Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
Investor Relations
703-742-5393
InvestorRelations@quadramed.com
QUADRAMED CORPORATION ANNOUNCES Q3 2006 RESULTS
Revenues of $33 million Produce
Net Income of $6 million
RESTON, VA – (November 9, 2006) — QuadraMed Corporation (Amex:QD) announced today that it will report net income of $6.0 million before preferred stock accretion for the three months ended September 30, 2006, compared to a net loss of $(4.0) million for the same period in 2005. Income from operations was $5.6 million for the three months ended September 30, 2006, compared to a loss from operations of $(2.8) million for the same period in 2005. On a year-to-date basis, net income was $8.0 million in 2006 compared to a net loss of $(5.2) million for the corresponding nine month period in 2005.
Cash and investments increased to $41.9 during the nine months ended September 30, 2006, from $34.4 million at December 31, 2005. Cash from operations was $3.0 million for three months and $12.4 million for the nine months ended September 30, 2006 compared to $2.9 million and $11.0 million for the corresponding periods in 2005.
Revenues of $33.0 million, gross margin of 67% and operating expenses of $16.4 million combined to produce the achieved operating results for the quarter. These compare to revenues of $30.0 million, gross margin of 62% and operating expenses of $21.5 million of the same period in 2005.
The increase in revenues to $33.0 million for the 2006 quarter is due in part to management initiatives enacted as a part of the Company’s strategic plan to install products and provide services in a timely manner, resolve outstanding implementation issues, and collect cash from past due receivables. The success of these initiatives is reflected in both the quarter and year-to-date periods. Revenues for the nine month periods ended September 30, 2006 and 2005 were $94.0 million and $91.1 million respectively.
Total operating expenses of $16.4 million for the three months ended and $52.6 million for the nine months ended September 30, 2006 compare to $21.5 million and $59.5 million for the comparable 2005 periods. After removing the effects of severance, exit costs on facility closings and settlement of litigation from the figures, operating expenses decreased approximately $0.8 million between the three month periods, and decreased $3.1 million between the nine month periods. The Company’s reorganization during the first quarter of 2006, as well as other management initiatives enacted in connection with the Company’s strategic plan, have accounted for the majority of these operating expense declines.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) was $7.4 million or 22% of revenues for the three months ended September 30, 2006, compared to negative EBITDA of $(0.6) million for the same period in 2005. On a year-to-date basis, EBITDA was $13.2 million or 14% of revenues, compared to $4.0 million or 4% of revenues for the nine months ended September 30, 2005.
The Company will also report net income attributable to common shareholders of $4.7 million, or $0.11 basic per share and $0.08 per fully diluted share for the three months ended September 30, 2006; this is compared to a net loss attributable to common shareholders of $(5.2) million, or $(0.13) basic and fully diluted per share for the same period in 2005. For the nine month period ended September 30, 2006, net income attributable to common shareholders was $4.2 million, or $0.10 basic per share and $0.10
per fully diluted share. The calculation of net income per fully diluted share for the three months and nine months ended September 30, 2006 was based on net income before preferred stock accretion. In our Quarterly Report on Form 10-Q for the six months ended June 30, 2006, as filed with the SEC on August 9, 2006, net income per fully diluted share was based on net income attributable to common shareholders, which reflects a deduction for the preferred stock accretion. If the calculation of net income per fully diluted share for the second quarter of 2006 were made using the same approach as in the current quarter, net income per fully diluted share would have been $0.05 and $0.03 for the three months and six months ended June 30, 2006 instead of $0.03 and $(0.01) as previously reported.
“We continue to make progress on effectively managing and operating our business by installing products, delivering services, identifying and resolving customer issues in a timely manner, and collecting old receivables,” said Keith Hagen, QuadraMed’s president and chief executive officer. “As a result, our revenues and EBITDA have increased this quarter and our cash position continues to increase. This year, we have signed two new name Affinity contracts. This most recent contract includes our revenue cycle management, identity management, electronic document management and enterprise scheduling products, allowing us to build a new long term relationship with a large healthcare delivery system. Looking ahead, we will continue to execute on the fundamental business principles that have been successful over the last year. We’ll continue to focus on building our reputation in the market, communicating our vision, managing our expenses and implementing initiatives designed to grow and improve our business,” added Mr. Hagen.
Management will review these results in an investment community conference call at 4:00 PM Eastern (1:00 PM Pacific) on Thursday, November 9, 2006. To ensure fair dissemination of information, no inquiries of management should be made regarding QuadraMed’s results until after the conference call. A brief question and answer period will follow management’s presentation. The dial-in number for the conference call is 800-862-9098 domestic, and 785-424-1051 international. Callers should dial in by 3:45 PM Eastern (12:45 PM Pacific) to register. The call will also be webcast live and available to the public via the Investor Relations section of QuadraMed’s webpage atwww.quadramed.com. Please note that the webcast is listen-only. Listeners should access the website at 3:45 PM Eastern (12:45 PM Pacific) to register and to download and install any necessary audio software. The webcast replays will be available until 12:00 AM ET on November 15, 2006 by dialing 719-457-0820 or 888-203-1112. The replay passcode is 9406656.
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| Attachments | | Exhibit 1 | | Condensed Consolidated Balance Sheets as of September 30, 2006 and December 31, 2005 |
| | |
| | Exhibit 2 | | Condensed Consolidated Statements of Operations for the Three Months Ended September 30, 2006 and 2005 and Nine Months Ended September 30, 2006 and 2005 |
| | |
| | Exhibit 3 | | Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2006 and 2005 and Nine Months Ended September 30, 2006 and 2005 |
| | |
| | Exhibit 4 | | Reconciliation of EBITDA and Non-GAAP Measurements for the Three Months Ended September 30, 2006, June 30, 2006, March 31, 2006, December 31, 2005, September 30, 2005, June 30, 2005 and March 31, 2005 |
| | |
| | Exhibit 5 | | Reconciliation of EBITDA and Non-GAAP Measurements for the Nine Months Ended September 30, 2006 and September 30, 2005 and the Twelve Months Ended September 30, 2006 |
About QuadraMed Corporation
QuadraMed Corporation advances the success of healthcare organizations through IT solutions that leverage quality care into positive financial outcomes. As evolving reimbursement scenarios challenge healthcare organizations to leverage quality of care into payment, clients committing to QuadraMed’s care-based solutions can realize market leading financial performance. Using QuadraMed’s end-to-end solutions to optimize the patient experience and leverage quality of care into payment, our clients can receive the proper reimbursement, in the shortest time, at the lowest administrative cost. Behind our products and services is a staff of almost 600 professionals whose experience and dedication to service have earned QuadraMed the trust and loyalty of customers at approximately 2,000 healthcare provider facilities. To find out more about QuadraMed, visit www.quadramed.com.
Cautionary Statement on Risks Associated with QuadraMed’s Forward-Looking Statements
This press release contains forward-looking statements, as defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, by QuadraMed that are subject to risks and uncertainties. The words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” “may,” “should,” “could,” and similar expressions are intended to identify such statements. Forward-looking statements are not guarantees of future performance and are to be interpreted only as of the date on which they are made. QuadraMed undertakes no obligation to update or revise any forward-looking statement except as required by law. QuadraMed advises investors that it discusses risk factors and uncertainties that could cause QuadraMed’s actual results to differ from forward-looking statements in its periodic reports filed with the Securities and Exchange Commission (“SEC”). QuadraMed’s SEC filings can be accessed through the Investor Relations section of our website, www.quadramed.com, or through the SEC’s EDGAR Database at www.sec.gov (QuadraMed has EDGAR CIK No. 0001018833).
QuadraMed Affinity and Care-based Revenue Cycle are registered trademarks of QuadraMed Corporation. All other trademarks are the property of their respective holders.
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Exhibit 1
QUADRAMED CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
| | | | | | | | |
| | | September 30,
2006 | | | December 31,
2005 | |
| ASSETS | | | | | | | | |
Current assets | | | | | | | | |
Cash and cash equivalents | | $ | 36,485 | | | $ | 33,042 | |
Short-term investments | | | 4,185 | | | | — | |
Accounts receivable, net of allowance for doubtful accounts of $2,953 and $4,177, respectively | | | 19,347 | | | | 27,089 | |
Unbilled and other receivables | | | 4,375 | | | | 3,387 | |
Notes and other receivables, net of allowance for doubtful accounts of $822 and $715, respectively | | | | | | | 50 | |
Prepaid expenses and other current assets | | | 9,947 | | | | 12,092 | |
| | | | | | | | |
Total current assets | | | 74,339 | | | | 75,660 | |
Restricted cash | | | 2,286 | | | | 2,391 | |
Long-term investments | | | 1,241 | | | | 1,334 | |
Property and equipment, net of accumulated depreciation and amortization of $20,666 and $19,052, respectively | | | 2,800 | | | | 3,737 | |
Goodwill | | | 25,983 | | | | 25,983 | |
Other intangible assets, net of accumulated amortization of $40,230 and $35,905, respectively | | | 3,279 | | | | 7,624 | |
Other long-term assets | | | 3,167 | | | | 3,167 | |
| | | | | | | | |
Total assets | | $ | 113,095 | | | $ | 119,896 | |
| | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
Current liabilities | | | | | | | | |
Accounts payable and accrued expenses | | $ | 3,479 | | | $ | 3,551 | |
Accrued payroll and related | | | 7,904 | | | | 7,422 | |
Other accrued liabilities | | | 5,395 | | | | 10,114 | |
Dividends payable | | | 5,181 | | | | 9,054 | |
Deferred revenue | | | 45,695 | | | | 52,169 | |
| | | | | | | | |
Total current liabilities | | | 67,654 | | | | 82,310 | |
Accrued exit cost of facility closing | | | 2,437 | | | | 3,613 | |
Other long-term liabilities | | | 3,132 | | | | 2,781 | |
| | | | | | | | |
Total liabilities | | | 73,223 | | | | 88,704 | |
Stockholders’ equity | | | | | | | | |
Preferred stock, $ 0.01 par, 5,000 shares authorized; 4,000 shares issued and outstanding | | | 92,000 | | | | 88,231 | |
Common stock, $ 0.01 par, 150,000 shares authorized; 42,255 and 41,245 shares issued and outstanding, including 457 and 457 shares of treasury stock, respectively | | | 422 | | | | 412 | |
Additional paid-in-capital | | | 303,897 | | | | 302,324 | |
Accumulated other comprehensive loss | | | (154 | ) | | | (89 | ) |
Accumulated deficit | | | (356,293 | ) | | | (359,686 | ) |
| | | | | | | | |
Total stockholders’ equity | | | 39,872 | | | | 31,192 | |
| | | | | | | | |
Total liabilities and stockholders’ equity | | $ | 113,095 | | | $ | 119,896 | |
| | | | | | | | |
Exhibit 1 to Press Release dated November 9, 2006
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Exhibit 2
QUADRAMED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended,
September 30, | | | Nine months ended,
September 30, | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Revenue | | | | | | | | | | | | | | | | |
Services | | $ | 3,859 | | | $ | 2,824 | | | $ | 9,480 | | | $ | 9,448 | |
Maintenance | | | 14,802 | | | | 13,767 | | | | 42,605 | | | | 41,152 | |
Installation and other | | | 2,893 | | | | 3,196 | | | | 9,048 | | | | 8,300 | |
| | | | | | | | | | | | | | | | |
Services and other revenue | | | 21,554 | | | | 19,787 | | | | 61,133 | | | | 58,900 | |
Licenses | | | 11,151 | | | | 10,009 | | | | 31,713 | | | | 30,143 | |
Hardware | | | 327 | | | | 250 | | | | 1,142 | | | | 2,061 | |
| | | | | | | | | | | | | | | | |
Total revenue | | | 33,032 | | | | 30,046 | | | | 93,988 | | | | 91,104 | |
| | | | | | | | | | | | | | | | |
Cost of revenue | | | | | | | | | | | | | | | | |
Cost of services and other revenue | | | 6,846 | | | | 7,326 | | | | 21,497 | | | | 21,764 | |
Royalties and other | | | 3,034 | | | | 2,385 | | | | 8,824 | | | | 6,811 | |
Amortization of acquired technology and capitalized software | | | 748 | | | | 1,014 | | | | 2,699 | | | | 3,073 | |
| | | | | | | | | | | | | | | | |
Cost of license revenue | | | 3,782 | | | | 3,399 | | | | 11,523 | | | | 9,884 | |
Cost of hardware revenue | | | 347 | | | | 682 | | | | 1,131 | | | | 2,190 | |
| | | | | | | | | | | | | | | | |
Total cost of revenue | | | 10,975 | | | | 11,407 | | | | 34,151 | | | | 33,838 | |
| | | | | | | | | | | | | | | | |
Gross margin | | | 22,057 | | | | 18,639 | | | | 59,837 | | | | 57,266 | |
| | | | | | | | | | | | | | | | |
Operating expense | | | | | | | | | | | | | | | | |
General and administration | | | 4,370 | | | | 8,340 | | | | 15,299 | | | | 20,625 | |
Software development | | | 7,298 | | | | 7,812 | | | | 23,254 | | | | 23,253 | |
Sales and marketing | | | 3,730 | | | | 3,160 | | | | 10,849 | | | | 10,727 | |
Amortization of intangible assets and depreciation | | | 1,035 | | | | 1,087 | | | | 3,239 | | | | 3,793 | |
Exit cost of facility closing | | | — | | | | 1,066 | | | | — | | | | 1,066 | |
| | | | | | | | | | | | | | | | |
Total operating expenses | | | 16,433 | | | | 21,465 | | | | 52,641 | | | | 59,464 | |
| | | | | | | | | | | | | | | | |
Income (loss) from operations | | | 5,624 | | | | (2,826 | ) | | | 7,196 | | | | (2,198 | ) |
| | | | | | | | | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | | | | |
Interest expense, includes non-cash charges of $85, $383, $306 and $740, respectively | | | (85 | ) | | | (403 | ) | | | (311 | ) | | | (763 | ) |
Interest income | | | 501 | | | | 223 | | | | 1,266 | | | | 444 | |
Other income (expense), net | | | 40 | | | | (21 | ) | | | 94 | | | | (37 | ) |
| | | | | | | | | | | | | | | | |
Other income (expense) | | | 456 | | | | (201 | ) | | | 1,049 | | | | (356 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations before income taxes | | $ | 6,080 | | | $ | (3,027 | ) | | $ | 8,245 | | | $ | (2,554 | ) |
Provision for income taxes | | | (101 | ) | | | (114 | ) | | | (262 | ) | | | (128 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) from continuing operations | | | 5,979 | | | | (3,141 | ) | | | 7,983 | | | | (2,682 | ) |
Loss from discontinued operations | | | — | | | | (817 | ) | | | — | | | | (2,503 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 5,979 | | | $ | (3,958 | ) | | $ | 7,983 | | | $ | (5,185 | ) |
Preferred stock accretion | | | (1,273 | ) | | | (1,207 | ) | | | (3,769 | ) | | | (3,573 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) attributable to common shareholders | | $ | 4,706 | | | $ | (5,165 | ) | | $ | 4,214 | | | $ | (8,758 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) per share-basic | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.11 | | | $ | (0.11 | ) | | $ | 0.10 | | | $ | (0.15 | ) |
Discontinued operations | | | — | | | | (0.02 | ) | | | — | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.11 | | | $ | (0.13 | ) | | $ | 0.10 | | | $ | (0.22 | ) |
| | | | | | | | | | | | | | | | |
Income (loss) per share-diluted | | | | | | | | | | | | | | | | |
Continuing operations | | $ | 0.08 | | | $ | (0.11 | ) | | $ | 0.10 | | | $ | (0.15 | ) |
Discontinued operations | | | — | | | | (0.02 | ) | | | — | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.08 | | | $ | (0.13 | ) | | $ | 0.10 | | | $ | (0.22 | ) |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding | | | | | | | | | | | | | | | | |
Basic | | | 42,156 | | | | 40,684 | | | | 41,788 | | | | 40,407 | |
| | | | | | | | | | | | | | | | |
Diluted | | | 78,093 | | | | 40,684 | | | | 77,932 | | | | 40,407 | |
| | | | | | | | | | | | | | | | |
Exhibit 2 to Press Release dated November 9, 2006
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Exhibit 3
QUADRAMED CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | Three months ended
September 30, | | | Nine months ended
September 30, | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
Cash flows from operating activities | | | | | | | | | | | | | | | | |
Net income (loss) attributable to common shareholders | | $ | 4,706 | | | $ | (5,165 | ) | | $ | 4,214 | | | $ | (8,758 | ) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | | | | | | | | | | | | | | |
Depreciation and amortization | | | 1,851 | | | | 3,465 | | | | 6,191 | | | | 9,478 | |
Preferred stock accretion | | | 1,273 | | | | 1,207 | | | | 3,769 | | | | 3,573 | |
Exit cost of facility closing | | | — | | | | 1,066 | | | | — | | | | 1,066 | |
Impairment and other charges for Financial Services Division | | | — | | | | 817 | | | | — | | | | 1,731 | |
Provision for bad debts | | | — | | | | 879 | | | | 820 | | | | 1,704 | |
Stock-based compensation expense | | | 324 | | | | — | | | | 985 | | | | — | |
Gain on sale of assets | | | — | | | | (383 | ) | | | — | | | | (383 | ) |
Other | | | — | | | | — | | | | (21 | ) | | | — | |
Changes in assets and liabilities: | | | | | | | | | | | | | | | | |
Accounts receivable | | | 3,494 | | | | 4,447 | | | | 6,923 | | | | (2,170 | ) |
Prepaid expenses and other | | | 869 | | | | (1,372 | ) | | | 1,229 | | | | 1,618 | |
Accounts payable and accrued liabilities | | | (626 | ) | | | 3,410 | | | | (5,199 | ) | | | 219 | |
Deferred revenue | | | (8,858 | ) | | | (2,331 | ) | | | (6,473 | ) | | | 6,065 | |
Payment to former executive out of trust | | | — | | | | (3,100 | ) | | | — | | | | (3,100 | ) |
| | | | | | | | | | | | | | | | |
Cash provided by operating activities | | | 3,033 | | | | 2,940 | | | | 12,438 | | | | 11,043 | |
Cash flows from investing activities | | | | | | | | | | | | | | | | |
Decrease (increase) in restricted cash | | | 82 | | | | (8 | ) | | | 105 | | | | 1,539 | |
Capital expenditures | | | (231 | ) | | | (297 | ) | | | (731 | ) | | | (1,101 | ) |
Proceeds from the sale of assets and available-for-sale securities, net | | | 1,951 | | | | 462 | | | | 2,609 | | | | 345 | |
Purchases of available-for-sale securities | | | (6,030 | ) | | | — | | | | (6,707 | ) | | | — | |
Termination of trust | | | — | | | | 3,100 | | | | — | | | | 3,100 | |
Other | | | (30 | ) | | | — | | | | 5 | | | | — | |
| | | | | | | | | | | | | | | | |
Cash provided by (used in) by investing activities | | | (4,258 | ) | | | 3,257 | | | | (4,719 | ) | | | 3,883 | |
Cash flows from financing activities | | | | | | | | | | | | | | | | |
Proceeds from issuance of common stock and other | | | 181 | | | | 239 | | | | 599 | | | | 845 | |
Payment of preferred stock dividends | | | (1,625 | ) | | | (1,458 | ) | | | (4,875 | ) | | | (4,208 | ) |
| | | | | | | | | | | | | | | | |
Cash used in financing activities | | | (1,444 | ) | | | (1,219 | ) | | | (4,276 | ) | | | (3,363 | ) |
Net increase (decrease) in cash and cash equivalents | | | (2,669 | ) | | | 4,978 | | | | 3,443 | | | | 11,563 | |
Cash and cash equivalents, beginning of period | | | 39,154 | | | | 29,014 | | | | 33,042 | | | | 22,429 | |
| | | | | | | | | | | | | | | | |
Cash and cash equivalents, end of period | | $ | 36,485 | | | $ | 33,992 | | | | 36,485 | | | $ | 33,992 | |
| | | | | | | | | | | | | | | | |
Exhibit 3 to Press Release dated November 9, 2006
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Exhibit 4
QUADRAMED CORPORATION
Reconciliation of EBITDA and Non-GAAP Measurements
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | 9/30/06 | | | 6/30/06 | | | 3/31/06 | | | 12/31/05 | | | 9/30/05 | | | 6/30/05 | | | 3/31/05 | |
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss), as reported | | $ | 5,979 | | | $ | 3,847 | | | | ($1,843 | ) | | $ | 1,247 | | | | ($3,958 | ) | | $ | 1,293 | | | | ($2,520 | ) |
Adjustments to Net Income for EBITDA | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest Expense | | | 85 | | | | 103 | | | | 123 | | | | (156 | ) | | | 403 | | | | 191 | | | | 169 | |
Interest Income | | | (501 | ) | | | (399 | ) | | | (366 | ) | | | (305 | ) | | | (223 | ) | | | (120 | ) | | | (101 | ) |
Benefit (provision) for Income Taxes | | | 101 | | | | 63 | | | | 98 | | | | 149 | | | | 114 | | | | 3 | | | | 11 | |
Depreciation and Amortization | | | 1,781 | | | | 2,060 | | | | 2,094 | | | | 2,137 | | | | 3,082 | | | | 2,280 | | | | 3,377 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal Adjustments for EBITDA | | | 1,466 | | | | 1,827 | | | | 1,949 | | | | 1,825 | | | | 3,376 | | | | 2,354 | | | | 3,456 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EBITDA | | $ | 7,445 | | | $ | 5,674 | | | $ | 106 | | | $ | 3,072 | | | | ($582 | ) | | $ | 3,647 | | | $ | 936 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proforma Net Income (Loss) before Preferred Stock Accretion | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss), as reported | | $ | 5,979 | | | $ | 3,847 | | | | ($1,843 | ) | | $ | 1,247 | | | | ($3,958 | ) | | $ | 1,293 | | | | ($2,520 | ) |
Exit Cost on Facility Closing (San Rafael) | | | — | | | | — | | | | — | | | | — | | | | 1,066 | | | | — | | | | — | |
Exit Cost on Facility Closing (Discontinued Operation) | | | — | | | | — | | | | — | | | | — | | | | 817 | | | | — | | | | 1,032 | |
Cash Severance | | | — | | | | 142 | | | | 315 | | | | — | | | | 2,344 | | | | — | | | | 500 | |
Non-Cash Severance | | | — | | | | — | | | | — | | | | — | | | | 850 | | | | — | | | | 592 | |
Costs of Litigation | | | — | | | | 27 | | | | 1,124 | | | | — | | | | — | | | | — | | | | — | |
Gain on Sale of EDI Division | | | — | | | | — | | | | — | | | | — | | | | (383 | ) | | | — | | | | — | |
Loss from Discontinued Operation | | | — | | | | — | | | | — | | | | (68 | ) | | | — | | | | — | | | | 654 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal Proforma adjustments | | | — | | | | 169 | | | | 1,439 | | | | (68 | ) | | | 4,694 | | | | — | | | | 2,778 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proforma net income (loss) | | $ | 5,979 | | | $ | 4,016 | | | | ($404 | ) | | $ | 1,179 | | | $ | 736 | | | $ | 1,293 | | | $ | 258 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proforma Income (Loss) from Operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Income (loss) from operations, as reported | | $ | 5,624 | | | $ | 3,578 | | | | ($2,006 | ) | | $ | 817 | | | | ($2,826 | ) | | $ | 1,229 | | | | ($601 | ) |
Exit Cost on Facility Closing (San Rafael) | | | — | | | | — | | | | — | | | | — | | | | 1,066 | | | | — | | | | — | |
Cash Severance | | | — | | | | 142 | | | | 315 | | | | — | | | | 2,344 | | | | — | | | | 500 | |
Non-Cash Severance | | | — | | | | — | | | | — | | | | — | | | | 850 | | | | — | | | | 592 | |
Costs of Litigation | | | — | | | | 27 | | | | 1,124 | | | | — | | | | — | | | | — | | | | — | |
Gain on Sale of EDI Division | | | — | | | | — | | | | — | | | | — | | | | (383 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Subtotal Proforma adjustments | | | — | | | | 169 | | | | 1,439 | | | | — | | | | 3,877 | | | | — | | | | 1,092 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Proforma Income (loss) from operations | | $ | 5,624 | | | $ | 3,747 | | | | ($567 | ) | | $ | 817 | | | $ | 1,051 | | | $ | 1,229 | | | $ | 491 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other Information | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Revenue | | $ | 33,032 | | | $ | 32,028 | | | $ | 28,928 | | | $ | 31,209 | | | $ | 30,046 | | | $ | 30,683 | | | $ | 30,375 | |
Costs of Revenue | | $ | 10,975 | | | $ | 11,592 | | | $ | 11,584 | | | $ | 11,806 | | | $ | 11,407 | | | $ | 10,945 | | | $ | 11,485 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross Margin | | $ | 22,057 | | | $ | 20,436 | | | $ | 17,344 | | | $ | 19,403 | | | $ | 18,639 | | | $ | 19,738 | | | $ | 18,890 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Gross Margin % | | | 67 | % | | | 64 | % | | | 60 | % | | | 62 | % | | | 62 | % | | | 64 | % | | | 62 | % |
Exhibit 4 to Press Release dated November 9, 2006
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Exhibit 5
QUADRAMED CORPORATION
Reconciliation of EBITDA and Non-GAAP Measurements
(in thousands)
(unaudited)
| | | | | | | | | | | | |
| | | | | | | | | Last 12
Months | |
| | | For the Nine Months Ended | | | Ended | |
| | | 9/30/06 | | | 9/30/05 | | | 9/30/06 | |
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) | | | | | | | | | | | | |
Net income (loss), as reported | | $ | 7,983 | | | | ($5,185 | ) | | $ | 9,230 | |
Adjustments to Net Income for EBITDA | | | | | | | | | | | | |
Interest Expense | | $ | 311 | | | $ | 763 | | | $ | 155 | |
Interest Income | | | ($1,266 | ) | | | ($444 | ) | | | ($1,571 | ) |
Benefit (provision) for Income Taxes | | $ | 262 | | | $ | 128 | | | $ | 411 | |
Depreciation and Amortization | | $ | 5,935 | | | $ | 8,739 | | | $ | 8,072 | |
| | | | | | | | | | | | |
Subtotal Adjustments for EBITDA | | | 5,242 | | | | 9,186 | | | | 7,067 | |
| | | | | | | | | | | | |
EBITDA | | $ | 13,225 | | | $ | 4,001 | | | $ | 16,297 | |
| | | | | | | | | | | | |
Proforma Net Income (Loss) before Preferred Stock Accretion | | | | | | | | | | | | |
Net income (loss), as reported | | $ | 7,983 | | | | ($5,185 | ) | | $ | 9,230 | |
Exit Cost on Facility Closing (San Rafael) | | | — | | | | 1,066 | | | | — | |
Exit Cost on Facility Closing (Discontinued Operation) | | | — | | | | 1,849 | | | | — | |
Cash Severance | | | 457 | | | | 2,844 | | | | 457 | |
Non-Cash Severance | | | — | | | | 1,442 | | | | — | |
Costs of Litigation | | | 1,151 | | | | — | | | | 1,151 | |
Gain on Sale of EDI Division | | | — | | | | (383 | ) | | | — | |
Loss from Discontinued Operation | | | — | | | | 654 | | | | (68 | ) |
| | | | | | | | | | | | |
Subtotal Proforma adjustments | | | 1,608 | | | | 7,472 | | | | 1,540 | |
| | | | | | | | | | | | |
Proforma net income (loss) | | $ | 9,591 | | | $ | 2,287 | | | $ | 10,770 | |
| | | | | | | | | | | | |
Proforma Income (Loss) from Operations | | | | | | | | | | | | |
Income (loss) from operations, as reported | | $ | 7,196 | | | | ($2,198 | ) | | $ | 8,013 | |
Exit Cost on Facility Closing (San Rafael) | | | — | | | | 1,066 | | | | — | |
Cash Severance | | | 457 | | | | 2,844 | | | | 457 | |
Non-Cash Severance | | | — | | | | 1,442 | | | | — | |
Costs of Litigation | | | 1,151 | | | | — | | | | 1,151 | |
Gain on Sale of EDI Division | | | — | | | | (383 | ) | | | — | |
| | | | | | | | | | | | |
Subtotal Proforma adjustments | | | 1,608 | | | | 4,969 | | | | 1,608 | |
| | | | | | | | | | | | |
Proforma Income (loss) from operations | | $ | 8,804 | | | $ | 2,771 | | | $ | 9,621 | |
| | | | | | | | | | | | |
Other Information | | | | | | | | | | | | |
Revenue | | $ | 93,988 | | | $ | 91,104 | | | $ | 125,197 | |
Costs of Revenue | | $ | 34,151 | | | $ | 33,837 | | | $ | 45,957 | |
| | | | | | | | | | | | |
Gross Margin | | $ | 59,837 | | | $ | 57,267 | | | $ | 79,240 | |
| | | | | | | | | | | | |
Gross Margin % | | | 64 | % | | | 63 | % | | | 63 | % |
Exhibit 5 to Press Release dated November 9, 2006
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