A push to spread technology in healthcare is paying off for TriZetto Group Inc.
Newport Beach-based TriZetto ranked No. 42 on this week’s list of fastest-growing Orange County public companies based on revenue growth.
TriZetto, a provider of software and services to health plans and benefits administrators, posted a 46% revenue increase for the three years ended June 30. TriZetto went from $276 million in sales for the 12-month period ended June 2004 to $403.2 million in the 12 months ended June 30.
TriZetto helps managed care companies, health plans and benefits administrators manage data through providing software and Web sites. The company also runs sites that allow patients, doctors and insurers to track healthcare information, appointments and claims.
TriZetto’s second-quarter revenue jumped 31% to $114.8 million, but its profit fell 4% to $6.1 million because of a steep hike in its tax rate. TriZetto set aside $4.5 million to pay taxes in the quarter, compared to $356,000 in 2006. The company’s second-quarter tax rate increased to 42.5% compared to 5.3% a year earlier.
TriZetto’s sales growth came at a time when a handful of large health plan operators combined in a set of deals that narrowed its customer base.
“We’ve been able to increase our business with the consolidating entities,” Jeffrey Margolis, TriZetto’s cofounder and chief executive, said previously.
UnitedHealth Group Inc.’s buy of PacifiCare Health Systems Inc. in 2005 and Anthem Inc.’s 2004 acquisition of WellPoint Health Networks boosted TriZetto, according to Margolis.
“When you have products and services in the marketplace that are of great value, they do survive mergers and acquisitions,” Margolis said.
TriZetto had to battle a “dot-com” stigma after its shares crashed in early 2000 and languished until the beginning of 2005. Since then, Wall Street has generally liked what it’s seen, though shares are down about 7% so far this year. TriZetto counted a recent market value of $765 million.
Earlier this year, an analyst said a need for better electronic systems was fueling growth in the healthcare software market.
“We also like TriZetto, because in the health plan marketplace for information systems, they are one of the dominant players,” said K. Newton Juhng, analyst with BB & T; Capital Markets.
TriZetto’s “well positioned for changes that happen within the health plan marketplace,” Juhng wrote.
As health plans decide to change their products or adapt to their environments, whether due to regulatory issues or overall competition, Juhng said TriZetto’s been able to use its software products for the data they have.
Meanwhile, the company appointed Robert Barbieri as its chief financial officer in July, replacing veteran Chief Financial Officer James Malone, who resigned for personal reasons. Barbieri previously served six years as chief financial officer of Lawson Software Inc. of Minneapolis.
THE NUMBERS
Three-year growth: 46%
Yearly sales through June 30: $403.2 million
Yearly profit: $11.4 million
Market value: $765 million
Employees: 1,845, 27 in OC
Company: healthcare software developer
