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HMS Explores Feasible Revival Options, Including Sale, To Overcome Pandemic Setback: Report

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HMS Explores Feasible Revival Options, Including Sale, To Overcome Pandemic Setback: Report

Technology and data analytics-driven healthcare management solutions provider HMS Holdings Corp (NASDAQ: HMSY) is exploring feasible options while braving headwinds due to the pandemic outbreak, including a sale, according to Bloomberg

The company is still holding discussions with advisors and hasn't yet reportedly reached a resolution.

What Happened: HMS Chairman and CEO Bill Lucia blamed pandemic for client work pauses, lower utilization rates, and a shift in the industry focus, which led to a dismal performance.

In the June quarter earnings report, HMS declared a net income of $6.6 million, a drop of 60% year-over-year. Adjusted EBITDA for the second quarter this year fell 41.6% YoY, and adjusted earnings per share were at $0.19 – compared to $0.34 in Q2 last year.

The company held cash and cash equivalents of $193 million at the end of June, 38.6% higher than the balance at the end of 2019.

Why Does It Matter: Despite missing earnings expectations, Lucia was positive about the company outlook for the second half of 2020 and full year 2021. The company cited higher unemployment driving Medicaid enrollment, an expected improvement in the Payment Integrity business, and reduced administrative burdens due to lifting pauses on medical record requests by clients as the key factors affecting its business.

Price Action: HMSY shares closed 1.92% up at $24.37 on Friday. The shares are down 17.67% year-to-date.

 

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