TRANSCEND SERVICES, INC. (NASDAQ: TRCR), a leading provider of clinical documentation solutions to the U.S. healthcare market, today announced its unaudited financial results for the third quarter ended September 30, 2011.
Third Quarter Results
Transcend's non-GAAP diluted earnings per share increased to $0.33 for the third quarter of 2011 compared to GAAP diluted earnings per share of $.24 for the third quarter of 2010. The non-GAAP results exclude $449,000 of expenses for three unusual items:
- transition costs (supplemental compensation) for newly outsourced transcriptionists related to one hospital system contract of $236,000;
- restructuring costs in India of $110,000; and
- transaction costs related to the acquisition of Salar, Inc. of $103,000.
Including these three unusual expenses, GAAP diluted earnings per share was $0.30 for the third quarter of 2011.
Revenue for the third quarter of 2011 increased $9,286,000 or 41% to $32,202,000 compared to $22,916,000 for the third quarter of 2010, including $7,625,000 of incremental revenue contributed by the Heartland (10/21/10), DTS (4/30/11) and Salar (7/31/11) acquisitions. Excluding the impact of these three acquisitions, revenue increased 7%.
Gross profit for the third quarter of 2011 increased 44% to $12,455,000, or 39% of revenue compared to $8,671,000, or 38% of revenue, for the third quarter of 2010. Excluding the $346,000 of India restructuring costs and onboarding costs described above, non-GAAP gross profit was $12,801,000 or 40% of revenue in the third quarter of 2011.
Operating income for the third quarter of 2011 increased 27% to $5,436,000, or 17% of revenue, compared to $4,270,000, or 19% of revenue, for the third quarter of 2010. Excluding the three unusual expenses mentioned above, non-GAAP operating income increased 38% to $5,885,000 or 18% of revenue for the third quarter of 2011 compared to the same quarter of last year.