HMS Holdings Corp. Announces Third Quarter 2009 Results; 2009 Revised Guidance and Initial 2010 Guidance
More News related to HMSY
- HMS Holdings Corp. to Present at Investor Conferences
- Jefferies & Co Maintains a 'Buy' on HMS Holdings (HMSY); Raises Price Target
- HMS Holdings (HMSY) Beats Q3 by 2c; Raises Guidance
- HMS Holdings Corp. Announces Third Quarter 2009 Results; 2009 Revised Guidance and Initial 2010 Guidance
- Trading Radar for 10/30: Sony (SNE), Penske (PAG), Alcatel-Lucent (ALU) Report
-- Q3 2009 Revenue of $59.2 million (+21%y/y), EPS $0.30 (+30% y/y)
-- 2009 EPS Guidance Increased to $1.08 from $1.05 (+35% y/y)
-- 2010 Initial EPS Guidance of $1.34 (+24% y/y)
NEW YORK--(BUSINESS WIRE)-- HMS Holdings Corp. (NASDAQ: HMSY) today announced its financial results for the third quarter of 2009.
For the quarter ended September 30, 2009 revenue increased 20.8% to $ 59.2 million, compared with $49.0 million for the same period a year ago. Net income for the quarter was $ 8.4 million (+36.4%) or $0. 30 (+30.4%) per diluted common share compared to net income of $6.1 million or $0.23 per diluted common share for the same period a year ago.
For the nine months ended September 30, 2009, HMS reported revenue of $162.9 million, an increase of $30.8 million or 23.3% from the $132.1 million for the same period a year ago. HMS reported net income of $ 20.7 million (+44.7%) or $0. 75 (+41.5%) per diluted common share for the nine months ended September 30, 2009, compared to net income of $14.3 million or $0.53 per diluted common share for the same period a year ago.
"Customers in each of our markets are benefiting from the scope and quality of our coordination of benefits and program integrity offerings," said Bill Lucia, CEO of HMS. "We see broad opportunities in the marketplace, and continue to offer our clients unique program savings initiatives that will become even more critical as the nation seeks to finance the expansion of healthcare coverage."
Guidance for 2009 and 2010
The Company announced it has increased its 2009 guidance from $222.0 million in revenue, $67.5 million in adjusted EBITDA and $1.05 in fully diluted EPS to $228.5 million (+23.9% y/y) in revenue, $70.4 million (+35.4% y/y) in adjusted EBITDA and $1.08 (+35.0% y/y) in fully diluted EPS.
The Company also announced its initial guidance for 2010. Revenue is projected to grow to $280.5 million (+22.8% over revised 2009 guidance). Adjusted EBITDA is expected to increase to $83.8 million (+18.9% over 2009 revised guidance), and fully diluted EPS is projected to increase to $1.34 (+24.1% over 2009 revised guidance).
Liquidity and Capital Resources
The Company reported cash balances at the end of September 2009 of $69.5 million, an increase of $12.6 million from the end of the second quarter of 2009. Cash balances are invested in low-risk, highly secure money market funds. On October 28, 2009, the Company paid down in its entirety its outstanding term loan balance of $12.6 million. The Company has no borrowings under its $25 million revolving credit facility, which expires in September 2011.
HMS will be hosting its third quarter 2009 conference call with the investment community on Friday, October 30, 2009 at 9:00 am Eastern Time. The conference call number is US/Canada (866) 394-8630 Int'l/Local Dial-In: (706) 758-0082 Conference ID: 36157807. A slide presentation will accompany the conference call and may be accessed through our website at http://www.hms.com/investor_relations/investors_quarterly_results.asp
A conference call replay will be available beginning October 30, 2009 at 10:00 AM ET through November 6, 2009 11:59 PM ET. To listen to the replay of the call, dial: US/Canada: (800) 642-1687 Int'l/Local Dial-In: (706) 645-9291 Conference ID: 36157807 or visit our website at http://www.hms.com/investor_relations/investors_quarterly_results.asp
Our Form 10-Q for the quarter ended September 30, 2009 will be filed with the Securities and Exchange Commission (SEC) and available on our website www.hms.com on or about November 14, 2009, and will contain additional information about our results of operations for the fiscal year-to-date. This press release and the interim financial statements herein will be available at http://www.hms.com for at least a 12-month period. Shareholders and interested investors are welcome to contact HMSY Investor Relations at 212-857-5986. Following the filing of the Form 10-Q, corporate executives will be available to respond to inquiries from shareholders and interested investors.
HMS Holdings Corp. (NASDAQ: HMSY) is the leader in coordination of benefits and program integrity services for government healthcare programs. The company's clients include health and human services programs in more than 40 states, 100 Medicaid managed care plans, the Centers for Medicare and Medicaid Services (CMS), and Veterans Administration facilities. HMS helps ensure that healthcare claims are paid correctly and by the responsible party. As a result of the company's services, government healthcare programs recover over $1 billion annually, and avoid billions of dollars more in erroneous payments.
This press release includes presentations of earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Adjusted EBITDA represents EBITDA adjusted for share-based compensation expense. EBITDA is a measure commonly used by the capital markets to value enterprises. Interest, taxes, depreciation and amortization can vary significantly between companies due in part to differences in accounting policies, tax strategies, levels of indebtedness and interest rates. Excluding these items provides insight into the underlying results of operations and facilitates comparisons between HMSY and other companies. EBITDA is also a useful measure of the Company's ability to service debt and is one of the measures used for determining debt covenant compliance. In addition, because of the varying methodologies for determining share-based compensation expense, and the subjective assumptions involved in those determinations, we believe excluding share-based compensation expense from EBITDA enhances the ability of management and investors to compare our core operating results over multiple periods with those of other companies. Management believes EBITDA and adjusted EBITDA information is useful to investors for these reasons. Both EBITDA and adjusted EBITDA are non-GAAP financial measures and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure is net income and has provided a reconciliation of EBITDA and adjusted EBITDA to net income in this press release.
Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of HMSY, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to: (i) the information being of a preliminary nature and therefore subject to further adjustment; (ii) the uncertainties of litigation; (iii) HMSY's dependence on significant customers; (iv) changing conditions in the healthcare industry which could simplify the reimbursement process and adversely affect HMSY's business; (v) government regulatory and political pressures which could reduce the rate of growth of healthcare expenditures and/or discourage the assertion of claims for reimbursement against and delay the ultimate receipt of payment from third party payors; (vi) competitive actions by other companies, including the development by competitors of new or superior services or products or the entry into the market of new competitors; (vii) all the risks inherent in the development, introduction, and implementation of new products and services; and (viii) other risk factors described from time to time in HMSY's filings with the SEC, including HMSY's Form 10-K for the year ended December 31, 2008. HMSY assumes no responsibility to update the forward-looking statements contained in this release as a result of new information, future events or otherwise. When/if used in this release, the words "focus", "believe", "confident", "anticipate", "expected", "strong", "potential", and similar expressions are intended to identify forward-looking statements, and the above described risks inherent therein.
HMS HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine-Months Ended September 30, 2009 and 2008
(In thousands, except per share amounts)
(unaudited)
Three months ended Sept 30, Nine months ended Sept 30,
2009 2008 2009 2008
Revenue $ 59,164 $ 48,965 $ 162,920 $ 132,091
Cost of services:
Compensation 19,191 15,862 54,537 43,960
Data processing 3,476 2,793 10,113 8,022
Occupancy 2,540 2,519 7,769 7,286
Direct project costs 7,446 7,310 21,170 19,749
Other operating costs 3,617 2,711 9,829 7,970
Amortization of
acquisition related 1,211 1,205 3,643 3,530
software and
intangibles
Total cost of 37,481 32,400 107,061 90,517
services
Selling, general & 7,322 5,794 20,196 16,272
administrative expenses
Total operating 44,803 38,194 127,257 106,789
expenses
Operating income 14,361 10,771 35,663 25,302
Interest expense (254 ) (371 ) (820 ) (1,137 )
Interest income 46 191 199 520
Income before income 14,153 10,591 35,042 24,685
taxes
Income taxes 5,774 4,448 14,319 10,368
Net income $ 8,379 $ 6,143 $ 20,723 $ 14,317
Basic income per share
data:
Net income per basic $ 0.32 $ 0.24 $ 0.80 $ 0.57
share
Weighted average
common shares 26,228 25,083 25,953 24,965
outstanding, basic
Diluted income per
share data:
Net income per $ 0.30 $ 0.23 $ 0.75 $ 0.53
diluted share
Weighted average 27,697 26,794 27,476 26,778
common shares, diluted
HMS HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(unaudited)
September 30, December 31,
2009 2008
Assets
Current assets:
Cash and cash equivalents $ 69,532 $ 49,216
Accounts receivable, net of allowance of $627 at 57,794 45,155
September 30, 2009 and $664 at December 31, 2008
Prepaid expenses and other current assets,
including net deferred tax assets of $831 at 7,384 5,541
September 30, 2009 and $ 1,697 at December 31,
2008, respectively
Total current assets 134,710 99,912
Property and equipment, net 17,910 17,757
Goodwill, net 82,342 82,342
Deferred income taxes, net 1,256 2,040
Intangible assets, net 20,336 19,823
Other assets 983 639
Total assets $ 257,537 $ 222,513
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable, accrued expenses and other $ 23,473 $ 22,859
liabilities
Current portion of long-term debt 6,300 6,300
Total current liabilities 29,773 29,159
Long-term liabilities:
Long-term debt 6,300 11,025
Other liabilities 4,371 3,967
Total long-term liabilities 10,671 14,992
Total liabilities 40,444 44,151
Shareholders' equity:
Preferred stock - $.01 par value; 5,000,000 shares - -
authorized; none issued
Common stock - $.01 par value; 45,000,000 shares
authorized; 27,986,107 shares issued and
26,323,261 shares outstanding at September 30, 280 272
2009; 27,174,875 shares issued and 25,512,029
shares outstanding at December 31, 2008
Capital in excess of par value 163,925 146,145
Retained earnings 62,285 41,562
Treasury stock, at cost; 1,662,846 shares at (9,397 ) (9,397 )
September 30, 2009 and December 31, 2008
Accumulated other comprehensive loss - (220 )
Total shareholders' equity 217,093 178,362
Total liabilities and shareholders' equity $ 257,537 $ 222,513
HMS HOLDINGS CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2009 and 2008
(in thousands)
(unaudited)
Nine months ended Sept 30,
2009 2008
Operating activities:
Net income $ 20,723 $ 14,317
Adjustments to reconcile net income to net cash
provided by operating activities:
Loss on disposal of fixed assets 6 53
Depreciation and amortization 10,014 8,834
Share-based compensation expense 4,482 2,351
Decrease/(increase) in deferred tax asset 1,649 (640 )
Changes in assets and liabilities:
Increase in accounts receivable (10,195 ) (7,380 )
Increase in prepaid expenses and other current (2,653 ) (888 )
assets
Increase in other assets (6 ) (18 )
Increase/ (decrease) in accounts payable, 669 (4,293 )
accrued expenses and other liabilities
Net cash provided by operating activities 24,689 12,336
Investing activities:
Purchases of property and equipment (6,544 ) (4,908 )
Acquisition of IntegriGuard LLC (5,217 ) -
Acquisition of PrudentRx, Inc. - (4,030 )
Investment in software (1,193 ) (735 )
Net cash used in investing activities (12,954 ) (9,673 )
Financing activities:
Proceeds from exercise of stock options 5,733 1,647
Repayment of long-term debt (4,725 ) (4,725 )
Excess tax benefit from exercised stock options 7,573 10,738
Net cash provided by financing activities 8,581 7,660
Net increase in cash and cash equivalents 20,316 10,323
Cash and cash equivalents at beginning of period 49,216 21,275
Cash and cash equivalents at end of period $ 69,532 $ 31,598
Supplemental disclosure of cash flow information:
Cash paid for income taxes $ 7,165 $ 1,813
Cash paid for interest $ 674 $ 979
Supplemental disclosure of noncash investing
activities:
Accrued purchase price relating to the PrudentRx $ - $ 466
acquisition
Accrued property and equipment purchases 774 -
HMS HOLDINGS CORP. AND SUBSIDIARIES
Reconciliation of net income to EBITDA and adjusted EBITDA
(In thousands, except share and per share amounts)
(unaudited)
As summarized in the following table, earnings before interest, taxes, depreciation and amortization, and share-based compensation expense (adjusted EBITDA) was $19.1 million for the third quarter of 2009, an increase of 31.1% over the same period a year ago. For the nine months ended September 30, 2009, adjusted EBITDA was $50.0 million, an increase of 37.8% over the nine months ended September 30, 2008.
Reconciliation of net income to EBITDA Three Months Ended Nine months Ended
and adjusted EBITDA
September 30, September 30,
2009 2008 2009 2008
Net Income $ 8,379 $ 6,143 $ 20,723 $ 14,317
Net interest expense 208 180 621 617
Income taxes 5,774 4,448 14,319 10,368
Depreciation and amortization, net of
deferred financing costs included in 3,211 2,993 9,889 8,662
net interest expense
Earnings before interest, taxes, 17,572 13,764 45,552 33,964
depreciation and amortization (EBITDA)
Share-based compensation expense 1,562 833 4,482 2,351
Adjusted EBITDA $ 19,134 $ 14,597 $ 50,034 $ 36,315
Source: HMS Holdings Corp.
Related Categories
Press ReleasesStocks Mentioned
-0.13Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
