athenahealth, Inc. Reports Fourth Quarter and Full Year 2010 Results
27% Revenue Growth Over Fourth Quarter of 2009 GAAP Net Income of $7.3 Million, or $0.21 Per Diluted Share Non-GAAP Adjusted Net Income of $9.8 Million, or $0.28 Per Diluted Share
WATERTOWN, Mass. (February 17, 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 fourth quarter and full year of 2010. The Company will conduct a conference call tomorrow, Friday, February 18, 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 December
“We delivered strong top and bottom line performance during 2010, but I am most proud of the heavy lifting we did at the same time,” said Jonathan Bush, the Company’s Chairman, President, and Chief Executive Officer. “We launched a new service offering, expanded our sales, marketing and implementation capacity, achieved Meaningful Use certification, and piloted a new business model for electronic health information exchange, all while delivering more value to our clients.”
For the three months ended December
“Our investments in growth and innovation during 2010 are a sign of our confidence in athenahealth’s potential to become a multi-billion dollar company” said Tim Adams, the Company’s Chief Financial Officer. “We achieved annual revenue growth in excess of 30% for the 11th year in a row and our efforts to enhance operational efficiency yielded record profitability levels.”
For the year ended December
Key metrics and milestones in the fourth quarter and full year of 2010 included the following:
- $1.6 billion in collections posted to client accounts in the fourth quarter of 2010, compared to $1.4 billion in the same quarter of 2009
- $5.9 billion in collections posted to client accounts in all of 2010, compared to $4.9 billion in all of 2009
- 38.8 average Client Days in Accounts Receivable (DAR) in the fourth quarter of 2010, compared to 38.5 average Client DAR in the same quarter of 2009
- 27,114 active medical providers using athenaCollector
- 3,348 active medical providers using athenaClinicals
- 1,213 active medical providers using athenaCommunicator
As of December
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 800-435-1261 (617-614-4076 for international calls) using conference code No. 15398557 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 888-286-8010 (617-801-6888 for international calls) using conference code No. 52965842. A webcast replay will also be archived on the Company’s website.
About athenahealth
athenahealth, Inc. is a leading provider of web-based business services for medical groups. 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, including anticipated annual growth rates, profitability 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) | ||||||||||
| December 31 | December 31 | |||||||||
| 2010 | 2009 | |||||||||
| Assets | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 35,944 | $ | 30,526 | ||||||
| Short-term investments | 80,231 | 52,323 | ||||||||
| Accounts receivable – net | 36,870 | 33,323 | ||||||||
| Deferred tax assets | 3,856 | 5,544 | ||||||||
| Prepaid expenses and other current assets | 6,749 | 4,663 | ||||||||
| Total current assets | 163,650 | 126,379 | ||||||||
| Property and equipment – net | 31,899 | 24,871 | ||||||||
| Restricted cash | 8,691 | 9,216 | ||||||||
| Software development costs – net | 3,642 | 2,324 | ||||||||
| Purchased intangibles – net | 12,651 | 14,490 | ||||||||
| Goodwill | 22,450 | 22,120 | ||||||||
| Deferred tax assets | 10,959 | 10,284 | ||||||||
| Investments and other assets | 7,228 | 1,393 | ||||||||
| Total assets | $ | 261,170 | $ | 211,077 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||
| Current liabilities: | ||||||||||
| Current portion of long-term debt and capital lease obligations | $ | 2,909 | $ | 3,437 | ||||||
| Accounts payable | 559 | 1,880 | ||||||||
| Accrued compensation | 19,178 | 15,774 | ||||||||
| Accrued expenses | 10,981 | 10,781 | ||||||||
| Current portion of deferred revenue | 4,978 | 4,038 | ||||||||
| Interest rate derivative liability | 490 | 291 | ||||||||
| Current portion of deferred rent | 1,497 | 1,288 | ||||||||
| Total current liabilities | 40,592 | 37,489 | ||||||||
| Deferred rent, net of current portion | 5,960 | 7,444 | ||||||||
| Deferred revenue, net of current portion | 35,661 | 28,684 | ||||||||
| Other long-term liabilities | 1,897 | 1,191 | ||||||||
| Debt and capital lease obligations, net of current portion | 6,307 | 8,951 | ||||||||
| Total liabilities | 90,417 | 83,759 | ||||||||
| Preferred stock; $0.01 par value: 5,000 shares authorized and no shares issued | ||||||||||
| and outstanding at December 31, 2010 and 2009, respectively | – | – | ||||||||
| Common stock; $0.01 par value per share; 125,000 shares authorized; | ||||||||||
| 35,808 shares issued and 34,530 shares outstanding at December 31, 2010 | ||||||||||
| 35,166 shares issued and 33,888 shares outstanding at December 31, 2009 | 358 | 352 | ||||||||
| Additional paid-in capital | 200,339 | 169,715 | ||||||||
| Treasury stock, at cost, 1,278 shares | (1,200 | ) | (1,200 | ) | ||||||
| Accumulated other comprehensive income (loss) | 28 | (73 | ) | |||||||
| Accumulated deficit | (28,772 | ) | (41,476 | ) | ||||||
| Total stockholders’ equity | 170,753 | 127,318 | ||||||||
| Total liabilities and stockholders’ equity | $ | 261,170 | $ | 211,077 |
| Three Months Ended | Year Ended | ||||||||||||||||||||
| December 31 | December 31 | ||||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | ||||||||||||||||||
| Revenue: | |||||||||||||||||||||
| Business services | $ | 67,094 | $ | 53,297 | $ | 237,145 | $ | 183,230 | |||||||||||||
| Implementation and other | 2,272 | 1,149 | 8,393 | 5,297 | |||||||||||||||||
| Total revenue | 69,366 | 54,446 | 245,538 | 188,527 | |||||||||||||||||
| Expenses: | |||||||||||||||||||||
| Direct operating | 24,419 | 21,117 | 96,582 | 79,017 | |||||||||||||||||
| Selling and marketing | 14,689 | 9,222 | 52,675 | 34,072 | |||||||||||||||||
| Research and development | 4,905 | 3,980 | 18,448 | 14,348 | |||||||||||||||||
| General and administrative | 9,649 | 9,784 | 43,119 | 36,111 | |||||||||||||||||
| Depreciation and amortization | 3,171 | 2,232 | 11,117 | 7,767 | |||||||||||||||||
| Total expenses | 56,833 | 46,335 | 221,941 | 171,315 | |||||||||||||||||
| Operating income | 12,533 | 8,111 | 23,597 | 17,212 | |||||||||||||||||
| Other income (expense): | |||||||||||||||||||||
| Interest income | 90 | 78 | 309 | 1,016 | |||||||||||||||||
| Interest expense | (316 | ) | (241 | ) | (753 | ) | (968 | ) | |||||||||||||
Source: athenahealth
