MedAssets' total net revenue for fourth-quarter of 2009 increases 14.3%

MedAssets, Inc. (NASDAQ: MDAS) today announced results for its fourth quarter and year ended December 31, 2009, as summarized below:

Net Revenue

Fourth Quarter

Total net revenue for the fourth quarter of 2009 increased 14.3% to $95.7 million from $83.7 million in the fourth quarter of 2008. RCM segment growth of 14.1% was driven primarily by an increase in the deployment of comprehensive or transformational revenue cycle technology and services engagements as well as increased demand in reimbursement technology solutions. Revenue growth of 14.7% in the SM segment was generated by strong demand for medical device consulting and strategic sourcing services, and modest growth in group purchasing services.

Full Year

Total net revenue for the year ended December 31, 2009 was $341.3 million, an increase of 22.0% when compared to total net revenue of $279.7 million reported for full-year 2008.

Comparing period-over-period organic growth, the Company’s total net revenue for full-year 2009 increased 10.7% to $341.3 million from non-GAAP acquisition-affected total net revenue of $308.2 million for full-year 2008.

Non-GAAP Adjusted EBITDA

Fourth Quarter

In the fourth quarter of 2009, non-GAAP total adjusted EBITDA was $36.0 million, or 37.7% of total net revenue, a 22.4% increase over non-GAAP total adjusted EBITDA of $29.4 million, or 35.2% of total net revenue, in the fourth quarter of 2008. SM segment adjusted EBITDA margin expanded 490 basis points, primarily due to financial improvement guarantee signoffs from a number of customers. This was offset slightly by a 50 basis point adjusted EBITDA margin decline in the RCM segment, primarily due to a mix shift towards more service-oriented revenue. Total adjusted EBITDA margin in the fourth quarter of 2009 also benefited from disciplined expense management and lower performance-based cash compensation.

Full Year

For the year ended December 31, 2009, non-GAAP total adjusted EBITDA increased 24.2% to $111.4 million, or 32.7% of total net revenue, from non-GAAP total adjusted EBITDA of $89.7 million, or 32.1% of total net revenue, in 2008.

Comparing period-over-period organic growth, the full-year 2009 non-GAAP total adjusted EBITDA of $111.4 million increased 11.6% from non-GAAP acquisition-affected adjusted EBITDA of $99.8 million, or 32.4% of non-GAAP acquisition-affected total net revenue, in full-year 2008.

Net Income and Earnings per Share

Fourth Quarter

Net income in the fourth quarter of 2009 was $10.0 million, or $0.17 per diluted share, versus net income of $6.0 million, or $0.11 per diluted share, in the fourth quarter of 2008.

Non-GAAP cash EPS, which is defined as EPS excluding acquisition-related intangible amortization, share-based compensation expense and non-recurring expense items on a tax-adjusted basis, was $0.28 per diluted share in the fourth quarter of 2009, compared to non-GAAP cash EPS of $0.21 per diluted share in the fourth quarter of 2008.

Full Year

For full-year 2009, net income was $19.9 million, or $0.34 per diluted share, versus net income of $10.8 million, or $0.21 per diluted share, in 2008. Non-GAAP cash EPS was $0.82 per diluted share in full-year 2009, compared to non-GAAP cash EPS of $0.65 per diluted share in the same period of 2008.

Cash Flow and Capital Resources

Net cash provided by operating activities in full-year 2009 rose 15.7% to $60.3 million from $52.1 million in 2008. During the fourth quarter of 2009, the Company repaid $15.6 million of its long-term bank debt. The Company’s balance sheet as of December 31, 2009 included $215.2 million in total bank debt, which represents leverage of approximately 1.9 times trailing 12-month non-GAAP adjusted EBITDA.

2010 Financial Guidance

The Company reiterated its 2010 financial guidance, as follows:

At December 31, 2009, the Company’s rolling 12-month non-GAAP contracted revenue was an estimated $350.3 million ($224.2 million from the RCM segment and $126.1 million from the SM segment). This is a year-over-year increase of 16.4% on a consolidated basis, and a 1.6% decrease when compared to the rolling 12-month total of $356.0 million as of September 30, 2009, as expected.