HMS Holdings Corp. (Nasdaq: HMSY) today announced financial results
for the third quarter of 2018. Net income for the quarter ended
September 30, 2018 was $18.6 million or $0.22 per diluted share,
compared to a net loss of ($3.4) million or ($0.04) per diluted
share in the second quarter of 2018 and net income of $6.4 million
or $0.07 per diluted share in the prior year third quarter. Net
income in the third quarter of 2018 included a cumulative tax
benefit of $2.9 million or $0.03 per diluted share relating to
prior open tax years and the current tax year in connection with a
realignment of certain state tax apportionments recognized in the
quarter. The net loss for the second quarter of 2018 included an
expense of $20.0 million related to the 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”). Net income YTD was $21.6 million, compared to
$14.3 million in the first three quarters of 2017.
Adjusted EPS in the third quarter of 2018 was
$0.31 per diluted share, compared to adjusted EPS of $0.25 per
diluted share in the second quarter of 2018 and adjusted EPS of
$0.19 per diluted share in the prior year third quarter. Adjusted
EPS in the second quarter of 2018 included an adjustment for the
non-recurring Settlement expense.
Total revenue in the third quarter of 2018 was a
record $154.3 million, compared to total revenue of $146.8 million
in the second quarter of 2018 (+5.1%) and $125.7 million in the
prior year third quarter (+22.8%). Total revenue YTD, which
includes a Medicare RAC reserve release in the first quarter of
2018 of $8.4 million, was $442.5 million compared to $372.7 million
in the first three quarters of 2017 (+18.7%). Excluding the
Medicare RAC reserve release, total revenue YTD was $434.1 million
(+16.5%).
Adjusted EBITDA in the third quarter of 2018 was
$41.4 million, compared to $40.0 million in the second quarter of
2018 (+3.5%) and $34.1 million in the prior year third quarter
(+21.4%). Adjusted EBITDA in the second quarter of 2018 included 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 Medicare RAC reserve release. Adjusted
EBITDA YTD was $116.3 million, compared to $84.5 million in the
first three quarters of 2017 (+37.6%).
”We are extremely pleased with our overall
financial performance through the first three quarters of 2018. The
record third quarter revenue reflects progress we have made
throughout the year on a number of growth initiatives related to
our coordination of benefits and payment integrity offerings, as
well as the important contribution of our new care management and
consumer engagement products. We intend to push hard through year
end to meet our full year objectives, including the increased
revenue target we have announced today,” said Bill Lucia, Chairman
and CEO. “Our key year-to-date metrics show the broad-based
strength of our overall performance. Total Company revenue is up
17% YTD, excluding the first quarter Medicare RAC reserve release -
including commercial, payment integrity and member engagement
revenues each up double digits. YTD adjusted EBITDA is 38% higher
than the comparable period last year, which reflects the leverage
in our business model.”
Commercial revenue increased sequentially to a
second straight quarterly record of $86.7 million in the third
quarter of 2018, compared to $80.5 million in the second quarter of
2018 (+7.7%) and $67.6 million in the prior year third quarter
(+28.3%). Commercial revenue YTD was $239.0 million compared to
$192.1 million in the first three quarters of 2017 (+24.4%), though
comparable 2017 commercial revenue only included roughly two
quarters of Eliza revenue following the April 2017 acquisition of
Eliza. Excluding Eliza revenue in both periods, Commercial revenue
YTD was $201.6 million compared to $174.6 million in the first
three quarters of 2017 (+15.5%). Commercial revenue in the third
quarter of 2018 included $14.0 million from Eliza, compared to
$13.7 million in the second quarter of 2018 (+2.2%) and $9.9
million in the prior year third quarter (+41.4%).
State government revenue increased sequentially
to $59.3 million in the third quarter of 2018, compared to $58.8
million in the second quarter of 2018 (+0.9%) and $51.6 million in
the prior year third quarter (+14.9%). State government
revenue YTD was $172.7 million, compared to $162.8 million in the
first three quarters of 2017 (+6.1%). Federal (including Medicare
RAC) and other revenue was $8.3 million in the third quarter of
2018, compared to $7.5 million in the second quarter of 2018
(+10.7%) and $6.5 million in the prior year third quarter
(+27.7%).
Coordination of benefits (COB) revenue increased
sequentially to $105.7 million in the third quarter of 2018,
compared to $100.8 million in the second quarter of 2018 (+4.9%)
and $90.1 million in the prior year third quarter (+17.3%). COB
revenue YTD was $298.2 million, compared to $277.1 million in the
first three quarters of 2017 (+7.6%). COB accounted for 68.5%
of total revenue in the third quarter of 2018, compared to 68.7% in
the second quarter of 2018 and 71.7% in the prior year third
quarter. COB revenue as a percentage of total revenue has declined
in recent quarters as Analytical Services (described below) has
grown more rapidly, and that trend is currently expected to
continue.
Revenue from Analytical Services, which includes
Payment Integrity (PI), care management (Essette) and consumer
engagement (Eliza) solutions and Medicare RAC, was $48.6 million in
the third quarter of 2018, compared to $46.0 million in the second
quarter of 2018 (+5.7%) and $35.6 million in the prior year third
quarter (+36.5%). Analytical Services revenue YTD was $144.3
million compared to $95.6 million in the first three quarters of
2017 (+50.9%), though 2017 revenue only included approximately two
quarters of Eliza revenue following the April 2017 acquisition of
Eliza.
PI revenue was $30.2 million in the third
quarter of 2018, compared to $29.5 million in the second quarter of
2018 (+2.4%) and $23.9 million in the prior year third quarter
(+26.4%). PI revenue YTD was $88.4 million, compared to $75.2
million in the first three quarters of 2017 (+17.6%). Care
management and consumer engagement revenue was $15.3 million in the
third quarter of 2018, including Eliza revenue of $14.0 million and
Essette revenue of $1.3 million, compared to $14.8 million in the
second quarter of 2018 (+3.4%) and $10.9 million in the prior year
third quarter (+40.4%). Medicare RAC revenue was $3.1 million in
the third quarter of 2018, compared to $1.7 million in the second
quarter of 2018 and $0.8 million in the prior year third
quarter.
Capital Expenditures were $6.8 million in the third quarter of
2018, which was unchanged from the second quarter of 2018 and the
prior year third quarter.
“Based on our strong financial performance
through the first three quarters of 2018, we are raising our full
year revenue projection to a range of $595 - $600 million.
Achieving this revenue target should result in exceeding the top
end of the revised guidance we provided in our second quarter 2018
earnings release on other key performance metrics, including
operating margin, GAAP Net Income and Adjusted EBITDA. Given the
leverage in our business model and the momentum we have going into
the fourth quarter, we believe we are well positioned to achieve
our full year financial goals,” said Jeff Sherman, CFO. “Cash flow
from operations of $31.8 million was particularly strong in the
third quarter and we ended the quarter with a cash balance of
$124.3 million. We are also very pleased with the impact of our
ongoing expense management initiatives, which continue to enhance
profitability as we grow top line revenue.”
For additional information about the Company’s
third quarter 2018 financial results, see the Q3 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 third quarter
2018 financial and operating results via webcast at 7:30 AM CT /
8:30 AM ET on November 2, 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 November 2, 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 advances the healthcare system by helping payers reduce
costs and improve health outcomes. Through our
industry-leading technology, analytics and engagement
solutions, we save billions of dollars annually for health care
payers, government programs and at-risk organizations, while
helping people live healthier lives. HMS provides a broad range of
coordination of benefits, payment integrity, risk analytics, care
management and member engagement solutions that move the healthcare
system forward. Learn more at hms.com.
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 September 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 revenue 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. 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:Dennis Oakes SVP, Investor Relationsdennis.oakes@hms.com
212-857-5786 |
|
Media
Contact:Lacey HautzingerSr. Director, External
Communicationslacey.hautzinger@hms.com469-284-7240 |
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(in thousands, except per share
amounts) (unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended September
30, |
|
Nine Months EndedSeptember
30, |
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
Revenue |
$ |
154,246 |
|
|
$ |
125,673 |
|
|
$ |
442,462 |
|
|
$ |
372,719 |
|
Cost of services: |
|
|
|
|
|
|
|
Compensation |
|
58,188 |
|
|
|
49,012 |
|
|
|
169,455 |
|
|
|
149,784 |
|
Information technology |
|
12,979 |
|
|
|
12,067 |
|
|
|
39,482 |
|
|
|
33,131 |
|
Occupancy |
|
3,500 |
|
|
|
4,332 |
|
|
|
11,897 |
|
|
|
12,109 |
|
Direct
project expenses |
|
10,661 |
|
|
|
9,548 |
|
|
|
31,652 |
|
|
|
30,092 |
|
Other
operating expenses |
|
8,567 |
|
|
|
7,446 |
|
|
|
22,183 |
|
|
|
21,212 |
|
Amortization of acquisition related software and intangible
assets |
|
7,942 |
|
|
|
8,167 |
|
|
|
25,695 |
|
|
|
21,825 |
|
Total
cost of services |
|
101,837 |
|
|
|
90,572 |
|
|
|
300,364 |
|
|
|
268,153 |
|
Selling, general and
administrative expenses |
|
28,178 |
|
|
|
22,240 |
|
|
|
86,708 |
|
|
|
73,400 |
|
Settlement expense |
|
- |
|
|
|
- |
|
|
|
20,000 |
|
|
|
- |
|
Total operating expenses |
|
130,015 |
|
|
|
112,812 |
|
|
|
407,072 |
|
|
|
341,553 |
|
Operating income |
|
24,231 |
|
|
|
12,861 |
|
|
|
35,390 |
|
|
|
31,166 |
|
Interest expense |
|
(2,880 |
) |
|
|
(3,109 |
) |
|
|
(8,562 |
) |
|
|
(7,734 |
) |
Interest
income |
|
292 |
|
|
|
14 |
|
|
|
600 |
|
|
|
201 |
|
Income before income taxes |
|
21,643 |
|
|
|
9,766 |
|
|
|
27,428 |
|
|
|
23,633 |
|
Income
taxes |
|
3,069 |
|
|
|
3,394 |
|
|
|
5,830 |
|
|
|
9,302 |
|
Net Income |
$ |
18,574 |
|
|
$ |
6,372 |
|
|
$ |
21,598 |
|
|
$ |
14,331 |
|
|
|
|
|
|
|
|
|
Basic income
per common share: |
|
|
|
|
|
|
|
Net income per common share -- basic |
$ |
0.22 |
|
|
$ |
0.08 |
|
|
$ |
0.26 |
|
|
$ |
0.17 |
|
Diluted income
per common share: |
|
|
|
|
|
|
|
Net income per common share -- diluted |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
$ |
0.25 |
|
|
$ |
0.17 |
|
Weighted
average shares: |
|
|
|
|
|
|
|
Basic |
|
83,509 |
|
|
|
83,923 |
|
|
|
83,373 |
|
|
|
83,778 |
|
Diluted |
|
85,144 |
|
|
|
85,730 |
|
|
|
85,241 |
|
|
|
85,586 |
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
amounts) |
|
|
|
|
|
September 30,
2018 |
|
December 31,2017 |
Assets |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash
equivalents |
$ |
124,297 |
|
|
$ |
83,313 |
|
Accounts
receivable, net of allowance of $16,239 and $14,799, |
|
|
|
at
September 30, 2018 and December 31, 2017, respectively |
|
202,498 |
|
|
|
189,460 |
|
Prepaid
expenses |
|
16,826 |
|
|
|
16,589 |
|
Income
tax receivable |
|
4,597 |
|
|
|
1,892 |
|
Deferred
financing costs, net |
|
564 |
|
|
|
564 |
|
Other current assets |
|
314 |
|
|
|
836 |
|
Total
current assets |
|
349,096 |
|
|
|
292,654 |
|
Property and equipment,
net |
|
93,145 |
|
|
|
98,581 |
|
Goodwill |
|
487,617 |
|
|
|
487,617 |
|
Intangible assets,
net |
|
72,593 |
|
|
|
91,482 |
|
Deferred financing
costs, net |
|
1,814 |
|
|
|
2,237 |
|
Other
assets |
|
2,655 |
|
|
|
2,589 |
|
Total assets |
$ |
1,006,920 |
|
|
$ |
975,160 |
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable, accrued expenses and other liabilities |
$ |
64,295 |
|
|
$ |
61,900 |
|
Estimated
liability for appeals |
|
22,184 |
|
|
|
30,787 |
|
Total current liabilities |
|
86,479 |
|
|
|
92,687 |
|
Long-term
liabilities: |
|
|
|
Revolving
credit facility |
|
240,000 |
|
|
|
240,000 |
|
Net
deferred tax liabilities |
|
14,407 |
|
|
|
21,989 |
|
Deferred
rent |
|
4,329 |
|
|
|
4,852 |
|
Other
liabilities |
|
9,925 |
|
|
|
9,403 |
|
Total long-term liabilities |
|
268,661 |
|
|
|
276,244 |
|
Total liabilities |
|
355,140 |
|
|
|
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; |
|
|
|
97,588,656 shares issued and 83,925,462 shares outstanding at
September 30, 2018; |
|
|
|
96,536,251 shares issued and 83,256,858 shares outstanding at
December 31, 2017 |
|
975 |
|
|
|
965 |
|
Capital in excess of
par value |
|
397,192 |
|
|
|
368,721 |
|
Retained earnings |
|
389,189 |
|
|
|
366,164 |
|
Treasury stock, at
cost: 13,663,194 shares at September 30, 2018 |
|
|
|
and
13,279,393 shares at December 31, 2017 |
|
(135,576 |
) |
|
|
(129,621 |
) |
|
|
|
|
Total shareholders' equity |
|
651,780 |
|
|
|
606,229 |
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
1,006,920 |
|
|
$ |
975,160 |
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS(in
thousands)(unaudited) |
|
|
|
|
|
Nine Months Ended September
30, |
|
|
2018 |
|
|
|
2017 |
|
Operating
activities: |
|
|
|
Net
income |
$ |
21,598 |
|
|
$ |
14,331 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization of property, equipment and
software |
|
24,331 |
|
|
|
20,599 |
|
Amortization of intangible assets |
|
18,889 |
|
|
|
15,947 |
|
Amortization of deferred financing costs |
|
423 |
|
|
|
1,563 |
|
Stock-based compensation expense |
|
17,645 |
|
|
|
16,761 |
|
Deferred
income taxes |
|
(7,582 |
) |
|
|
(726 |
) |
Change in
fair value of contingent consideration |
|
(35 |
) |
|
|
(2,450 |
) |
Release
of estimated liability for appeals |
|
(8,436 |
) |
|
|
- |
|
Changes
in operating assets and liabilities: |
|
|
|
Accounts
receivable |
|
(13,038 |
) |
|
|
5,630 |
|
Prepaid
expenses |
|
(237 |
) |
|
|
757 |
|
Other
current assets |
|
522 |
|
|
|
712 |
|
Other
assets |
|
(66 |
) |
|
|
163 |
|
Income
taxes receivable / (payable) |
|
(2,705 |
) |
|
|
(2,731 |
) |
Accounts
payable, accrued expenses and other liabilities |
|
4,394 |
|
|
|
(15,457 |
) |
Estimated
liability for appeals |
|
(167 |
) |
|
|
(1 |
) |
Net cash provided by operating activities |
|
55,536 |
|
|
|
55,098 |
|
Investing
activities: |
|
|
|
Acquisition of a
business, net of cash acquired |
|
- |
|
|
|
(171,174 |
) |
Purchases
of property and equipment |
|
(4,333 |
) |
|
|
(11,656 |
) |
Investment in capitalized software |
|
(15,100 |
) |
|
|
(10,664 |
) |
Net cash used in investing activities |
|
(19,433 |
) |
|
|
(193,494 |
) |
Financing
activities: |
|
|
|
Proceeds
from exercise of stock options |
|
13,633 |
|
|
|
2,580 |
|
Payments
of tax withholdings on behalf of employees for net-share settlement
for stock-based compensation |
|
(2,797 |
) |
|
|
(2,898 |
) |
Payments
on capital lease obligations |
|
- |
|
|
|
(5 |
) |
Proceeds
from credit facility |
|
- |
|
|
|
42,204 |
|
Purchases
of treasury stock |
|
(5,955 |
) |
|
|
- |
|
Net cash provided by financing activities |
|
4,881 |
|
|
|
41,881 |
|
Net increase (decrease) in cash and cash
equivalents |
|
40,984 |
|
|
|
(96,515 |
) |
Cash and Cash
Equivalents |
|
|
|
Cash and cash
equivalents at beginning of year |
|
83,313 |
|
|
|
175,999 |
|
Cash and cash equivalents at end of period |
$ |
124,297 |
|
|
$ |
79,484 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for income taxes, net of refunds |
$ |
15,501 |
|
|
$ |
12,317 |
|
Cash paid for interest |
$ |
7,769 |
|
|
$ |
5,819 |
|
|
|
|
|
Supplemental
disclosure of non-cash
activities: |
|
|
|
Change in balance of accrued property and equipment purchases |
$ |
538 |
|
|
$ |
(414 |
) |
|
|
|
|
|
|
|
|
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
$41.4 million for the third quarter of 2018.
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
Net (Loss)/
income |
|
$ |
18,574 |
|
|
$ |
(3,367 |
) |
|
$ |
6,372 |
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
2,588 |
|
|
|
2,846 |
|
|
|
3,095 |
|
Income taxes |
|
|
3,069 |
|
|
|
(242 |
) |
|
|
3,394 |
|
Depreciation and
amortization of property and equipment and intangible assets |
|
|
13,688 |
|
|
|
16,066 |
|
|
|
13,879 |
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
37,919 |
|
|
|
15,303 |
|
|
|
26,740 |
|
Stock based
compensation expense |
|
|
3,437 |
|
|
|
4,714 |
|
|
|
7,381 |
|
Settlement expense |
|
|
- |
|
|
|
20,000 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
41,356 |
|
|
$ |
40,017 |
|
|
$ |
34,121 |
|
|
|
|
|
|
|
|
As summarized in the following table, earnings
before interest, taxes, depreciation and amortization, stock-based
compensation expense and settlement expense (adjusted EBITDA) was
$116.3 million for the nine months ended September 30, 2018,
including the first quarter net benefit of $6.3 million related to
the Reserve Release.
|
|
|
|
|
|
|
Nine Months
Ended |
|
|
September 30, 2018 |
|
September 30, 2017 |
Net Income |
|
$ |
21,598 |
|
|
$ |
14,331 |
|
|
|
|
|
|
Net interest
expense |
|
|
7,962 |
|
|
|
7,533 |
|
Income taxes |
|
|
5,830 |
|
|
|
9,302 |
|
Depreciation and
amortization of property and equipment and intangible assets |
|
|
43,220 |
|
|
|
36,546 |
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
78,610 |
|
|
|
67,712 |
|
Stock based
compensation expense |
|
|
17,645 |
|
|
|
16,761 |
|
Settlement expense |
|
|
20,000 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
116,255 |
|
|
$ |
84,473 |
|
|
|
|
|
|
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
$0.31 for the third quarter of 2018.
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
September 30, 2018 |
|
June 30, 2018 |
|
September 30, 2017 |
Net (Loss)/
income |
|
$ |
18,574 |
|
|
$ |
(3,367 |
) |
|
$ |
6,372 |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
3,437 |
|
|
|
4,714 |
|
|
|
7,381 |
|
Settlement expense |
|
|
- |
|
|
|
20,000 |
|
|
|
- |
|
Amortization of
acquisition related software and intangible assets |
|
|
7,942 |
|
|
|
9,621 |
|
|
|
8,167 |
|
Income
tax related to adjustments (1) |
|
|
(3,186 |
) |
|
|
(10,404 |
) |
|
|
(5,815 |
) |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
26,767 |
|
|
$ |
20,564 |
|
|
$ |
16,105 |
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
85,144 |
|
|
|
83,231 |
|
|
|
85,730 |
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.22 |
|
|
$ |
(0.04 |
) |
|
$ |
0.07 |
|
Diluted
adjusted EPS |
|
$ |
0.31 |
|
|
$ |
0.25 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
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
$0.79 for the first nine months ended September 30, 2018, including
the first quarter net benefit of $0.05 per diluted share related to
the Reserve Release.
|
|
|
|
|
|
|
Nine Months
Ended |
|
|
September 30, 2018 |
|
September 30, 2017 |
Net Income |
|
$ |
21,598 |
|
|
$ |
14,331 |
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
17,645 |
|
|
|
16,761 |
|
Settlement expense |
|
|
20,000 |
|
|
|
- |
|
Amortization of
acquisition related software and intangible assets |
|
|
25,695 |
|
|
|
21,825 |
|
Income
tax related to adjustments (1) |
|
|
(17,735 |
) |
|
|
(14,431 |
) |
|
|
|
|
|
Adjusted net income |
|
$ |
67,203 |
|
|
$ |
38,486 |
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
85,241 |
|
|
|
85,586 |
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.25 |
|
|
$ |
0.17 |
|
Diluted
adjusted EPS |
|
$ |
0.79 |
|
|
$ |
0.45 |
|
|
|
|
|
|
(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.
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