NEW YORK, July 28 /PRNewswire-FirstCall/ -- HMS Holdings Corp. announced results today for the three months ended June 30, 2004, reporting revenue of $21.3 million compared with $17.0 million during the same period in the prior year. HMSY reported net income of $1.1 million or $0.06 per basic and $0.05 per diluted common share for the quarter, compared to a net loss $0.9 million or $0.05 per basic and diluted common share during the same period last year.
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For the six months ended June 30, 2004, HMSY generated revenue of $40.7 million compared with $34.8 million during the same period in the prior year and reported net income of $0.9 million or $0.05 per basic and $0.04 per diluted common share compared to a net loss of $1.3 million or $0.07 per basic and diluted common share during the same period in the prior year. As of June 30, 2004, HMSY had cash and cash equivalents of $28.2 million and no debt.
Revenue from Health Management Systems, Inc., which provides coordination of benefits and cost containment services to state Medicaid agencies, was $10.4 million and $20.4 million for the three and six month periods ended June 30, 2004, respectively, compared to $9.3 million and $17.9 million, respectively, for the same periods in the prior year. This 14% year-to-date growth reflects increased revenue from existing customers as well as an increase in the number of customers. For the full fiscal year, HMS revenue is expected to grow approximately 15% over the prior year, which is at the high end of our previous guidance of 12% to 15% growth.
Revenue from Accordis, which provides revenue cycle management services to hospitals and emergency medical transport agencies, was $10.9 million and $20.3 million for the three and six month periods ended June 30, 2004, respectively, compared to $7.7 million and $16.8 million, respectively, for the same periods in the prior year. This 20% year-to-date growth reflects increased revenue from existing customers as well as an increase in the number of customers. Because Accordis revenues in 2003 were disproportionately weighted to the second half, Accordis growth will be less pronounced in the second half of 2004. For the full fiscal year, Accordis revenue is expected to grow between 10% and 12% over the prior year, which represents a slight improvement from our earlier guidance of 6% to 9% growth.
William F. Miller III, HMSY’s Chairman and Chief Executive Officer, said, “Our second quarter and year to date results confirm that we are well on our way to our third consecutive year of revenue growth and have returned to solid operating profitability. Both our HMS and Accordis businesses have posted significant revenue increases over the prior year and we have raised our expected revenue growth guidance for both businesses. We continue to believe that our revenue growth should translate into incremental operating income consistent with our leverage model of 20% for Accordis and 40% for HMS. As always, the project nature of some of our business can result in an uneven revenue stream and thus our expectations for 2004 are based on an annual comparison to 2003 and are not necessarily applicable on a sequential or year- over-year quarterly basis.”
HMSY will be hosting a conference call with the investment community on Thursday, July 29, 2004 at 10:00 A.M. Eastern Daylight Time. The conference call will include listen-only capability for individual investors and interested parties. The conference call number is (212) 231-6045. The conference call will be available for replay at (212) 857-5423 until August 13, 2004. This press release and the included earnings statements will be available at http://www.hmsholdings.com/ indefinitely.
The HMS Holdings Corp. Form 10-Q for the three and six month periods ended June 30, 2004 will be filed and available on our website http://www.hmsholdings.com/ on or about August 5, 2004, and will contain additional information about our results of operations for the fiscal year to date. Shareholders and interested investors are also welcome to contact the Company through our Investor Relations phone number, 212-857-5423. Following the filing of the Form 10-Q, corporate executives will be available to respond to inquiries from shareholders and interested investors.
HMS Holdings Corp. provides revenue recovery, cost containment and business office outsourcing services to healthcare providers and payors. We help our clients increase revenue, accelerate collections and reduce operating and administrative costs.
Certain statements in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of HMSY, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to (i) the information being of a preliminary nature and therefore subject to further adjustment; (ii) the final resolution of the investigation by the United States Attorney’s Office; (iii) the uncertainties of litigation; (iv) HMSY’s dependence on significant customers; (v) changing conditions in the healthcare industry which could simplify the reimbursement process and adversely affect HMSY’s business; (vi) government regulatory and political pressures which could reduce the rate of growth of healthcare expenditures and/or discourage the assertion of claims for reimbursement against and delay the ultimate receipt of payment from third party payors; (vii) competitive actions by other companies, including the development by competitors of new or superior services or products or the entry into the market of new competitors; (viii) all the risks inherent in the development, introduction, and implementation of new products and services; and (ix) other risk factors described from time to time in HMSY’s filings with the SEC, including HMSY’s Form 10-K for the year ended December 31, 2003. HMSY assumes no responsibility to update the forward-looking statements contained in this release as a result of new information, future events or otherwise. When/if used in this release, the words “focus,” “believe,” “confident,” “anticipate,” “expected,” “strong,” “potential,” and similar expressions are intended to identify forward-looking statements, and the above described risks inherent therein.
Condensed Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) (unaudited) Three months ended Six months ended June 30, June 30, 2004 2003 2004 2003 Revenue $21,326 $17,016 $40,653 $34,774 Cost of services: Compensation 11,165 9,619 21,645 19,489 Data processing 1,220 1,190 2,386 2,377 Occupancy 1,372 1,367 2,700 2,852 Direct project costs 4,245 2,959 7,422 6,294 Other operating costs 2,196 1,767 4,018 3,513 US Attorney investigation costs 44 1,075 1,731 1,702 Total cost of services 20,242 17,977 39,902 36,227 Operating income (loss) 1,084 (961) 751 (1,453) Net interest income 58 59 118 156 Income (loss) before income taxes 1,142 (902) 869 (1,297) Income taxes - - - - Net income (loss) $1,142 $(902) $869 $(1,297) Basic income (loss) per share data: Net loss per share $0.06 $(0.05) $0.05 $(0.07) Weighted average common shares outstanding, basic 19,173 18,284 18,896 18,281 Diluted income (loss) per share data: Net income (loss) per share $0.05 $(0.05) $0.04 $(0.07) Weighted average common shares outstanding, diluted 22,260 18,284 22,133 18,281 Condensed Consolidated Balance Sheets ($ In Thousands, Except Share and Per Share Amounts) (unaudited) June 30, December 31, 2004 2003 Assets Current assets: Cash and cash equivalents $28,228 $26,615 Short-term investments 100 100 Accounts receivable, net 18,637 17,331 Prepaid expenses and other current assets 1,306 1,072 Total current assets 48,271 45,118 Property and equipment, net 3,416 3,123 Goodwill 5,679 5,679 Deferred income taxes, net 8,920 8,920 Other assets 133 283 Total assets $66,419 $63,123 Liabilities and Shareholders’ Equity Current liabilities: Accounts payable, accrued expenses and other liabilities $11,903 $11,290 Total current liabilities 11,903 11,290 Other liabilities 1,356 1,226 Total liabilities 13,259 12,516 Commitments and contingencies Shareholders’ equity: Preferred stock - $.01 par value; 5,000,000 shares authorized; none issued - - Common stock - $.01 par value; 45,000,000 shares authorized; 20,841,094 shares issued and 19,196,178 shares outstanding at June 30, 2004; 20,042,421 shares issued and 18,397,505 shares outstanding at December 31, 2003 208 200 Capital in excess of par value 76,843 75,167 Accumulated deficit (14,603) (15,472) Treasury stock, at cost; 1,644,916 shares at June 30, 2004 and December 31, 2003 (9,288) (9,288) Total shareholders’ equity 53,160 50,607 Total liabilities and shareholders’ equity $66,419 $63,123 Condensed Consolidated Statements of Cash Flows ($ in Thousands) (unaudited) Six months ended June 30, 2004 2003 Operating activities: Net income (loss) $869 $(1,297) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Loss on disposal of fixed assets 18 50 Depreciation and amortization 1,098 1,377 Provision for doubtful accounts 150 150 Stock compensation credit - (21) Changes in assets and liabilities: Increase in accounts receivable (1,456) (1,312) Increase in prepaid expenses and other current assets (234) (62) Decrease in other assets 150 16 Increase (decrease) in accounts payable, accrued expenses and other liabilities 743 (2,216) Net cash provided by (used in) operating activities 1,338 (3,315) Investing activities: Purchases of property and equipment (1,270) (311) Net proceeds from sale of short-term investments - 1,000 Investment in software (139) - Net cash provided by (used in) investing activities (1,409) 689 Financing activities: Proceeds from exercise of stock options 1,684 106 Repayment of note receivable from officer for purchase of common stock - 361 Purchases of treasury stock - (105) Proceeds from issuance of common stock - 48 Net cash provided by financing activities 1,684 410 Net increase (decrease) in cash and cash equivalents 1,613 (2,216) Cash and cash equivalents at beginning of period 26,615 24,174 Cash and cash equivalents at end of period $28,228 $21,958 Supplemental disclosure of non-cash investing and financing activities: Change in unearned compensation $- $(21) Supplemental disclosure of cash flow information: Cash paid for income taxes $46 $18
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CONTACT: William F. Miller III, Chairman and CEO of HMS Holdings Corp.,+1-212-857-5423, or +1-212-857-5973 (fax), or ir@hmsy.com
Web site: http://www.hmsholdings.com/
