HMS Holdings Corp. (Nasdaq: HMSY) today
announced financial results for the first quarter ended March 31,
2019.
“We are encouraged by our solid start to 2019,
with first quarter revenue rising 11% excluding the Medicare RAC
reserve release, net income more than doubling and adjusted EBITDA
increasing over 17% compared to the first quarter last year.
These results clearly demonstrate the inherent operating leverage
of our business model,” said Bill Lucia, Chairman and CEO.
“The double-digit growth in both our coordination of benefits
and total population management revenue reflects strong demand for
those services and the ongoing opportunity to cross sell into our
existing customer base. Our margin expansion also clearly
demonstrated the inherent operating leverage of our business model
and highlighted the meaningful impact our investments in advanced
technology applications are having on our profitability.”
First Quarter 2019
Total revenue in the first quarter of 2019 was
$148.0 million, compared to total revenue of $141.4 million in the
prior year first quarter (+4.7%) that included $8.4 million from
the Medicare RAC reserve release (the “Reserve Release”).
Excluding the Reserve Release, total revenue increased 11.3%
compared to the prior year quarter.
Commercial revenue in the first quarter of 2019
was $76.3 million, compared to $71.8 million in the prior year
first quarter (+6.3%). State government revenue was $61.7
million in the first quarter of 2019, compared to $54.6 million in
the prior year first quarter (+13.0%). Federal and Other
revenue was $10.0 million in the first quarter of 2019, compared to
$15.0 million in the prior year first quarter (-33.3%).
Coordination of Benefits (COB) revenue was
$105.9 million in the first quarter of 2019 compared to $91.7
million in the prior year first quarter (+15.5%).
Analytical Services revenue, which includes
Payment Integrity (PI) and Total Population Management (TPM), was
$42.1 million in the first quarter of 2019, compared to $49.7
million in the prior year first quarter (-15.3%) including $8.4
million from the Reserve Release in the first quarter of 2018.
Excluding the Reserve Release, Analytical Services revenue in
the first quarter of 2019 increased 1.9% from the prior year first
quarter.
PI revenue was $27.7 million in the first
quarter of 2019, compared to $30.3 million in the prior year first
quarter (-8.6%) excluding the Reserve Release. TPM revenue
was $14.4 million in the first quarter of 2019, compared to $11.0
million in the prior year first quarter (+30.9%).
Net income in the first quarter of 2019 was
$19.6 million, or $0.22 per diluted share, compared to $6.4
million, or $0.07 per diluted share, in the prior year first
quarter. In the first quarter of 2019, net income included
tax benefits totaling $0.07 per diluted share, due primarily to the
exercise of employee stock options. In the first quarter of 2018,
net income included a net benefit of $0.05 per diluted share
related to the Reserve Release.
Adjusted EBITDA in the first quarter of 2019 was
$41.0 million compared to $34.9 million in the prior year first
quarter (+17.4%) that included a net benefit of $6.3 million
related to the Reserve Release. Excluding that benefit,
Adjusted EBITDA increased 43.4% compared to the prior year first
quarter.
Adjusted EPS in the first quarter of 2019 was
$0.35 per diluted share, including tax benefits totaling $0.07 per
diluted share due primarily to the discrete tax item mentioned
above. Adjusted EPS in the first quarter of 2018 was $0.22 per
diluted share, including a net benefit of $0.05 related to the
Reserve Release. Excluding the discrete tax item in 2019 and the
Reserve Release in 2018, adjusted EPS for the first quarter of 2019
was $0.28 per diluted share, compared to $0.17 per diluted share in
the prior year first quarter (+64.7%).
Cash Flow and Capital
Resources
Net cash provided by operating activities in the
three months ended March 31, 2019 was $23.1 million compared to
$14.7 million in the first quarter of 2018 (+57.1%). Capital
expenditures were $4.0 million for the first quarter of 2019,
compared to $5.8 million in the prior year first quarter.
The Company's balance sheet at March 31, 2019
included $214.5 million of cash and cash equivalents and $240.0
million in outstanding bank debt, compared to cash and cash
equivalents of $83.9 million and outstanding bank debt of $240.0
million at March 31, 2018. These numbers are preliminary
pending resolution of a technical accounting issue.
“The impact of our ongoing investments in
advanced technology applications such as machine learning, natural
language processing and robotic process automation to drive revenue
yield and operating efficiency improvements were evident again this
quarter in our margin expansion and increased profitability.
In addition, we continue to strengthen our balance sheet and
improve our liquidity profile to support our business growth and
future investments,” said Jeff Sherman, CFO. “Our overall
performance in the first quarter positions HMS well to achieve our
full-year financial objectives.”
For additional information about the Company’s
first quarter 2019 financial results, refer to the Investor
Presentation available on the Company’s website at
http://investor.hms.com/events-and-presentations.
Webcast and Conference Call
Information
HMS will report its preliminary first quarter
2019 financial and operating results via webcast at 7:30 AM CT /
8:30 AM ET on Friday, May 3, 2019. The webcast will 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 (224-357–2389
for international participants), or on the HMS Investor Relations
website at http://investor.hms.com/events-and-presentations. The
webcast will be archived and available for replay 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/press-releases.
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 while helping health plan members
lead healthier lives. HMS provides a broad range of coordination of
benefits, payment integrity, population risk analytics, care
management and member engagement solutions that help move the
healthcare system forward. Visit us at www.hms.com follow us
on Twitter at @HMSHealthcare.
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 are relevant and provide
useful information to the Company's management, investors, and
other interested parties about the Company's operating performance
because the measures allow them to understand and compare the
Company's actual and expected operating results during the prior,
current and future 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, unaudited results, which are not final until
the Company’s Form 10-Q is filed. 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,”
“future,” “intends,” “likely,” “may,” “outlook,” “plans,”
“potential,” “projects,” “seeks,” “strategy,” “targets,” “trends,”
“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 and full
year guidance and projections. 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; significant competition for our
solutions and services; 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; 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 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;
unexpected changes in tax laws, regulations or guidance and
unexpected changes in our effective tax rate; unanticipated
increases in the number or amount of claims for which we are
self-insured; 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; anti-takeover provisions in our
corporate governance documents; accounting changes or revisions;
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:
Media Contact:Robert
Borchert
Lacy HautzingerSVP,
Investor
Relations
Sr. Director, External Communicationsrobert.borchert@hms.com
lacey.hautzinger@hms.com469-284-2140
469-284-7240
|
|
|
|
HMS HOLDINGS CORP. AND SUBSIDIARIES |
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
|
|
|
|
|
(in thousands, except per share amounts) |
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
Revenue |
|
|
|
$ |
147,953 |
|
|
$ |
141,425 |
|
|
|
Cost of
services: |
|
|
|
|
|
|
|
Compensation |
|
|
|
57,452 |
|
|
|
56,079 |
|
|
|
Direct project and other operating expenses |
|
20,199 |
|
|
|
16,648 |
|
|
|
Information technology |
|
|
13,105 |
|
|
|
12,263 |
|
|
|
Occupancy |
|
|
|
4,079 |
|
|
|
4,383 |
|
|
|
Amortization of acquisition related software and
intangible assets |
|
4,166 |
|
|
|
8,132 |
|
|
|
Total cost of services |
|
|
99,001 |
|
|
|
97,505 |
|
|
|
Selling,
general and administrative expenses |
|
29,246 |
|
|
|
31,998 |
|
|
|
Total operating expenses |
|
|
128,247 |
|
|
|
129,503 |
|
|
|
Operating income |
|
|
|
19,706 |
|
|
|
11,922 |
|
|
|
Interest
expense |
|
|
|
(2,849 |
) |
|
|
(2,648 |
) |
|
|
Interest income |
|
|
|
1,114 |
|
|
|
120 |
|
|
|
Income before income taxes |
|
|
17,971 |
|
|
|
9,394 |
|
|
|
Income taxes |
|
|
|
(1,671 |
) |
|
|
3,003 |
|
|
|
Net Income |
|
|
$ |
19,642 |
|
|
$ |
6,391 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
Net income per common share -- basic |
$ |
0.23 |
|
|
$ |
0.08 |
|
|
|
Diluted income per common share: |
|
|
|
|
|
Net income per common share -- diluted |
$ |
0.22 |
|
|
$ |
0.07 |
|
|
|
Weighted average
shares: |
|
|
|
|
|
|
Basic |
|
|
|
|
85,853 |
|
|
|
83,933 |
|
|
|
Diluted |
|
|
|
|
88,614 |
|
|
|
85,682 |
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share and per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
December 31,2018 |
Assets |
|
|
|
|
|
(unaudited) |
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
$ |
214,463 |
|
|
$ |
178,946 |
|
Accounts receivable, net of allowance of $14,037 and
$13,683, |
|
|
|
at March 31, 2019 and December 31, 2018, respectively |
|
204,795 |
|
|
|
206,772 |
|
Prepaid expenses |
|
|
|
|
|
22,097 |
|
|
|
19,970 |
|
Income
tax receivable |
|
|
|
|
|
|
17,628 |
|
|
|
18,817 |
|
Deferred
financing costs, net |
|
|
|
|
|
|
564 |
|
|
|
564 |
|
Other current assets |
|
|
|
|
|
249 |
|
|
|
240 |
|
Total current assets |
|
|
|
|
459,796 |
|
|
|
425,309 |
|
Property
and equipment, net |
|
|
|
|
90,294 |
|
|
|
94,435 |
|
Goodwill |
|
|
|
|
|
|
487,617 |
|
|
|
487,617 |
|
Intangible
assets, net |
|
|
|
|
|
64,801 |
|
|
|
67,140 |
|
Operating
lease right-of-use assets |
|
|
|
20,110 |
|
|
|
- |
|
Deferred
financing costs, net |
|
|
|
|
1,532 |
|
|
|
1,673 |
|
Other assets |
|
|
|
|
|
3,110 |
|
|
|
2,344 |
|
Total assets |
|
|
|
|
$ |
1,127,260 |
|
|
$ |
1,078,518 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
$ |
57,684 |
|
|
$ |
74,902 |
|
Estimated liability for appeals |
|
|
|
|
24,043 |
|
|
|
21,723 |
|
Total current liabilities |
|
|
|
|
81,727 |
|
|
|
96,625 |
|
Long-term
liabilities: |
|
|
|
|
|
|
|
Revolving credit facility |
|
|
|
|
240,000 |
|
|
|
240,000 |
|
Operating lease liabilities |
|
|
|
|
18,677 |
|
|
|
- |
|
Net deferred tax liabilities |
|
|
|
|
19,710 |
|
|
|
18,485 |
|
Other liabilities |
|
|
|
|
|
6,758 |
|
|
|
10,012 |
|
Total long-term liabilities |
|
|
|
|
285,145 |
|
|
|
268,497 |
|
Total liabilities |
|
|
|
|
|
366,872 |
|
|
|
365,122 |
|
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; |
|
|
|
|
|
|
|
|
100,745,077 shares issued and 87,081,712 shares outstanding at
March 31, 2019; |
|
|
|
|
|
|
|
|
98,924,501 shares issued and 85,261,664 shares outstanding at
December 31, 2018; |
|
|
|
|
|
|
1,007 |
|
|
|
989 |
|
Capital in excess of
par value |
|
|
|
|
|
|
453,080 |
|
|
|
425,748 |
|
Retained earnings |
|
|
|
|
|
|
441,877 |
|
|
|
422,235 |
|
Treasury stock, at
cost: 13,663,194 shares at March 31, 2019 |
|
|
|
|
|
|
- |
|
|
|
and
13,663,194 shares at December 31, 2018 |
|
|
|
|
|
|
(135,576 |
) |
|
|
(135,576 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
|
|
760,388 |
|
|
|
713,396 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders'
equity |
|
$ |
1,127,260 |
|
|
$ |
1,078,518 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
$ |
19,642 |
|
|
$ |
6,391 |
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
Depreciation and amortization of property, equipment and
software |
|
7,930 |
|
|
|
7,345 |
|
|
|
|
Amortization of intangible assets |
|
|
|
2,339 |
|
|
|
6,121 |
|
|
|
|
Amortization of deferred financing costs |
|
|
|
141 |
|
|
|
141 |
|
|
|
|
Stock-based compensation expense |
|
|
|
10,979 |
|
|
|
9,494 |
|
|
|
|
Deferred income taxes |
|
|
|
|
1,225 |
|
|
|
(777 |
) |
|
|
|
Noncash lease expense |
|
|
|
|
1,196 |
|
|
|
- |
|
|
|
|
Loss on disposal of assets |
|
|
|
|
- |
|
|
|
72 |
|
|
|
|
Release of estimated liability for appeals |
|
|
|
- |
|
|
|
(8,436 |
) |
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
1,977 |
|
|
|
2,328 |
|
|
|
|
Prepaid expenses |
|
|
|
|
(2,127 |
) |
|
|
2,539 |
|
|
|
|
Other current assets |
|
|
|
|
(9 |
) |
|
|
469 |
|
|
|
|
Other assets |
|
|
|
|
|
(766 |
) |
|
|
(25 |
) |
|
|
|
Income taxes receivable |
|
|
|
|
1,189 |
|
|
|
2,919 |
|
|
|
|
Accounts payable, accrued expenses and other
liabilities |
|
(21,389 |
) |
|
|
(14,115 |
) |
|
|
|
Operating lease liabilities |
|
|
|
|
(1,519 |
) |
|
|
- |
|
|
|
|
Estimated liability for appeals |
|
|
|
2,320 |
|
|
|
271 |
|
|
|
|
Net cash provided by operating
activities |
|
|
23,128 |
|
|
|
14,737 |
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
|
(369 |
) |
|
|
(791 |
) |
|
|
|
Investment in capitalized software |
|
|
|
(3,621 |
) |
|
|
(4,963 |
) |
|
|
|
Net cash used in investing
activities |
|
|
|
(3,990 |
) |
|
|
(5,754 |
) |
|
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
|
23,139 |
|
|
|
144 |
|
|
|
|
Payments of tax withholdings on behalf of employees for
net-share settlements |
|
(6,768 |
) |
|
|
(2,587 |
) |
|
|
|
Payments on capital lease obligations |
|
|
|
8 |
|
|
|
- |
|
|
|
|
Purchases of treasury stock |
|
|
|
|
- |
|
|
|
(5,955 |
) |
|
|
|
Net cash provided by/(used in) financing
activities |
|
16,379 |
|
|
|
(8,398 |
) |
|
|
|
Net increase in cash and cash
equivalents |
|
|
|
35,517 |
|
|
|
585 |
|
|
|
|
Cash and Cash Equivalents |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of year |
|
|
178,946 |
|
|
|
83,313 |
|
|
|
|
Cash and cash equivalents at end of
period |
|
$ |
214,463 |
|
|
$ |
83,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
|
Cash paid for income taxes/(refunds received),
net of refunds |
$ |
(4,288 |
) |
|
$ |
626 |
|
|
|
|
Cash paid for interest |
|
|
|
|
$ |
2,771 |
|
|
$ |
2,055 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
activities: |
|
|
|
|
|
|
|
Change in balance of accrued property and
equipment purchases |
$ |
(201 |
) |
|
$ |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income to EBITDA and Adjusted EBITDA |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
(in
thousands, except percentages) |
|
March 31, 2019 |
|
March 31, 2018 |
|
|
Net Income |
|
$ |
19,642 |
|
|
$ |
6,391 |
|
|
|
|
|
|
|
|
|
|
Net interest
expense |
|
|
1,735 |
|
|
|
2,528 |
|
|
|
Income taxes |
|
|
(1,671 |
) |
|
|
3,003 |
|
|
|
Depreciation and
amortization of property and equipment and intangible assets |
|
|
10,269 |
|
|
|
13,466 |
|
|
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
|
29,975 |
|
|
|
25,388 |
|
|
|
Stock-based
compensation expense |
|
|
10,979 |
|
|
|
9,494 |
|
|
|
Adjusted EBITDA |
|
$ |
40,954 |
|
|
$ |
34,882 |
|
|
|
%
of Revenue |
|
|
27.7 |
% |
|
|
24.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Net Income to GAAP EPS (Diluted) and Adjusted EPS
(Diluted) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
(in
thousands, except per share amounts) |
|
March 31, 2019 |
|
March 31, 2018 |
|
|
Net
Income |
|
$ |
19,642 |
|
|
$ |
6,391 |
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense |
|
|
10,979 |
|
|
|
9,494 |
|
|
|
Amortization of
acquisition related software and intangible assets |
|
|
4,166 |
|
|
|
8,132 |
|
|
|
Income
tax related to adjustments 1 |
|
|
(4,089 |
) |
|
|
(5,505 |
) |
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
30,698 |
|
|
$ |
18,512 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
|
88,614 |
|
|
|
85,682 |
|
|
|
|
|
|
|
|
|
|
Diluted GAAP EPS 2 |
|
$ |
0.22 |
|
|
$ |
0.07 |
|
|
|
Diluted
adjusted EPS 2 |
|
$ |
0.35 |
|
|
$ |
0.22 |
|
|
|
|
|
|
|
|
|
|
Discrete
tax benefits |
|
$ |
0.07 |
|
|
$ |
- |
|
|
|
Reserve
release benefit |
|
$ |
- |
|
|
$ |
0.05 |
|
|
|
Diluted
adjusted EPS after reserve release and discrete tax benefits |
|
$ |
0.28 |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
(1) Tax
effect of adjustments is computed as the pre-tax effect of the
adjustments multiplied by the adjusted annual effective tax rate at
period end. |
|
|
(2)
Diluted GAAP EPS and Diluted Adjusted EPS included discrete tax
benefits of $0.07 per diluted share for the three months ended
March 31, 2019 primarily related to the exercise of employee stock
options, and $0.05 related to the reserve release benefit for the
three months ended March 31, 2018. |
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
(unaudited) |
|
|
|
|
Reconciliation
of Net Income to EBITDA and Adjusted EBITDA (Trailing twelve
months) |
|
|
|
|
|
|
|
|
Trailing Twelve Months Ended |
(In
thousands) |
March 31, 2019 |
|
March 31, 2018 |
Net Income |
$ |
68,240 |
|
|
$ |
45,003 |
|
|
|
|
|
Net interest
expense |
|
9,428 |
|
|
|
10,973 |
|
Income taxes |
|
(6,646 |
) |
|
|
2,434 |
|
Depreciation and amortization of property and equipment and
intangible assets |
|
54,399 |
|
|
|
52,974 |
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
125,421 |
|
|
|
111,384 |
|
Stock-based
compensation expense |
|
22,992 |
|
|
|
28,251 |
|
Settlement Expense |
|
20,000 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
168,413 |
|
|
$ |
139,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
of Total Debt to Net Leverage Ratio |
|
|
|
|
|
|
|
(In
thousands) |
March 31, 2019 |
|
March 31, 2018 |
Total Debt (revolving
credit facility)3 |
$ |
240,000 |
|
|
$ |
240,000 |
|
Cash and cash equivalents |
|
(214,463 |
) |
|
|
(83,898 |
) |
|
|
|
|
Total net
debt |
$ |
25,537 |
|
|
$ |
156,102 |
|
|
|
|
|
Net
income 4 |
$ |
68,240 |
|
|
$ |
45,003 |
|
Adjusted
EBITDA 5 |
$ |
168,413 |
|
|
$ |
139,635 |
|
Net
leverage ratio 6 |
|
0.15 |
|
|
|
1.12 |
|
|
|
|
|
(3) Total
Debt consists of the outstanding principal balance under our senior
secured revolving credit facility as of the dates shown |
|
|
(4) Trailing twelve
months Net income |
|
|
|
(5) Trailing twelve
months Adjusted EBITDA |
|
|
|
(6) The
Company's net leverage ratio is calculated by dividing total net
debt as of the date shown by trailing twelve months' Adjusted
EBITDA |
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities
to Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(In
thousands) |
|
March 31, 2019 |
|
March 31, 2018 |
|
Net cash provided by
operating activities |
|
$ |
23,128 |
|
|
$ |
14,737 |
|
|
Purchases of property and equipment |
|
|
(369 |
) |
|
|
(791 |
) |
|
Investment in capitalized software |
|
|
(3,621 |
) |
|
|
(4,963 |
) |
|
|
|
|
|
|
|
Non-GAAP
free cash flow |
|
$ |
19,138 |
|
|
$ |
8,983 |
|
|
|
|
|
|
|
|
The Company believes that the non-GAAP free cash
flow financial measures presented in this press release provide
useful information regarding how much cash flow is available, after
purchase of property and equipment and investment in capitalized
software, to be used for working capital needs or for other
opportunities. It should not be inferred that the entire non-GAAP
free cash flow amount is available for discretionary expenditures.
These non-GAAP measures may not be comparable to similarly titled
measures used by other companies. |
|
|
|
|
|
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