WageWorks reports total revenue of $55 million for fourth quarter 2013

WageWorks, Inc. (the "Company") (NYSE: WAGE), a leader in administering Consumer-Directed Benefits (CDBs), which empower employees to save money on taxes while also providing corporate tax savings for employers, today announced the Company's financial results for its fourth quarter and fiscal year ended December 31, 2013.

"Both our fourth quarter and record annual results reflect the strength of our position in a growing market. In addition to improving our enrollment rates, we had an excellent new sales year and client renewal period, evidencing the success of our strategic investments in expanding our sales force and broker network, further developing channel partnerships, continuing portfolio purchases and increasing overall awareness of the value CDBs provide. Moreover, we are taking advantage of the opportunities presented by the rise in employer adoption of private exchanges and are excited about the potential impact of the Department of Treasury's introduction of the carryover provision for Healthcare Flexible Spending Accounts late last year," said Joe Jackson, Chief Executive Officer of WageWorks.

For the fourth quarter, WageWorks reported total revenue of $55.0 million, compared to $46.7 million for the fourth quarter of 2012, an increase of 18 percent. Healthcare revenue was $32.9 million, compared to $29.6 million for the fourth quarter of 2012, an increase of 11 percent. Commuter revenue was $15.2 million, compared to $13.5 million for the fourth quarter of 2012, an increase of 12 percent. Other revenue was $6.9 million, compared to $3.6 million for the fourth quarter of 2012, an increase of 93 percent.

GAAP operating income was $7.9 million for the fourth quarter of 2013, compared to GAAP operating income of $5.3 million for the fourth quarter of 2012. On a non-GAAP basis, fourth quarter of 2013 operating income was $10.4 million, compared to non-GAAP operating income of $7.7 million for the fourth quarter of 2012.

GAAP net income was $5.3 million, or $0.15 per diluted share, for the fourth quarter of 2013, compared to GAAP net income of $2.7 million, or $0.09 per diluted share, for the fourth quarter of 2012.

On a non-GAAP basis, fourth quarter of 2013 net income was $6.2 million, or $0.17 per diluted share, compared to non-GAAP net income of $4.2 million, or $0.13 per diluted share, for the fourth quarter of 2012. Non-GAAP net income for the fourth quarter of 2012 and 2013 excludes expenses related to stock-based compensation, amortization of acquired intangibles, contingent consideration gain and the related tax impact of these items.

Non-GAAP adjusted EBITDA was $13.5 million for the fourth quarter of 2013, a 30 percent increase compared to non-GAAP adjusted EBITDA of $10.4 million for the fourth quarter of 2012.

For the full year 2013, WageWorks reported total revenue of $219.3 million, compared to $177.3 million for the full year 2012, an increase of 24 percent. Healthcare revenue was $135.1 million, compared to $112.9 million for full year 2012, an increase of 20 percent. Commuter revenue was $59.6 million, compared to $51.8 million for the full year 2012, an increase of 15 percent. Other revenue was $24.6 million, compared to $12.6 million for the full year 2012, an increase of 96 percent.

GAAP operating income was $32.0 million for the full year 2013, compared to GAAP operating income of $18.9 million for the full year 2012. On a non-GAAP basis, full year 2013 operating income was $44.9 million, compared to non-GAAP operating income of $31.7 million for the full year 2012.

GAAP net income was $21.7 million, or $0.62 per diluted share, for the full year 2013, compared to GAAP net income of $7.9 million, or $0.33 per diluted share, for the full year 2012.

On a non-GAAP basis, full year 2013 net income was $26.3 million, or $0.74 per diluted share, compared to non-GAAP net income of $17.4 million, or $0.58 per diluted share, for the full year 2012. Non-GAAP net income for the full year 2013 and 2012 excludes expenses related to stock-based compensation, amortization of acquired intangibles, contingent consideration expense and gain, and the related tax impact of these items. For 2012, non-GAAP net income also excludes accretion of redemption premium expense and gains from revaluation of warrants.

Non-GAAP adjusted EBITDA was $56.5 million for the full year 2013, a 36 percent increase compared to non-GAAP adjusted EBITDA of $41.4 million for the full year 2012.

The reconciliation of the non-GAAP measures to the comparable GAAP measures for the fourth quarter and full year 2013 and 2012 is detailed in the tables provided in this press release.

As of December 31, 2013, WageWorks had cash and cash equivalents totaling $360.0 million. This compares to cash and cash equivalents totaling $305.8 million as of December 31, 2012.