MedAssets Reports Third Quarter and Nine-Month 2013 Financial Results

MedAssets Reports Third Quarter and Nine-Month 2013 Financial Results

MedAssetsRobert Borchert, 678-248-8194

(NASDAQ: MDAS) today announced results for its third quarter and nine-month periods ended September 30, 2013. Third quarter results are summarized in the table below:

(a) Column amounts may not add to total due to rounding.

Total net revenue for the third quarter of 2013 increased 1.8% to $166.4 million from $163.4 million for the third quarter of 2012. Net revenue in the SCM segment increased 4.2% to $103.2 million from net revenue of $99.1 million for the third quarter of 2012, due to growth in consulting and other service fees as well as group purchasing net administrative fees, partially offset by an expected year-over-year decrease in performance-related fees. Net revenue in the RCM segment decreased 1.8% to $63.1 million from $64.3 million for the third quarter of 2012 as technology-related revenue increased 5.3% while services-related revenue declined 15.8%.

Total net revenue for the first nine months of 2013 increased 7.1% to $510.0 million from $476.3 million for the first nine months of 2012. Net revenue in the SCM segment grew 8.0% to $318.0 million from net revenue of $294.5 million for the first nine months of 2012. Net revenue in the RCM segment increased 5.5% to $191.9 million from $181.8 million for the first nine months of 2012 as technology-related revenue grew 6.6% and services-related revenue increased 3.1%.

Total non-GAAP adjusted EBITDA was $53.9 million, or 32.4% of total net revenue, for the third quarter of 2013, a 5.4% decrease from total non-GAAP adjusted EBITDA of $57.0 million, or 34.9% of total net revenue, for the third quarter of 2012. This decline was due to an expected year-over-year decrease in performance-related fees, a higher proportion of revenue from SCM consulting and other service fees, as well as higher one-time or non-recurring revenue in the RCM segment in the third quarter last year.

For the first nine months of 2013, total non-GAAP adjusted EBITDA was $168.1 million, or 33.0% of total net revenue, a 10.3% increase over total non-GAAP adjusted EBITDA of $152.4 million, or 32.0% of total net revenue, for the first nine months of 2012.

Net income for the third quarter of 2013 was $6.9 million, or $0.11 per share, a 26.3% increase when compared with net income of $5.5 million, or $0.09 per share, for the third 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 $0.31 per share for the third quarter of 2013, a 3.1% decrease when compared with non-GAAP adjusted EPS of $0.32 per share for the third quarter of 2012.

Net income for the first nine months of 2013 was $19.7 million, or $0.32 per share, versus net income of $7.5 million, or $0.13 per share, for the first nine months of 2012. Non-GAAP adjusted EPS was $1.02 per share for the first nine months of 2013, a 21.4% increase over non-GAAP adjusted EPS of $0.84 per share for the first nine months of 2012.

Cash provided by operating activities in the first nine months of 2013 was $109.8 million versus $107.7 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) decreased 2.3% to $63.4 million versus $64.9 million for the first nine months of 2012. The Company prepaid an additional $25.0 million of its Term Loan B in the third quarter of 2013 along with its scheduled principal payments. Its balance sheet at September 30, 2013 included $793.4 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.

At September 30, 2013, MedAssets rolling 12-month non-GAAP contracted revenue estimate was $625.1 million (SCM segment - $391.0 million; RCM segment - $234.1 million), a year-over-year increase of 3.6%. 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.

MedAssets updated its full-year 2013 financial guidance ranges, as follows:

MedAssets (NASDAQ: MDAS) is a healthcare performance improvement company focused on helping providers realize financial and operational gains so that they can sustainably serve the needs of their community. More than 4,200 hospitals and 122,000 non-acute healthcare providers currently use the company’s evidence-based solutions, best practice processes and analytics to help reduce the total cost of care, enhance operational efficiency, align clinical delivery, and improve revenue performance across the care continuum. For more information, please visit .

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