HMS Holdings Corp. (Nasdaq: HMSY) today announced financial results
for the second quarter of 2018. Net loss for the quarter ended June
30, 2018 was ($3.4) million or ($0.04) per diluted share, compared
to net income of $6.4 million or $0.07 per diluted share in the
first quarter of 2018 and $6.5 million or $0.08 per diluted share
in the prior year second quarter. The net loss for the quarter
ended June 30, 2018 included an expense of $20.0 million related to
the previously announced settlement on June 27, 2018 of litigation
in connection with the earn-out portion of the purchase price for
an acquisition the Company completed in 2010 (the “Settlement”).
Adjusted EPS in the second quarter of 2018 was
$0.25 per diluted share compared to adjusted EPS of $0.22 per
diluted share in the first quarter of 2018 and adjusted EPS of
$0.16 per diluted share in the prior year second quarter. Adjusted
EPS in the second quarter of 2018 includes an adjustment for the
non-recurring Settlement expense. Adjusted EPS in the first quarter
of 2018 included a net benefit of $0.05 per diluted share related
to the reversal of the Company’s reserve liability for open or
pending Medicare RAC appeals following expiration of the original
Medicare RAC contract on January 31, 2018 (the “Reserve
Release”).
Total revenue in the second quarter of 2018 was
$146.8 million, compared to total revenue of $141.4 million in the
first quarter of 2018 (which included the $8.4 million Reserve
Release) and $133.3 million in the prior year second quarter.
Adjusted EBITDA in the second quarter of 2018 was $40.0 million,
compared to $34.9 million in the first quarter of 2018 and $30.5
million in the prior year second quarter. Adjusted EBITDA in the
second quarter of 2018 includes an adjustment for the non-recurring
Settlement expense. Adjusted EBITDA in the first quarter of 2018
included a net benefit of $6.3 million related to the Reserve
Release.
"Over the past 18 months we have made
investments in technology, undertaken extensive work to revamp new
business implementations, continued to put in place new process
improvement and cost containment initiatives across the enterprise,
and heightened our focus on internal innovation. We have also
expanded the solution set we offer payers, which now includes care
management and consumer engagement services, and focused on
exceptional execution. The success of these internal and external
efforts is reflected in our second quarter financial results,” said
Bill Lucia, Chairman and CEO. “We are extremely pleased with both
our top line and bottom line performance, highlighted by record
quarterly commercial revenue and a strong quarter for Eliza
solutions.”
Commercial revenue increased 12.1% sequentially
to a record $80.5 million in the second quarter of 2018, compared
to $71.8 million in the first quarter of 2018 and $69.4 million in
the prior year second quarter. Commercial revenue in the second
quarter of 2018 included $13.7 million from Eliza, an increase of
41.2% compared to $9.7 million in the first quarter of 2018 and
$7.6 million in the prior year second quarter following the close
of the Eliza acquisition in April 2017. For comparison
purposes, Eliza revenue for the full second quarter of 2017,
including the portion of April 2017 prior to the acquisition, was
approximately $10 million.
State government revenue increased 7.7%
sequentially to $58.8 million in the second quarter of 2018,
compared to $54.6 million in the first quarter of 2018 and $57.9
million in the prior year second quarter. Federal (including
Medicare RAC) and other revenue was $7.5 million in the second
quarter of 2018, compared to $15.0 million in the first quarter of
2018 (which included the $8.4 million Reserve Release) and $6.0
million in the prior year second quarter.
Coordination of benefits (COB) revenue was
$100.8 million in the second quarter of 2018, compared to $91.7
million in the first quarter of 2018 and $98.5 million in the prior
year second quarter. COB accounted for 68.7% of total revenue in
the second quarter, compared to 64.9% in the first quarter of 2018
and 73.9% in the prior year second quarter.
Revenue from Analytical Services, which include
Payment Integrity (PI), care management and consumer engagement
solutions and Medicare RAC, was $46.0 million in the second quarter
of 2018, compared to $49.7 million in the first quarter of 2018
(which included the $8.4 million Reserve Release) and $34.8 million
in the prior year second quarter. PI revenue was $29.5 million in
the second quarter of 2018, compared to $28.7 million in the first
quarter of 2018 and $26.9 million in the prior year second quarter.
Care management and consumer engagement revenue was $14.8 million
in the second quarter of 2018, including Eliza revenue of $13.7
million and Essette revenue of $1.1 million, compared to $11.0
million in the first quarter of 2018 and $8.6 million in the prior
year second quarter. Medicare RAC revenue was $1.7 million in the
second quarter of 2018, compared to $10.0 million in the first
quarter of 2018 (which included the $8.4 million Reserve Release)
and ($0.7) million in the prior year second quarter.
Capital expenditures in the second quarter of
2018 were $6.8 million, compared to $5.8 million in the first
quarter of 2018 and $7.0 million in the prior year second
quarter.
“Based on our strong financial performance
through the first half of the year, we are raising our full year
2018 revenue guidance to a range of $575 - $585 million and our
adjusted EBITDA guidance to a range of $143 - $148 million. Both
take into account the impact of the $8.4 million Reserve Release in
Q1 2018 and the $20 million Settlement in Q2 2018,” said Jeff
Sherman, CFO. “Our second quarter results and revised full year
outlook clearly demonstrate the leveragability inherent in our
business model, as adjusted EBITDA of $75 million year-to-date is
nearly 50% ahead of the first half of 2017.”
Outlook for FY 2018 – As Revised
- Total Company Revenue of $575 – 585 million (was $560 – 570
million)*
- Net Income of $23 – 26 million (was $29 – 33 million)*
- Adjusted EBITDA of $143 – 148 million (was $128 – 133
million)*
- Operating Margin Expansion of 50 – 75 bps, excluding the
Reserve Release and Settlement (was Approximately 50 bps)
- Capital Expenditures of approximately $33 million
(unchanged)
- Net Interest Expense of $11 million (was $12 million)
- An Effective Annual Tax Rate of 28 – 30% (unchanged, but
projected to be at the top of the range)*
- Income Taxes of $10 – 12 million (was $12 – 13 million)
- Depreciation and Amortization of $58 million (was $55
million)
- Stock Based Compensation Expense of $21 million (was $20
million)
*Reflects impact of the $8.4 million Reserve Release in Q1 2018
and the $20 million Settlement in Q2 2018
For additional information about the Company’s second quarter
2018 financial results, see the Q2 2018 Investor Presentation
available on the HMS Investor Relations Website at
http://investor.hms.com/events-and-presentations.
Webcast and Conference Call Information
HMS will report its preliminary second quarter
2018 financial and operating results via webcast at 7:30 AM CT /
8:30 AM ET on August 3, 2018. The webcast may also include
discussion of HMS developments, forward-looking statements 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 on the HMS Investor
Relations website at
http://investor.hms.com/events-and-presentations. The webcast will
also be archived and available for replay beginning at
approximately 11:00 AM CT / 12:00 PM ET on August 3, 2018 at
http://investor.hms.com/events-and-presentations. This press
release and the financial statements contained herein are also
available on the HMS Investor Relations website at
http://investor.hms.com/releases.cfm.
About HMS
HMS is a leading provider of cost containment
solutions in the U.S. healthcare marketplace. Using innovative
technology as well as extensive data services and powerful
analytics, the Company delivers coordination of benefits, payment
integrity, care management, consumer engagement and risk
stratification solutions to help healthcare payers improve
financial performance and clinical outcomes. Together our various
services help customers recover improper payments; prevent future
improper payments; reduce fraud, waste and abuse; better manage the
care their members receive; engage healthcare consumers to improve
clinical outcomes and increase retention; and achieve
regulatory compliance. The Company serves commercial health plans,
state government agencies, federal programs, at-risk providers,
pharmacy benefit managers, employers and other healthcare payers
and sponsors. The Company also serves as a subcontractor for
certain business outsourcing and technology firms.
Trademarks
HMS, Eliza, Essette and the HMS logo are
registered trademarks of HMS Holdings Corp. and/or its
affiliates. Other names may be trademarks of their respective
owners.
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
press 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 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
The financial results in this press release
reflect preliminary results, which are not final until the
Company’s Form 10-Q for the quarter ended June 30, 2018 is filed
with the Securities and Exchange Commission. This press release
contains "forward-looking statements" within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. Such
statements relate to our current expectations, projections and
assumptions about our business, the economy and future events or
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, and future operating or
financial performance, including our updated guidance for full year
2018. Factors or events that could cause actual results to differ
may emerge from time to time and are difficult to predict. Should
known or unknown risks or uncertainties materialize, or should
underlying assumptions prove inaccurate, actual results may differ
materially from past results and those anticipated, estimated or
projected. We caution you not to place undue reliance upon any of
these forward-looking statements.
Factors that could cause or contribute to such
differences, include, but are not limited to: our ability to
execute our business plans or growth strategy; our ability to
innovate, develop or implement new or enhanced solutions or
services; the nature of investment and acquisition opportunities we
are pursuing, and the successful execution of such investments and
acquisitions; our ability to successfully integrate acquired
businesses and realize synergies; variations in our results of
operations; our ability to accurately forecast the revenue under
our contracts and solutions; our ability to protect our systems
from damage, interruption or breach, and to maintain effective
information and technology systems and networks; our ability to
protect our intellectual property rights, proprietary technology,
information processes, and know-how; significant competition
relating to solutions and services; our failure to maintain a high
level of customer retention or the unexpected reduction in scope or
termination of key contracts with major customers; 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; our inability to manage our relationships with
information and data sources and suppliers; our reliance on
subcontractors and other third party providers and parties to
perform services; our ability to continue to secure contracts and
favorable contract terms through the competitive bidding process;
pending or threatened litigation; unfavorable outcomes in legal
proceedings; our success in attracting and retaining qualified
employees and members of our management team; our ability to
generate sufficient cash to cover our interest and principal
payments under our credit facility, or to borrow, obtain financing,
maintain liquidity or use credit; unexpected changes in tax laws,
regulations or guidance and unexpected changes in our effective tax
rates; unanticipated increases in the number or amount of claims
for which we are self-insured; our ability to develop, implement
and maintain effective internal control over financial reporting;
changes in the U.S. healthcare environment or healthcare financing
system, including regulatory, budgetary or political actions that
affect healthcare spending or the practices and operations of
healthcare organizations; our failure to comply with applicable
laws and regulations governing individual privacy and information
security or to protect such information from theft and misuse; our
ability to comply with current and future legal and regulatory
requirements; negative results of government or customer reviews,
audits or investigations; state or federal limitations related to
outsourcing of certain government programs or functions;
restrictions on bidding or performing certain work due to perceived
conflicts of interests; the market price of our common stock and
lack of dividend payments; and 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 in our other filings with the Securities and Exchange
Commission. With respect to our projected effective annual tax rate
for 2018, this reflects our current reasonable estimate of the
income tax effects of the recently enacted tax legislation, however
these are provisional amounts subject to adjustment during the
one-year measurement period. 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.
|
|
|
Investor Contact: |
|
Media Contact: |
|
|
|
Dennis Oakes |
|
Lacey Hautzinger |
SVP, Investor
Relations |
|
Sr. Director, External
Communications |
dennis.oakes@hms.com |
|
lacey.hautzinger@hms.com |
212-857-5786 |
|
469-284-7240 |
|
|
|
|
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, |
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
2018 |
|
|
|
2017 |
|
Revenue |
|
|
|
$ |
146,791 |
|
|
$ |
133,313 |
|
$ |
288,216 |
|
|
$ |
247,046 |
|
Cost of
services: |
|
|
|
|
|
|
|
|
Compensation |
|
|
|
55,188 |
|
|
|
51,853 |
|
|
111,267 |
|
|
|
100,773 |
|
Information technology |
|
|
14,240 |
|
|
|
11,281 |
|
|
26,503 |
|
|
|
21,064 |
|
Occupancy |
|
|
|
4,014 |
|
|
|
4,230 |
|
|
8,397 |
|
|
|
7,777 |
|
Direct project expenses |
|
|
10,908 |
|
|
|
10,101 |
|
|
20,991 |
|
|
|
20,544 |
|
Other operating expenses |
|
|
7,051 |
|
|
|
6,562 |
|
|
13,616 |
|
|
|
13,765 |
|
Amortization of acquisition related software and
intangible assets |
|
9,621 |
|
|
|
7,372 |
|
|
17,753 |
|
|
|
13,658 |
|
Total cost of services |
|
|
101,022 |
|
|
|
91,399 |
|
|
198,527 |
|
|
|
177,581 |
|
Selling,
general and administrative expenses |
|
26,532 |
|
|
|
27,553 |
|
|
58,530 |
|
|
|
51,161 |
|
Settlement
expense |
|
|
|
20,000 |
|
|
|
- |
|
|
20,000 |
|
|
|
- |
|
Total operating expenses |
|
|
147,554 |
|
|
|
118,952 |
|
|
277,057 |
|
|
|
228,742 |
|
Operating (loss)/income |
|
|
(763 |
) |
|
|
14,361 |
|
|
11,159 |
|
|
|
18,304 |
|
Interest
expense |
|
|
|
(3,034 |
) |
|
|
(2,339 |
) |
|
(5,682 |
) |
|
|
(4,625 |
) |
Interest income |
|
|
|
188 |
|
|
|
33 |
|
|
308 |
|
|
|
188 |
|
(Loss)/income before income taxes |
|
(3,609 |
) |
|
|
12,055 |
|
|
5,785 |
|
|
|
13,867 |
|
Income taxes |
|
|
|
(242 |
) |
|
|
5,538 |
|
|
2,761 |
|
|
|
5,908 |
|
Net (loss)/income |
|
|
$ |
(3,367 |
) |
|
$ |
6,517 |
|
$ |
3,024 |
|
|
$ |
7,959 |
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
|
Net (loss)/income per common share -- basic |
$ |
(0.04 |
) |
|
$ |
0.08 |
|
$ |
0.04 |
|
|
$ |
0.10 |
|
Diluted income per common share: |
|
|
|
|
|
|
Net (loss)/income per common share -- diluted |
$ |
(0.04 |
) |
|
$ |
0.08 |
|
$ |
0.04 |
|
|
$ |
0.09 |
|
Weighted average
shares: |
|
|
|
|
|
|
|
Basic |
|
|
|
|
83,231 |
|
|
|
83,921 |
|
|
83,222 |
|
|
|
83,708 |
|
Diluted |
|
|
|
|
83,231 |
|
|
|
85,826 |
|
|
84,837 |
|
|
|
85,534 |
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2018 |
|
December 31, 2017 |
Assets |
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
88,127 |
|
|
$ |
83,313 |
|
Accounts receivable, net of allowance of $14,322 and
$14,799, |
|
|
|
at June 30, 2018 and December 31, 2017, respectively |
|
193,114 |
|
|
|
189,460 |
|
Prepaid expenses |
|
16,526 |
|
|
|
16,589 |
|
Income tax receivable |
|
7,216 |
|
|
|
1,892 |
|
Deferred financing costs, net |
|
564 |
|
|
|
564 |
|
Other current assets |
|
266 |
|
|
|
836 |
|
Total current assets |
|
305,813 |
|
|
|
292,654 |
|
Property
and equipment, net |
|
93,369 |
|
|
|
98,581 |
|
Goodwill |
|
487,617 |
|
|
|
487,617 |
|
Intangible
assets, net |
|
78,708 |
|
|
|
91,482 |
|
Deferred
financing costs, net |
|
1,955 |
|
|
|
2,237 |
|
Other assets |
|
2,618 |
|
|
|
2,589 |
|
Total assets |
$ |
970,080 |
|
|
$ |
975,160 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable, accrued expenses and other liabilities |
$ |
56,687 |
|
|
$ |
61,900 |
|
Estimated liability for appeals |
|
22,252 |
|
|
|
30,787 |
|
Total current liabilities |
|
78,939 |
|
|
|
92,687 |
|
Long-term
liabilities: |
|
|
|
Revolving credit facility |
|
240,000 |
|
|
|
240,000 |
|
Net deferred tax liabilities |
|
18,089 |
|
|
|
21,989 |
|
Deferred rent |
|
4,539 |
|
|
|
4,852 |
|
Other liabilities |
|
9,874 |
|
|
|
9,403 |
|
Total long-term liabilities |
|
272,502 |
|
|
|
276,244 |
|
Total liabilities |
|
351,441 |
|
|
|
368,931 |
|
Commitments
and contingencies |
|
|
|
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; |
|
|
|
97,051,108 shares issued and 83,387,914 shares outstanding at
June 30, 2018; |
|
|
|
96,536,251 shares issued and 83,256,858 shares outstanding at
December 31, 2017 |
|
970 |
|
|
|
965 |
|
Capital in
excess of par value |
|
382,630 |
|
|
|
368,721 |
|
Retained
earnings |
|
370,615 |
|
|
|
366,164 |
|
Treasury
stock, at cost: 13,663,194 shares at June 30, 2018 |
|
|
|
and 13,279,393 shares at December 31, 2017 |
|
(135,576 |
) |
|
|
(129,621 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
618,639 |
|
|
|
606,229 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity |
$ |
970,080 |
|
|
$ |
975,160 |
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
$ |
3,024 |
|
|
$ |
7,959 |
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization of property, equipment and
software |
|
16,758 |
|
|
|
12,927 |
|
|
|
Amortization of intangible assets |
|
|
|
12,774 |
|
|
|
9,740 |
|
|
|
Amortization of deferred financing costs |
|
|
282 |
|
|
|
1,042 |
|
|
|
Stock-based compensation expense |
|
|
|
14,208 |
|
|
|
9,380 |
|
|
|
Deferred income taxes |
|
|
|
|
(3,900 |
) |
|
|
1,265 |
|
|
|
Change in fair value of contingent consideration |
|
|
- |
|
|
|
500 |
|
|
|
Release of estimated liability for appeals |
|
|
(8,436 |
) |
|
|
- |
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
(3,654 |
) |
|
|
(9,039 |
) |
|
|
Prepaid expenses |
|
|
|
|
63 |
|
|
|
149 |
|
|
|
Other current assets |
|
|
|
|
570 |
|
|
|
526 |
|
|
|
Other assets |
|
|
|
|
|
(29 |
) |
|
|
149 |
|
|
|
Income taxes receivable / (payable) |
|
|
|
(5,324 |
) |
|
|
(6,180 |
) |
|
|
Accounts payable, accrued expenses and other liabilities |
|
(2,546 |
) |
|
|
(8,196 |
) |
|
|
Estimated liability for appeals |
|
|
|
(99 |
) |
|
|
518 |
|
|
|
Net cash provided by operating
activities |
|
|
23,691 |
|
|
|
20,740 |
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Acquisition of a business, net of cash acquired |
|
|
- |
|
|
|
(171,174 |
) |
|
|
Purchases of property and equipment |
|
|
|
(2,455 |
) |
|
|
(8,881 |
) |
|
|
Investment in capitalized software |
|
|
|
(10,173 |
) |
|
|
(6,626 |
) |
|
|
Net cash used in investing
activities |
|
|
(12,628 |
) |
|
|
(186,681 |
) |
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
2,390 |
|
|
|
1,986 |
|
|
|
Payments of tax withholdings on behalf of employees for
net-share settlement for stock-based compensation |
|
(2,684 |
) |
|
|
(2,874 |
) |
|
|
Payments on capital lease obligations |
|
|
|
- |
|
|
|
(5 |
) |
|
|
Proceeds from credit facility |
|
|
|
|
- |
|
|
|
42,204 |
|
|
|
Purchases of treasury stock |
|
|
|
|
(5,955 |
) |
|
|
- |
|
|
|
Net cash (used in)/provided by financing
activities |
|
(6,249 |
) |
|
|
41,311 |
|
|
|
Net increase (decrease) in cash and cash
equivalents |
|
4,814 |
|
|
|
(124,630 |
) |
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of year |
|
|
83,313 |
|
|
|
175,999 |
|
|
|
Cash and cash equivalents at end of
period |
|
$ |
88,127 |
|
|
$ |
51,369 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
Cash paid for income taxes |
|
|
|
$ |
11,472 |
|
|
$ |
10,656 |
|
|
|
Cash paid for interest |
|
|
|
$ |
4,916 |
|
|
$ |
3,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
activities: |
|
|
|
|
|
|
Change in balance of accrued property and equipment
purchases |
$ |
1,082 |
|
|
$ |
(1,313 |
) |
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands)
(unaudited)
Reconciliation of Net (Loss)/Income to
EBITDA and Adjusted EBITDA
As summarized in the following table, earnings
before interest, taxes, depreciation and amortization, stock-based
compensation expense and settlement expense (adjusted EBITDA) was
$40.0 million for the second quarter of 2018.
|
|
|
Three Months
Ended |
|
|
|
|
June 30, 2018 |
|
March 31, 2018 |
|
June 30, 2017 |
Net
(Loss)/income |
|
$ |
(3,367 |
) |
|
$ |
6,391 |
|
$ |
6,517 |
|
|
|
|
|
|
|
Net interest
expense |
|
|
2,846 |
|
|
|
2,528 |
|
|
2,306 |
Income taxes |
|
|
(242 |
) |
|
|
3,003 |
|
|
5,538 |
Depreciation and
amortization of property and equipment and intangible assets |
|
|
16,066 |
|
|
|
13,466 |
|
|
12,105 |
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
15,303 |
|
|
|
25,388 |
|
|
26,466 |
Stock based
compensation expense |
|
|
4,714 |
|
|
|
9,494 |
|
|
3,994 |
Settlement expense |
|
|
20,000 |
|
|
|
- |
|
|
- |
Adjusted EBITDA |
|
$ |
40,017 |
|
|
$ |
34,882 |
|
$ |
30,460 |
|
|
|
|
|
|
|
As summarized in the following table, earnings before interest,
taxes, depreciation and amortization, stock-based compensation
expense and settlement expense (adjusted EBITDA) was $74.9 million
for the first half of 2018.
|
|
Six Months
Ended |
|
|
|
|
|
|
June 30, 2018 |
|
June 30, 2017 |
|
Net
Income |
|
$ |
3,024 |
|
$ |
7,959 |
|
|
|
|
|
|
|
Net interest
expense |
|
|
5,374 |
|
|
4,437 |
|
Income taxes |
|
|
2,761 |
|
|
5,908 |
|
Depreciation and
amortization of property and equipment and intangible assets |
|
|
29,532 |
|
|
22,667 |
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
40,691 |
|
|
40,971 |
|
Stock based
compensation expense |
|
|
14,208 |
|
|
9,380 |
|
Settlement expense |
|
|
20,000 |
|
|
- |
|
Adjusted EBITDA |
|
$ |
74,899 |
|
$ |
50,351 |
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands, except per share
amounts) (unaudited)
Reconciliation of Net (Loss)/income to
GAAP EPS (Diluted) and Adjusted EPS (Diluted)
As summarized in the following table, diluted earnings per share
adjusted for stock-based compensation expense, settlement expense,
amortization of acquisition related software and intangible assets
and for the related taxes (adjusted EPS) was $0.25 for the second
quarter of 2018.
|
|
Three Months
Ended |
|
|
|
|
June 30, 2018 |
|
March 31, 2018 |
|
June 30, 2017 |
Net
(Loss)/income |
|
$ |
(3,367 |
) |
|
$ |
6,391 |
|
|
$ |
6,517 |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
4,714 |
|
|
|
9,494 |
|
|
|
3,994 |
|
Settlement expense |
|
|
20,000 |
|
|
|
- |
|
|
|
- |
|
Amortization of
acquisition related software and intangible assets |
|
|
9,621 |
|
|
|
8,132 |
|
|
|
7,372 |
|
Income
tax related to adjustments (1) |
|
|
(10,404 |
) |
|
|
(5,505 |
) |
|
|
(4,319 |
) |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
20,564 |
|
|
$ |
18,512 |
|
|
$ |
13,564 |
|
|
|
|
|
|
|
|
Weighted average common shares, basic or diluted |
|
|
83,231 |
|
|
|
85,682 |
|
|
|
85,826 |
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
Diluted
adjusted EPS |
|
$ |
0.25 |
|
|
$ |
0.22 |
|
|
$ |
0.16 |
|
|
|
|
|
|
|
|
As summarized in the following table, diluted earnings per share
adjusted for stock-based compensation expense, settlement expense,
amortization of acquisition related software and intangible assets
and for the related taxes (adjusted EPS) was $0.46 for the first
half of 2018.
|
|
|
|
Six Months
Ended |
|
|
|
June 30, 2018 |
|
June 30, 2017 |
|
Net
Income |
|
$ |
3,024 |
|
|
$ |
7,959 |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
14,208 |
|
|
|
9,380 |
|
|
Settlement expense |
|
|
20,000 |
|
|
|
- |
|
|
Amortization of
acquisition related software and intangible assets |
|
|
17,753 |
|
|
|
13,658 |
|
|
Income
tax related to adjustments (1) |
|
|
(15,744 |
) |
|
|
(8,754 |
) |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
39,241 |
|
|
$ |
22,243 |
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
84,837 |
|
|
|
85,534 |
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.04 |
|
|
$ |
0.09 |
|
|
Diluted
adjusted EPS |
|
$ |
0.46 |
|
|
$ |
0.26 |
|
|
(1) Tax effect of adjustments is computed as the pre-tax effect
of the adjustments multiplied by the forecasted adjusted annual
effective tax rate at period end.
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in millions)
Reconciliation of Projected 2018 Net
Income to Projected 2018 EBITDA and Adjusted EBITDA
As summarized in the following table, the
Company currently estimates net income of between approximately $23
million and $26 million and adjusted EBITDA of between
approximately $143 million and $148 million for 2018.
|
|
|
|
Twelve Months Ending
December 31, 2018 |
|
|
|
|
|
|
Estimated Range |
|
|
|
Current Guidance |
|
Prior Guidance |
|
|
|
Low |
|
High |
|
Low |
|
High |
|
Net Income |
|
$ |
23 |
|
$ |
26 |
|
$ |
29 |
|
$ |
33 |
|
Net
interest expense |
|
|
11 |
|
|
11 |
|
|
12 |
|
|
12 |
|
Income
taxes |
|
|
10 |
|
|
12 |
|
|
12 |
|
|
13 |
|
Depreciation and amortization of property and equipment and
intangible assets |
|
58 |
|
|
58 |
|
|
55 |
|
|
55 |
|
Earnings
before interest, taxes, depreciation and amortization
(EBITDA) |
$ |
102 |
|
|
107 |
|
$ |
108 |
|
|
113 |
|
Stock
based compensation expense |
|
|
21 |
|
|
21 |
|
|
20 |
|
|
20 |
|
Settlement expense |
|
|
20 |
|
|
20 |
|
|
- |
|
|
- |
|
Adjusted EBITDA |
|
$ |
143 |
|
$ |
148 |
|
$ |
128 |
|
$ |
133 |
|
|
|
|
|
|
|
|
|
|
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