MedAssets, Inc. Reports First Quarter 2015 Financial Results

ATLANTA, April 29, 2015 (GLOBE NEWSWIRE) -- MedAssets, Inc. (Nasdaq:MDAS) today announced results for its first quarter ended March 31, 2015, which are summarized below.

($ in millions, except per share)    1Q'15  1Q'14  % Change
Net Revenue:         
Spend and Clinical Resource Mgmt (SCM)   $119.4 $108.6   9.9%
Revenue Cycle Management (RCM)     66.2   62.3    6.3
Total Net Revenue    185.6  170.9   8.6
Net income    3.4  7.7  (56.3)
Earnings per share (EPS) – diluted    0.06  0.12   (50.0)
Non-GAAP adjusted EBITDA    57.4  56.7  1.2
Non-GAAP adjusted EPS - diluted    $ 0.31  $ 0.32    (3.1) 
Weighted average shares – diluted    60.5  61.7  (1.9)%

Net Revenue

Total net revenue for the first quarter of 2015 increased 8.6% to $185.6 million from $170.9 million for the first quarter of 2014. Excluding the revenue contribution from Sg2 (acquired on September 22, 2014), total net revenue growth was 2.4% on a year-over-year basis.

Net revenue in the SCM segment increased 9.9% to $119.4 million from $108.6 million for the first quarter of 2014 due to the contribution from Sg2 and growth in group purchasing net administrative fees, partially offset by a slight decline in advisory solutions consulting fees. Excluding Sg2, first quarter SCM net revenue increased 0.1%. Net revenue in the RCM segment increased 6.3% to $66.2 million from $62.3 million for the first quarter of 2014 as technology-related revenue (69.5% of RCM segment revenue) increased 4.0% while services-related revenue increased 11.8%.

Non-GAAP Adjusted EBITDA

Total non-GAAP adjusted EBITDA was $57.4 million, or 30.9% of total net revenue, for the first quarter of 2015, a 1.2% increase from total non-GAAP adjusted EBITDA of $56.7 million, or 33.2% of total net revenue, for the first quarter of 2014. The dollar increase was due to growth in net revenue noted above, partially offset by a higher proportion of revenue from lower-margin advisory, consulting and revenue cycle services.

Net Income, Earnings Per Share (EPS) and Non-GAAP Adjusted EPS

Net income for the first quarter of 2015 was $3.4 million, or $0.06 per share, compared with net income of $7.7 million, or $0.12 per share, for the first quarter of 2014. Non-GAAP adjusted EPS (defined as EPS excluding non-cash acquisition-related intangible amortization and depreciation, non-cash share-based compensation, certain restructuring, acquisition and integration-related expenses and non-recurring items on a tax-adjusted basis) was $0.31 per share for the first quarter of 2015, compared with non-GAAP adjusted EPS of $0.32 per share for the first quarter of 2014.

Cash Flow and Capital Resources

Cash provided by operating activities in the first quarter of 2015 was $34.6 million, up 95.1% from $17.7 million for the first quarter of 2014. Non-GAAP free cash flow (defined as cash provided by operating activities less purchases of property, equipment and software and capitalized software development costs) increased 205.5% to $23.2 million from $7.6 million for the first quarter of 2014 due to improvements in working capital during the first quarter of 2015. The company's balance sheet at March 31, 2015 included $848.8 million in total bank and bond debt, net of cash and cash equivalents. Total net debt equates to a leverage ratio of approximately 3.6 times non-GAAP adjusted EBITDA for the trailing twelve-month period.

Non-GAAP Contracted Revenue

At March 31, 2015, MedAssets' rolling 12-month non-GAAP contracted revenue estimate was $696.6 million (SCM segment - $446.5 million; RCM segment - $250.1 million), a year-over-year increase of 9.2% (an increase of 3.5% excluding Sg2). Non-GAAP contracted revenue is the company's estimate of contractually committed revenue to be generated under existing client contracts in the forward 12-month period.

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