HMS Holdings Corp. (NASDAQ:HMSY) today announced financial and operating results for the fourth quarter and full year ended December 31, 2013.
Q4 and Full Year 2013 Financial Summary
For the quarter ended December 31, 2013, HMS reported revenue of $121.6 million, a decrease of 8.6% compared to revenue of $133.1 million for the same period a year ago. Net income for the quarter was $11.1 million or $0.13 per fully diluted share compared to net income of $20.0 million or $0.23 per fully diluted share for the same period a year ago. Adjusted EPS decreased 25.9% year over year to $0.20.
For the year ended December 31, 2013, HMS reported revenue of $491.8 million, an increase of 3.8% compared to revenue of $473.7 million for the same period a year ago. Net income for the year ended December 31, 2013 was $40.0 million or $0.45 per fully diluted share compared to net income of $50.5 million or $0.57 per fully diluted share for the same period a year ago. Adjusted EPS decreased 12.8% year over year to $0.75.
"Fourth quarter 2013 revenue compares unfavorably to the prior year quarter, which had benefited principally from a catch-up of revenue associated with insurance carriers' resolution of claim adjudication delays caused by implementation of new formats earlier in the year," said Bill Lucia, Chief Executive Officer. "Fourth quarter 2013 expenses were higher year over year, but lower than the prior quarter, reflecting our continued efforts to manage our cost structure. Fourth quarter spending also included expenses required to maintain our responsiveness to changes in the Medicare RAC program and re-procurement."
"2013 was a year of instability within the post-reform healthcare environment, and also marked the start of the now year-long re-procurement process for the Medicare RAC program," remarked Lucia. "Against this backdrop, we maintained our leadership position in the State Medicaid coordination of benefits market by re-procuring every contract up for bid and achieved record results under our Medicare RAC contract. With new industry experts on our executive team, we began an enterprise-wide re-engineering of our operations focusing on improving yield and efficiencies, restructured our cost basis, and identified new opportunities for product innovation and growth across our markets, including commercial."
Lucia added, "As we move into 2014, the Medicare RAC program and the related procurement process continue to evolve, which means there is still a wide range of potential outcomes for this contract in the year. Given the importance of this program to CMS and the Medicare Trust Fund, we expect to see a resolution in the second half of the year. In the interim, we remain focused on growing the majority of our business by reinvigorating growth in sales, strengthening our product portfolio to take advantage of ACA fueled Medicaid expansion, and further streamlining our cost structure to prepare us for stronger revenue and EPS growth in 2015 and beyond."