HMS Holdings Corp. (NASDAQ:HMSY) Q4 2014 Earnings Conference Call - Final Transcript
Feb 27, 2015 • 08:30 am ET
Good day, ladies and gentlemen, and welcome to the HMS Fourth Quarter 2014 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to Dennis Oakes. You may begin.
Thank you, Nicole. Good morning and thank you, everyone, for joining the HMS fourth-quarter and full-year 2014 earnings conference call. With me today are Bill Lucia, our President and Chief Executive Officer; and Jeff Sherman, our Chief Financial Officer. Our earnings release issued earlier this morning is available on the Company website at HMS.com under the Investor Relations tab. This call is being webcast and can be accessed via the Events and Presentations tab on our website and a replay will be posted later this morning. During the call, we will be referring to certain non-GAAP measures. A reconciliation of those measures to GAAP is included in the press release. We have also posted our usual quarterly investor slides containing supplemental information though we will not make specific reference to them on the call.
Let me remind you that some of the information presented today regarding the Company's future expectations, plans, and prospects is considered forward-looking statements under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on the Company's current expectations and actual events may differ materially from those expectations. We also refer you to the Company's filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q, which identify important risk factors that could cause actual results to differ materially from those contained in the Company's projections or forward-looking statements. All information on this call is as of today, February 27, 2015 and the Company disclaims any intent or obligation to update any forward-looking statements as a result of developments occurring after this call.
We're ready now to begin with the prepared portion of the call and then we will take questions. Bill?
Thank you, Dennis, and good morning, everyone. 2014 was a very solid growth year for HMS and a strong affirmation of our strategy over the last few years to concentrate on commercial expansion opportunities. Full-year revenue of $421 million, excluding Medicare RAC, was 10% higher than the previous year fueled by a 15% increase in commercial revenue. State government revenue was up 9% due primarily to the ACA-driven surge in Medicaid enrollments. Revenue generated by our coordination of benefits product suite, which accounted for more than 70% of total revenue, was up 14% year-over-year. The past year did come with challenges. The prolonged re-procurement process for the new Medicare RAC regions dragged on throughout 2014 and will likely persist through much of the coming year. Phasing down, complete stop, and then limited restart of the current contracts reduced our full-year RAC revenue