Cotiviti Holdings Inc. (COTV) swung to a net profit for the quarter ended Sep. 30, 2016. The company has made a net profit of $4.58 million, or $ 0.05 a share in the quarter, against a net loss of $7.29 million, or $0.09 a share in the last year period. On the other hand, adjusted net income for the quarter stood at $33.72 million, or $0.36 a share compared with $26.51 million or $0.34 a share, a year ago.
Revenue during the quarter grew 14.10 percent to $156.24 million from $136.94 million in the previous year period. Gross margin for the quarter contracted 369 basis points over the previous year period to 58.29 percent. Total expenses were 84.54 percent of quarterly revenues, down from 96.99 percent for the same period last year. This has led to an improvement of 1245 basis points in operating margin to 15.46 percent.
Operating income for the quarter was $24.16 million, compared with $4.13 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $61.63 million compared with $51.92 million in the prior year period. At the same time, adjusted EBITDA margin improved 153 basis points in the quarter to 39.45 percent from 37.92 percent in the last year period.
"We continue to achieve strong operating and financial performance as a result of our successful execution on our long-term strategic plan by delivering unique value and service to our clients every day. Our third quarter results demonstrate the strength of our business and our very talented team’s dedication to serving our clients, with total revenue growth of 14% compared to the prior year period driven by 16% revenue growth in our Healthcare segment," said Doug Williams, chief executive officer. "Our robust performance, as shown by the 19% growth in non-GAAP Adjusted EBITDA in the third quarter, was driven by our ability to deliver tangible payment solutions to our clients through our proprietary technology platform, advanced analytics capabilities and the unique expertise collected from decades of experience across the payment continuum. In both Healthcare and Retail, payment complexity continues to grow and drive demand for our services. Beyond the economic benefit, assuring payment accuracy also supports our clients’ relationships with their providers and suppliers, enhancing the overall value we deliver."
For fiscal year 2016, Cotiviti Holdings Inc. projects revenue to be in the range of $615 million to $620 million. It expects net income to be in the range of $38 million to $41 million for the same period.
Operating cash flow improves significantly
Cotiviti Holdings Inc. has generated cash of $108.34 million from operating activities during the nine month period, up 256.30 percent or $77.94 million, when compared with the last year period.
The company has spent $21.40 million cash to meet investing activities during the nine month period as against cash outgo of $10.62 million in the last year period.
The company has spent $192.16 million cash to carry out financing activities during the nine month period as against cash outgo of $6.95 million in the last year period.
Cash and cash equivalents stood at $43.77 million as on Sep. 30, 2016, down 66.54 percent or $87.06 million from $130.83 million on Sep. 30, 2015.
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