• Q1 Revenue Up 30.1% (y/y) to $107.3M
• Adjusted EPS Up 14.3% (y/y) to $0.16
• 2012 GAAP EPS Guidance Lowered to $0.58–$0.64
• 2012 Adjusted EPS Guidance Lowered to $0.91-$0.96

Company Website: http://www.hms.com
NEW YORK -- (Business Wire)

HMS Holdings Corp. (NASDAQ: HMSY) today announced financial results for its first quarter ended March 31, 2012.

For the first quarter of 2012, HMS reported revenue of $107.3 million, an increase of 30.1% compared to revenue of $82.5 million for the same period a year ago. Net income for the quarter was $7.0 million or $0.08 per fully diluted share compared to net income of $9.8 million or $0.11 per fully diluted share for the same period a year ago. Adjusted EPS increased 14.3% year over year to $0.16.

"HMS opened the year with mixed results,” said Bill Lucia, Chief Executive Officer. “We are particularly pleased with the performance of HDI, which exceeded Medicare RAC revenue targets for the quarter. Our Medicaid business, however, was impacted by temporary challenges faced by our clients and carriers in adopting several new CMS-mandated claim transaction formats. And while the Company continued to win a market-leading share of Medicaid RAC business, uncertainty surrounding the Supreme Court's review of the Affordable Care Act contributed to further delays in state decision-making relating to RAC procurements, awards and implementations.”

In recognition of these factors, the Company is lowering 2012 guidance to cover a range of possible revenue and EPS outcomes. For the full year, revenue guidance is revised to $500.0-$515.0 million from $520 million, and fully diluted GAAP EPS is revised to $0.58-$0.64 from $0.65. Adjusted EPS is revised to $0.91-$0.96 from $0.98.

Added Lucia, “HMS continues to see an abundance of opportunity for 2012 and beyond. HDI significantly extends our presence into the Medicare and commercial markets and our core Medicaid market is expanding. We believe that HMS is well-positioned with a broad set of services to help clients in all our markets address fraud, waste, and abuse in the healthcare system."

HMS will be hosting its first quarter 2012 conference call and webcast with the investment community on Friday, April 27, 2012 at 9:00 am Eastern Time. Individuals can access the webcast at http://investor.hms.com/events.cfm or listen to the call at 1-800-289-0498. International participants can listen to the call at 913-312-4373.

The webcast will be archived at http://investor.hms.com/events.cfm. Individuals can listen to the replay at 1-888-203-1112. International participants can listen to the replay at 1-719-457-0820. The passcode is 4759433. The replay will be available at 11 a.m. ET on April 27 through 11:59 p.m. ET on May 4, 2012.

The HMS Form 10-Q for the quarter March 31, 2012 will be filed and available on our website on http://investor.hms.com or about May 9, 2012, and will contain additional information about our results of operations for the fiscal year-to-date. This press release and the interim financial statements herein will be available at http://investor.hms.com for at least a 12-month period. Shareholders and interested investors are welcome to contact Investor Relations at 212-857-5986.

HMS Holdings Corp. (NASDAQ: HMSY), through its subsidiaries, is the nation's leader in coordination of benefits and program integrity services for healthcare payers. HMS's clients include health and human services programs in more than 40 states; commercial programs, including commercial plans, employers, and over 120 Medicaid managed care plans; the Centers for Medicare and Medicaid Services (CMS); and Veterans Administration facilities. As a result of the company's services, clients recovered over $2 billion in 2011, and saved nearly $7 billion through the prevention of erroneous payments.

Use of Non-GAAP Financials

This press release includes presentations of earnings before interest, taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Adjusted EBITDA represents EBITDA adjusted for share-based compensation expense. EBITDA is a measure commonly used by the capital markets to value enterprises. EBITDA is a non-GAAP financial measure and is reconciled to income before income taxes, which the Company's management believes to be the most comparable generally accepted accounting principles ("GAAP") measure. Adjusted EBITDA results are calculated by adjusting GAAP income before income taxes to exclude the effects of depreciation, amortization of intangible assets, stock-based compensation expense, and net interest expense.

This press release also includes presentations of adjusted EPS. Adjusted EPS represents EPS adjusted for stock-based compensation expense and amortization of intangibles. Adjusted EPS is a non-GAAP financial measure and is reconciled to EPS, which the Company’s management believes to be the most comparable GAAP measure.

The Company uses these non-GAAP financial measures for internal management purposes, when publicly providing guidance on possible future results, and as a means to evaluate period-to-period comparisons. The Company's management believes that these non-GAAP financial measures are a common measure used by investors and analysts to evaluate its performance. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of the Company's operations that, when viewed with GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provides a more complete understanding of the results of operations and trends affecting the Company's business. These non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, income before income taxes in accordance with GAAP.

Safe Harbor Statement

This press release contains “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such statements give our expectations or forecasts of future events; they do not relate strictly to historical or current facts. Forward-looking statements can be identified by words such as “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes,” “will,” “target,” “seeks,” “forecast” and similar expressions and references to guidance. In particular, these include statements relating to future actions, business plans, objects and prospects, and future operating or financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to: government regulatory, political and budgetary pressures that could affect the procurement practices and operations of healthcare organizations; changes in the United States healthcare environment, including as a result of the pending Supreme Court decision on the ACA; the development by competitors of new or superior products or services; the emergence of new competitors, or the development by our clients of in-house capacity to perform the services we offer; all the risks inherent in the development, introduction, and implementation of new products and services; our ability to manage our growth and its demands on our resources and infrastructure; our ability to successfully integrate our acquisitions; our ability to retain clients or the loss of one or more major clients; client dissatisfaction or early termination of contracts triggering significant costs or liabilities; our compliance with the covenants and obligations under the terms of our credit facility and our ability to generate sufficient cash to cover our interest and principal payments thereunder; variations in our results of operations; negative results of government reviews, audits or investigations to verify our compliance with contracts and applicable laws and regulations; changing conditions in the healthcare industry which could simplify the payment process and reduce the need for and price of our services; our ability to continue to secure contracts through the competitive bidding process and to accurately predict the cost and time to complete such contracts; our failure to comply with laws and regulations governing health data or to protect such data from theft and misuse; and, our ability to maintain effective information systems and protect them from damage or interruption. A further description of these and other risks, uncertainties, and related matters can be found in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011, which is available at www.hms.com under the “Investor Relations” tab. Any forward-looking statements made by us in this press release speak only as of the date of this release. Factors or events that could cause actual results to differ may emerge from time to time and it is not possible for us to predict all of them. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Contacts:

HMS Holdings Corp.
Christine Saenz (investor relations)
212-857-5986
csaenz@hms.com
or
Francesca Marraro (media relations)
212-857-5442
fmarraro@hms.com

Source: HMS Holdings Corp.