HMS Holdings Corp. (NASDAQ:HMSY) today announced financial
results for the second quarter of 2016. Net income for the quarter
ended June 30, 2016 was $8.6 million or $0.10 per diluted share,
compared to net income of $4.6 million or $0.05 per diluted share
in the first quarter of 2016 and $5.4 million or $0.06 per diluted
share in the prior year second quarter. Adjusted EPS in the quarter
was $0.18 per diluted share compared to adjusted EPS of $0.13 per
diluted share in the prior year second quarter. Total revenue in
the quarter was $123.6 million, compared to $119.8 million in the
first quarter of 2016 and $116.9 million in the prior year second
quarter.
“With commercial health plan revenue up 20% in
the first half of this year, compared to the comparable period in
2015, we are on course to achieve our full-year growth target of
18-20%. The addition this quarter of approximately 15 million new
commercial lives and the sale of incremental products to current
health plan customers covering approximately 3.1 million of their
members resulted in a record quarter for our sales team. Of
particular significance, the new lives are a combination of
commercial at-risk and administrative services only (ASO) lives and
virtually all sales in the quarter were for payment integrity
products," said Bill Lucia, Chairman and CEO. "Up to this point
nearly all of our work for health plan customers has been for their
Medicaid managed care and Medicare Advantage populations, with a
focus primarily on our coordination of benefits product line. As
many of the larger national and regional plans address ongoing cost
challenges, we expect there will be a growing opportunity to sell
our payment integrity cost containment solutions for their
commercial at-risk and ASO populations - which presents a
significant growth opportunity for HMS."
Total revenue in the second quarter of 2016 of
$123.6 million was approximately 5.7% higher than the prior year
second quarter. Commercial health plan revenue in the quarter was
$55.2 million, a 12.0% increase compared to $49.3 million in the
prior year second quarter and a $0.8 million decline from the first
quarter of 2016. State government revenue in the quarter was $57.6
million, compared to $57.2 million in the prior year second
quarter, and an increase of $6.9 million compared to the first
quarter of 2016.
Non-Medicare RAC Federal and other revenue was
$6.7 million in the second quarter of 2016, a $0.2 million increase
compared to the prior year second quarter and an increase of $1.9
million from the first quarter of 2016. Medicare RAC revenue in
quarter was $4.1 million, compared to $3.9 million in the prior
year second quarter and $8.3 million in the first quarter of
2016.
Coordination of Benefits (COB) revenue, which
continues to be our largest product line across both the state
government and commercial health plan sectors, was $89.7 million in
the second quarter of 2016 compared to $83.0 million in the prior
year second quarter and $82.9 million in the first quarter of 2016.
COB revenue accounted for 73% of total revenue in the quarter,
compared to 71% in the prior year second quarter and 69% in the
first quarter of 2016. Payment integrity revenue (excluding
Medicare RAC) was $29.8 million in the quarter, a $0.2 million or
0.7% decline from the second quarter of last year and a $1.2
million or 4.2% increase from the first quarter of 2016.
"Cash flow from operations of $45.1 million was
particularly strong in the second quarter, as cash collections
accelerated and accounts receivable declined. Quarter end cash on
the balance sheet at June 30, 2016 increased to nearly $188 million
and we are on track to reach our full year operating cash flow
target in the $80 -100 million range," said Jeff Sherman, Chief
Financial Officer. "As we have indicated previously, the primary
capital allocation focus for our increasingly strong balance sheet
is acquisitions to complement our core business; expand our data
analytics capabilities to assist customers with member health
management and/or member engagement; and add to our capacity to
detect fraud, waste and abuse."
For additional information about the Company’s
second quarter 2016 financial results, see the Q2 2016 Investor
Presentation which is available on the Company’s website at
http://investor.hms.com/events.cfm.
Webcast and Conference Call
Information
HMS will report its second quarter 2016
financial and operating results via webcast at 7:30 AM CT / 8:30 AM
ET on Friday, August 5, 2016. The webcast may also include
discussion of HMS developments, and forward-looking and other
material information about business and financial matters.
The webcast can be accessed via phone at (877) 303–7208 or
(224) 357–2389 for international participants, or at
http://investor.hms.com/events.cfm on the HMS Investor Relations
website. The webcast will also be archived and available for replay
beginning at approximately 11:00 AM CT / 12:00 PM ET on August 5,
2016 at http://investor.hms.com/events.cfm. This press release and
the financial statements contained herein are also available at
http://investor.hms.com/releases.cfm.
The HMS Quarterly Report on Form 10-Q for the
period ended June 30, 2016 is expected to be filed and available on
the HMS website at http://investor.hms.com/financials.cfm and at
www.sec.gov on August 9, 2016 and will contain additional
information about our results of operations for the fiscal year to
date.
About HMS
HMS Holdings Corp., through its subsidiaries,
provides coordination of benefits and payment integrity services
for payers. The Company serves state Medicaid programs; health
plans, including Medicaid managed care, Medicare Advantage and
group and individual health lines of business; federal government
health agencies, including the Centers for Medicare & Medicaid
Services and the Veterans Health Administration; government and
private employers; and other healthcare payers and sponsors,
including child support agencies. As a result of the Company’s
services, our customers recover billions of dollars annually and
save billions more through the prevention of improper payments.
Non-GAAP Financial Measures
The Company reports and discusses its operating
results using financial measures consistent with accounting
principles generally accepted in the United States ("GAAP"). From
time to time, in press releases, financial presentations, earnings
conference calls or otherwise, the Company may disclose certain
non-GAAP financial measures. The non-GAAP financial measures
presented in this press release should not be viewed as
alternatives or substitutes for the Company's reported GAAP
results. A reconciliation to the most directly comparable GAAP
financial measure is set forth in the tables that accompany this
release.
The Company believes that the non-GAAP financial
measures presented in this press release provide useful information
to the Company's management, investors, and other interested
parties about the Company's operating performance because they
allow them to understand and compare the Company's operating
results during the current periods to the prior year periods in a
more consistent manner. The non-GAAP measures presented in this
press release may not be comparable to similarly titled measures
used by other companies. These non-GAAP financial measures are used
in addition to and in conjunction with results presented in
accordance with GAAP and reflect an additional way of viewing
aspects of the Company's operations that, when viewed with GAAP
results and the accompanying reconciliations to corresponding GAAP
financial measures, provides a more complete understanding of the
results of operations and trends affecting the Company's business.
These non-GAAP financial measures should be considered as a
supplement to, and not as a substitute for, or superior to
financial measures calculated in accordance with GAAP.
Safe Harbor
Statement
This press release contains "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such statements give our projections
or forecasts of future events and are based on our current
expectations and assumptions regarding our business, the economy
and other future conditions; they do not relate strictly to
historical or current facts. Forward‐looking statements can be
identified by words such as “aims,” “anticipates,” “believes,”
“estimates,” “expects,” “forecasts,” “intends,” “likely,” “may,”
“plans,” “projects,” “seeks,” “targets,” “will,” “would,” “could,”
“should,” and similar expressions and references to guidance,
although some forward-looking statements may be expressed
differently. In particular, these include statements relating to
future actions, business plans, objectives and prospects, future
operating or financial performance. Factors or events that could
cause actual results to differ may emerge from time to time and it
is not possible for us to predict all of them. Should known or
unknown risks or uncertainties materialize, or should underlying
assumptions prove inaccurate, actual results could differ
materially from past results and those anticipated, estimated or
projected. We caution you therefore against relying on any of these
forward-looking statements.
Factors that could cause or contribute to such
differences, include, but are not limited to: changes in the
U.S. healthcare environment or healthcare financing system;
negative or reduced growth rate of spending on Medicaid/Medicare;
our ability to retain customers or the loss of one or more major
customers; the unexpected reduction in scope or termination of a
significant contract; customer dissatisfaction or our
non-compliance with contractual provisions or regulatory
requirements; our failure to meet performance standards triggering
significant costs or liabilities under our contracts; emergence of
new competitors or competitors’ introduction of new or superior
products or services; intellectual property rights, confidential
and proprietary information; the cancellation or delay of
procurements or contract implementation due to protests or
challenges to government awards; regulatory, budgetary or political
actions that affect procurement practices; our ability to continue
to secure contracts or favorable contract terms through the
competitive bidding process; our ability to execute our business
plans or growth strategy; variations in our results of operations;
development and implementation of new product solutions or new
process improvements; the risk that guidance may not be achieved;
our ability to maintain effective information and technology
systems and networks, and to protect them from damage, interruption
or breach, including cyber-security breaches and other disruptions;
our failure to comply with applicable laws and regulations
governing the conduct of certain electronic health transactions and
the confidentiality of individually identifiable health information
or to protect such information from theft and misuse; the nature of
investment and acquisition opportunities we are pursuing, and the
successful execution or integration of such investments and
acquisitions; the failure to realize the full value of goodwill or
intangible assets from acquisitions; negative results of government
or customer reviews, audits or investigations; state or federal
limitations related to the outsourcing of certain government
programs or functions; our reliance on subcontractors, vendors or
other third party providers and sources to perform services;
pending or threatened litigation; unfavorable outcomes in legal
proceedings; restrictions on bidding or performing certain work due
to perceived conflicts of interests; our ability to attract and
retain qualified employees and key personnel and to manage
leadership transitions effectively; our cash flows from operations,
available cash and ability to generate sufficient cash to cover our
interest and principal payments under our credit facility or to
borrow or use credit; unanticipated changes in our effective tax
rates; unanticipated increases in the number or amount of claims
for which we are self-insured; the market price of our common stock
and lack of dividend payments; risks related to internal control
over financial reporting; anti-takeover provisions in our corporate
governance documents; and other factors, risks and uncertainties
described in our most recent Annual Report on Form 10-K and
subsequent filings with the Securities and Exchange Commission. Any
forward-looking statements are made as of the date of this press
release. Except as may be required by law, we disclaim any
obligation to publicly update forward-looking statements, whether
as a result of new information, future events or otherwise.
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF
INCOME |
(in thousands, except per share
amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended
June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Revenue |
|
|
|
$ |
123,550 |
|
|
$ |
116,934 |
|
|
$ |
243,313 |
|
|
$ |
227,258 |
|
|
|
Cost of
services: |
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
|
47,343 |
|
|
|
43,883 |
|
|
|
93,744 |
|
|
|
87,950 |
|
|
|
Data processing |
|
|
|
9,104 |
|
|
|
10,438 |
|
|
|
18,728 |
|
|
|
20,483 |
|
|
|
Occupancy |
|
|
|
3,631 |
|
|
|
3,806 |
|
|
|
7,258 |
|
|
|
7,813 |
|
|
|
Direct project
expenses |
|
|
11,473 |
|
|
|
13,572 |
|
|
|
25,955 |
|
|
|
24,050 |
|
|
|
Other operating
expenses |
|
|
6,407 |
|
|
|
7,153 |
|
|
|
12,184 |
|
|
|
13,891 |
|
|
|
Amortization of
acquisition related software and intangible assets |
|
7,013 |
|
|
|
7,047 |
|
|
|
14,026 |
|
|
|
14,094 |
|
|
|
Total cost of
services |
|
|
84,971 |
|
|
|
85,899 |
|
|
|
171,895 |
|
|
|
168,281 |
|
|
|
Selling, general and administrative expenses |
|
22,227 |
|
|
|
19,283 |
|
|
|
45,157 |
|
|
|
39,244 |
|
|
|
Total operating
expenses |
|
|
107,198 |
|
|
|
105,182 |
|
|
|
217,052 |
|
|
|
207,525 |
|
|
|
Operating
income |
|
|
16,352 |
|
|
|
11,752 |
|
|
|
26,261 |
|
|
|
19,733 |
|
|
|
Interest
expense |
|
|
|
(2,100 |
) |
|
|
(1,940 |
) |
|
|
(4,191 |
) |
|
|
(3,894 |
) |
|
|
Interest income |
|
|
|
60 |
|
|
|
12 |
|
|
|
107 |
|
|
|
23 |
|
|
|
Income before
income taxes |
|
14,312 |
|
|
|
9,824 |
|
|
|
22,177 |
|
|
|
15,862 |
|
|
|
Income taxes |
|
|
|
5,746 |
|
|
|
4,406 |
|
|
|
9,051 |
|
|
|
6,922 |
|
|
|
Net income |
|
|
$ |
8,566 |
|
|
$ |
5,418 |
|
|
$ |
13,126 |
|
|
$ |
8,940 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
|
|
|
|
Net income per
common share -- basic |
$ |
0.10 |
|
|
$ |
0.06 |
|
|
$ |
0.16 |
|
|
$ |
0.10 |
|
|
|
Diluted income per common share: |
|
|
|
|
|
|
|
|
|
Net income per
common share -- diluted |
$ |
0.10 |
|
|
$ |
0.06 |
|
|
$ |
0.15 |
|
|
$ |
0.10 |
|
|
|
Weighted average shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
84,073 |
|
|
|
88,523 |
|
|
|
84,104 |
|
|
|
88,385 |
|
|
|
Diluted |
|
|
|
|
84,528 |
|
|
|
88,908 |
|
|
|
84,923 |
|
|
|
88,771 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain reclassifications were made to prior period
amounts to conform to current period presentations. |
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016 |
|
December 31, 2015 |
|
|
Assets |
|
|
|
|
|
(unaudited) |
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
|
|
$ |
187,884 |
|
|
$ |
145,610 |
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of $3,649 and $4,849, and
estimated allowance for appeals of $6,483 and $6,614, at June 30,
2016 and December 31, 2015, respectively |
|
152,339 |
|
|
|
169,146 |
|
|
|
Prepaid expenses |
|
|
|
|
11,389 |
|
|
|
11,261 |
|
|
|
Deferred tax assets |
|
|
|
|
|
|
5,285 |
|
|
|
7,460 |
|
|
|
Other current
assets |
|
|
|
|
399 |
|
|
|
3,051 |
|
|
|
Total current
assets |
|
|
|
|
357,296 |
|
|
|
336,528 |
|
|
|
Property
and equipment, net |
|
|
|
|
87,907 |
|
|
|
96,551 |
|
|
|
Goodwill |
|
|
|
|
|
|
361,468 |
|
|
|
361,468 |
|
|
|
Intangible
assets, net |
|
|
|
|
44,222 |
|
|
|
54,308 |
|
|
|
Deferred
financing costs, net |
|
|
|
|
3,831 |
|
|
|
4,873 |
|
|
|
Other assets |
|
|
|
|
|
4,649 |
|
|
|
4,329 |
|
|
|
Total
assets |
|
|
|
|
$ |
859,373 |
|
|
$ |
858,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other liabilities |
$ |
40,450 |
|
|
$ |
51,661 |
|
|
|
Estimated liability for
appeals |
|
|
|
30,586 |
|
|
|
33,078 |
|
|
|
Income taxes
payable |
|
|
|
|
700 |
|
|
|
3,873 |
|
|
|
Total current
liabilities |
|
|
|
|
71,736 |
|
|
|
88,612 |
|
|
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
|
Revolving credit
facility |
|
|
|
|
197,796 |
|
|
|
197,796 |
|
|
|
Deferred tax
liabilities |
|
|
|
|
33,899 |
|
|
|
38,421 |
|
|
|
Deferred rent |
|
|
|
|
|
5,798 |
|
|
|
6,006 |
|
|
|
Other
liabilities |
|
|
|
|
|
3,017 |
|
|
|
2,520 |
|
|
|
Total long-term
liabilities |
|
|
|
|
240,510 |
|
|
|
244,743 |
|
|
|
Total
liabilities |
|
|
|
|
|
312,246 |
|
|
|
333,355 |
|
|
|
Commitments
and contingencies (Note 11) |
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred
stock -- $0.01 par value; 5,000,000 shares authorized; none
issued |
|
- |
|
|
|
- |
|
|
|
Common stock -- $0.01 par value; 175,000,000 shares authorized;
95,711,773 shares issued and 84,438,027 shares outstanding at June
30, 2016; 95,263,461 shares issued and 83,989,715 shares
outstanding at December 31, 2015 |
|
957 |
|
|
|
952 |
|
|
|
Capital in
excess of par value |
|
|
|
|
339,584 |
|
|
|
330,290 |
|
|
|
Retained
earnings |
|
|
|
|
|
301,600 |
|
|
|
288,474 |
|
|
|
Treasury stock, at cost: 11,273,746 shares at
June 30, 2016 and December 31, 2015 |
|
(95,014 |
) |
|
|
(95,014 |
) |
|
|
Total
shareholders' equity |
|
|
|
|
547,127 |
|
|
|
524,702 |
|
|
|
Total liabilities and shareholders'
equity |
|
$ |
859,373 |
|
|
$ |
858,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain reclassifications were made to prior period
amounts to conform to current period presentation. |
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
$ |
13,126 |
|
|
$ |
8,940 |
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
Depreciation and
amortization of property and equipment |
|
12,784 |
|
|
|
16,002 |
|
|
|
Amortization of
intangible assets |
|
|
|
10,086 |
|
|
|
10,154 |
|
|
|
Amortization of
deferred financing costs |
|
|
1,042 |
|
|
|
1,042 |
|
|
|
Stock-based
compensation expense |
|
|
8,645 |
|
|
|
7,068 |
|
|
|
Excess tax benefit from
exercised stock options |
|
(1,313 |
) |
|
|
(1,456 |
) |
|
|
Deferred income
taxes |
|
|
|
|
(3,135 |
) |
|
|
(3,483 |
) |
|
|
Loss on disposal of
fixed assets |
|
|
|
44 |
|
|
|
10 |
|
|
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
Accounts
receivable |
|
|
|
|
16,807 |
|
|
|
(10,161 |
) |
|
|
Prepaid expenses |
|
|
|
|
(128 |
) |
|
|
628 |
|
|
|
Prepaid income
taxes |
|
|
|
|
- |
|
|
|
6,265 |
|
|
|
Other current
assets |
|
|
|
|
2,652 |
|
|
|
5 |
|
|
|
Other assets |
|
|
|
|
|
(320 |
) |
|
|
(660 |
) |
|
|
Income taxes
payable |
|
|
|
|
(1,860 |
) |
|
|
- |
|
|
|
Accounts payable, accrued expenses
and other liabilities |
|
|
|
|
|
|
(10,190 |
) |
|
|
(11,479 |
) |
|
|
Estimated
liability for appeals |
|
|
|
(2,492 |
) |
|
|
(2,785 |
) |
|
|
Net cash
provided by operating activities |
|
|
45,748 |
|
|
|
20,090 |
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Purchases of land,
property and equipment |
|
|
(2,122 |
) |
|
|
(5,022 |
) |
|
|
Investment in
capitalized software |
|
|
|
(2,752 |
) |
|
|
(1,340 |
) |
|
|
Net cash
used in investing activities |
|
|
(4,874 |
) |
|
|
(6,362 |
) |
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from exercise
of stock options |
|
|
1,196 |
|
|
|
3,412 |
|
|
|
Excess tax benefit from
exercised stock options |
|
|
1,313 |
|
|
|
1,456 |
|
|
|
Payments of tax
withholdings on behalf of employees for net-share settlement for
stock-based compensation |
|
(1,067 |
) |
|
|
(628 |
) |
|
|
Payments on
capital lease obligations |
|
|
|
(42 |
) |
|
|
(655 |
) |
|
|
Net cash
provided by financing activities |
|
|
1,400 |
|
|
|
3,585 |
|
|
|
Net increase in cash and cash
equivalents |
|
|
42,274 |
|
|
|
17,313 |
|
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of year |
|
|
145,610 |
|
|
|
133,116 |
|
|
|
Cash and cash equivalents at end of
year |
|
$ |
187,884 |
|
|
$ |
150,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
Cash paid for
income taxes |
|
|
|
$ |
13,450 |
|
|
$ |
8,226 |
|
|
|
Cash paid for
interest |
|
|
|
$ |
3,016 |
|
|
$ |
3,868 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
activities: |
|
|
|
|
|
|
Change in balance
of accrued property and equipment purchases |
$ |
(690 |
) |
|
$ |
154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Certain reclassifications were made to prior period
amounts to conform to current period presentation. |
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands, except per share
amounts)(unaudited)
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA
As
summarized in the following tables, earnings before interest,
taxes, depreciation and amortization, stock-based compensation, and
non-recurring legal expense (adjusted EBITDA) was $32.3 million for
the second quarter of 2016. |
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Net Income |
|
$ |
8,566 |
|
|
$ |
5,418 |
|
|
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
2,040 |
|
|
|
1,928 |
|
|
|
Income taxes |
|
|
5,746 |
|
|
|
4,406 |
|
|
|
Depreciation and amortization, net of deferred financing costs,
included in net interest expense |
|
|
11,250 |
|
|
|
12,916 |
|
|
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA) |
|
|
27,602 |
|
|
|
24,668 |
|
|
|
Stock based
compensation expense |
|
|
4,405 |
|
|
|
3,823 |
|
|
|
Non-recurring legal
fees (1) |
|
|
315 |
|
|
|
- |
|
|
|
Adjusted EBITDA |
|
$ |
32,322 |
|
|
$ |
28,491 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA was $59.3 million for the first half of 2016. |
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Net Income |
|
$ |
13,126 |
|
|
$ |
8,940 |
|
|
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
4,084 |
|
|
|
3,871 |
|
|
|
Income taxes |
|
|
9,051 |
|
|
|
6,922 |
|
|
|
Depreciation and amortization, net of deferred financing costs,
included in net interest expense |
|
|
22,870 |
|
|
|
26,156 |
|
|
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA) |
|
|
49,131 |
|
|
|
45,889 |
|
|
|
Stock based
compensation expense |
|
|
8,645 |
|
|
|
7,068 |
|
|
|
Non-recurring legal
fees (1) |
|
|
1,563 |
|
|
|
- |
|
|
|
Adjusted EBITDA |
|
$ |
59,339 |
|
|
$ |
52,957 |
|
|
|
|
|
|
|
|
|
1 In periods prior to 2016, legal fees were included
in operations. For the three months ended June 30, 2015 related
legal fees were $0.5 million. For the six months ended June 30,
2015 related legal fees were $3.2 million. |
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands, except per share
amounts)(unaudited)
Reconciliation of Net Income to GAAP EPS and Adjusted
EPS
As
summarized in the following tables, earnings per share adjusted for
stock-based compensation expense, non-recurring legal expense,
amortization of acquisition related software and intangible assets
and for the related taxes (adjusted EPS) was $0.18 for the second
quarter of 2016, an increase of 38.5% from $0.13 for the second
quarter of 2015. |
|
|
|
|
|
|
|
|
Three months ended
June 30, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
8,566 |
|
|
$ |
5,418 |
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
4,405 |
|
|
|
3,823 |
|
|
|
Non-recurring legal
fees (2) |
|
|
315 |
|
|
|
- |
|
|
|
Amortization of
acquisition related software and intangible assets |
|
|
7,013 |
|
|
|
7,047 |
|
|
|
Income tax related to
adjustments |
|
|
(4,704 |
) |
|
|
(4,875 |
) |
|
|
Sub-total |
|
$ |
15,595 |
|
|
$ |
11,413 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
84,528 |
|
|
|
88,908 |
|
|
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.10 |
|
|
$ |
0.06 |
|
|
|
Diluted adjusted EPS |
|
$ |
0.18 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
Adjusted
EPS was $0.32 for the first half of 2016, an increase of 33.3%
compared to the first half of 2015. |
|
|
|
|
|
|
|
|
Six months ended
June 30, |
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Net Income |
$ |
13,126 |
|
|
$ |
8,940 |
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
8,645 |
|
|
|
7,068 |
|
|
|
Non-recurring legal
fees (2) |
|
1,563 |
|
|
|
- |
|
|
|
Amortization of
acquisition related software and intangible assets |
|
14,026 |
|
|
|
14,094 |
|
|
|
Income tax related to
adjustments |
|
(9,887 |
) |
|
|
(9,234 |
) |
|
|
Sub-total |
$ |
27,473 |
|
|
$ |
20,868 |
|
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
84,923 |
|
|
|
88,771 |
|
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
0.15 |
|
|
$ |
0.10 |
|
|
|
Diluted adjusted EPS |
|
0.32 |
|
|
$ |
0.24 |
|
|
|
|
|
|
|
|
2 For the three months ended June 30, 2015, related
legal fees were approximately $0.5 million and income taxes on
related legal fees were approximately $0.2 million or $0.01 per
diluted Adjusted EPS. For the six months ended June 30, 2015,
related legal fees were approximately $3.2 million and income taxes
on related legal fees were approximately $1.3 million or $0.02 per
diluted Adjusted EPS. |
|
|
|
|
|
|
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Francesca Marraro
VP, Marketing and Communications
fmarraro@hms.com
212-857-5442
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