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MedAssets Reports First Quarter 2013 Financial Results

MedAssets Reports First Quarter 2013 Financial Results

MedAssets, Inc. has 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

 

$

93.3

 

17.4

%

Revenue Cycle Management (RCM)

 

63.3

 

56.6

 

11.8

Total Net Revenue

 

172.8

 

149.9

 

15.3

%

Net income (loss)

 

7.7

 

(0.2

)

 

nm

Earnings (loss) per share (EPS) — diluted

 

0.13

 

(0.00

)

 

nm

Non-GAAP adjusted EBITDA

 

61.6

 

46.4

 

32.8

%

Non-GAAP adjusted EPS - diluted

 

$

0.41

 

$

0.24

 

70.8

Weighted average shares - diluted a

 

60.4

 

57.0

 

5.9

%

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 - 422.0

 

5.2 - 7.2%

RCM segment

255.0 - 263.0

 

3.4 - 6.7

Total Net Revenue

670.0 - 684.0

 

4.7 - 6.9

Non-GAAP adjusted EBITDA

215.0 - 225.0

 

3.7 - 8.5%

GAAP EPS — diluted

0.32 - 0.42

 

nm

Non-GAAP adjusted EPS — diluted

$1.22 - 1.32

 

8.0-16.8%

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