athenahealth, Inc. Reports First Quarter Fiscal Year 2012 Results
38% Revenue Growth Over First Quarter of 2011 GAAP Net Income of $2.4 Million, or $0.07 Per Diluted Share Non-GAAP Adjusted Net Income of $6.3 Million, or $0.17 Per Diluted Share
WATERTOWN, Mass. (April 26, 2012) – athenahealth, Inc. (NASDAQ: ATHN) (the “Company”), a leading provider of cloud-based practice management, electronic health record (EHR), and care coordination services to medical groups, today announced financial and operational results for the first quarter of fiscal year 2012. The Company will conduct a conference call tomorrow, Friday, April 27, 2012, 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 31, 2012, was $96.6 million, compared to $69.9 million in the same period last year, an increase of 38%.
“I am very pleased with our execution during Q1. While the U.S. health care market becomes more complex, our clients are thriving as our services allow them to profit by doing the right thing,” said Jonathan Bush, the Company’s Chairman, President, and Chief Executive Officer. “During the past quarter, we streamlined the packaging of our services with athenaOne, transitioned to an order-based athenaClinicals pricing model, and extended our athenaCoordinator service to include physician receivers. We believe that these strategies have the potential to drive broader changes in the way medical care givers coordinate health care in the U.S. and that they will bring many new senders and receivers of health information onto our cloud-based network.”
For the three months ended March 31, 2012, Non-GAAP Adjusted Gross Margin was 61.5%, down from 62.5% in the same period last year as the Company continues to invest in its newest service offering, athenaCoordinatorSM. Non-GAAP Adjusted EBITDA increased 27% to $17.1 million, or 17.7% of total revenue, from Non-GAAP Adjusted EBITDA of $13.4 million, or 19.1% of total revenue, in the same period last year. For the three months ended March 31, 2012, GAAP net income was $2.4 million, or $0.07 per diluted share, compared to $3.3 million, or $0.09 per diluted share, in the same period last year. Non-GAAP Adjusted Net Income was $6.3 million, or $0.17 per diluted share, up slightly from $5.9 million, or $0.17 per diluted share, in the same period last year. See “Use of Non-GAAP Financial Measures” below.
“I am thrilled with our performance in Q1 2012, our 49th quarter of consecutive revenue growth. Demand for our cloud-based services has increased even more with the launch of our care coordination services,” said Tim Adams, the Company’s Chief Financial Officer. “Despite our success to date, we are still early in our quest to become a health information backbone and will continue our investments in growth and innovation to achieve this goal.”
Key metrics and milestones in the first quarter of fiscal year 2012 included the following:
- $2.1 billion in collections posted to client accounts in the first quarter of 2012, compared to $1.6 billion in the same quarter of 2011
- 40.0 average client Days in Accounts Receivable (DAR) in the first quarter of 2012, compared to 41.0 average client DAR in the same quarter of 2011
- 33,923 active medical providers using athenaCollector
- 7,402 active medical providers using athenaClinicals
- 6,800 active medical providers using athenaCommunicator
As of March 31, 2012, the Company had cash, cash equivalents, and available-for-sale investments of $133.6 million. The Company does not have any outstanding debt obligations.
Use of Non-GAAP Financial Measures
In the Company’s earnings releases, conference calls, slide presentations, and 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 800-447-0521 (or 847-413-3238 for international calls) using conference code No. 32023096, or visit the Investors section of the Company’s web site at www.athenahealth.com. A replay will be available for one week following the conference call at 888-843-7419 (and 630-652-3042 for international calls) using conference code No. 32023096. 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 care coordination services. For more information, please visit http://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; statements regarding the benefits of the Company’s service offerings, the creation of a sustainable market for health information exchange, a social network for health care, and a national health IT network, statements regarding the expansion of the types of tasks the Company performs for its clients and the Company’s continued investment in growth and development; and statements found under the Company’s “Reconciliation of Non-GAAP Financial Measures to Comparable GAAP 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 the acquisition and integration of companies and new technologies, including those related to the Company’s ability to successfully integrate the athenaCoordinator service and successfully scale the Proxsys services and technologies to achieve expected synergies; 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, please 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 | December | |||||||
| 31, 2012 | 31, 2011 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 52,491 | $ | 57,781 | ||||
| Short-term investments | 63,550 | 62,084 | ||||||
| Current portion of restricted cash | 4,047 | – | ||||||
| Accounts receivable – net | 53,058 | 49,038 | ||||||
| Deferred tax assets | 5,527 | 5,245 | ||||||
| Prepaid expenses and other current assets | 12,549 | 8,988 | ||||||
| Total current assets | 191,222 | 183,136 | ||||||
| Property and equipment – net | 51,482 | 52,275 | ||||||
| Restricted cash, net of current portion | 856 | 5,007 | ||||||
| Software development costs – net | 8,187 | 6,974 | ||||||
| Purchased intangibles – net | 19,299 | 20,052 | ||||||
| Goodwill | 47,307 | 47,307 | ||||||
| Deferred tax assets | 12,191 | 12,532 | ||||||
| Investments and other assets | 20,360 | 21,503 | ||||||
| Total assets | $ | 350,904 | $ | 348,786 | ||||
| Liabilities & Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,556 | $ | 6,318 | ||||
| Accrued compensation | 16,829 | 28,176 | ||||||
| Accrued expenses | 17,753 | 17,774 | ||||||
| Current portion of deferred revenue | 6,311 | 6,345 | ||||||
| Current portion of deferred rent | 987 | 960 | ||||||
| Total current liabilities | 46,436 | 59,573 | ||||||
| Deferred rent, net of current portion | 2,684 | 2,932 | ||||||
| Deferred revenue, net of current portion | 45,173 | 44,281 | ||||||
| Other long-term liabilities | 3,109 | 5,529 | ||||||
| Total liabilities | 97,402 | 112,315 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.01 par value: 5,000 shares authorized; no shares issuedand outstanding at March 31, 2012, and December 31, 2011, respectively | – | – | ||||||
| Common stock, $0.01 par value: 125,000 shares authorized; 37,024 sharesissued, and 35,746 shares outstanding at March 31, 2012; 36,678 sharesissued and 35,400 shares outstanding at December 31, 2011. | 370 | 367 | ||||||
| Additional paid-in capital | 261,668 | 247,131 | ||||||
| Treasury stock, at cost, 1,278 shares | (1,200 | ) | (1,200 | ) | ||||
| Accumulated other comprehensive loss | (38 | ) | (101 | ) | ||||
| Accumulated deficit | (7,298 | ) | (9,726 | ) | ||||
| Total stockholders’ equity | 253,502 | 236,471 | ||||||
| Total liabilities and stockholders’ equity | $ | 350,904 | $ | 348,786 |
| athenahealth, Inc. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited, in thousands, except per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenue: | ||||||||
| Business services | $ | 93,549 | $ | 67,486 | ||||
| Implementation and other | 3,017 | 2,444 | ||||||
| Total revenue | 96,566 | 69,930 | ||||||
| Expense: | ||||||||
| Direct operating | 38,798 | 27,270 | ||||||
| Selling and marketing | 23,728 | 16,941 | ||||||
| Research and development | 7,168 | 5,079 | ||||||
| General and administrative | 16,199 | 11,719 | ||||||
| Depreciation and amortization | 5,486 | 3,398 | ||||||
| Total expense | 91,379 | 64,407 | ||||||
| Operating income | 5,187 | 5,523 | ||||||
| Other income (expense) | 134 | 33 | ||||||
| Income before income taxes | 5,321 | 5,556 | ||||||
| Income tax provision | (2,893 | ) | (2,305 | ) | ||||
| Net income | $ | 2,428 | $ | 3,251 | ||||
| Net income per share – Basic | $ | 0.07 | $ | 0.09 | ||||
| Net income per share – Diluted | $ | 0.07 | $ | 0.09 | ||||
| Weighted average shares used in computing net income per share: | ||||||||
| Basic | 35,535 | 34,678 | ||||||
| Diluted | 36,996 | 35,657 |
| athenahealth, Inc. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2012 | 2011 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 2,428 | $ | 3,251 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 6,276 | 3,858 | ||||||
| Amortization of premium on investments | 354 | 381 | ||||||
| Provision for uncollectible accounts | 287 | 259 | ||||||
| Excess tax benefit from stock-based awards | (2,829 | ) | (2,175 | ) | ||||
| Deferred income tax | 40 | 136 | ||||||
| Increase in fair value of contingent consideration | 71 | 114 | ||||||
| Stock-based compensation expense | 5,633 | 4,005 | ||||||
| Loss on interest rate derivative contract | – | (65 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (4,307 | ) | (6,103 | ) | ||||
| Prepaid expenses and other current assets | (847 | ) | 542 | |||||
| Other long-term assets | 94 | 79 | ||||||
| Accounts payable | 3,054 | 2,124 | ||||||
| Accrued expenses | 77 | 1,791 | ||||||
| Accrued compensation |
Source: athenahealth
