MedAssets Reports Fourth Quarter and Full-Year 2008 Financial Results

Business Wire, Feb 25, 2009

Reaffirms 2009 Financial Guidance

ATLANTA -- MedAssets, Inc. (NASDAQ: MDAS) today announced results for its fourth quarter and year ended December 31, 2008, as summarized below:

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Net Revenue

Fourth Quarter

Total net revenue for the fourth quarter of 2008 increased 55.2% to $83.7 million from $53.9 million in the fourth quarter of 2007, driven primarily by revenue from the Accuro acquisition, an increase in recurring subscription and service fees in the Revenue Cycle Management segment, and continued growth in the Spend Management segment from supply chain services, consulting and technology solutions.

In comparing quarter-over-quarter organic growth, the Company's total net revenue increased 18.4% to $83.7 million in the fourth quarter of 2008 when compared to non-GAAP acquisition-affected (see definition at end of this press release) total net revenue of $70.7 million in the same quarter of 2007.

Full Year

Total net revenue for the year ended December 31, 2008 increased 48.3% to $279.7 million from $188.5 million in 2007. The year-over-year improvement was driven primarily by acquisitions as well as the other factors noted above for the fourth quarter.

In comparing year-over-year organic growth, the Company's non-GAAP acquisition-affected total net revenue for full-year 2008 increased 12.5% to $308.2 million from $274.1 million in 2007.

Non-GAAP Adjusted EBITDA

Fourth Quarter

In the fourth quarter of 2008, non-GAAP total adjusted EBITDA was $29.4 million, or 35.2% of total net revenue, an 87.0% increase over non-GAAP total adjusted EBITDA of $15.7 million, or 29.2% of total net revenue, in the fourth quarter of 2007, driven primarily by revenue growth, operating leverage and the impact of the Accuro acquisition.

In comparing quarter-over-quarter organic growth, the Company's total adjusted EBITDA of $29.4 million increased 38.6% when compared to fourth quarter 2007 non-GAAP acquisition-affected total adjusted EBITDA of $21.2 million, or 30.0% of non-GAAP acquisition-affected total net revenue.

Full Year

For the year ended December 31, 2008, non-GAAP total adjusted EBITDA increased 48.1% to $89.7 million, or 32.1% of total net revenue, versus non-GAAP total adjusted EBITDA of $60.6 million, or 32.1% of total net revenue, in full-year 2007. The year-over-year non-GAAP total adjusted EBITDA growth was driven primarily by acquisitions as well as the other factors noted above for the fourth quarter.

In comparing year-over-year organic growth, the Company's full-year 2008 non-GAAP acquisition-affected total adjusted EBITDA was $99.8 million, or 32.4% of non-GAAP acquisition-affected total net revenue, an increase of 17.6% from $84.9 million, or 31.0% of non-GAAP acquisition-affected total net revenue, in 2007.

Net Income & Earnings per Share

Fourth Quarter

Net income attributable to common stockholders in the fourth quarter of 2008 was $6.0 million, or $0.11 per diluted share, versus a net loss attributable to common stockholders of $3.8 million, or a loss of $0.20 per diluted share, in the fourth quarter of 2007.

Non-GAAP adjusted diluted EPS in the fourth quarter of 2008, which is defined as diluted EPS excluding non-cash acquisition-related intangible amortization and non-recurring expense items on a tax-adjusted basis, was $0.19 per diluted share. Non-GAAP cash diluted EPS, which additionally excludes non-cash tax-adjusted share-based compensation expense, was $0.21 per diluted share.

Full Year

For full-year 2008, net income attributable to common stockholders was $10.8 million, or $0.21 per diluted share, versus a net loss attributable to common stockholders of $9.8 million, or a loss of $0.75 per diluted share, in full-year 2007.

Non-GAAP adjusted diluted EPS in 2008 was $0.55 per diluted share. Non-GAAP cash diluted EPS in full-year 2008 was $0.65 per diluted share.

* The comparison of 2007 non-GAAP adjusted diluted EPS and non-GAAP cash diluted EPS to 2008 performance is not meaningful due to the significant non-recurring preferred stock dividends accrued in 2007 prior to the Company's initial public offering in December of that year.

Cash Flow and Capital Resources

Net cash provided by operating activities for full-year 2008 rose 25.2% to $52.1 million from $41.6 million in 2007. The Company's balance sheet as of December 31, 2008 included $245.6 million in total bank debt, and leverage was approximately 2.5 times trailing non-GAAP acquisition-affected adjusted EBITDA.

Reaffirming 2009 Guidance

MedAssets reaffirmed its full-year 2009 financial outlook, as follows:

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At December 31, 2008, the Company's rolling 12-month non-GAAP contracted revenue was an estimated $301.1 million ($174.6 million from the Revenue Cycle Management segment and $126.5 million from the Spend Management segment). This is an increase of approximately 1.0% on a consolidated basis when compared to the rolling 12-month total as of September 30, 2008, and was anticipated given the strength of the Company's financial results in the fourth quarter of 2008. The December 31, 2008 non-GAAP contracted revenue of $301.1 million equates to approximately 86% of the midpoint of the Company's 2009 total net revenue guidance range.