Additional revenue from its newly acquired analytics firm didn't prevent second-quarter profits from falling at MedAssets as restructuring costs and other expenses took a toll.
The Alpharetta, Ga.-based healthcare group purchasing and performance improvement company reported $6.3 million in income during the three months ended June 30, down 4.3% from $6.6 million during the same time a year ago. MedAssets did not report its net income on a pro forma basis, so results from Sg2 may skew its financials.
Revenue in the second quarter was $190.4 million, up 8.6% from $175.4 million reported during last year's second quarter. Excluding contributions from Sg2, revenue only increased 1.8%.
Expenses rose by 9%, putting a dent in income. MedAssets paid $556,000 in restructuring, acquisition and integration-related costs this quarter, bringing the total to $5 million for the year.
Sg2 revenues and growth in consulting fees boosted revenues for MedAssets' Spend and Clinical Resource Management segment. Those gains were partially offset by a slight decline in group purchasing administrative fees, the company said, leaving an revenue increase of 13.2% to $119.9 million. Excluding Sg2, revenue increased by 2%.
MedAssets reported $70.5 million in second quarter revenue from its revenue-cycle management operations, an increase of 1.4% from $69.5 million in the prior year. Though technology-related revenue makes up a majority of this segment, services-related revenue grew faster, by 7.7%, as compared to 2% technology-related growth.
Profits are down significantly so far this year. Net income was $9.7 million for the six months ended June 30, down 32.3% from $14.3 million during the same period last year. The company reported $376 million in revenues, up 8.6% from $346.3 million, but up only 2.1% when excluding Sg2.
As it heads into the third quarter, MedAssets is lowering its expectations for 2015 because of the poor results posted in the first half of the year. Excluding contributions from Sg2, the company expects revenue to growth of 0.1% to 1.8%. It expects non-GAAP adjusted diluted earnings per share of $1.20 to $1.26, a 11.1% to 6.7% decrease from 2014.
