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MedAssets Reports Second Quarter and Six-Month 2013 Financial Results

MedAssets Reports Second Quarter and Six-Month 2013 Financial Results

MedAssets, Inc has announced results for its second quarter and six-month periods ended June 30, 2013. Second quarter results are summarized in the table below:

($ in millions, except per share)

2Q'13

2Q'12

% Change

Net Revenue:

 

 

 

 

Spend and Clinical Resource Mgmt (SCM)

 

$

105.3

 

$

102.1

3.1

%

Revenue Cycle Management (RCM)

 

65.4

 

60.9

7.5

Total Net Revenue

 

170.7

 

163.0

4.7

Net income

 

5.1

 

2.3

125.9

Earnings per share (EPS) — diluted

 

0.08

 

0.04

100.0

Non-GAAP adjusted EBITDA

 

52.5

 

49.0

7.2

Non-GAAP adjusted EPS - diluted

 

$

0.30

 

$

0.28

7.1

Weighted average shares — diluted

 

60.7

 

58.7

3.4

%

Net Revenue

Second Quarter

Total net revenue for the second quarter of 2013 increased 4.7% to $170.7 million from $163.0 million for the second quarter of 2012. Net revenue in the SCM segment increased 3.1% to $105.3 million from net revenue of $102.1 million for the second quarter of 2012, due primarily to group purchasing net administrative fee growth, partially offset by an expected year-over-year decrease in performance-related fees. Net revenue in the RCM segment increased 7.5% to $65.4 million from $60.9 million for the second quarter of 2012 as technology-related revenue increased 6.5% while services-related revenue grew 9.7%.

Six-Month Period

Total net revenue for the first half of 2013 increased 9.8% to $343.6 million from $312.9 million for the first half of 2012. Net revenue in the SCM segment grew 9.9% to $214.8 million from net revenue of $195.4 million for the first half of 2012. Net revenue in the RCM segment increased 9.6% to $128.8 million from $117.5 million for the first half of 2012 as technology-related revenue grew 7.3% and services-related revenue increased 14.9%.

Non-GAAP Adjusted EBITDA

Second Quarter

Total non-GAAP adjusted EBITDA was $52.5 million, or 30.8% of total net revenue, for the second quarter of 2013, a 7.2% increase from total non-GAAP adjusted EBITDA of $49.0 million, or 30.1% of total net revenue, for the second quarter of 2012. The 71 basis point margin increase was due to higher RCM segment margin and relatively flat corporate expenses, partially offset by an expected year-over-year decrease in performance-related fees.

Six-Month Period

For the first half of 2013, total non-GAAP adjusted EBITDA was $114.2 million, or 33.2% of total net revenue, a 19.7% increase over total non-GAAP adjusted EBITDA of $95.4 million, or 30.5% of total net revenue, for the first half of 2012.

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

Second Quarter

The Company reported net income for the second quarter of 2013 of $5.1 million, or $0.08 per share, compared to net income of $2.3 million, or $0.04 per share, for the second 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) was $0.30 per share for the second quarter of 2013, a 7.1% increase when compared with non-GAAP adjusted EPS of $0.28 per share for the second quarter of 2012.

Six-Month Period

Net income for the first half of 2013 was $12.8 million, or $0.21 per share, versus net income of $2.0 million, or $0.03 per share, for the first half of 2012. Non-GAAP adjusted EPS was $0.71 per share for the first half of 2013, a 39.2% increase over non-GAAP adjusted EPS of $0.51 per share for the first half of 2012.

Cash Flow and Capital Resources

Cash provided by operating activities in the first half of 2013 was $67.6 million versus $62.7 million for 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 25.4% to $43.4 million versus $34.6 million for the first six months of 2012. The Company prepaid an additional $40.0 million of its Term Loan B in the second quarter of 2013 along with its scheduled principal payments. Its balance sheet at June 30, 2013 included $821.5 million in total bank and bond debt, net of cash and cash equivalents. Total net debt equates to leverage of approximately 3.6 times non-GAAP adjusted EBITDA for the trailing twelve-month period.

Non-GAAP Contracted Revenue

At June 30, 2013, MedAssets rolling 12-month non-GAAP contracted revenue estimate was $616.8 million (SCM segment - $378.4 million RCM segment - $238.4 million), a year-over-year increase of 2.2%. 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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