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Healthways Inc. Reports Operating Results (10-Q)

August 08, 2012 | About:

10qk

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Healthways Inc. (HWAY) filed Quarterly Report for the period ended 2012-06-30.

Healthways, Inc. has a market cap of $359.4 million; its shares were traded at around $10.89 with a P/E ratio of 16.3 and P/S ratio of 0.5.
This is the annual revenues and earnings per share of HWAY over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of HWAY.


Highlight of Business Operations:

Some of our contracts place a portion of our fees at risk based on achieving certain performance metrics, cost savings, and/or clinical outcomes improvements (“performance-based”). Approximately 7% of revenues recorded during the six months ended June 30, 2012 were performance-based and were subject to final reconciliation as of June 30, 2012. We anticipate that this percentage may increase throughout 2012 due to the level of performance-based fees in new contracts and the timing and amount of revenue recognition associated with performance-based fees.

Some of our contracts place a portion of our fees at risk based on achieving certain performance metrics, cost savings, and/or clinical outcomes improvements (“performance-based”). Approximately 7% of revenues recorded during the six months ended June 30, 2012 were performance-based and were subject to final reconciliation as of June 30, 2012. We anticipate that this percentage may increase throughout 2012 due to the level of performance-based fees in new contracts and the timing and amount of revenue recognition associated with performance-based fees.

Performance-related adjustments (including any amounts recorded as revenue that were ultimately refunded), changes in estimates, or data reconciliation differences may cause us to recognize or reverse revenue in a current fiscal year that pertains to services provided during a prior fiscal year. During the six months ended June 30, 2012, we recognized a net increase in revenue of $6.7 million that related to services provided prior to 2012.

Cost of services (excluding depreciation and amortization) as a percentage of revenues increased to 76.0% and 80.4% for the three and six months ended June 30, 2012, compared to 74.3% and 74.5% for the three and six months ended June 30, 2011 primarily due to the wind-down of our current contract with CIGNA and certain other contract or program terminations with three smaller health plan customers to whom we provided traditional disease management services, all of which carried a lower than average cost of services as a percentage of revenues. In addition, due to the timing of the notification from CIGNA in late 2011, some of the related costs could not be reduced until the first quarter of 2012. These increases were partially offset by

Selling, general and administrative expenses as a percentage of revenues decreased to 8.8% and 8.6% for the three and six months ended June 30, 2012 compared to 10.4% and 10.7% for the three and six months ended June 30, 2011, primarily due to a restructuring of the Company that was largely completed during the fourth quarter of 2011, partially offset by increased costs involved in pursuing business in emerging markets.

Read the The complete Report

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