Actionable news
0
All posts from Actionable news
Actionable news in MDAS: MedAssets, Inc.,

Medassets Reports Third Quarter And Nine-Month 2015 Financial Results EXHIBIT 99.1

The following excerpt is from the company's SEC filing.

MedAssets Reports Third Quarter and Nine-Month 2015 Financial Results

MedAssets, Inc.

(NASDAQ:MDAS) today announced results for its third quarter and nine-month period ended September 30, 2015, which are summarized below.

Three-Month Period

(In millions, except per share)

3Q'15

3Q'14

% Change

Net Revenue:

Spend and Clinical Resource Mgmt. (SCM)

$117.2

$105.8

10.8%

Revenue Cycle Management (RCM)

72.7

69.9

4.0

Total Net Revenue

190.0

175.7

8.1

Net (loss) income

(2.2)

7.7

nm

Earnings (loss) per share (EPS) - diluted

(0.04)

0.13

Non-GAAP adjusted EBITDA

58.8

59.5

(1.2)%

Non-GAAP adjusted EPS - diluted

$0.32

$0.34

(5.9)

Weighted average shares - diluted

60.9

60.7

0.4%

(a) Given the company's net loss in 3Q'15, loss per share was calculated by using basic weighted average shares of 59.4 million.

Total net revenue for the third quarter of 2015 increased 8.1% to $190.0 million from $175.7 million for the third quarter of 2014. Excluding the revenue contribution from Sg2 (acquired on September 22, 2014), total net revenue growth was 2.3% on a year-over-year basis. Net revenue in the SCM segment increased 10.8% to $117.2 million from $105.8 million for the third quarter of 2014 due to the contribution from Sg2 and growth in group purchasing net administrative fees. Excluding Sg2, third quarter SCM net revenue increased 1.1% on a year-over-year basis. Net revenue in the RCM segment increased 4.0% to $72.7 million from $69.9 million for the third quarter of 2014 as technology-related revenue (66.1% of RCM segment revenue) increased 1.8% while services-related revenue grew 8.7%.

Non-GAAP Adjusted EBITDA

Total non-GAAP adjusted EBITDA was $58.8 million, or 30.9% of total net revenue, for the third quarter of 2015, a 1.2% decrease from total non-GAAP adjusted EBITDA of $59.5 million, or 33.8% of total net revenue, for the third quarter of 2014.

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

Net loss for the third quarter of 2015 was $(2.2) million, or a loss of $(0.04) per share, compared with net income of $7.7 million, or $0.13 per share, for the third quarter of 2014. The net loss in the third quarter of 2015 was due to $5.0 million of restructuring charges related to the company's expense reduction program announced in late September 2015 and $10.3 million of non-cash capitalized software impairments related to certain Revenue Cycle Management products, which is described in more detail below.

Non-GAAP adjusted EPS (defined as EPS excluding non-cash acquisition-related intangible amortization and depreciation, non-cash share-based compensation, non-cash asset impairment, certain restructuring, acquisition and integration-related expenses and non-recurring items on a tax-adjusted basis) was $0.32 per share for the third quarter of 2015, compared with non-GAAP adjusted EPS of $0.34 per share for the third quarter of 2014.

"Since February, our executive leadership team has been developing and implementing a business transformation and value creation plan. We have been making substantial progress, with our third quarter 2015 financial results coming in near or above the high end of our previous guidance for the quarter on all measures. This performance is a testament to our employees' commitment, dedication and hard work to executing our plan," said R. Halsey Wise, chairman and chief executive officer, MedAssets.

Nine-Month Period

9 mos. '15

9 mos. '14

$356.6

$320.3

11.3%

209.4

201.7

3.8

566.0

522.0

8.4

Net income

7.4

22.0

(66.2)

Earnings per share (EPS) - diluted

0.12

0.36

(66.7)

175.3

170.5

2.8

$0.94

$0.96

(2.1)

60.8

61.3

(0.7)%

Total net revenue for the nine months ended September 30, 2015 increased 8.4% to $566.0 million from $522.0 million for the first nine months of 2014. Excluding the contribution from Sg2, full-year total net revenue growth was 2.1% when compared with the first nine months of 2014. Net revenue in the SCM segment grew 11.3% to $356.6 million from $320.3 million for the first nine months of 2014. Excluding the contribution from Sg2, year-to-date SCM net revenue growth was 1.1%. Net revenue in the RCM segment increased 3.8% to $209.4 million from $201.7 million for the first nine months of 2014 as technology-related revenue (67.6% of RCM segment revenue) increased 1.9% while services-related revenue increased 8.1%.

For the first nine months of 2015, total non-GAAP adjusted EBITDA was $175.3 million, or 31.0% of total net revenue, a 2.8% increase from total non-GAAP adjusted EBITDA of $170.5 million, or 32.7% of total net revenue, for the same period in 2014.

Net Income and Non-GAAP Adjusted EPS

Net income for the first nine months of 2015 was $7.4 million, or $0.12 per share, compared with net income of $22.0 million, or $0.36 per share, for the first nine months of 2014. The year-over-year decrease was due to restructuring charges related to an expense reduction program and non-cash capitalized software impairments described in more detail below. Non-GAAP adjusted EPS was $0.94 per share for the first nine months of 2015, compared with $0.96 per share for the first nine months of 2014.

Cash Flow and Capital Resources

Cash provided by operating activities in the first nine months of 2015 was $143.6 million, up 49.5% from $96.1 million for the first nine months of 2014. 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 92.7% to $107.3 million from $55.7 million for the first nine months of 2014 due to improvements in working capital during 2015.

During the quarter, the company repurchased a total of 792,148 shares of common stock for $16.4 million or an average price of $20.72 per share. Year-to-date, the company repurchased 1,207,384 shares of common stock for $25.0 million or an average price of $20.71 per share. The company also reduced its bank debt by $43.2 million in the quarter, and its balance sheet at September 30, 2015 included $789.1 million in total bank and bond debt, net of cash and cash equivalents. Total net debt equates to a leverage ratio of approximately 3.3 times non-GAAP adjusted EBITDA for the trailing twelve-month period.

Non-GAAP Contracted Revenue

Non-GAAP contracted revenue is the company's estimate of contractually committed revenue to be generated under existing customer contracts in the forward 12-month period. At September 30, 2015, the company's non-GAAP contracted revenue estimate was $679.6 million (SCM segment - $419.0 million; RCM segment - $260.6 million), a year-over-year increase of 2.8%.

Expense Reduction Program and Impairment Charge

As previously disclosed, the company implemented an expense reduction program on September 28, 2015, to align its cost structure with expected future net revenue, while maintaining the highest level of customer service, support and satisfaction. The cost reduction program includes a reduction of approximately 5% of the company's workforce by year-end 2015, the elimination of certain open full-time positions, and the reduction of other non-employee expenses including professional services and vendor fees in human resource, information technology, legal, and marketing service areas. The company incurred pre-tax restructuring charges of $5.0 million in the third quarter ended September 30, 2015 primarily related to one-time termination benefits. The company also announced it will eliminate certain Revenue Cycle Management products that resulted in an aggregate asset impairment charge of $10.3 million in the third quarter of 2015.

Financial Guidance and...


More