Earnings wrap: Healthways, Nashville Bank & Trust

Wellness company's shares set for big down day, lender posts best-ever quarter

Shares of Healthways are set for a big drop Friday after the wellness services provider slashed its 2012 guidance because of higher costs related to setting up newly signed contracts.

Investors pushed Healthways (Ticker: HWAY) down more than 10 percent in after-hours trading Thursday, ended the session at $9.95. It was the first time in almost three months that the stock traded in single digits.

Healthways said it earned $5 million, or 15 cents per diluted share, in the third quarter, a little more than half of last year's number. But the bigger news was the outlook for the rest of this year: CEO Ben Leedle said his team now expects 2012 earnings per diluted share to come in between 24 and 30 cents, down from the previous range of 38 cents to 50 cents. The main reason is that the raft of new contracts signed recently will require a lot of set-up spending before they begin to produce meaningful revenues and profits, which can take between six and 18 months. On top of that, several existing contracts were renewed early and will produce less revenue in what remains of this year before ramping up again.

Leedle didn't provide earnings guidance for 2013, but said EBITDA margin should come in between 10 percent to 13 percent — this year's range is 11 percent to 13 percent — and said the number would improve in 2014.

"As these [new] contracts ramp throughout next year, we expect to produce our strongest revenue growth since fiscal 2008, even with the $80 million comparable-year impact of the termination of the Cigna contract and one other health plan contract," Leedle said. "Excluding the impact of these terminated contracts, the implied growth for 2013 from our adjusted revenue guidance range for 2012 is in a range of 17 percent to 27 percent."

The team at Nashville Bank & Trust posted their best results ever in the third quarter, putting up $847,000 in profits versus $585,000 a year ago.

Assets at the eight-year-old company ended the quarter at $278 million, up 19 percent from a year ago, while fee income climbed 37 percent to more than $1.3 million and deposits rose 17 percent to $225 million. The only big line item that didn't pop was loans, which stayed flat at about $174 million.

“Growth in deposits, increases in wealth management revenue and tight expense control pushed us to record earnings,” said CEO Tom Stumb. “Our loan portfolio continues to perform well; asset quality has remained very strong throughout the last several difficult years.”