HMS Holdings Corp. (NASDAQ:HMSY) today announced financial
results for the second quarter of 2017. Net income for the quarter
ended June 30, 2017 was $6.5 million or $0.08 per diluted share,
compared to net income of $1.4 million or $0.02 per diluted share
in the first quarter of 2017 and $9.9 million or $0.12 per diluted
share in the prior year second quarter. Adjusted EPS in the second
quarter was $0.16 per diluted share, compared to adjusted EPS of
$0.13 per diluted share in the first quarter of 2017 and adjusted
EPS of $0.20 per diluted share in the prior year second quarter.
The Company incurred approximately $3.5 million of transaction
expenses related to its acquisition of Eliza Corporation, which
closed in the quarter, but those expenses were not discrete
adjustments used in the calculation of adjusted EPS. Total revenue
in the second quarter was $133.3 million, compared to total revenue
of $113.7 million in the first quarter of 2017 and $121.5 million
in the prior year second quarter.
"The second quarter played out essentially as we
expected. Topline growth included record quarterly commercial
revenue – up 30% year-over-year, including revenue generated by
Eliza following the April close of our acquisition. Organic
commercial revenue growth was 16%, compared to the prior year
second quarter, and total company organic revenue was up 11%
sequentially as projected,” said Bill Lucia, Chairman and CEO. "We
are very encouraged by early customer interest in our new health
management and member engagement capabilities on the combined
Essette and Eliza platforms. We are taking the necessary steps
internally to create a unified approach for the sale of these new
solutions to current and potential customers, along with our
coordination of benefits and payment integrity offerings."
Commercial revenue in the second quarter of 2017
was $69.4 million, a 29.7% increase compared to $53.5 million in
the prior year second quarter and $14.3 million or 26% higher than
the first quarter of 2017 total of $55.1 million. State government
revenue was $57.9 million in the second quarter, a 0.5% increase
compared to $57.6 million in the prior year second quarter and $4.6
million or 8.6% higher than the first quarter of 2017 total of
$53.3 million. State government revenue in the prior year second
quarter included a one-time acceleration of approximately $5.5
million of subrogation related revenue. Federal (including Medicare
RAC) and Other revenue was $6.0 million in the second quarter, a
$4.4 million decrease compared to the prior year second quarter and
$0.7 million higher than the first quarter of 2017. The decline was
due primarily to the Medicare RAC contract generating no revenue in
the second quarter of 2017, compared to $3.8 million in the prior
year second quarter.
Coordination of benefits (COB) revenue was $98.5
million in the second quarter of 2017, compared to $89.7 million in
the prior year second quarter and $88.5 million in the first
quarter of 2017. COB accounted for 73.9% of total revenue in the
second quarter, compared to 73.8% in the prior year second quarter
and 77.8% in the first quarter of 2017. Revenue from analytical
services, which include payment integrity (PI), Medicare RAC,
health management and member engagement solutions, was $34.8
million in the second quarter of 2017, compared to $31.9 million in
the prior year second quarter and $25.2 million in the first
quarter of 2017. PI revenue was $26.9 million in the second quarter
of 2017, compared to $28.1 million in the prior year second quarter
and $24.3 million in the first quarter of 2017. The Eliza
acquisition contributed $7.6 million to health management and
member engagement revenue in the second quarter.
“We saw measurable progress in recent months in our
PI implementations – both in terms of implementations completed and
new PI edits initiated, though the revenue impact will be more
evident in the remaining quarters of the year. Additionally, as we
continue to move additional clients to our big data platform our
ability to more rapidly ingest and analyze data continues to
improve and throughput for our PI customers is increasing,” said
Jeff Sherman, CFO. “Our effective tax rate in the quarter was
higher than expected, due to the fact that a portion of the
transaction fees in connection with the Eliza acquisition were not
deductible for tax purposes and that negatively impacted GAAP EPS
and adjusted EPS by $0.01 per diluted share.”
For additional information about the Company’s
preliminary second quarter 2017 financial results, see the
Company’s Q2 2017 Investor Presentation available at:
http://investor.hms.com/events.cfm.
Webcast and Conference Call
Information
HMS will report its preliminary second quarter 2017
financial and operating results via webcast at 7:30 AM CT / 8:30 AM
ET on Friday, August 4, 2017. 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.cfm. The
webcast will also be archived and available for replay beginning at
approximately 11:00 AM CT / 12:00 PM ET on August 4, 2017 at
http://investor.hms.com/events.cfm. 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, and health management and member engagement solutions to
help customers recover improper payments; prevent future improper
payments; reduce fraud, waste and abuse; effectively engage their
members and better manage the care they receive; and ensure
regulatory compliance. The Company serves commercial health plans,
state government agencies, federal programs, at-risk providers,
pharmacy benefit managers and employers.
Trademarks
HMS 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
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
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, 2017 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 reflect
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, future operating or
financial performance. 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 for
our 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, 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; 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 and to prevail in protests or
challenges to contract awards; pending or threatened litigation;
unfavorable outcomes in legal proceedings; our success in
attracting 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
our effective tax rates; unanticipated increases in the number or
amount of claims for which we are self-insured; our ability to
successfully remediate material weaknesses in our internal control
over financial reporting; changes in the U.S. healthcare
environment or healthcare financing system, including regulatory,
budgetary or political actions that affect procurement practices
and healthcare spending; our failure to comply with applicable laws
and regulations governing individual privacy and information
security or to protect such information from theft and misuse;
negative results of government or customer reviews, audits or
investigations; state or federal limitations related to outsourcing
or 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.
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, |
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
Revenue |
|
|
|
$ |
133,313 |
|
|
$ |
121,512 |
|
|
$ |
247,046 |
|
|
$ |
241,270 |
|
|
Cost of
services: |
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
|
51,853 |
|
|
|
47,343 |
|
|
|
100,773 |
|
|
|
93,744 |
|
|
Data processing |
|
|
|
11,281 |
|
|
|
9,104 |
|
|
|
21,064 |
|
|
|
18,728 |
|
|
Occupancy |
|
|
|
4,230 |
|
|
|
3,631 |
|
|
|
7,777 |
|
|
|
7,258 |
|
|
Direct project expenses |
|
|
10,101 |
|
|
|
11,473 |
|
|
|
20,544 |
|
|
|
25,955 |
|
|
Other operating expenses |
|
|
6,562 |
|
|
|
6,407 |
|
|
|
13,765 |
|
|
|
12,184 |
|
|
Amortization of acquisition related software and
intangible assets |
|
7,372 |
|
|
|
7,013 |
|
|
|
13,658 |
|
|
|
14,026 |
|
|
Total cost of services |
|
|
91,399 |
|
|
|
84,971 |
|
|
|
177,581 |
|
|
|
171,895 |
|
|
Selling,
general and administrative expenses |
|
27,553 |
|
|
|
20,189 |
|
|
|
51,161 |
|
|
|
43,114 |
|
|
Total operating expenses |
|
|
118,952 |
|
|
|
105,160 |
|
|
|
228,742 |
|
|
|
215,009 |
|
|
Operating income |
|
|
|
14,361 |
|
|
|
16,352 |
|
|
|
18,304 |
|
|
|
26,261 |
|
|
Interest
expense |
|
|
|
(2,339 |
) |
|
|
(2,100 |
) |
|
|
(4,625 |
) |
|
|
(4,191 |
) |
|
Interest income |
|
|
|
33 |
|
|
|
60 |
|
|
|
188 |
|
|
|
107 |
|
|
Income before income taxes |
|
|
12,055 |
|
|
|
14,312 |
|
|
|
13,867 |
|
|
|
22,177 |
|
|
Income taxes |
|
|
|
5,538 |
|
|
|
4,443 |
|
|
|
5,908 |
|
|
|
7,738 |
|
|
Net income |
|
|
$ |
6,517 |
|
|
$ |
9,869 |
|
|
$ |
7,959 |
|
|
$ |
14,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
|
|
|
Net income per common share -- basic |
$ |
0.08 |
|
|
$ |
0.12 |
|
|
$ |
0.10 |
|
|
$ |
0.17 |
|
|
Diluted income per common share: |
|
|
|
|
|
|
|
|
Net income per common share -- diluted |
$ |
0.08 |
|
|
$ |
0.12 |
|
|
$ |
0.09 |
|
|
$ |
0.17 |
|
|
Weighted average
shares: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
83,921 |
|
|
|
84,073 |
|
|
|
83,708 |
|
|
|
84,104 |
|
|
Diluted |
|
|
|
85,826 |
|
|
|
84,528 |
|
|
|
85,534 |
|
|
|
84,923 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Certain amounts in the prior periods have been adjusted
to reflect the retrospective application required by the early
adoption of ASU No. 2016-09, Compensation – Stock Compensation
(Topic 718): Improvements to Employee Share-Based Payment
Accounting, (“ASU 2016-09”) related to the recognition of excess
tax benefits in the provision for income taxes. |
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
Assets |
|
|
|
|
|
(unaudited) |
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
$ |
51,369 |
|
|
$ |
175,999 |
|
|
|
Accounts receivable, net of allowance of $9,246 and
$10,772, |
|
|
|
|
|
at June 30, 2017 and December 31, 2016, respectively |
|
193,369 |
|
|
|
173,582 |
|
|
|
Prepaid expenses |
|
|
|
|
|
14,977 |
|
|
|
13,699 |
|
|
|
Income
tax receivable |
|
|
|
|
|
|
9,534 |
|
|
|
3,354 |
|
|
|
Deferred financing costs, net |
|
|
|
|
1,748 |
|
|
|
- |
|
|
|
Other current assets |
|
|
|
|
475 |
|
|
|
1,001 |
|
|
|
Total current assets |
|
|
|
|
271,472 |
|
|
|
367,635 |
|
|
|
Property
and equipment, net |
|
|
|
|
95,893 |
|
|
|
92,167 |
|
|
|
Goodwill |
|
|
|
|
|
|
491,088 |
|
|
|
379,716 |
|
|
|
Intangible
assets, net |
|
|
|
|
95,397 |
|
|
|
37,797 |
|
|
|
Deferred
financing costs, net |
|
|
|
|
- |
|
|
|
2,790 |
|
|
|
Other assets |
|
|
|
|
|
2,416 |
|
|
|
2,650 |
|
|
|
Total assets |
|
|
|
|
$ |
956,266 |
|
|
$ |
882,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
$ |
55,753 |
|
|
$ |
59,402 |
|
|
|
Estimated liability for appeals |
|
|
|
|
31,272 |
|
|
|
30,755 |
|
|
|
Revolving credit facility |
|
|
|
|
240,000 |
|
|
|
- |
|
|
|
Total current liabilities |
|
|
|
|
327,025 |
|
|
|
90,157 |
|
|
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
|
Revolving credit facility |
|
|
|
|
- |
|
|
|
197,796 |
|
|
|
Net deferred tax liabilities |
|
|
|
|
40,080 |
|
|
|
22,717 |
|
|
|
Deferred rent |
|
|
|
|
|
5,094 |
|
|
|
5,427 |
|
|
|
Other liabilities |
|
|
|
|
|
11,006 |
|
|
|
10,048 |
|
|
|
Total long-term liabilities |
|
|
|
|
56,180 |
|
|
|
235,988 |
|
|
|
Total liabilities |
|
|
|
|
|
383,205 |
|
|
|
326,145 |
|
|
|
|
|
|
|
|
|
|
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; |
|
|
|
|
|
96,458,775 shares issued and 84,044,697 shares outstanding at
June 30, 2017; |
|
|
|
|
|
95,966,852 shares issued and 83,552,774 shares outstanding at
December 31, 2016 |
|
964 |
|
|
|
959 |
|
|
|
Capital in
excess of par value |
|
|
|
|
353,512 |
|
|
|
345,025 |
|
|
|
Retained
earnings |
|
|
|
|
|
334,069 |
|
|
|
326,110 |
|
|
|
Treasury
stock, at cost: 12,414,078 shares at June 30, 2017 and December 31,
2016 |
|
(115,484 |
) |
|
|
(115,484 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
|
|
573,061 |
|
|
|
556,610 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity |
|
|
$ |
956,266 |
|
|
$ |
882,755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Operating activities: |
|
|
|
|
|
|
|
Net income |
|
|
|
|
$ |
7,959 |
|
|
$ |
14,439 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization of property and equipment |
|
12,927 |
|
|
|
12,784 |
|
|
Amortization of intangible assets |
|
|
|
9,740 |
|
|
|
10,086 |
|
|
Amortization of deferred financing costs |
|
|
1,042 |
|
|
|
1,042 |
|
|
Stock-based compensation expense |
|
|
9,380 |
|
|
|
8,645 |
|
|
Deferred income taxes |
|
|
|
|
1,265 |
|
|
|
(3,135 |
) |
|
Loss on disposal of assets |
|
|
|
- |
|
|
|
44 |
|
|
Change in fair value of contingent consideration |
|
500 |
|
|
|
- |
|
|
Changes in operating assets and liabilities, net of
acquisition: |
|
|
|
|
Accounts receivable |
|
|
|
|
(9,039 |
) |
|
|
16,807 |
|
|
Prepaid expenses |
|
|
|
|
149 |
|
|
|
(128 |
) |
|
Other current assets |
|
|
|
|
526 |
|
|
|
2,652 |
|
|
Other assets |
|
|
|
|
|
149 |
|
|
|
(320 |
) |
|
Income taxes receivable / (payable) |
|
|
(6,180 |
) |
|
|
(3,173 |
) |
|
Accounts payable, accrued expenses and other liabilities |
|
(8,196 |
) |
|
|
(10,190 |
) |
|
Estimated liability for appeals |
|
|
|
518 |
|
|
|
(2,492 |
) |
|
Net cash provided by operating
activities |
|
|
20,740 |
|
|
|
47,061 |
|
|
Investing activities: |
|
|
|
|
|
|
|
Acquisition of a business, net of cash acquired |
|
|
(171,174 |
) |
|
|
- |
|
|
Purchases of property and equipment |
|
|
|
(8,881 |
) |
|
|
(2,122 |
) |
|
Investment in capitalized software |
|
|
|
(6,626 |
) |
|
|
(2,752 |
) |
|
Net cash used in investing
activities |
|
|
(186,681 |
) |
|
|
(4,874 |
) |
|
Financing activities: |
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
1,986 |
|
|
|
1,196 |
|
|
Payments of tax withholdings on behalf of employees for
net-share settlement for stock-based compensation |
|
(2,874 |
) |
|
|
(1,067 |
) |
|
Payments on capital lease obligations |
|
|
|
(5 |
) |
|
|
(42 |
) |
|
Proceeds from credit facility |
|
|
|
|
42,204 |
|
|
|
- |
|
|
Net cash provided by financing
activities |
|
|
41,311 |
|
|
|
87 |
|
|
Net (decrease) / increase in cash and cash
equivalents |
|
(124,630 |
) |
|
|
42,274 |
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of year |
|
|
175,999 |
|
|
|
145,610 |
|
|
Cash and cash equivalents at end of
period |
|
$ |
51,369 |
|
|
$ |
187,884 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
Cash paid for income taxes |
|
|
|
$ |
10,656 |
|
|
$ |
13,450 |
|
|
Cash paid for interest |
|
|
|
$ |
3,451 |
|
|
$ |
3,016 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
activities: |
|
|
|
|
|
Change in balance of accrued property and equipment
purchases |
$ |
(1,313 |
) |
|
$ |
(690 |
) |
|
|
|
|
|
|
|
|
|
|
|
Note: Certain amounts in the prior periods have been
adjusted to reflect the retrospective application required by the
early adoption of ASU 2016-09 related to the cash flow presentation
of share-based compensation. |
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 table, earnings before
interest, taxes, depreciation and amortization, stock-based
compensation expense, and non-recurring legal fees (adjusted
EBITDA) was $30.5 million for the second quarter of 2017. |
|
|
|
Three months ended
June 30, |
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Net
Income |
|
$ |
6,517 |
|
|
$ |
9,869 |
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
2,306 |
|
|
|
2,040 |
|
|
Income taxes |
|
|
5,538 |
|
|
|
4,443 |
|
|
Depreciation and
amortization of property and equipment and intangible assets, |
|
|
|
|
|
net of
deferred financing costs |
|
|
12,105 |
|
|
|
11,251 |
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
26,466 |
|
|
|
27,603 |
|
|
Stock based
compensation expense |
|
|
3,994 |
|
|
|
4,405 |
|
|
Non-recurring legal
fees |
|
|
- |
|
|
|
315 |
|
|
Adjusted EBITDA |
|
$ |
30,460 |
|
|
$ |
32,323 |
|
|
|
|
|
|
|
|
As
summarized in the following table, earnings before interest, taxes,
depreciation and amortization, stock-based compensation expense,
and non-recurring legal fees (adjusted EBITDA) was $50.4 million
for the first half of 2017. |
|
|
Six months ended
June 30, |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Net
Income |
|
$ |
7,959 |
|
|
$ |
14,439 |
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
4,437 |
|
|
|
4,084 |
|
|
Income taxes |
|
|
5,908 |
|
|
|
7,738 |
|
|
Depreciation and
amortization of property and equipment and intangible assets, |
|
|
|
|
|
|
|
|
|
net of
deferred financing costs |
|
|
22,667 |
|
|
|
22,872 |
|
|
|
|
|
|
|
|
Earnings before interest, taxes, depreciation and
amortization (EBITDA) |
|
|
40,971 |
|
|
|
49,133 |
|
|
Stock based
compensation expense |
|
|
9,380 |
|
|
|
8,645 |
|
|
Non-recurring legal fees |
|
|
- |
|
|
|
1,563 |
|
|
Adjusted EBITDA |
|
$ |
50,351 |
|
|
$ |
59,341 |
|
|
|
|
|
|
|
|
Note:
Certain amounts in the prior periods have been adjusted to reflect
the retrospective application required by the early adoption of ASU
No. 2016-09 related to the recognition of excess tax benefits in
the provision for income taxes. |
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
(in thousands, except per share
amounts) |
(unaudited) |
|
Reconciliation of Net 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, non-recurring
legal fees, amortization of acquisition related software and
intangible assets and for the related taxes (adjusted EPS) was
$0.16 for the second quarter of 2017. |
|
|
|
Three months ended
June 30, |
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Net
Income |
|
$ |
6,517 |
|
|
$ |
9,869 |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
3,994 |
|
|
|
4,405 |
|
|
Non-recurring legal
fees |
|
|
- |
|
|
|
315 |
|
|
Amortization of
acquisition related software and intangible assets |
|
|
7,372 |
|
|
|
7,013 |
|
|
Income
tax related to adjustments (1) |
|
|
(4,319) |
|
|
|
(4,693 |
) |
|
|
|
|
|
|
|
Adjusted
net income |
|
$ |
13,564 |
|
|
$ |
16,909 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
85,826 |
|
|
|
84,528 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.08 |
|
|
$ |
0.12 |
|
|
Diluted adjusted EPS |
|
$ |
0.16 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
As
summarized in the following table, diluted earnings per share
adjusted for stock-based compensation expense, non-recurring legal
fees, amortization of acquisition related software and intangible
assets and for the related taxes (adjusted EPS) was $0.26 for the
first half of 2017. |
|
|
Six months ended
June 30, |
|
|
|
|
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Net
Income |
|
$ |
7,959 |
|
|
$ |
14,439 |
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
9,380 |
|
|
|
8,645 |
|
|
Non-recurring legal
fees |
|
|
- |
|
|
|
1,563 |
|
|
Amortization of
acquisition related software and intangible assets |
|
|
13,658 |
|
|
|
14,026 |
|
|
Income
tax related to adjustments (1) |
|
|
(8,754 |
) |
|
|
(9,887 |
) |
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
22,243 |
|
|
$ |
28,786 |
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
85,534 |
|
|
|
84,923 |
|
|
|
|
|
|
|
|
Diluted GAAP EPS |
|
$ |
0.09 |
|
|
$ |
0.17 |
|
|
Diluted
adjusted EPS |
|
$ |
0.26 |
|
|
$ |
0.34 |
|
|
|
|
|
|
|
|
1 Tax
effect of adjustments is computed as the pre-tax effect of the
adjustments multiplied by the annual effective tax rate. |
|
Note: Certain amounts in the prior periods have been
adjusted to reflect the retrospective application required by the
early adoption of ASU 2016-09 related to the recognition of excess
tax benefits in the provision for income taxes and the cash flow
presentation of share-based compensation. |
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Elizabeth Bonet
Sr. Director, Communications
Elizabeth.bonet@hms.com
972-894-8405
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