Revenue during the quarter dropped 4.39 percent to $114.50 million from $119.76 million in the previous year period. Gross margin for the quarter expanded 29 basis points over the previous year period to 15.61 percent. Total expenses were 97.35 percent of quarterly revenues, up from 91.73 percent for the same period last year. That has resulted in a contraction of 562 basis points in operating margin to 2.65 percent.

Operating income for the quarter was $3.04 million, compared with $9.91 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $18.99 million compared with $27.02 million in the prior year period. At the same time, adjusted EBITDA margin contracted 598 basis points in the quarter to 16.58 percent from 22.56 percent in the last year period.

"We are excited about the acquisition of Eliza Corporation, which we announced in March and closed in April. We currently anticipate approximately $35 million of revenue from Eliza this year, beginning in the second quarter, which will raise full year projected total Company revenue growth to approximately 15% compared to the prior year," said Bill Lucia, Chairman and CEO. "The addition of Eliza significantly enhances our suite of health management and member engagement solutions. We believe there is now a substantial cross-sell opportunity with our existing customer base, particularly as they seek to improve the health outcomes for the small percentage of their population that account for the majority of healthcare spending."

The company has spent $8.49 million cash to meet investing activities during the quarter as against cash outgo of $1.76 million in the last year period.

The company has spent $2.61 million cash to carry out financing activities during the quarter as against cash outgo of $1.01 million in the last year period.

Cash and cash equivalents stood at $168.29 million as on Mar. 31, 2017, up 17.31 percent or $24.84 million from $143.45 million on Mar. 31, 2016.

Working capital increases
HMS Holdings Corp. has recorded an increase in the working capital over the last year. It stood at $284.88 million as at Mar. 31, 2017, up 7.69 percent or $20.35 million from $264.53 million on Mar. 31, 2016. Current ratio was at 5.06 as on Mar. 31, 2017, up from 5.05 on Mar. 31, 2016.

Days sales outstanding went up to 133 days for the quarter compared with 127 days for the same period last year.

Debt remains stable 
Total debt remained stable at $197.80 million as on Mar. 31, 2017, when compared with the last year. Long-term debt remained stable at $197.80 million as on Mar. 31, 2017, when compared with the last year. Total debt was 22.83 percent of total assets as on Mar. 31, 2017, compared with 23.52 percent on Mar. 31, 2016. Debt to equity ratio was at 0.35 as on Mar. 31, 2017, down from 0.37 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 1.33 for the quarter from 4.74 for the same period last year.