HMS Holdings Corp. (Nasdaq: HMSY) today
announced financial results for the first quarter ended
March 31, 2020.
“HMS delivered solid top-line growth with first
quarter revenue increasing 15.9% compared with the same period last
year, driven by strong organic growth of 8.5% plus a full quarter
of the Accent business acquired at the end of 2019,” said Bill
Lucia, Chairman and CEO. “Net income declined 35.4% year-over year
in the quarter, due primarily to Accent-related integration costs
this year and discrete tax benefits in the first quarter of
2019. Adjusted EBITDA increased 15.0% and cash and cash
equivalents topped $148 million at quarter end. With healthy cash
flows and low leverage, HMS continues to be well positioned to
invest in our talent, technology and product development to support
our business growth and clients' needs.
"Given the circumstances surrounding COVID-19
and its broad impact on our nation and the world, the entire HMS
organization moved swiftly to enact our business continuity plan to
ensure we remained fully operational. By the end of March,
essentially 100% of our employees were working from home with the
necessary tools to accomplish their day-to-day work in a secure
environment to support clients,” Lucia added. "We also implemented
several measures to address organizational agility, client support
and health and safety, including helping employees avoid exposure
to the novel coronavirus and care for their families.
"First and foremost, we are working diligently
to protect our employees and business operations, and help clients
actively communicate at scale with millions of individuals. Given
the challenges currently facing the healthcare system, we believe
strong cost containment and clinical outcome capabilities are going
to be more important than ever when this health crisis subsides,"
Lucia concluded.
First Quarter
Total revenue in the first quarter of 2020 was
$171.4 million, compared to total revenue of $148.0 million in the
prior year first quarter (+15.9%). Revenue from the
Accent business in the first quarter of 2020 was $10.9 million.
Organic revenue growth in the first quarter of 2020, excluding
Accent, was 8.5%.
Coordination of Benefits (COB) revenue was a
record $118.1 million in the first quarter of 2020 compared to the
previous record of $105.9 million in the prior year first quarter
(+11.5%). Organic COB revenue, excluding Accent, was $107.2
million (+1.2%).
Payment Integrity (PI) revenue was $39.3 million
in the first quarter of 2020, compared to $27.7 million in the
prior year first quarter (+41.8%). Population Health
Management (PHM) revenue was $14.0 million in the first quarter of
2020, compared to $14.4 million in the prior year first quarter
(-2.3%).
Net income in the first quarter of 2020 was
$12.7 million, or $0.14 per diluted share, compared to net income
of $19.6 million, or $0.22 per diluted share, in the first quarter
of 2019. Net income in the first quarter of 2019 included $0.07 per
diluted share of discrete tax items primarily related to the
exercise of employee stock options.
Adjusted EBITDA in the first quarter of 2020 was
$47.1 million, compared to $41.0 million in the prior year first
quarter (+15.0%).
Adjusted EPS in the first quarter of 2020 was
$0.32 per diluted share, compared to $0.28 per diluted share in the
first quarter of 2019 excluding discrete tax benefits of $0.07 per
diluted share (+14.3%).
Cash Flow and Capital
Resources
Net cash provided by operating activities for
the three months ended March 31, 2020 was $17.1 million compared to
$28.5 million in the first three months of 2019. Capital
expenditures were $5.0 million for the three months ended March 31,
2020, compared to $4.0 million in the comparable prior year
period.
The Company's balance sheet at March 31,
2020 included $148.0 million of cash and cash equivalents and
$240.0 million in outstanding bank debt, compared to cash and cash
equivalents of $139.3 million and outstanding bank debt of $240.0
million at December 31, 2019.
Financial Guidance
The Company revised its full year 2020 financial
guidance, as follows:
($ in millions) |
Reported FY 2019 |
|
Adjusted FY 2019 |
|
Revised FY 2020
Guidance |
|
Y - Y % Change from Adjusted FY 2019 |
Total Revenue |
$ |
626 |
|
|
$ |
616 |
|
(1 |
) |
$ 690 - 705 |
|
12.1 - 14.5% |
Net Income |
$ |
87 |
|
|
$ |
69 |
|
(2 |
) |
$ 62 - 74 |
|
(10.1) - 7.2% |
Adjusted EBITDA |
$ |
180 |
|
|
$ |
164 |
|
(3 |
) |
$ 177 - 187 |
|
7.9 - 14.0% |
(1) Reported FY 2019 revenue includes $10.5
million related to the 2Q 2019 Reserve Release. Including the 2Q
2019 Reserve Release, total FY 2020 revenue growth is expected to
be 10.2 - 12.6%. Excluding the 2Q 2019 Reserve Release, then
total FY 2020 revenue growth is expected to be 12.1 - 14.5%.
(2) Reported FY 2019 net income includes $6.0
million related to the 2Q 2019 Reserve Release, $5.6 million
related to the 3Q 2019 Gain on Investment and $6.5 million related
to discrete tax benefits. Including the 2Q 2019 Reserve Release, 3Q
2019 Gain on Investment and discrete tax benefits, then FY 2020 net
income growth is expected to be (28.7) - (14.9)%. Excluding the 2Q
2019 Reserve Release and 3Q 2019 Gain on Investment, net
income growth is expected to be (10.1) - 7.2%.
(3) Reported 2019 adjusted EBITDA includes $8.2
million related to the 2Q 2019 Reserve Release and $7.7 million
related to the 3Q 2019 Gain on Investment. Including the 2Q 2019
Reserve Release and 3Q 2019 Gain on Investment, adjusted
EBITDA growth is expected to be (1.7) - 3.9%. Excluding the
2Q 2019 Reserve Release and 3Q 2019 Gain on Investment, then FY
2020 adjusted EBITDA growth is expected to be 7.9 - 14.0%.
Key assumptions underlying the Company's revised
full year 2020 financial guidance include:
- Depreciation and amortization of
approximately $50 million
- Stock-based compensation expense of
approximately $23 million
- Integration-related costs of
approximately $5-10 million
- Net interest expense of
approximately $6 million
- An effective tax rate of
28-30%
- Capital expenditures of
approximately $30-35 million
Webcast and Conference Call
Information
HMS will report its preliminary first quarter
2020 financial and operating results via webcast at 7:30 AM CT /
8:30 AM ET on Friday, May 8, 2020. 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
healthcare organizations reduce costs and improve health outcomes.
Through our industry-leading technology, analytics and engagement
solutions, we save billions of dollars annually while helping
consumers lead healthier lives. HMS provides a broad range of
payment accuracy and population health management solutions that
help move the healthcare system forward. Visit us at
www.hms.com and 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,” "assumes," “believes,” “estimates,” “expects,”
“forecasts,” “future,” “intends,” “likely,” “may,” “outlook,”
“plans,” “potential,” “projects,” “seeks,” “strategy,” “targets,”
“trends,” “will,” “would,” “could,” “should,” and variations of
such terms and similar expressions and references to guidance,
although some forward-looking statements may be expressed
differently. In particular, these include statements relating to,
among other things, the possible effects of COVID-19; our future
actions, business plans, objectives and prospects; and our future
operating or financial performance and projections, including our
updated full year guidance for 2020. 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: the course of the
COVID-19 pandemic and the responses to the pandemic, and their
effects on our business and operations, including those of our
customers and partners, and general economic, business and market
conditions; our ability to execute our business plans and growth
strategy; our ability to innovate, develop or implement new or
enhanced solutions or services; the nature of acquisition,
investment, strategic relationship and divestiture opportunities we
are pursuing, and our ability to successfully execute on such
opportunities; our ability to successfully integrate acquired
businesses and operations and realize synergies; significant and
increased competition related to 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,
including during a catastrophic or extraordinary event, such as
COVID-19; 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 secure future 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; 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; accounting changes or revisions;
political, economic and foreign exchange conditions and other risks
relating to our international operations; changes in the 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, domestically and
internationally, 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; 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 |
|
Lacey Hautzinger |
SVP, Investor Relations |
|
Sr. Director, External
Communications |
robert.borchert@hms.com |
|
lacey.hautzinger@hms.com |
469-284-2140 |
|
469-284-7240 |
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(in thousands, except per share
amounts)(unaudited)
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
Revenue |
$ |
171,412 |
|
|
$ |
147,953 |
|
Cost of services: |
|
|
|
Compensation |
67,455 |
|
|
57,452 |
|
Direct project and other
operating expenses |
24,895 |
|
|
20,199 |
|
Information technology |
14,903 |
|
|
13,105 |
|
Occupancy |
4,362 |
|
|
4,079 |
|
Amortization of acquisition
related software and intangible assets |
5,505 |
|
|
4,166 |
|
Total cost of services |
117,120 |
|
|
99,001 |
|
Selling, general and
administrative expenses |
35,839 |
|
|
29,246 |
|
Total operating expenses |
152,959 |
|
|
128,247 |
|
Operating income |
18,453 |
|
|
19,706 |
|
Interest expense |
(2,262 |
) |
|
(2,849 |
) |
Interest income |
234 |
|
|
1,114 |
|
Other income |
652 |
|
|
— |
|
Income before income taxes |
17,077 |
|
|
17,971 |
|
Income taxes |
4,395 |
|
|
(1,671 |
) |
Net income |
$ |
12,682 |
|
|
$ |
19,642 |
|
|
|
|
|
Basic income per common
share: |
|
|
|
Net income per common share -- basic |
$ |
0.14 |
|
|
$ |
0.23 |
|
Diluted income per common
share: |
|
|
|
Net income per common share -- diluted |
$ |
0.14 |
|
|
$ |
0.22 |
|
Weighted average shares: |
|
|
|
Basic |
88,202 |
|
|
85,853 |
|
Diluted |
89,601 |
|
|
88,614 |
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(in thousands, except share and per share
amounts)
|
March 31, 2020 |
|
December 31, 2019 |
Assets |
(unaudited) |
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
148,033 |
|
|
$ |
139,268 |
|
Accounts receivable, net |
234,901 |
|
|
223,443 |
|
Prepaid expenses and other
current assets |
22,231 |
|
|
30,925 |
|
Income tax receivable |
524 |
|
|
3,210 |
|
Deferred financing costs,
net |
564 |
|
|
564 |
|
Total current assets |
406,253 |
|
|
397,410 |
|
Property and equipment,
net |
86,764 |
|
|
86,947 |
|
Goodwill |
597,803 |
|
|
599,351 |
|
Intangible assets, net |
128,170 |
|
|
131,849 |
|
Operating lease right-of-use
assets |
16,544 |
|
|
17,493 |
|
Deferred financing costs,
net |
968 |
|
|
1,109 |
|
Other assets |
14,586 |
|
|
10,117 |
|
Total assets |
$ |
1,251,088 |
|
|
$ |
1,244,276 |
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable, accrued
expenses and other liabilities |
$ |
81,242 |
|
|
$ |
97,747 |
|
Liability for appeals |
3,906 |
|
|
3,570 |
|
Total current liabilities |
85,148 |
|
|
101,317 |
|
Long-term liabilities: |
|
|
|
Revolving credit facility |
240,000 |
|
|
240,000 |
|
Operating lease
liabilities |
13,839 |
|
|
14,881 |
|
Net deferred tax
liabilities |
26,527 |
|
|
25,587 |
|
Other liabilities |
7,727 |
|
|
7,626 |
|
Total long-term liabilities |
288,093 |
|
|
288,094 |
|
Total liabilities |
373,241 |
|
|
389,411 |
|
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;102,073,527 shares issued and
88,410,333 shares outstanding at March 31, 2020; 101,766,468 shares
issued and 88,103,566 shares outstanding at December 31, 2019 |
1,021 |
|
|
1,018 |
|
Capital in excess of par
value |
490,261 |
|
|
479,964 |
|
Retained earnings |
522,141 |
|
|
509,459 |
|
Treasury stock, at cost:
13,663,194 shares at March 31, 2020 and December 31, 2019 |
(135,576 |
) |
|
(135,576 |
) |
Total shareholders' equity |
877,847 |
|
|
854,865 |
|
Total liabilities and shareholders' equity |
$ |
1,251,088 |
|
|
$ |
1,244,276 |
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENT OF CASH
FLOWS(in
thousands)(unaudited)
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
Operating activities: |
|
|
|
Net income |
$ |
12,682 |
|
|
$ |
19,642 |
|
Adjustments to reconcile net
income to net cash provided by operating activities: |
|
|
|
Depreciation and amortization
of property, equipment and software |
8,024 |
|
|
7,930 |
|
Amortization of intangible
assets |
3,679 |
|
|
2,339 |
|
Amortization of deferred
financing costs |
141 |
|
|
141 |
|
Stock-based compensation
expense |
13,510 |
|
|
10,979 |
|
Deferred income taxes |
940 |
|
|
1,225 |
|
Noncash lease expense |
949 |
|
|
1,196 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
(9,910 |
) |
|
1,977 |
|
Prepaid expenses and other current assets |
8,694 |
|
|
(2,136 |
) |
Other assets |
(4,469 |
) |
|
(766 |
) |
Income taxes receivable |
2,686 |
|
|
1,189 |
|
Accounts payable, accrued expenses and other liabilities |
(19,126 |
) |
|
(15,995 |
) |
Operating lease liabilities |
(1,042 |
) |
|
(1,519 |
) |
Liability for appeals |
336 |
|
|
2,320 |
|
Net cash provided by operating activities |
17,094 |
|
|
28,522 |
|
Investing activities: |
|
|
|
Purchases of property and
equipment |
(1,678 |
) |
|
(369 |
) |
Investment in capitalized
software |
(3,339 |
) |
|
(3,621 |
) |
Net cash used in investing activities |
(5,017 |
) |
|
(3,990 |
) |
Financing activities: |
|
|
|
Proceeds from exercise of
stock options |
125 |
|
|
23,139 |
|
Payments of tax withholdings
on behalf of employees for net-share settlements |
(3,335 |
) |
|
(6,768 |
) |
Payments on capital lease
obligations |
(102 |
) |
|
8 |
|
Net cash (used in)/provided by financing
activities |
(3,312 |
) |
|
16,379 |
|
Net increase in cash and cash equivalents |
8,765 |
|
|
40,911 |
|
Cash and Cash Equivalents |
|
|
|
Cash and cash equivalents at
beginning of year |
139,268 |
|
|
178,946 |
|
Cash and cash equivalents at end of period |
$ |
148,033 |
|
|
$ |
219,857 |
|
|
|
|
|
Supplemental
disclosure of cash flow information: |
|
|
|
Cash paid for income
taxes/(refunds received), net of refunds |
$ |
585 |
|
|
$ |
(4,288 |
) |
Cash paid for interest |
$ |
2,134 |
|
|
$ |
2,771 |
|
|
|
|
|
Supplemental
disclosure of non-cash activities: |
|
|
|
Change
in balance of accrued property and equipment purchases |
$ |
(2,824 |
) |
|
$ |
(201 |
) |
HMS HOLDINGS CORP. AND
SUBSIDIARIES(unaudited)
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA
|
Three Months Ended |
(in thousands, except
percentages) |
March 31, 2020 |
|
March 31, 2019 |
Net income |
$ |
12,682 |
|
|
$ |
19,642 |
|
|
|
|
|
Net interest expense |
2,028 |
|
|
1,735 |
|
Income taxes |
4,395 |
|
|
(1,671 |
) |
Depreciation and amortization of
property and equipment and intangible assets |
11,703 |
|
|
10,269 |
|
Earnings before interest, taxes, depreciation and
amortization (EBITDA) |
30,808 |
|
|
29,975 |
|
Stock-based compensation
expense |
13,510 |
|
|
10,979 |
|
Transaction and integration
costs |
2,764 |
|
|
— |
|
Adjusted EBITDA |
$ |
47,082 |
|
|
$ |
40,954 |
|
% of Revenue |
27.5 |
% |
|
27.7 |
% |
Reconciliation of Net Income to EPS (Diluted) and
Adjusted EPS (Diluted)
|
Three Months Ended |
(in thousands, except per
share amounts) |
March 31, 2020 |
|
March 31, 2019 |
Net income |
$ |
12,682 |
|
|
$ |
19,642 |
|
|
|
|
|
Stock-based compensation
expense |
13,510 |
|
|
10,979 |
|
Transaction and integration
costs |
2,764 |
|
|
— |
|
Amortization of acquisition
related software and intangible assets |
5,505 |
|
|
4,166 |
|
Income tax related to adjustments1 |
(5,597 |
) |
|
(4,089 |
) |
|
|
|
|
Adjusted net income |
$ |
28,864 |
|
|
$ |
30,698 |
|
|
|
|
|
Weighted average common shares, diluted |
89,601 |
|
|
88,614 |
|
|
|
|
|
Diluted EPS² |
$ |
0.14 |
|
|
$ |
0.22 |
|
Diluted adjusted EPS2 |
$ |
0.32 |
|
|
$ |
0.35 |
|
|
|
|
|
Discrete tax benefits |
$ |
— |
|
|
$ |
0.07 |
|
Diluted adjusted EPS excluding discrete tax benefits |
$ |
0.32 |
|
|
$ |
0.28 |
|
(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 EPS and Diluted Adjusted EPS
included a $0.07 per diluted share discrete tax benefit primarily
related to the exercise of employee stock options for the three
months ended March 31, 2019.
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, 2020 |
March 31, 2019 |
Net income |
$ |
80,264 |
|
$ |
68,240 |
|
|
|
|
Net interest expense |
7,159 |
|
9,428 |
|
Income taxes |
23,204 |
|
(6,646 |
) |
Depreciation and amortization
of property and equipment and intangible assets |
44,418 |
|
54,399 |
|
Earnings before interest, taxes, depreciation and
amortization (EBITDA) |
155,045 |
|
125,421 |
|
Stock-based compensation
expense |
24,432 |
|
22,992 |
|
Transaction and integration
costs |
6,253 |
|
— |
|
Settlement expense |
— |
|
20,000 |
|
Adjusted EBITDA |
$ |
185,730 |
|
$ |
168,413 |
|
Reconciliation of Total Debt to Net Leverage
Ratio
(in thousands, except
ratios) |
March 31, 2020 |
|
March 31, 2019 |
Total Debt (revolving credit facility)3 |
$ |
240,000 |
|
|
$ |
240,000 |
|
Cash and cash equivalents |
(148,033 |
) |
|
(219,857 |
) |
Total net debt |
$ |
91,967 |
|
|
$ |
20,143 |
|
|
|
|
|
Net income4 |
$ |
80,264 |
|
|
$ |
68,240 |
|
Adjusted EBITDA5 |
$ |
185,730 |
|
|
$ |
168,413 |
|
Net leverage ratio6 |
0.50 |
|
|
0.12 |
|
(3) Total Debt consists of the outstanding principal under our
senior secured revolving credit facility(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 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, 2020 |
|
March 31, 2019 |
Net cash provided by operating activities |
$ |
17,094 |
|
|
$ |
28,522 |
|
Purchases of property and
equipment |
(1,678 |
) |
|
(369 |
) |
Investment in capitalized
software |
(3,339 |
) |
|
(3,621 |
) |
|
|
|
|
Non-GAAP free cash flow |
$ |
12,077 |
|
|
$ |
24,532 |
|
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
purchases 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.
Reconciliation of Revised Financial Guidance for Full
Year 2020 Net Income to Projected 2020 EBITDA and Adjusted
EBITDA
|
Twelve Months Ended |
|
December 31, 2020 |
|
Estimated Range |
|
Current Guidance |
|
Prior Guidance |
(in millions) |
Low |
|
High |
|
Low |
|
High |
Net Income |
$ |
62 |
|
|
$ |
74 |
|
|
$ |
76 |
|
|
$ |
80 |
|
|
|
|
|
|
|
|
|
Net interest expense |
$ |
6 |
|
|
$ |
6 |
|
|
$ |
6 |
|
|
$ |
6 |
|
Income taxes |
$ |
26 |
|
|
$ |
29 |
|
|
$ |
29 |
|
|
$ |
32 |
|
Depreciation and amortization
of property and equipment and intangible assets |
$ |
50 |
|
|
$ |
50 |
|
|
$ |
51 |
|
|
$ |
51 |
|
Earnings before interest, taxes, depreciation and
amortization (EBITDA) |
$ |
144 |
|
|
$ |
159 |
|
|
$ |
162 |
|
|
$ |
169 |
|
Stock-based compensation
expense |
$ |
23 |
|
|
$ |
23 |
|
|
$ |
23 |
|
|
$ |
23 |
|
Transaction and Integration
costs |
$ |
10 |
|
|
$ |
5 |
|
|
$ |
— |
|
|
$ |
— |
|
Adjusted EBITDA |
$ |
177 |
|
|
$ |
187 |
|
|
$ |
185 |
|
|
$ |
192 |
|
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