HMS Holdings Corp. (NASDAQ:HMSY) today announced financial results
for the fourth quarter and full-year 2016. Net income for the
quarter ended December 31, 2016 was $11.0 million or $0.13 per
diluted share, compared to net income of $13.5 million or $0.16 per
diluted share in the third quarter of 2016 and $8.7 million or
$0.10 per diluted share in the prior year fourth quarter. Adjusted
EPS in the quarter was $0.20 per diluted share, compared to
adjusted EPS of $0.24 per diluted share in the third quarter of
2016 and adjusted EPS of $0.19 per diluted share in the prior year
fourth quarter. Net income and adjusted EPS in the third quarter of
2016 both included tax benefits of approximately $6.2 million or
$0.07 per diluted share for certain prior open years’ Research and
Development (“R&D”) credits and domestic manufacturing
deductions recognized in the quarter.
For the full-year ended December 31, 2016, net
income was $37.6 million or $0.43 per diluted share, compared to
$24.5 million or $0.28 per diluted share in the prior year – an
increase of $0.15 or 53.6%. Adjusted EPS for the full-year 2016 was
$0.75 per diluted share, compared to $0.57 per diluted share in
full-year 2015 - an increase of $0.18 per diluted share or
31.6%.
Total revenue in the fourth quarter was $128.1
million, compared to total revenue of $124.6 million in the third
quarter of 2016 and $128.5 million in the prior year fourth
quarter. For the full-year 2016, total revenue increased 4.6% to a
record $496.0 million, including $18.8 million of Medicare RAC
revenue, compared to total revenue for the full-year 2015 of $474.2
million, which included $20.5 million of Medicare RAC revenue.
“2016 was a year of solid growth in total
revenue, operating income and adjusted EPS. Adjusted EBITDA also
increased, overall profitability and margins improved, operating
cash flow remained strong and we acquired a care management
platform - which was our first step in building out a new vertical
to complement our historically strong cost containment product
suite,” said Bill Lucia, Chairman and CEO. “We enter the new year
with momentum as fourth quarter health plan revenue of $64.3
million was the second consecutive record quarterly total, though
not quite enough to meet our full-year growth target. Additionally,
sales which closed during the second half of 2016 and will become
revenue generating over the next few months; the run rate benefit
of business implemented throughout last year; ongoing product yield
improvement initiatives; and a robust pipeline of potential sales
we expect to close in the early part of this year each contribute
to our view of expected 2017 growth. As a result, we are projecting
a high teens increase in year-over-year health plan revenue," Lucia
concluded.
Revenue in the fourth quarter of $127.4 million,
excluding Medicare RAC, was approximately 7.2% higher than the
prior year fourth quarter. Commercial health plan revenue in the
quarter was a record $64.3 million, a 10% increase compared to
$58.5 million in the prior year fourth quarter and 8.6% higher than
the third quarter of 2016. State government revenue was $57.7
million in the fourth quarter, a 5.9% increase compared to $54.5
million in the prior year fourth quarter and 8.9% higher than the
third quarter of 2016. Federal (excluding Medicare RAC) and Other
revenue was $5.3 million in the fourth quarter, a $0.5 million
decrease compared to the prior year fourth quarter and a $0.5
million decrease compared to the third quarter of 2016. Medicare
RAC revenue in the fourth quarter of 2016 was $0.7 million,
compared to $9.7 million in the prior year fourth quarter and $5.8
million in the third quarter of 2016.
On a full-year basis, commercial health plan
revenue was $234.7 million, a 15.6% increase compared to $203.1
million in 2015; state government revenue was $219.1 million, a
3.1% decrease compared to $226.1 million in 2015; Federal
(excluding Medicare RAC) and Other revenue was $23.3 million, a
decrease of $1.3 million or 5.3% compared to 2015; and Medicare RAC
revenue was $18.8 million, an 8.0% decrease compared to $20.5
million in 2015.
Coordination of Benefits (“COB”) revenue, which
continues to be our largest product line across both the state
government and commercial health plan businesses, was $95.0 million
in the fourth quarter of 2016 compared to $87.1 million in the
prior year fourth quarter and $86.3 million in the third quarter of
2016. COB accounted for 74.2% of total revenue in the fourth
quarter, compared to 67.8% in the prior year fourth quarter and
69.3% in the third quarter of 2016. For the full-year, COB revenue
was $353.9 million, a 4.8% increase compared to $337.6 million in
2015.
Payment integrity (“PI”) revenue (excluding
Medicare RAC) was $32.4 million in the fourth quarter, a $0.7
million or 2.2% increase compared to the prior year fourth quarter
and a $0.1 million or 0.3% decrease from the third quarter of 2016.
For the full-year, PI revenue was $123.3 million, a 6.2% increase
compared to $116.1 million in 2015.
"The leveragability and cash flow generation
inherent in our operating model was evident throughout 2016, but
particularly so in the fourth quarter which included adjusted
EBITDA of $32.2 million, operating cash flow of $34.3 million and a
14.6% operating margin," said Jeff Sherman, CFO. “Available cash at
year-end of ~$176 million was significantly higher than the prior
year end, even after our third-quarter acquisition of Essette and
share repurchases in the fourth quarter of approximately $20.5
million. Our strong balance sheet and expected operating cash flow
of $90–110 million for 2017 position the Company well for
additional acquisitions, planned investments in big data solutions
and our IT infrastructure, internal product innovation activities
and other growth initiatives," added Sherman.
For additional information about the Company’s
fourth quarter and full-year 2016 financial results and the
Company’s 2017 guidance, see the Q4 and Full-Year 2016 Investor
Presentation which is available on the Company’s website at
http://investor.hms.com/events.cfm.
Webcast and Conference Call
Information
HMS will report its preliminary fourth quarter
and full-year 2016 financial and operating results via webcast at
7:30 AM CT / 8:30 AM ET on Friday, February 24, 2017. The numbers
are preliminary as there are still open audit items that will be
discussed on the webcast. 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 February 24, 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 Holdings Corp., through its subsidiaries,
provides coordination of benefits, payment integrity and care
management solutions for payers. The Company serves state Medicaid
programs; commercial health plans, including Medicaid managed care,
Medicare Advantage and group and individual health lines of
business; federal government health agencies, including the Centers
for Medicare & Medicaid Services and the Veterans Health
Administration; government and private employers; child support
agencies; and other healthcare payers and sponsors. As a result of
the Company's services, customers recover billions of dollars
annually and save billions more through the prevention of improper
payments.
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, unaudited results, which are not final until
the Company’s Form 10-K 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 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 failure 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 failure 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 failure 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 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; 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
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
Three Months Ended December
31, |
|
Twelve Months Ended
December 31, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
Revenue |
|
|
|
$ |
128,093 |
|
|
$ |
128,514 |
|
|
$ |
496,010 |
|
|
$ |
474,216 |
|
|
|
Cost of
services: |
|
|
|
|
|
|
|
|
|
|
|
Compensation |
|
|
|
47,229 |
|
|
|
46,694 |
|
|
|
189,271 |
|
|
|
178,272 |
|
|
|
Data processing |
|
|
|
9,068 |
|
|
|
10,409 |
|
|
|
37,337 |
|
|
|
40,915 |
|
|
|
Occupancy |
|
|
|
3,354 |
|
|
|
3,765 |
|
|
|
14,000 |
|
|
|
15,766 |
|
|
|
Direct project expenses |
|
|
9,301 |
|
|
|
14,775 |
|
|
|
46,254 |
|
|
|
51,527 |
|
|
|
Other operating expenses |
|
|
7,130 |
|
|
|
8,453 |
|
|
|
27,778 |
|
|
|
28,895 |
|
|
|
Amortization of acquisition related software and
intangible assets |
|
7,614 |
|
|
|
7,013 |
|
|
|
28,030 |
|
|
|
28,148 |
|
|
|
Total cost of services |
|
|
83,696 |
|
|
|
91,109 |
|
|
|
342,670 |
|
|
|
343,523 |
|
|
|
Selling,
general and administrative expenses |
|
25,639 |
|
|
|
22,582 |
|
|
|
95,671 |
|
|
|
83,121 |
|
|
|
Total operating expenses |
|
|
109,335 |
|
|
|
113,691 |
|
|
|
438,341 |
|
|
|
426,644 |
|
|
|
Operating income |
|
|
|
18,758 |
|
|
|
14,823 |
|
|
|
57,669 |
|
|
|
47,572 |
|
|
|
Interest
expense |
|
|
|
(2,207 |
) |
|
|
(1,970 |
) |
|
|
(8,519 |
) |
|
|
(7,812 |
) |
|
|
Interest income |
|
|
|
109 |
|
|
|
15 |
|
|
|
321 |
|
|
|
49 |
|
|
|
Income before income taxes |
|
|
16,660 |
|
|
|
12,868 |
|
|
|
49,471 |
|
|
|
39,809 |
|
|
|
Income tax expense |
|
|
|
5,658 |
|
|
|
4,143 |
|
|
|
11,835 |
|
|
|
15,282 |
|
|
|
Net income |
|
|
$ |
11,002 |
|
|
$ |
8,725 |
|
|
$ |
37,636 |
|
|
$ |
24,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income per common share: |
|
|
|
|
|
|
|
|
|
Net income per common share -- basic |
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.45 |
|
|
$ |
0.28 |
|
|
|
Diluted income per common share: |
|
|
|
|
|
|
|
|
|
Net income per common share -- diluted |
$ |
0.13 |
|
|
$ |
0.10 |
|
|
$ |
0.43 |
|
|
$ |
0.28 |
|
|
|
Weighted average
shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
84,154 |
|
|
|
86,625 |
|
|
|
84,221 |
|
|
|
87,881 |
|
|
|
Diluted |
|
|
|
|
85,822 |
|
|
|
87,110 |
|
|
|
86,987 |
|
|
|
88,361 |
|
|
|
|
|
|
Note: Certain reclassifications were made to
prior period amounts to conform to current period
presentations. |
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except per
share amounts) |
|
|
|
|
|
|
|
|
|
|
|
December 31,
2016 |
|
December 31, 2015 |
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
$ |
175,999 |
|
|
$ |
145,610 |
|
|
|
Accounts receivable, net of allowance for doubtful accounts of
$10,772 and $11,464, |
|
|
|
|
|
at December 31, 2016 and 2015, respectively |
|
|
173,582 |
|
|
|
169,146 |
|
|
|
Prepaid expenses |
|
|
|
|
|
13,699 |
|
|
|
11,261 |
|
|
|
Income tax receivable |
|
|
|
|
3,354 |
|
|
|
- |
|
|
|
Other current assets |
|
|
|
|
1,001 |
|
|
|
3,051 |
|
|
|
Total current assets |
|
|
|
|
367,635 |
|
|
|
329,068 |
|
|
|
Property
and equipment, net |
|
|
|
|
92,167 |
|
|
|
96,551 |
|
|
|
Goodwill |
|
|
|
|
|
|
379,716 |
|
|
|
361,468 |
|
|
|
Intangible
assets, net |
|
|
|
|
37,797 |
|
|
|
54,308 |
|
|
|
Deferred
financing costs, net |
|
|
|
|
2,790 |
|
|
|
4,873 |
|
|
|
Other assets |
|
|
|
|
|
2,650 |
|
|
|
4,329 |
|
|
|
Total assets |
|
|
|
|
$ |
882,755 |
|
|
$ |
850,597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses and other liabilities |
$ |
59,402 |
|
|
$ |
51,661 |
|
|
|
Estimated liability for appeals |
|
|
|
|
30,755 |
|
|
|
33,078 |
|
|
|
Income taxes payable |
|
|
|
|
- |
|
|
|
3,873 |
|
|
|
Total current liabilities |
|
|
|
|
90,157 |
|
|
|
88,612 |
|
|
|
Long-term
liabilities: |
|
|
|
|
|
|
|
|
|
Revolving credit facility |
|
|
|
|
197,796 |
|
|
|
197,796 |
|
|
|
Net deferred tax liabilities |
|
|
|
|
22,717 |
|
|
|
30,961 |
|
|
|
Deferred rent |
|
|
|
|
|
5,427 |
|
|
|
6,006 |
|
|
|
Other liabilities |
|
|
|
|
|
10,048 |
|
|
|
2,520 |
|
|
|
Total long-term liabilities |
|
|
|
|
235,988 |
|
|
|
237,283 |
|
|
|
Total liabilities |
|
|
|
|
|
326,145 |
|
|
|
325,895 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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; 95,966,852
shares issued and 83,552,774 shares |
|
|
|
|
|
outstanding at December 31, 2016; 95,263,461 shares issued and
83,989,715 shares outstanding at December 31, 2015 |
|
959 |
|
|
|
952 |
|
|
|
Capital in
excess of par value |
|
|
|
|
345,025 |
|
|
|
330,290 |
|
|
|
Retained
earnings |
|
|
|
|
|
326,110 |
|
|
|
288,474 |
|
|
|
Treasury stock, at cost -- 12,414,078 shares at
December 31, 2016 and 11,273,746 shares December 31, 2015 |
|
(115,484 |
) |
|
|
(95,014 |
) |
|
|
Total shareholders' equity |
|
|
|
|
556,610 |
|
|
|
524,702 |
|
|
|
Total liabilities and shareholders'
equity |
|
|
$ |
882,755 |
|
|
$ |
850,597 |
|
|
|
|
|
|
Note: Certain reclassifications were made to
prior period amounts to conform to current period
presentation. |
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Years ended December
31, |
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
$ |
37,636 |
|
|
$ |
24,527 |
|
|
$ |
13,947 |
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization of property and equipment |
|
|
24,882 |
|
|
|
30,328 |
|
|
|
32,864 |
|
|
|
Amortization of intangible assets |
|
|
|
|
20,164 |
|
|
|
20,270 |
|
|
|
20,734 |
|
|
|
Amortization of deferred financing costs |
|
|
|
|
2,083 |
|
|
|
2,084 |
|
|
|
2,084 |
|
|
|
Stock-based compensation expense |
|
|
|
|
13,277 |
|
|
|
14,297 |
|
|
|
13,356 |
|
|
|
Deferred income taxes |
|
|
|
|
|
(7,368 |
) |
|
|
(14,020 |
) |
|
|
(12,290 |
) |
|
|
(Gain) / Loss on disposal of assets |
|
|
|
|
(948 |
) |
|
|
84 |
|
|
|
219 |
|
|
|
Change in fair value of contingent consideration |
|
|
|
- |
|
|
|
- |
|
|
|
(517 |
) |
|
|
Changes in operating assets and liabilities, net of the effect
of acquisitions: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
|
(3,554 |
) |
|
|
(12,045 |
) |
|
|
14,625 |
|
|
|
Prepaid expenses |
|
|
|
|
|
(2,399 |
) |
|
|
549 |
|
|
|
1,132 |
|
|
|
Prepaid income taxes |
|
|
|
|
|
- |
|
|
|
6,711 |
|
|
|
3,445 |
|
|
|
Other current assets |
|
|
|
|
|
2,066 |
|
|
|
(412 |
) |
|
|
(2,150 |
) |
|
|
Other assets |
|
|
|
|
|
|
234 |
|
|
|
10 |
|
|
|
121 |
|
|
|
Income taxes receivable / (payable) |
|
|
|
|
(7,227 |
) |
|
|
3,873 |
|
|
|
- |
|
|
|
Accounts payable, accrued expenses and other liabilities |
|
|
12,116 |
|
|
|
(250 |
) |
|
|
18,039 |
|
|
|
Estimated liability for appeals |
|
|
|
|
(2,323 |
) |
|
|
(3,721 |
) |
|
|
(5,053 |
) |
|
|
Net cash provided by operating
activities |
|
|
|
88,639 |
|
|
|
72,285 |
|
|
|
100,556 |
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of a business, net of cash acquired |
|
|
|
(20,678 |
) |
|
|
- |
|
|
|
- |
|
|
|
Proceeds from sale of cost basis investment |
|
|
|
|
2,496 |
|
|
|
- |
|
|
|
- |
|
|
|
Purchases of land, property and equipment |
|
|
|
|
(13,703 |
) |
|
|
(8,620 |
) |
|
|
(22,687 |
) |
|
|
Investment in capitalized software |
|
|
|
|
(7,316 |
) |
|
|
(3,197 |
) |
|
|
(3,514 |
) |
|
|
Net cash used in investing
activities |
|
|
|
(39,201 |
) |
|
|
(11,817 |
) |
|
|
(26,201 |
) |
|
|
Financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Repayment of revolving credit facility |
|
|
|
|
- |
|
|
|
- |
|
|
|
(35,000 |
) |
|
|
Proceeds from exercise of stock options |
|
|
|
|
2,940 |
|
|
|
4,187 |
|
|
|
4,110 |
|
|
|
Payments of tax withholdings on behalf of employees for
net-share |
|
|
|
|
|
|
|
|
settlement for stock-based compensation |
|
|
|
|
(1,475 |
) |
|
|
(1,029 |
) |
|
|
(1,658 |
) |
|
|
Payments on capital lease obligations |
|
|
|
|
(44 |
) |
|
|
(1,132 |
) |
|
|
(1,629 |
) |
|
|
Payments on contingent consideration |
|
|
|
|
- |
|
|
|
- |
|
|
|
(428 |
) |
|
|
Purchases of treasury stock |
|
|
|
|
|
(20,470 |
) |
|
|
(50,000 |
) |
|
|
- |
|
|
|
Net cash used in financing
activities |
|
|
|
(19,049 |
) |
|
|
(47,974 |
) |
|
|
(34,605 |
) |
|
|
Net increase in cash and cash equivalents |
|
|
|
|
30,389 |
|
|
|
12,494 |
|
|
|
39,750 |
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
|
|
|
145,610 |
|
|
|
133,116 |
|
|
|
93,366 |
|
|
|
Cash and cash equivalents at end of year |
|
|
|
$ |
175,999 |
|
|
$ |
145,610 |
|
|
$ |
133,116 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
|
|
|
$ |
20,326 |
|
|
$ |
22,878 |
|
|
$ |
21,144 |
|
|
|
Cash paid for interest |
|
|
|
|
$ |
6,196 |
|
|
$ |
5,694 |
|
|
$ |
4,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of noncash
activities: |
|
|
|
|
|
|
|
|
|
Change in balance of accrued property and equipment
purchases |
|
$ |
684 |
|
|
$ |
729 |
|
|
$ |
1,610 |
|
|
|
|
|
|
Note: Certain reclassifications were made to prior
period amounts to conform to current period presentation. |
|
|
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands, except per share
amounts) |
|
|
|
Reconciliation of Net Income to EBITDA and Adjusted
EBITDA |
|
|
|
As
summarized in the following tables, earnings before interest,
taxes, depreciation and amortization, stock-based compensation, and
non-recurring legal expense (adjusted EBITDA) was $32.3 million for
the fourth quarter of 2016. |
|
|
Three months ended September
30, |
|
Three months ended December
31, |
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
2015 |
|
Net
Income |
$ |
13,508 |
|
|
$ |
11,002 |
|
$ |
8,724 |
|
Net interest
expense |
|
2,016 |
|
|
|
2,099 |
|
|
1,956 |
|
Income taxes |
|
(2,874 |
) |
|
|
5,659 |
|
|
4,144 |
|
Depreciation and amortization, net of deferred financing costs,
included in net interest expense |
|
11,106 |
|
|
|
10,962 |
|
|
12,143 |
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
23,756 |
|
|
|
29,722 |
|
|
26,967 |
|
Stock based
compensation expense |
|
2,102 |
|
|
|
2,530 |
|
|
4,089 |
|
Non-recurring legal
fees (1) |
|
- |
|
|
|
- |
|
|
- |
|
Adjusted EBITDA |
$ |
25,858 |
|
|
$ |
32,252 |
|
$ |
31,056 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA was $117.4 million for the full-year 2016.
|
|
Twelve months ended December
31, |
|
|
|
|
|
|
|
2016 |
|
|
2015 |
|
Net
Income |
$ |
37,636 |
|
$ |
24,527 |
|
Net interest
expense |
|
8,198 |
|
|
7,763 |
|
Income taxes |
|
11,835 |
|
|
15,282 |
|
Depreciation and amortization, net of deferred financing costs,
included in net interest expense |
|
44,930 |
|
|
50,598 |
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA) |
|
102,599 |
|
$ |
98,170 |
|
Stock based
compensation expense |
|
13,277 |
|
|
14,297 |
|
Non-recurring legal
fees (1) |
|
1,563 |
|
|
- |
|
Adjusted EBITDA |
$ |
117,439 |
|
$ |
112,467 |
|
|
|
1 In
periods prior to 2016, legal fees related to disputes involving PCG
were not included in adjusted earnings because they were not
considered non-recurring at the time. For the three months ended
September 30, 2015, related legal fees were $0.9 million. For the
three months ended December 31, 2015 related legal fees were $1.4
million. For the nine months ended December 31, 2015 related legal
fees were $5.5 million. |
HMS HOLDINGS CORP. AND
SUBSIDIARIES (in thousands, except per share
amounts) |
|
Reconciliation of Net Income to GAAP EPS and Adjusted
EPS |
|
As
summarized in the following tables, diluted earnings per share
adjusted for stock-based compensation expense, non-recurring legal
expense, amortization of acquisition related software and
intangible assets and for the related taxes (adjusted EPS) was
$0.20 for the fourth quarter of 2016, an increase of 5.3% from
$0.19 for the fourth quarter of 2015. |
|
Three months ended September
30, |
|
Three months ended December
31, |
|
|
|
|
|
|
2016 |
|
|
|
2016 |
|
|
|
2015 |
|
Net
Income |
$ |
13,508 |
|
|
$ |
11,002 |
|
|
$ |
8,724 |
|
Stock-based
compensation expense |
|
2,102 |
|
|
|
2,530 |
|
|
|
4,089 |
|
Non-recurring legal
fees (2) |
|
- |
|
|
|
- |
|
|
|
- |
|
Amortization of
acquisition related software and intangible assets |
|
7,015 |
|
|
|
6,989 |
|
|
|
7,013 |
|
Income
tax related to adjustments |
|
(2,644 |
) |
|
|
(3,189 |
) |
|
|
(3,349 |
) |
Sub-total |
$ |
19,981 |
|
|
$ |
17,332 |
|
|
$ |
16,477 |
|
|
|
|
|
|
|
Weighted average common shares, diluted |
|
84,853 |
|
|
|
85,822 |
|
|
|
87,110 |
|
|
|
|
|
|
|
Diluted GAAP EPS |
$ |
0.16 |
|
|
$ |
0.13 |
|
|
$ |
0.10 |
|
Diluted
adjusted EPS |
$ |
0.24 |
|
|
$ |
0.20 |
|
|
$ |
0.19 |
|
|
Adjusted EPS was $0.75 for the full-year of 2016, an increase of
31.6% compared $0.57 for the full-year of 2015.
|
|
|
Twelve months ended December 31, |
|
|
2016 |
|
|
|
2015 |
|
Net
Income |
$ |
37,636 |
|
|
$ |
24,527 |
|
Stock-based
compensation expense |
|
13,277 |
|
|
|
14,297 |
|
Non-recurring legal
fees (2) |
|
1,563 |
|
|
|
- |
|
Amortization of
acquisition related software and intangible assets |
|
28,030 |
|
|
|
28,148 |
|
Income
tax related to adjustments |
|
(15,536 |
) |
|
|
(16,295 |
) |
Sub-total |
$ |
64,970 |
|
|
$ |
50,677 |
|
|
|
|
|
Weighted average common shares, diluted |
|
86,987 |
|
|
|
88,361 |
|
|
|
|
|
Diluted GAAP EPS |
|
0.43 |
|
|
$ |
0.28 |
|
Diluted
adjusted EPS |
|
0.75 |
|
|
$ |
0.57 |
|
|
2 Related
legal fees were not considered non-recurring in 2015. For the three
months September 30, 2015, related legal fees were approximately
$0.9 million and income taxes on related legal fees were
approximately $0.3 million or the equivalent of $0.01 per diluted
Adjusted EPS. For the three months ended December 31, 2015, related
legal fees were approximately $1.4 million and income taxes on
related legal fees were approximately $0.5 million or the
equivalent of $0.01 per diluted Adjusted EPS. For the twelve months
ended December 31, 2015, related legal fees were approximately $5.5
million and income taxes on related legal fees were approximately
$2.1 million or the equivalent of $0.04 per diluted Adjusted
EPS. |
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Francesca Marraro
VP, Marketing and Communications
fmarraro@hms.com
212-857-5442
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