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HWAY is a passively managed exchange-traded fund designed to provide exposure to a broad spectrum of U.S. infrastructure companies. It targets U.S.-domiciled businesses that generate at least 50% of their revenue from activities essential to infrastructure development and maintenance, including the provision of building materials, specialized equipment, logistics, construction, and engineering services. The initial screening process involves establishing a universe of U.S.-headquartered securities of various market capitalizations, which must also satisfy specific market-cap and liquidity…
Is HWAY's expense ratio expensive, average, or a steal for its category?
Pro reveals the verdict on a 5-tier spectrum calibrated against ICI 2025 industry averages, with strategy-aware bands so the comparison is meaningful.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Healthways (NASDAQ: HWAY) today announced financial results for the second quarter and six months ended June 30, 2015. Highlights for the second quarter included: a 9.7% increase in comparable-quarter revenues to $198.1 million; net income of $0.4 million, or $0.01 per diluted share, compared with a net loss of $0.5 million, or $0.01 per share, for the second quarter of 2014; and adjusted net income per diluted share of $0.11 compared with $0.01 for the second quarter last year, which excludes non-cash interest expense for the second quarter of each year and expenses associated with the Company’s previously announced CEO transition in the second quarter of 2015. (In millions, except per-share data) See pages 9-11 for a reconciliation of non-GAAP financial measures Three Months Ended Six Months Ended June 30 June 30 2015 2014 2015 2014 $ 0.01 1 $ (0.01 )2 $ (0.07 )2 $ (0.29 )2 0.03 1 0.03 2 0.06 2 0.06 2 0.07 1 0.08 2 0.17 2 Adjusted net income (loss) per share3 $ 0.11 1 $ 0.01 1 $ 0.06 1 $ (0.06 )2 1 Diluted 2 Basic 3 Figures may not add due to rounding and use of basic or diluted shares in calculation Alfred Lumsdaine, interim chief executive officer of Healthways, commented, “Our second-quarter revenues and earnings reflected the positive timing impact of recording approximately $8 million in performance-based revenues for the quarter that were expected to be recorded in the second half of 2015. Adjusted cash flow from operations was $28.4 million for the second quarter. Capital expenditures were $8.7 million, down 16.2% from the second quarter last year. Our ratio of total debt to EBITDA, as calculated under our credit agreement, improved to 3.0 at the end of the second quarter from 3.2 at the end of the first quarter of 2015.” Affirms and Adds Detail to Previously Revised 2015 Financial Guidance Based on the Company’s performance through the first half of 2015 and its outlook for the remainder of 2015, Healthways is affirming and adding detail to its financial guidance for the full year, which was revised on June 18, 2015. Key elements of full-year financial guidance include (see pages 9-11 for a reconciliation of non-GAAP financial measures): 2015 revenues in a range of $770 million to $785 million; 2015 EBITDA margin in a range of 8.0% to 8.5%; and 2015 net income (loss) per share: Guidance Prior Guidance Year Ending Year Ending December 31, December 31, 2015 2015 1 $ 0.35–0.47 1 (0.12 )2 (0.12 )1 (0.08 )2 (0.13)–(0.05 )2 $ 0.23–0.35 1 1 Diluted 2 Basic Healthways’ financial guidance for 2015 does not include potential costs associated with hiring a permanent CEO. The Company expects adjusted operating cash flow for 2015 in a range of $65 million to $75 million, compared with prior guidance in a range of $80 million to $90 million, both of which exclude cash payments made in the first half of 2015 for legal settlements of $14 million. The Company continues to expect total capital expenditures in a range of $37 million to $42 million for 2015. The Company’s ratio of total debt to EBITDA, as calculated under its credit agreement, is expected to remain under 3.4 for the rest of 2015. The Company expects to remain in compliance with all covenants under its credit agreement. Conference Call Healthways will hold a conference call to discuss this release today at 5:00 p.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to www.healthways.com and clicking Investors at least 15 minutes early to register, download and install any necessary audio software. Presentation materials related to the conference call may also be accessed by going to www.healthways.com and clicking Investors. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, code 2769710, and the replay will also be available on the Company’s web site for the next 12 months. Safe Harbor Provisions This press release contains forward-looking statements, including our guidance and financial expectations for future periods, which are based upon current expectations, involve a number of risks and uncertainties and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief or expectations of the Company, including, without limitation, all statements regarding the Company’s future earnings and results of operations. Those forward-looking statements are subject to the finalization of the Company’s quarterly financial accounting procedures and may be affected by certain risks and uncertainties, including, but not limited to: the effectiveness of management’s strategies and decisions; the Company’s ability to sign and implement new contracts for our solutions; the Company’s ability to accurately forecast the costs required to successfully implement new contracts; the Company’s ability to accurately forecast the costs necessary to integrate new or acquired businesses, services (including outsourced services) or technologies into the Company’s business; the Company’s ability to achieve estimated annualized revenue in backlog in the manner and within the timeframe we expect, which is based on certain estimates regarding the implementation of our services; the Company’s ability to anticipate change and respond to emerging trends in the domestic and international markets for healthcare and the impact of the same on demand for the Company’s services; the Company’s ability to implement its integrated data and technology solutions platform within the required time frame and expected cost estimates and to develop and enhance this platform and/or other technologies to meet evolving customer and market needs; the Company’s ability to renew and/or maintain contracts with its customers under existing terms or restructure these contracts on terms that would not have a material negative impact on the Company’s results of operations; the Company’s ability to accurately forecast the Company’s revenues, margins, earnings and net income, as well as any potential charges that the Company may incur as a result of changes in its business and leadership; the Company’s ability to accurately forecast performance and the timing of revenue recognition under the terms of its customer contracts ahead of data collection and reconciliation; the Company’s ability to accurately forecast enrollment and participation rates in services and programs offered within the Company’s contracts; the risks associated with deriving a significant concentration of revenues from a limited number of customers; the risks associated with foreign currency exchange rate fluctuations; the ability of the Company’s customers to provide timely and accurate data that is essential to the operation and measurement of the Company’s performance; the Company’s ability to achieve the contractually required cost savings and clinical outcomes improvements and reach mutual agreement with customers with respect to cost savings, or to achieve such savings and improvements within the time frames it contemplates; the risks associated with changes in macroeconomic conditions; the risks associated with data privacy or security breaches, computer hacking, network penetration and other illegal intrusions of our information systems or those of third-party vendors or other service providers, which may result in unauthorized access by third parties to customer, employee or Company information or patient health information and lead to enforcement actions, fines and other litigation against the Company; the Company’s ability to effectively compete against other entities, whose financial, research, staff, and marketing resources may exceed our resources; the Company’s ability to service its debt and remain in compliance with its debt covenants; counterparty risk associated with our interest rate swap agreements and foreign currency exchanged contracts; the impact of litigation involving the Company and/or its subsidiaries; the impact of future state, federal and international legislation and regulations applicable to the Company’s business, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 on the Company’s operations and/or demand for its services; and other risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements. About Healthways Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 68 million people on four continents. Learn more at www.healthways.com. Less: comprehensive loss attributable to non-controlling interest Weighted average common shares and equivalents: (1) The impact of potentially dilutive securities for the six months ended June 30, 2015 and the three and six months ended June 30, 2014 was not considered because the effect would be anti-dilutive in each of those periods. $.001 par value, 5,000,000 shares authorized, none outstanding $.001 par value, 120,000,000 shares authorized, 35,818,495 and 35,511,221 shares outstanding, respectively Reconciliation of Adjusted Net Income (Loss) Attributable to Healthways, Inc. (“Adjusted Net Income (Loss)”) and Adjusted Net Income (Loss) Per Share to Net Income (Loss) Attributable to Healthways, Inc., GAAP Basis and Net Income (Loss) Per Share Attributable to Healthways, Inc., GAAP Basis June 30, 2015 June 30, 2014 June 30, 2015 June 30, 2014 $ in thousands $ in thousands $ in thousands $ in thousands 0.06 (0.06 ) ) ) ) ) ) (1) Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per share are non-GAAP financial measures. The Company excludes net loss attributable to non-cash interest, CEO transition-related expenses, and legal settlement charges from these measures because of their comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider Adjusted Net Income (Loss) or Adjusted Net Income (Loss) per share in isolation or as a substitute for net income (loss) attributable to Healthways, Inc. or net income (loss) per share attributable to Healthways, Inc. determined in accordance with accounting principles generally accepted in the United States. (2) Net loss attributable to non-cash interest charges represents the amortization of a debt discount. Total pre-tax charges were $1,769,000 and $1,672,000 for the three months ended June 30, 2015 and 2014, respectively, and $3,495,000 and $3,303,000 for the six months ended June 30, 2015 and 2014, respectively. The tax rate applied to these non-cash interest charges was 39.55%, which represented the combined estimated U.S. federal and state statutory tax rate. (3) Net loss attributable to CEO transition-related expenses represents the after-tax impact of expenses associated with the termination in May 2015 of our former President and Chief Executive Officer. Total pre-tax charges were $4,467,000 for the three and six months ended June 30, 2015. The tax rate applied to these CEO transition-related expenses was 39.55%, which represented the combined estimated U.S. federal and state statutory tax rate. (4) Net loss attributable to legal settlement charges represents the after-tax impact of the Company's settlement of a contractual dispute recorded in the first quarter of 2014. Total pre-tax charges of $9,363,000 were recorded at a tax rate of 35.52%, which represented the estimated annualized effective tax rate for domestic operations at the time the charge was recorded. (5) Figures may not add due to rounding. Three Months Ended Ended Guidance for Twelve Months Ending 43.0 29.0 (6) Adjusted net cash flows provided by operating activities is a non-GAAP financial measure. The Company excludes legal settlements paid from this measure because of its comparability to the Company's historical operating results and guidance. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted net cash flows provided by operating activities in isolation or as a substitute for net cash flows provided by operating activities determined in accordance with accounting principles generally accepted in the United States. (7) Legal settlement payments include $12.8 million paid in the first quarter of 2015 and $1.2 million paid in the second quarter of 2015. These amounts were reflected in the Company’s results of operations for 2014. (8) Adjusted EPS guidance is a non-GAAP financial measure. The Company excludes EPS (loss) guidance attributable to non-cash interest charges from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EPS guidance in isolation or as a substitute for EPS guidance determined in accordance with accounting principles generally accepted in the United States. (9) EPS (loss) guidance attributable to non-cash interest charges consists of pre-tax charges of $7.1 million for the twelve months ending December 31, 2015 associated with amortization of a debt discount. (10) EPS (loss) guidance attributable to CEO transition-related expenses consists of pre-tax charges of $4.5 million for the twelve months ending December 31, 2015 associated with the termination in May 2015 of our former President and Chief Executive Officer and does not include potential costs, if any, associated with hiring a new CEO. Three Months Ended Three Months Ended (11) Adjusted EBITDA is a non-GAAP financial measure. The Company excludes CEO transition-related expenses from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EBITDA in isolation or as a substitute for net income (loss) including non-controlling interest determined in accordance with accounting principles generally accepted in the United States. (12) CEO transition-related expenses consists of pre-tax charges of $4.5 million for the three months ended June 30, 2015 associated with the termination in May 2015 of our former President and Chief Executive Officer.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Ben R. Leedle, Jr., president and chief executive officer of Healthways (NASDAQ: HWAY), today announced financial results for the first quarter ended March 31, 2015. Revenues were $189.9 million for the quarter, an increase of 7.4% from $176.8 million for the first quarter of 2014. Net loss for the first quarter of 2015 improved to $2.9 million, or $0.08 per share, compared with net loss of $9.6 million, or $0.27 per share, for the first quarter last year. Adjusted net loss per share improved to $0.05 for the first quarter of 2015 from $0.07 per share for the first quarter of 2014. Adjusted results excluded non-cash interest expense of $0.03 per share for the first quarter of each year and a charge of $0.17 per share in the first quarter of 2014 related to the settlement of a contract dispute. (See pages 9 and 10 for a reconciliation of non-GAAP financial measures.) “We are pleased with our financial, operating and business development results for the first quarter,” said Leedle. “In addition to improvements in revenues and bottom-line performance achieved versus the same period last year, adjusted net cash flow from operations for the first quarter of 2015 increased to $14.6 million, and capital expenditures declined 18.5% to $8.6 million. As anticipated, our ratio of total debt to EBITDA, as calculated under our credit agreement, increased slightly during the first quarter to 3.19 at the quarter’s end. “Business development momentum was strong during the first quarter of 2015, reflecting continued market demand for our population health solutions. We signed a total of 30 contracts for the quarter, including six new customer contracts, 17 expanded contracts and seven extended contracts. These contracts were signed across all our customer markets: commercial health plans; Medicare and other state or federal health plans; employers; health systems, hospitals and physicians; and international. We expect continued demand for our entire portfolio of services and expect to sign more contracts throughout 2015.” Affirms 2015 Financial Guidance Based on the Company’s first-quarter performance and its outlook for the remainder of 2015, Healthways affirms its financial guidance for the full year. Key elements of this guidance include (See pages 9 and 10 for a reconciliation of non-GAAP financial measures): 2015 revenues in a range of $800 million to $825 million. 2015 EBITDA margin in a range of 10.5% to 11.0%. 2015 earnings: Guidance Year Ending December 31, 2015 (0.12 ) The Company anticipates sequential-quarter improvement in revenue and bottom-line results for the remainder of 2015. The factors that are expected to drive this improvement include the ramp of existing contracts, new contracts to be signed and implemented in 2015, and primarily in the second half of the year, the recognition of performance-based revenues. Healthways expects adjusted operating cash flow in a range of $80 million to $90 million, which excludes cash payments for legal settlements of $14 million. Further, the Company expects total capital expenditures in a range of $37 million to $42 million and its ratio of total debt to EBITDA, as calculated under its credit agreement, by the end of 2015 to be at or below 2.5. Summary Leedle concluded, “Building on the increasing momentum that supported our profitable growth in 2014, we began 2015 with solid performance for the first quarter, and we have affirmed our financial guidance for the year. We are well-positioned to meet global demand for population health services. By executing on the opportunities before us, we expect to produce further growth and increased stockholder value.” Conference Call Healthways will hold a conference call to discuss this release today at 5:00 p.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to www.healthways.com and clicking Investors at least 15 minutes early to register, download and install any necessary audio software. Presentation materials related to the conference call may also be accessed by going to www.healthways.com and clicking Investors. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, code 5818105, and the replay will also be available on the Company’s web site for the next 12 months. Safe Harbor Provisions This press release contains forward-looking statements, including our guidance and financial expectations for future periods, which are based upon current expectations, involve a number of risks and uncertainties and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief or expectations of the Company, including, without limitation, all statements regarding the Company’s future earnings and results of operations. Those forward-looking statements are subject to the finalization of the Company’s quarterly financial accounting procedures and may be affected by certain risks and uncertainties, including, but not limited to: the effectiveness of management’s strategies and decisions; the Company’s ability to sign and implement new contracts for our solutions; the Company’s ability to accurately forecast the costs required to successfully implement new contracts; the Company’s ability to accurately forecast the costs necessary to integrate new or acquired businesses, services (including outsourced services) or technologies into the Company’s business; the Company’s ability to achieve estimated annualized revenue in backlog in the manner and within the timeframe we expect, which is based on certain estimates regarding the implementation of our services; the Company’s ability to anticipate change and respond to emerging trends in the domestic and international markets for healthcare and the impact of the same on demand for the Company’s services; the Company’s ability to implement its integrated data and technology solutions platform within the required time frame and expected cost estimates and to develop and enhance this platform and/or other technologies to meet evolving customer and market needs; the Company’s ability to renew and/or maintain contracts with its customers under existing terms or restructure these contracts on terms that would not have a material negative impact on the Company’s results of operations; the Company’s ability to accurately forecast the Company’s revenues, margins, earnings and net income, as well as any potential charges that the Company may incur as a result of changes in its business; the Company’s ability to accurately forecast performance and the timing of revenue recognition under the terms of its customer contracts ahead of data collection and reconciliation; the Company’s ability to accurately forecast enrollment and participation rates in services and programs offered within the Company’s contracts; the risks associated with deriving a significant concentration of revenues from a limited number of customers; the risks associated with foreign currency exchange rate fluctuations; the ability of the Company’s customers to provide timely and accurate data that is essential to the operation and measurement of the Company’s performance; the Company’s ability to achieve the contractually required cost savings and clinical outcomes improvements and reach mutual agreement with customers with respect to cost savings, or to achieve such savings and improvements within the time frames it contemplates; the risks associated with changes in macroeconomic conditions; the risks associated with data privacy or security breaches, computer hacking, network penetration and other illegal intrusions of our information systems or those of third-party vendors or other service providers, which may result in unauthorized access by third parties to customer, employee or Company information or patient health information and lead to enforcement actions, fines and other litigation against the Company; the Company’s ability to effectively compete against other entities, whose financial, research, staff, and marketing resources may exceed our resources; the Company’s ability to service its debt and remain in compliance with its debt covenants; counterparty risk associated with our interest rate swap agreements and foreign currency exchanged contracts; the impact of litigation involving the Company and/or its subsidiaries; the impact of future state, federal and international legislation and regulations applicable to the Company’s business, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 on the Company’s operations and/or demand for its services; and other risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements. About Healthways Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 68 million people on four continents. Learn more at www.healthways.com. Three Months Ended March 31, Weighted average common shares and equivalents: (1) The assumed exercise of stock-based compensation awards for the three months ended March 31, 2015 and 2014 was not considered because the impact would be anti-dilutive. $.001 par value, 5,000,000 shares authorized, none outstanding $.001 par value, 120,000,000 shares authorized, 35,683,404 and 35,511,221 shares outstanding, respectively Three Months EndedMarch 31, 2015 Three Months Ended March 31, 2014 (1) Adjusted net loss per share is a non-GAAP financial measure. The Company excludes net loss per share attributable to non-cash interest and legal settlement charges from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted net loss per share in isolation or as a substitute for net loss per share determined in accordance with accounting principles generally accepted in the United States. (2) Net loss per share attributable to non-cash interest charges represents the impact of the amortization of a debt discount for the three months ended March 31, 2015 and 2014. (3) Net loss per share attributable to legal settlement charges represents the impact of a legal settlement included in the Company’s results of operations for the quarter ended March 31, 2014. Guidance for Twelve Months Ending (4) Adjusted net cash flows provided by operating activities is a non-GAAP financial measure. The Company excludes legal settlements paid from this measure because of its comparability to the Company's historical operating results and guidance. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted net cash flows provided by operating activities in isolation or as a substitute for net cash flows provided by operating activities determined in accordance with accounting principles generally accepted in the United States. (5) For the three months ended March 31, 2015, legal settlements paid consist of $5.5 million in connection with the Company’s settlement of a legal matter in April 2014 as well as $7.25 million related to an additional legal settlement, both of which were reflected in the Company’s results of operations for 2014. For the twelve months ending December 31, 2015, the Company expects to pay a total of $14.0 million, which includes the two payments made in the first quarter of 2015 plus $1.2 million related to an additional legal settlement, all of which were reflected in the Company’s results of operations for 2014. (6) Adjusted EPS guidance is a non-GAAP financial measure. The Company excludes EPS (loss) guidance attributable to non-cash interest charges from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EPS guidance in isolation or as a substitute for EPS guidance determined in accordance with accounting principles generally accepted in the United States. (7) EPS (loss) guidance attributable to non-cash interest charges consists of pre-tax charges of $7.1 million for the twelve months ending December 31, 2015 associated with amortization of a debt discount.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Healthways, Inc. (NASDAQ: HWAY) today announced that its financial results for the first quarter ending March 31, 2015, will be released after market close on Thursday, April 23, 2015, followed the same day by a conference call and live webcast scheduled for 5:00 p.m. ET. The live broadcast of Healthways’ quarterly conference call will be available online by going to www.healthways.com and clicking on “Investors." For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, confirmation number 5818105, and the webcast replay will also be available on the Company’s Web site for the next 12 months. About Healthways Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for its customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. Healthways provides highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 68 million people on four continents. Learn more at www.healthways.com.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Healthways, Inc. (NASDAQ: HWAY) today announced that its financial results for the fourth quarter and year ending December 31, 2014, will be released after market close on Tuesday, February 24, 2015, followed the same day by a conference call and live webcast scheduled for 5:00 p.m. ET. The live broadcast of Healthways’ quarterly conference call will be available online by going to www.healthways.com and clicking on “Investors." For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, confirmation number 9216905, and the webcast replay will also be available on the Company’s Web site for the next 12 months. About Healthways Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 68 million people on four continents. Learn more at www.healthways.com.
NASHVILLE, Tenn.--(BUSINESS WIRE)--Ben R. Leedle, Jr., president and chief executive officer of Healthways (NASDAQ: HWAY), today announced financial results for the third quarter and nine months ended September 30, 2014. For the quarter, revenues increased 11.4% to $185.7 million from $166.6 million for the third quarter of 2013. Net income for the third quarter of 2014 was $2.0 million, or $0.05 per share, compared with $1.8 million, or $0.05 per share, for the third quarter of 2013. Adjusted net income per diluted share for the third quarter of 2014 and 2013 was $0.08, which excludes non-cash interest expense of $0.03 for each quarter. (See pages 9 and 10 for a reconciliation of non-GAAP financial measures.) For the first nine months of 2014, revenues increased 9.9% to $543.0 million from $494.0 million for the first nine months of 2013. Net loss for the first nine months of 2014 was $8.1 million, or $0.23 per share, compared with a net loss of $3.3 million, or $0.09 per share, for the same period in 2013. Adjusted net income per diluted share for the first nine months of 2014 was $0.03, which excludes a contract dispute settlement charge of $0.17 and non-cash interest expense of $0.09, compared with adjusted net loss of $0.07 for the first nine months of 2013, which excludes non-cash interest expense of $0.03. “Healthways’ third-quarter performance is consistent with our expectations for the year and demonstrates our continued growth momentum,” Leedle said. “Third-quarter revenues increased at a double-digit year-over-year pace for the second consecutive quarter and also grew on a sequential-quarter basis for the fifth consecutive quarter. As we have previously discussed, we expect this type of revenue growth to create significant long-term expansion in operating leverage because of the fixed-cost nature of our unique and scaled operating platform. We are therefore pleased that our revenue growth of 9.9% for the first nine months of 2014 has driven meaningful margin improvement, with adjusted EBITDA increasing 13.5% from the comparable period in 2013. “Net cash flows from operations for the third quarter of 2014 were $13.0 million, and capital expenditures totaled $11.0 million. Our ratio of total debt to EBITDA, as calculated under our credit agreement, improved slightly from the end of the second quarter to 3.85 at the end of the third quarter of 2014.” Broad Market Adoption of Well-Being Improvement “Market demand for population health services remains strong, and we continue to experience increasing interest in our Well-Being Improvement SolutionTM among all our customer markets: commercial health plans; Medicare and Medicaid health plans; large employers; health systems, hospitals and physicians; and international,” Leedle said. “We signed 23 contracts during the third quarter, including five contracts with new customers, five contract expansions and thirteen contract extensions. Since the end of the third quarter, we have renewed the third of the four contracts up for renewal in 2014 that each represented at least 2% of 2013 revenues. “We continue to see a growing pipeline of health system prospects. Three of our third-quarter contract signings were with health systems, and so far we have signed two additional contracts with new health system customers in the fourth quarter. Without exception, these health systems are focused on positioning themselves for the clinical outcomes and financial risks inherent in population health management. These health systems view the Dr. Dean Ornish Lifestyle Management program and our acute-to-post acute Care Transitions SolutionTM as either ideal entry points or key capabilities under a broader relationship because of the immediate benefits they provide under either fee-for-service reimbursement or value-based payment arrangements.” 2014 Financial Guidance Key Elements (See pages 9 and 10 for a reconciliation of non-GAAP financial measures): Guidance for 2014 revenues remains in a range of $730 million to $760 million. Guidance for 2014 adjusted EBITDA margin remains in a range of 10.5% to 11.5%. Earnings guidance: Guidance Year Ending December 31, 2014 (0.17)-(0.02 ) Healthways expects that profit margins will improve sequentially in the fourth quarter of 2014 compared with the third quarter, primarily driven by the increased recognition of performance-based fees, as well as ongoing revenue growth from current and new customers. Healthways also continues to expect operating cash flow for the full year of $75 million to $85 million, total capital expenditures of $40 million to $45 million, and improvement in its ratio of total debt to EBITDA, as calculated under its credit agreement. Summary Leedle concluded, “Our financial results for the third quarter and first nine months of 2014 position us to achieve our financial guidance for the full year. To conclude the year as planned, we must continue to successfully execute the ongoing ramp of existing contracts, the launch of new contracts and the timely recognition of performance-based fees. Based on our results throughout 2014 to-date and our expectations for the remainder of the year, we are affirming our financial guidance for the full year.” Conference Call Healthways will hold a conference call to discuss this release today at 5:00 p.m. Eastern Time. Investors will have the opportunity to listen to the conference call live over the Internet by going to www.healthways.com and clicking Investors at least 15 minutes early to register, download and install any necessary audio software. Presentation materials related to the conference call may also be accessed by going to www.healthways.com and clicking Investors. For those who cannot listen to the live broadcast, a telephonic replay will be available for one week at 719-457-0820, code 8108100, and the replay will also be available on the Company’s web site for the next 12 months. Safe Harbor Provisions This press release contains forward-looking statements, including our guidance and financial expectations for future periods, which are based upon current expectations, involve a number of risks and uncertainties and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding the intent, belief or expectations of the Company, including, without limitation, all statements regarding the Company’s future earnings and results of operations. Those forward-looking statements are subject to the finalization of the Company’s quarterly and year-end financial accounting procedures and may be affected by certain risks and uncertainties, including, but not limited to: the effectiveness of management’s strategies and decisions; the Company’s ability to sign and implement new contracts for our solutions; the Company’s ability to accurately forecast the costs required to successfully implement new contracts; the Company’s ability to accurately forecast the costs necessary to integrate new or acquired businesses, services (including outsourced services) or technologies into the Company’s business; the Company’s ability to achieve estimated annualized revenue in backlog in the manner and within the timeframe we expect, which is based on certain estimates regarding the implementation of our services; the Company’s ability to anticipate change and respond to emerging trends in the domestic and international markets for healthcare and the impact of the same on demand for the Company’s services; the Company’s ability to implement its integrated data and technology solutions platform within the required time frame and expected cost estimates and to develop and enhance this platform and/or other technologies to meet evolving customer and market needs; the Company’s ability to renew and/or maintain contracts with its customers under existing terms or restructure these contracts on terms that would not have a material negative impact on the Company’s results of operations; the Company’s ability to accurately forecast the Company’s revenues, margins, earnings and net income, as well as any potential charges that the Company may incur as a result of changes in its business; the Company’s ability to accurately forecast performance and the timing of revenue recognition under the terms of its customer contracts ahead of data collection and reconciliation; the Company’s ability to accurately forecast enrollment and participation rates in services and programs offered within the Company’s contracts; the risks associated with deriving a significant concentration of revenues from a limited number of customers; the risks associated with foreign currency exchange rate fluctuations; the ability of the Company’s customers to provide timely and accurate data that is essential to the operation and measurement of the Company’s performance; the Company’s ability to achieve the contractually required cost savings and clinical outcomes improvements and reach mutual agreement with customers with respect to cost savings, or to achieve such savings and improvements within the time frames it contemplates; the risks associated with changes in macroeconomic conditions; the risks associated with data privacy or security breaches, computer hacking, network penetration and other illegal intrusions of our information systems or those of third-party vendors or other service providers, which may result in unauthorized access by third parties to customer, employee or Company information or patient health information and lead to enforcement actions, fines and other litigation against the Company; the Company’s ability to effectively compete against other entities, whose financial, research, staff, and marketing resources may exceed our resources; the Company’s ability to service its debt and remain in compliance with its debt covenants; counterparty risk associated with our interest rate swap agreements and foreign currency exchanged contracts; the impact of litigation involving the Company and/or its subsidiaries; the impact of future state, federal and international legislation and regulations applicable to the Company’s business, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 on the Company’s operations and/or demand for its services; and other risks detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any such forward-looking statements. About Healthways Healthways is the largest independent global provider of well-being improvement solutions. Dedicated to creating a healthier world one person at a time, the Company uses the science of behavior change to produce and measure positive change in well-being for our customers, which include employers, integrated health systems, hospitals, physicians, health plans, communities and government entities. We provide highly specific and personalized support for each individual and their team of experts to optimize each participant’s health and productivity and to reduce health-related costs. Results are achieved by addressing longitudinal health risks and care needs of everyone in a given population. The Company has scaled its proprietary technology infrastructure and delivery capabilities developed over 30 years and now serves approximately 68 million people on four continents. Learn more at www.healthways.com. HEALTHWAYS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Weighted average common shares and equivalents: (1) The assumed exercise of stock-based awards for the nine months ended September 30, 2014 and 2013 was not considered because the impact would be anti-dilutive. HEALTHWAYS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) ASSETS HEALTHWAYS, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) LIABILITIES AND STOCKHOLDERS’ EQUITY $.001 par value, 5,000,000 shares authorized, none outstanding $.001 par value, 120,000,000 shares authorized, 35,360,327 and 35,107,303 shares outstanding, respectively HEALTHWAYS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) Adjustments to reconcile net loss to net cash flows provided by operating activities, net of business acquisitions: HEALTHWAYS, INC. RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES (Unaudited) Reconciliation of Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Share to Net Income (Loss) and Net Income (Loss) Per Share, GAAP Basis September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013 $ inthousands $ inthousands $ inthousands $ inthousands (1,036 ) (1) Adjusted net income (loss) and adjusted net income (loss) per share are non-GAAP financial measures. The Company excludes net loss attributable to non-cash interest and legal settlement charges from these measures because of their comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted net income (loss) or adjusted net income (loss) per share in isolation or as a substitute for net income (loss) or net income (loss) per share determined in accordance with accounting principles generally accepted in the United States. (2) Net loss attributable to non-cash interest charges represents the after-tax impact of the amortization of a debt discount for the three and nine months ended September 30, 2014 and 2013. (3) Net loss attributable to legal settlement charges represents the after-tax impact of the Company’s settlement of a contractual dispute in April 2014. (4) Figures may not add due to rounding. Reconciliation of Adjusted EPS Guidance to EPS (Loss) Guidance, GAAP Basis (5) Adjusted EPS guidance is a non-GAAP financial measure. The Company excludes EPS (loss) guidance attributable to non-cash interest and legal settlement charges from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EPS guidance in isolation or as a substitute for EPS (loss) guidance determined in accordance with accounting principles generally accepted in the United States. (6) EPS (loss) guidance attributable to non-cash interest charges consists of pre-tax charges of $6.8 million for the twelve months ending December 31, 2014 associated with amortization of a debt discount. (7) EPS (loss) guidance attributable to legal settlement charges consists of pre-tax charges of $9.4 million for the twelve months ending December 31, 2014 related to the Company’s settlement of a contractual dispute in April 2014. Reconciliation of Adjusted EBITDA to Net Loss, GAAP Basis (In thousands) Nine Months Ended (8) Adjusted EBITDA is a non-GAAP financial measure. The Company excludes legal settlement charges from this measure because of its comparability to the Company's historical operating results. The Company believes it is useful to investors to provide disclosures of its operating results and guidance on the same basis as that used by management. You should not consider adjusted EBITDA in isolation or as a substitute for net loss determined in accordance with accounting principles generally accepted in the United States. (9) Legal settlement charges consists of pre-tax charges of $9.4 million for the nine months ended September 30, 2014 related to the Company’s settlement of a contractual dispute in April 2014.