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MedAssets Reports Fourth Quarter and Full-Year 2013 Financial Results

Board of Directors Authorizes Share Repurchase Plan

Net Revenue

Total net revenue for the fourth quarter of 2013 increased 4.1% to $170.5 million from$163.8 million for the fourth quarter of 2012. Net revenue in the SCM segment increased 7.4% to $106.4 million from net revenue of $99.1 million for the fourth quarter of 2012, due to growth in group purchasing net administrative fees as well as consulting and other service fees, partially offset by an expected year-over-year decrease in performance-related fees. Net revenue in the RCM segment decreased 1.0% to $64.0 million from $64.7 million for the fourth quarter of 2012 as technology-related revenue (approximately 73.0% of RCM segment revenue) increased 4.9% while services-related revenue declined 14.2% due primarily to lower fees and the loss of two clients disclosed in early 2013.

Non-GAAP Adjusted EBITDA

Total non-GAAP adjusted EBITDA was $52.8 million, or 30.9% of total net revenue, for the fourth quarter of 2013, a 4.0% decrease from total non-GAAP adjusted EBITDA of $55.0 million, or 33.6% of total net revenue, for the fourth quarter of 2012. This decline was due primarily to business investments, lower fees from higher-margin Revenue Cycle Services contracts and the anticipated year-over-year decrease in performance-related fees versus the fourth quarter of 2012.

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

Net income for the fourth quarter of 2013 was $7.8 million, or $0.13 per share, compared with a net loss of $14.4 million, or a loss of $0.25 per share, for the fourth quarter of 2012. The net loss in the fourth quarter of 2012 was due to debt extinguishment charges related to a new debt agreement completed in December 2012.

Non-GAAP adjusted EPS (defined as EPS excluding non-cash acquisition-related intangible amortization and depreciation, non-cash share-based compensation, certain restructuring, acquisition and integration-related expenses and non-recurring items on a tax-adjusted basis) was $0.30 per share for the fourth quarter of 2013, an 11.1% increase when compared with non-GAAP adjusted EPS of $0.27 per share for the fourth quarter of 2012.

Net Revenue

Total net revenue for full-year 2013 increased 6.3% to $680.4 million from $640.1 millionfor full-year 2012. Net revenue in the SCM segment grew 7.8% to $424.5 million from net revenue of $393.6 million for full-year 2012. Net revenue in the RCM segment rose 3.8% to$256.0 million from $246.5 million for full-year 2012 as technology-related revenue (approximately 70.5% of RCM segment revenue) grew 6.2% and services-related revenue decreased 1.4%.

Non-GAAP Adjusted EBITDA

For full-year 2013, total non-GAAP adjusted EBITDA was $220.8 million, or 32.5% of total net revenue, a 6.5% increase over total non-GAAP adjusted EBITDA of $207.3 million, or 32.4% of total net revenue, for full-year 2012.

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

Net income for full-year 2013 was $27.4 million, or $0.45 per share, versus a net loss of$6.9 million, or a loss of $0.12 per share, for full-year 2012 due to the debt extinguishment charges referenced earlier. Non-GAAP adjusted EPS was $1.32 per share for full-year 2013, a 16.8% increase over non-GAAP adjusted EPS of $1.13 per share for full-year 2012.

Cash Flow and Capital Resources

Cash provided by operating activities in full-year 2013 was $152.9 million versus $157.9 million for full-year 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 2.9% to $94.1 million versus $91.4 million for full-year 2012, as the company paid approximately $7.7 million in cash taxes during 2013 versus $5.6 million in cash taxes in 2012. The Company prepaid an additional $25.0 million of its Term Loan B in the fourth quarter of 2013, and $105.0 million in the full year, along with its scheduled principal payments. The company's balance sheet at December 31, 2013included $761.7 million in total bank and bond debt, net of cash and cash equivalents. Total net debt equates to leverage of approximately 3.4 times non-GAAP adjusted

EBITDA for the trailing twelve-month period.

Non-GAAP Contracted Revenue

At December 31, 2013, MedAssets' rolling 12-month non-GAAP contracted revenue estimate was $625.4 million (SCM segment - $386.0 million RCM segment - $239.4 million), a year-over-year increase of 4.1%. 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.

Share Repurchase Plan Announced

The MedAssets, Inc. Board of Directors authorized the repurchase of up to $75 million of the company's common stock over the next 12 months. The company plans to repurchase shares from time to time using a variety of methods, which may include open market purchases, accelerated share repurchases, 10b5-1 trading plans, privately negotiated transactions or block trades, or any combination of such methods. As of February 24, 2014,MedAssets had approximately 61.8 million fully diluted shares of common stock outstanding.

2014 Financial Guidance

MedAssets introduced full-year 2014 financial guidance ranges, as follows:

($ in millions, except per share)                 FY'14     Y-Y % change

Net Revenue:                   

 SCM segment   $ 438.0 - 446.0    3.2 - 5.1%

 RCM segment  261.0 - 269.0       2.0 - 5.1

Total Net Revenue         700.0 - 714.0       2.9 - 4.9

Non-GAAP adjusted EBITDA      232.0 - 242.0       5.1 - 9.6

GAAP EPS - diluted          0.57 - 0.67            26.7 - 48.9

Non-GAAP adjusted EPS - diluted            $ 1.33 - 1.43        0.8 - 8.3%

Excluding performance-related fees from both periods, total net revenue in 2014 is expected to grow approximately 4.5% at the midpoint of the guidance range.

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