athenahealth, Inc. Reports First Quarter Fiscal Year 2011 Results
28% Revenue Growth Over First Quarter of 2010 GAAP Net Income of $3.3 Million, or $0.09 Per Diluted Share Non-GAAP Adjusted Net Income of $5.9 Million, or $0.17 Per Diluted Share
WATERTOWN, Mass. (April 28, 2011) – athenahealth, Inc. (Nasdaq: ATHN), (the “Company”), a leading provider of Internet-based business services for physician practices, today announced financial and operational results for the first quarter of fiscal year 2011. The Company will conduct a conference call tomorrow, Friday, April 29, 2011, at 8:00 a.m. Eastern Time to discuss these results and management’s outlook for future financial and operational performance.
Total revenue for the three months ended March
“I am thrilled with our performance in Q1, our 45th consecutive quarter of revenue growth. Demand for the cloud-based services that athenahealth has championed since inception is growing as the business of health care becomes more complex,” said Jonathan Bush, the Company’s Chairman, President, and Chief Executive Officer. “Whether our clients must demonstrate meaningful use, develop an accountable care organization or adopt new billing requirements like ANSI 5010 and ICD-10, they can depend on athenahealth to morph in support of changing market dynamics.”
For the three months ended March
“athenahealth is pursuing a vast market opportunity that demands aggressive investments in growth and innovation,” said Tim Adams, the Company’s Chief Financial Officer. “We believe the operating leverage inherent in our cloud-based services model will enable us to invest in building long-term shareholder value during 2011 while increasing profitability.”
Key metrics and milestones in the first quarter of fiscal year 2011 included the following:
- $1.6 billion in collections posted to client accounts in the first quarter of 2011, compared to $1.3 billion in the same quarter of 2010
- 41.0 average client Days in Accounts Receivable (DAR) in the first quarter of 2011, compared to 40.0 average Client DAR in the same quarter of 2010
- 27,944 active medical providers using athenaCollector
- 4,161 active medical providers using athenaClinicals
- 1,564 active medical providers using athenaCommunicator
As of March
Use of Non-GAAP Financial Measures
In the Company’s earnings releases, conference calls, slide presentations, or webcasts, the Company may use or discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. The Company’s earnings press releases containing such non-GAAP reconciliations can be found on the Investors section of the Company’s web site at http://www.athenahealth.com.
Conference Call Information
To participate in the Company’s live conference call and webcast, please dial (800) 446-2782, or (847) 413-3235 for international calls, using conference code No. 29497876, or visit the Investors section of the Company’s web site: www.athenahealth.com. A replay will be available for one week following the conference call at (888) 843-7419, or (630) 652-3042 for international calls, using conference code No. 29497876. A webcast replay will also be archived on the Company’s website.
About athenahealth
athenahealth, Inc. is a leading provider of cloud-based business services for physician practices. athenahealth’s service offerings are based on proprietary web-native practice management and electronic health record (EHR) software, a continuously updated payer knowledge-base, integrated back-office service operations, and automated and live patient communication services. For more information, please visit www.athenahealth.com or call (888) 652-8200.
Forward-Looking Statements
This press release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements reflecting management’s expectations for future financial and operational performance and operating expenditures, expected growth and business outlook, the benefits of the Company’s current service offerings, and statements found under the Company’s Reconciliation of Non-GAAP Financial Measures section of this release. The forward-looking statements in this release do not constitute guarantees of future performance. These statements are neither promises nor guarantees, and are subject to a variety of risks and uncertainties, many of which are beyond the Company’s control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: the Company’s fluctuating operating results; the Company’s variable sales and implementation cycles, which may result in fluctuations in its quarterly results; risks associated with its expectations regarding its ability to maintain profitability; the impact of increased sales and marketing expenditures, including whether increased expansion in revenues is attained and whether impact on margins and profitability is longer term than expected; changes in tax rates or exposure to additional tax liabilities; the highly competitive industry in which the Company operates and the relative immaturity of the market for its service offerings; and the evolving and complex governmental and regulatory compliance environment in which the Company and its clients operate. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances, or otherwise. For additional disclosure regarding these and other risks faced by the Company, see the disclosures contained in its public filings with the Securities and Exchange Commission, available on the Investors section of the Company’s website at http://www.athenahealth.com and on the SEC’s website at http://www.sec.gov.
| athenahealth, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands, except per share amounts) | ||||||||||
| March 31, | December 31, | |||||||||
| 2011 | 2010 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 45,582 | $ | 35,944 | ||||||
| Short-term investments | 57,152 | 80,231 | ||||||||
| Accounts receivable – net | 42,714 | 36,870 | ||||||||
| Deferred tax assets | 4,347 | 3,856 | ||||||||
| Prepaid expenses and other current assets | 8,327 | 6,749 | ||||||||
| Total current assets | 158,122 | 163,650 | ||||||||
| Property and equipment – net | 31,423 | 31,899 | ||||||||
| Restricted cash | 5,804 | 8,691 | ||||||||
| Software development costs – net | 4,225 | 3,642 | ||||||||
| Purchased intangibles – net | 12,191 | 12,651 | ||||||||
| Goodwill | 22,450 | 22,450 | ||||||||
| Deferred tax assets | 10,332 | 10,959 | ||||||||
| Investments and other assets | 24,510 | 7,228 | ||||||||
| Total assets | $ | 269,057 | $ | 261,170 | ||||||
| Liabilities & Stockholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt and capital lease obligations | $ | 2,666 | $ | 2,909 | ||||||
| Accounts payable | 2,648 | 559 | ||||||||
| Accrued compensation | 12,585 | 19,178 | ||||||||
| Accrued expenses | 10,404 | 10,981 | ||||||||
| Current portion of deferred revenue | 5,364 | 4,978 | ||||||||
| Interest rate derivative liability | 425 | 490 | ||||||||
| Current portion of deferred rent | 1,522 | 1,497 | ||||||||
| Total current liabilities | 35,614 | 40,592 | ||||||||
| Deferred rent, net of current portion | 5,583 | 5,960 | ||||||||
| Deferred revenue, net of current portion | 38,006 | 35,661 | ||||||||
| Other long-term liabilities | 1,821 | 1,897 | ||||||||
| Debt and capital lease obligations, net of current portion | 5,757 | 6,307 | ||||||||
| Total liabilities | 86,781 | 90,417 | ||||||||
| Stockholders’ equity: | ||||||||||
| Preferred stock, $0.01 par value: 5,000 shares authorized; no shares issued | ||||||||||
| – | – | |||||||||
| Common stock, $0.01 par value: 125,000 shares authorized; 36,106 shares issued, | ||||||||||
| 361 | 358 | |||||||||
| Additional paid-in capital | 208,586 | 200,339 | ||||||||
| Treasury stock, at cost, 1,278 shares | (1,200 | ) | (1,200 | ) | ||||||
| Accumulated other comprehensive income | 50 | 28 | ||||||||
| Accumulated deficit | (25,521 | ) | (28,772 | ) | ||||||
| Total stockholders’ equity | 182,276 | 170,753 | ||||||||
| Total liabilities and stockholders’ equity | $ | 269,057 | $ | 261,170 |
| athenahealth, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| Revenue: | ||||||||
| Business services | $ | 67,486 | $ | 52,565 | ||||
| Implementation and other | 2,444 | 1,912 | ||||||
| Total revenue | 69,930 | 54,477 | ||||||
| Expense: | ||||||||
| Direct operating | 27,270 | 23,519 | ||||||
| Selling and marketing | 16,941 | 12,060 | ||||||
| Research and development | 5,079 | 4,074 | ||||||
| General and administrative | 11,719 | 11,677 | ||||||
| Depreciation and amortization | 3,398 | 2,420 | ||||||
| Total expense | 64,407 | 53,750 | ||||||
| Operating income | 5,523 | 727 | ||||||
| Other income (expense): | ||||||||
| Interest income | 107 | 78 | ||||||
| Interest expense | (177 | ) | (217 | ) | ||||
| Gain (loss) on interest rate derivative contract | 65 | (60 | ) | |||||
| Other income | 38 | 30 | ||||||
| Total other income (expense) | 33 | (169 | ) | |||||
| Income before income taxes | 5,556 | 558 | ||||||
| Income tax provision | (2,305 | ) | (281 | ) | ||||
| Net income | $ | 3,251 | $ | 277 | ||||
| Net income per share – Basic | $ | 0.09 | $ | 0.01 | ||||
| Net income per share – Diluted | $ | 0.09 | $ | 0.01 | ||||
| Weighted average shares used in computing net income per share | ||||||||
| Basic | 34,678 | 34,014 | ||||||
| Diluted | 35,657 | 35,201 |
| athenahealth, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 3,251 | $ | 277 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 3,858 | 2,880 | ||||||
| Amortization of premiums on investments | 381 | 381 | ||||||
| Provision for uncollectible accounts | 259 | 213 | ||||||
| Excess tax benefit from stock-based awards | (2,175 | ) | – | |||||
| Deferred income tax | 136 | 152 | ||||||
| Increase in fair value of contingent consideration | 114 | 304 | ||||||
| Stock-based compensation expense | 4,005 | 2,784 | ||||||
| (Gain) loss on interest rate derivative contract | (65 | ) | 60 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (6,103 | ) | (1,122 | ) |
Source: athenahealth
