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MedAssets Reports First Quarter 2012 Financial Results

MedAssets Reports First Quarter 2012 Financial Results

MedAssets, Inc. has announced its results for its first quarter ended March 31, 2012, which are summarized in the table below:

($ in millions, except per share)

1Q-12

1Q-11

% Change

Net Revenue:

Spend and Clinical Resource Mgmt (SCM)

$

93.3

$

79.3

17.6

%

Revenue Cycle Management (RCM)

56.6

51.2

10.5

Total Net Revenue

149.9

130.5

14.8

%

Non-GAAP acquisition-related purchase

accounting revenue adjustments a

--

5.6

nm

Total non-GAAP Net Revenue

149.9

136.1

10.1

%

Net loss

(0.2

)

(16.2

)

nm

Loss per share — diluted

(0.00

)

(0.28

)

nm

Non-GAAP adjusted EBITDA

46.4

40.9

13.3

%

Non-GAAP adjusted earnings per share - diluted

$

0.24

$

0.17

41.2

%

Weighted average shares - diluted b

57.0

57.2

nm

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

(b) Given MedAssets' net loss in the periods ended March 31, 2012 and 2011, basic and diluted weighted average shares are the same in each respective period.

Net Revenue

Total net revenue for the first quarter of 2012 increased 14.8% to $149.9 million from $130.5 million in the first quarter of 2011. On a non-GAAP basis, adjusted for acquisition-related purchase accounting revenue adjustments, total net revenue of $149.9 million in the first quarter of 2012 increased 10.1% from total non-GAAP net revenue of $136.1 million in the first quarter of 2011. Net revenue in the SCM segment grew 9.9% to $93.3 million from non-GAAP net revenue of $84.9 million in the first quarter of 2011 primarily due to earlier-than-expected recognition of certain guarantee-related revenue and performance fees as well as continued growth in group purchasing-related net administrative fees. Net revenue in the RCM segment increased 10.5% to $56.6 million from $51.2 million in the first quarter of 2011 as technology-related revenue grew 10.0% and services-related revenue increased 11.9%.

Non-GAAP Adjusted EBITDA

Total non-GAAP adjusted EBITDA was $46.4 million, or 31.0% of total net revenue, in the first quarter of 2012, a 13.3% increase over total non-GAAP adjusted EBITDA of $40.9 million, or 30.1% of total non-GAAP net revenue, in the first quarter of 2011.

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

Net loss in the first quarter of 2012 was $0.2 million, or a loss of $0.00 per share, versus a net loss of $16.2 million, or a loss of $0.28 per share, in the first quarter of 2011. The first quarter of both years was impacted by acquisition and integration-related expenses associated with the purchase of Broadlane in November 2010.

Non-GAAP adjusted EPS, defined as EPS excluding non-cash acquisition-related intangible amortization, share-based compensation, acquisition-related expenses and non-recurring items on a tax-adjusted basis, increased 41.2% to $0.24 per share in the first quarter of 2012, versus non-GAAP adjusted EPS of $0.17 per share in the first quarter of 2011.

Cash Flow and Capital Resources

Cash provided by operating activities in the first quarter of 2012 was $18.8 million, a 4.5% increase from $18.0 million in the first quarter of 2011. The Company's balance sheet at March 31, 2012 included $955.6 million in total bank and bond debt, net of cash and cash equivalents, which represented leverage of approximately 5.0 times non-GAAP adjusted EBITDA for the trailing twelve-month period.

2012 Financial Guidance

MedAssets reiterated its full-year 2012 financial guidance, as follows:

($ in millions, except per share)

FY 2012

Y-Y % change

Net Revenue:

SCM segment

$ 378 - 386

2.1 - 4.3%

RCM segment

217 - 225

1.3 - 5.0%

Total Net Revenue

596 - 610

2.0 - 4.4%

Non-GAAP adjusted EBITDA

193 - 203

4.8 - 10.3%

GAAP EPS — diluted

0.11 - 0.21

nm

Non-GAAP adjusted EPS - diluted

$1.00 - 1.10

0.1 - 11.1%

Non-GAAP Contracted Revenue

At March 31, 2012, MedAssets rolling 12-month non-GAAP contracted revenue estimate was $579.2 million (SCM segment - $356.5 million RCM segment - $222.7 million), a year-over-year increase of 4.3%. 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.

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