition of Broadlane on November 16, 2010.

Comparing period-over-period organic growth, total net revenue of $156.8 million in the fourth quarter of 2011 increased 10.1% from total non-GAAP acquisition-affected net revenue of $142.4 million in the fourth quarter of 2010. Net revenue in the SCM segment grew 15.9% to $103.1 million from non-GAAP acquisition-affected net revenue of $89.0 million in the fourth quarter of 2010 primarily due to the recognition of approximately $15.0 million in guarantee-related revenue and growth in group purchasing-related net administrative fees. Net revenue in the RCM segment increased 0.5% to $53.7 million from $53.4 million in the fourth quarter of 2010 as technology-related revenue grew 9.5% and services-related revenue declined 19.5%.

Twelve-month Period

Total net revenue for the full-year 2011 increased 47.8% to $578.3 million from $391.3 million in full-year 2010, due primarily to the acquisition of Broadlane.

Comparing period-over-period organic growth, total net revenue of $584.5 million in full-year 2011 increased 4.9% from total non-GAAP acquisition-affected net revenue of $557.4 million in full-year 2010. Net revenue in the SCM segment grew 7.7% to $370.2 million from non-GAAP acquisition-affected net revenue of $343.7 million in full-year 2010. Net revenue in the RCM segment increased 0.3% to $214.3 million from $213.7 million in 2010.

Non-GAAP Adjusted EBITDA

Fourth Quarter

In the fourth quarter of 2011, total non-GAAP adjusted EBITDA was $53.7 million, or 34.2% of total net revenue, a 30.0% increase over total non-GAAP adjusted EBITDA of $41.3 million, or 38.6% of total net revenue, in the fourth quarter of 2010.

Comparing period-over-period organic growth, total non-GAAP adjusted EBITDA in the fourth quarter of 2011 increased 12.9% from total non-GAAP acquisition-affected adjusted EBITDA of $47.5 million, or 33.4% of total non-GAAP acquisition-affected net revenue, in the fourth quarter of 2010.

Twelve-month Period

In full-year 2011, total non-GAAP adjusted EBITDA was $184.1 million, or 31.8% of total net revenue, a 43.8% increase over total non-GAAP adjusted EBITDA of $128.0 million, or 32.7% of total net revenue, in full-year 2010.

Comparing period-over-period organic growth, total non-GAAP adjusted EBITDA in full-year 2011 was $184.1 million, or 31.5% of total non-GAAP net revenue, an increase of 9.1% from non-GAAP acquisition-affected adjusted EBITDA of $168.7 million, or 30.3% of total non-GAAP acquisition-affected net revenue, in full-year 2010.

Net Income (Loss) and Per Share

Fourth Quarter

Net income in the fourth quarter of 2011 was $4.1 million, or $0.07 per share, versus a net loss of $49.4 million, or a loss of $0.87 per share, in the fourth quarter of 2010. The net loss in the fourth quarter of 2010 was due to an impairment charge to write off goodwill associated with the Company's DSS operating unit, as well as acquisition-related costs and restructuring charges in connection with the purchase and integration of Broadlane.

Non-GAAP adjusted EPS, defined as EPS excluding non-cash acquisition-related intangible amortization, share-based compensation, acquisition-related expenses and other non-recurring items on a tax-adjusted basis, increased 77.8% to $0.32 per share in the fourth quarter of 2011, versus non-GAAP adjusted EPS of $0.18 per share in the fourth quarter of 2010.

Twelve-month Period

Net loss in full-year 2011 was $15.5 million, or a loss of $0.27 per share, versus a net loss of $32.1 million, or a loss of $0.57 per share, in full-year 2010. The net loss in full-year 2011 was due to costs associated with the acquisition and integration of Broadlane.

Non-GAAP adjusted EPS was $0.99 per share in full-year 2011, versus non-GAAP adjusted EPS of $0.82 per share in full-year 2010.

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