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Accretive Health Announces 2014 Results and Provides Business UpdateAccretive Health, Inc. (OTC Pink: ACHI) today announced results for the twelve months ended December 31, 2014. Earlier today, the company filed its Annual Report on Form 10-K for the year ended December 31, 2014, as well as its Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2014. 2014 Financial Summary:
Emad Rizk, M.D., President and Chief Executive Officer of Accretive Health stated: "Filing of our 2014 Form 10-K and the upcoming filing of the Form 10-Q for the first quarter of 2015 are major steps toward the company becoming current with its SEC filings. We are on a firm pathway to executing our strategy and believe the Company is laying a solid foundation for future growth." Peter Csapo, Chief Financial Officer and Treasurer, commented, "We are pleased with the progress we have achieved in the process of becoming current with our filings, and expect to be back to a normal reporting cycle as a publicly-traded company in the coming months." The Company currently serves 79 hospitals with collective net patient revenue (NPR) of $16.5 billion. NPR represents net revenue collected annually by the Company's customers from their patients and is not a measure of the revenue the Company recognizes. "Over the past six months, we have continued to improve our core revenue cycle operations while at the same time developing new capabilities to meet the future needs of our customers," added Rizk. "Our core value proposition remains focused on reducing the cost of our customers' revenue cycle operations, maximizing appropriate fee-for-service revenue, and preparing for value-based reimbursement." Updated 2015 Outlook and Preliminary Results for the First Quarter of 2015 Accretive Health expects to generate gross cash from customer contracting activities of $230 million to $240 million for 2015. The Company expects net cash from contracting activities to be at the lower end of the $30 million to $40 million guidance range previously provided. The Company's PAS business continues to experience headwinds from the Two-Midnight Rule, a regulatory change in the healthcare industry. For the first quarter of 2015, on a GAAP basis, the Company expects net services revenue of $9 million to $11 million and a net loss of $29 million to $31 million. On a non-GAAP basis, the Company expects gross cash generated from customer contracting activities of $53 million to $55 million, adjusted EBITDA of a loss of $41 million to $43 million and net cash generated from customer contracting activities of $1 million to $3 million. The Company anticipates filing its Form 10-Q for the quarter ended March 31, 2015 in July 2015. Conference Call and Webcast Details Accretive Health's management will host a conference call today at 3:30 p.m. CT (4:30 p.m. ET) to discuss its 2014 and first quarter 2015 results and business outlook. To participate, please dial 877-280-4954 (857- 244-7311 from outside the U.S. and Canada) using conference code number 70316750, or visit the Investor Relations section of Accretive Health's web site at www.accretivehealth.com to access the live webcast. A replay will be available for one week following the conference call at 888-286-8010 (617-801-6888 from outside the U.S. and Canada) using conference code number 74907423. A replay of the conference call will also be available online at www.accretivehealth.com. Accompanying slides have been posted to the Investor Relations section of Accretive Health's web site at www.accretivehealth.com. Non-GAAP Financial Measures In order to provide a more comprehensive understanding of the information used by Accretive Health's management team in financial and operational decision making, the Company supplements its GAAP consolidated financial statements with certain non-GAAP financial measures, which are included in this press release. These include gross and net cash generated from customer contracting activities, and adjusted EBITDA. Our Board and management team use these non-GAAP measures as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations; and (ii) as a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation plans for employees. Gross cash generated from customer contracting activities is defined as GAAP net services revenue, plus the change in deferred customer billings. Accordingly, gross cash generated from customer contracting activities is the sum of (i) invoiced or accrued net operating fees, (ii) cash collections on incentive fees and (iii) other services fees. Net cash generated from customer contracting activities reflects non-GAAP adjusted EBITDA and the change in deferred customer billings. Adjusted EBITDA is defined as net income before net interest income (expense), income tax provision, depreciation and amortization expense, share-based compensation expense, restatement-related expense, reorganization-related expense and certain non-recurring items. The use of adjusted EBITDA to measure operating and financial performance is limited by our revenue recognition criteria, pursuant to which GAAP net services revenue is recognized at the end of a contract or other contractual agreement event. Adjusted EBITDA does not adequately match corresponding cash flows from customer contracting activities. As a result, the Company uses gross cash and net cash generated from customer contracting activities to better compare cash flows to operating performance. Deferred customer billings include the portion of both (i) invoiced or accrued net operating fees and (ii) cash collections of incentive fees, in each case, that have not met our revenue recognition criteria. Deferred customer billings are included in the detail of our customer liabilities balance in the consolidated balance sheet available in the Company's Annual Report on Form 10-K for the year ended December 31, 2014. Table 4 presents a reconciliation of GAAP revenue to gross cash generated from customer contracting activities, and Table 5 presents a reconciliation of GAAP net income (loss), the most comparable GAAP measure, to adjusted EBITDA and net cash generated from customer contracting activities, in each case, for each of the periods indicated. These adjusted measures are non-GAAP and should be considered in addition to, but not as a substitute for, the information prepared in accordance with GAAP. Safe Harbor This press release contains forward-looking statements, including the Company's ability to generate specified levels of cash from contracting activities, reduce the cost of customers' revenue cycle operations, maximize appropriate fee-for-service revenue, and become current with its SEC filings. All forward-looking statements contained in this press release involve risks and uncertainties. The Company's actual results and outcomes could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the factors set forth in its Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on June 23, 2015, under the heading "Risk Factors". The words "strive," "objective," "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "vision," "would," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. The Company has based these forward-looking statements on its current expectations and projections about future events. Although the Company believes that the expectations underlying any of its forward-looking statements are reasonable, these expectations may prove to be incorrect and all of these statements are subject to risks and uncertainties. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections, or expectations prove incorrect, actual results, performance, financial condition, or events may vary materially and adversely from those anticipated, estimated, or expected. All forward-looking statements included in this press release are expressly qualified in their entirety by these cautionary statements. The Company cautions readers not to place undue reliance on any forward-looking statement that speaks only as of the date made and to recognize that forward-looking statements are predictions of future results, which may not occur as anticipated. Actual results could differ materially from those anticipated in the forward-looking statements and from historical results, due to the uncertainties and factors described above, as well as others that the Company may consider immaterial or does not anticipate at this time. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, the Company does not know whether its expectations may prove correct. The Company's expectations reflected in its forward-looking statements can be affected by inaccurate assumptions it might make or by known or unknown uncertainties and factors, including those described above. The risks and uncertainties described above are not exclusive, and further information concerning the Company and its business, including factors that potentially could materially affect its financial results or condition or relationships with customers and potential customers, may emerge from time to time. The Company assumes no, and it specifically disclaims any, obligation to update, amend, or clarify forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. The Company advises investors, however, to consult any further disclosures it makes on related subjects in our periodic reports that it files with or furnishes to the SEC. About Accretive Health At Accretive Health, our mission is to partner with healthcare communities to serve as a catalyst for a healthier future for all. For more information, visit www.accretivehealth.com.
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