HMS third quarter revenue increases 15.4% to $92.4 million

HMS Holdings Corp. (NASDAQ: HMSY) today announced its financial results for the third quarter of 2011.

For the quarter ended September 30, 2011, revenue increased 15.4% to $92.4 million, compared to $80.0 million for the same period a year ago. Net income for the quarter was $14.4 million or $0.17 per diluted common share compared to net income of $11.0 million or $0.13 per diluted common share for the same period a year ago, an increase of 30.7%.

For the nine months ended September 30, 2011, revenue increased 22.5% to $264.2 million, compared to $215.7 million for the same period a year ago. Net income for the nine months ended September 30, 2011 was $36.7 million or $0.42 per diluted common share, compared to net income of $27.7 million or $0.33 per diluted common share for the same period a year ago, an increase of 27.2%.

2011 Revised Guidance & 2012 Guidance

As a result of the delay in the issuance of the Medicaid RAC (Recovery Audit Contractor) final rule, states' progress in procuring, awarding and implementing RAC contracts was slower than anticipated and accordingly, the Company is revising revenue guidance for 2011 from $372.0 million to $363.0 million (+19.8% y/y). However, improved operational performance permits the Company to raise projected GAAP earnings per share (EPS) from $0.59 to $0.60 (+27.7% y/y) on a fully diluted basis.

The Company also announced initial guidance for 2012. Revenue is projected to grow to $435.0 million (+19.8% over revised 2011 guidance), fully diluted GAAP EPS is projected to increase to $0.74 (+23.3% over 2011 revised guidance).

"On the sales front, HMS continued to win competitive Medicaid RAC procurements in the third quarter," said Lucia. "We are very pleased that the components of CMS's Final Rule, which governs Medicaid RAC implementations and provides guidance to states, aligns favorably with HMS's capabilities, even though the delay in the rule slowed a number of state contract awards and implementations. With contract award activity resuming as states re-focus on Medicaid RAC, we're confident that the opportunity associated with this program will be realized in 2012 and beyond."