Emdeon Reports Third Quarter 2012 Results

                  Emdeon Reports Third Quarter 2012 Results

-- Revenue of $297.1 million, increased 5.3% over third quarter 2011

-- Adjusted EBITDA of $79.2 million, increased 3.3% over third quarter 2011

PR Newswire

NASHVILLE, Tenn., Nov. 8, 2012

NASHVILLE, Tenn., Nov. 8, 2012 /PRNewswire/ --Emdeon Inc., a leading provider
of healthcare revenue and payment cycle management and clinical information
exchange solutions, today announced financial results for the third quarter
ended September 30, 2012 as summarized below:

 (In millions)              3Q 2012    3Q 2011   % Change
 Revenue                  $ 297.1    $ 282.1     5.3%
 Net Income (Loss)        $ (15.2)   $ 6.3       -341.3%
 Non-GAAP Adjusted EBITDA $ 79.2     $ 76.7      3.3%

"We continue to make significant progress towards our financial goals as
demonstrated by our operational performance in the third quarter," said George
Lazenby, chief executive officer for Emdeon. "The third quarter also proved
productive strategically with the recently announced patient medication
history initiative in our pharmacy services division and the launch of our
integrated payment integrity suite, Emdeon Edge^™. We are looking forward to
continued success to round out the year."

Third quarter revenue was $297.1 million, an increase of 5.3%, compared to
$282.1 for the same period in 2011. Net loss for the third quarter of 2012
was $15.2 million compared to net income of $6.3 million for the same period
in 2011. This loss was primarily due to increased interest and other expenses
associated with the November 2011 acquisition of Emdeon by affiliates of
Blackstone, which more than offset the impact of business growth as compared
to the prior year period. Third quarter 2012 Non-GAAP Adjusted EBITDA grew
3.3% to $79.2 million, or 26.7% of revenue, from Non-GAAP Adjusted EBITDA of
$76.7 million, or 27.2% of revenue, for the comparable period in 2011.

A reconciliation of Emdeon's financial results determined in accordance with
U.S. Generally Accepted Accounting Principles (GAAP) to certain non-GAAP
financial measures has been provided in the financial statement tables
included in this release to supplement its unaudited condensed consolidated
financial statements presented on a GAAP basis. An explanation of these
non-GAAP measures is also included below under the heading "Explanation of
Non-GAAP Financial Measures."

About Emdeon

Emdeon is a leading provider of revenue and payment cycle management and
clinical information exchange solutions, connecting payers, providers and
patients in the U.S.healthcare system. Emdeon's offerings integrate and
automate key business and administrative functions of its payer and provider
customers throughout the patient encounter. Through the use of Emdeon's
comprehensive suite of solutions, which are designed to easily integrate with
existing technology infrastructures, customers are able to improve efficiency,
reduce costs, increase cash flow and more efficiently manage the complex
revenue and payment cycle and clinical information exchange processes.For
more information, visit www.emdeon.com.

Forward-Looking Statements

Statements made in this press release that express Emdeon's or management's
intentions, plans, beliefs, expectations or predictions of future events are
forward-looking statements. These statements often include words such as
"may," "will," "should," "believe," "expect," "anticipate," "intend," "plan,"
"estimate" or similar expressions. Forward-looking statements may include
information concerning Emdeon's possible or assumed future results of
operations, including descriptions of Emdeon's revenues, profitability,
outlook and overall business strategy. You should not place undue reliance on
these statements because they are subject to numerous uncertainties and
factors relating to Emdeon's operations and business environment, all of which
are difficult to predict and many of which are beyond Emdeon's control.
Although Emdeon believes that these forward-looking statements are based on
reasonable assumptions, you should be aware that many factors could affect
Emdeon's actual financial results or results of operations and could cause
actual results to differ materially from those in the forward-looking
statements. Such factors related to Emdeon's actual financial results or
results of operations include: effects of competition, including competition
from entities that are customers for certain of Emdeon's solutions; Emdeon's
ability to maintain relationships with its customers and channel partners;
Emdeon's ability to effectively cross-sell its solutions to existing customers
and to continue to generate revenue and maintain profitability by developing
or acquiring and successfully deploying new or updated solutions; pricing
pressures on Emdeon's solutions; the anticipated benefits from acquisitions
not being fully realized or not being realized within the expected time
frames; and general economic, business or regulatory conditions affecting the
healthcare information technology and services industries; as well as the
other risks discussedin the "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections and
elsewhere in Emdeon's Registration Statement on Form S-4 (File No. 333-182786)
and the accompanying Prospectus thereto, as well as Emdeon's periodic and
other reports, filed with the Securities and Exchange Commission.

You should keep in mind that any forward-looking statement made by Emdeon
herein, or elsewhere, speaks only as of the date on which made. Emdeon
expressly disclaims any intent, obligation or undertaking to update or revise
any forward-looking statements made herein to reflect any change in Emdeon's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statements are based. 



Emdeon Inc.
Condensed Consolidated Statements of Operations
(unaudited and amounts in thousands)
                    Successor      Predecessor   Successor       Predecessor
                    Three Months   Three Months  Nine Months     Nine Months
                    Ended          Ended         Ended           Ended
                    September      September     September 30,   September 30,
                    30,            30,
                    2012           2011          2012            2011
Revenue             $  297,075     $   282,149   $  877,577      $   835,758
Costs and
expenses:
 Cost of
 operations
 (exclusive of
 depreciation and
 amortization          184,794         173,455      542,550          515,481
 below)
 Development and       7,994           7,473        24,246           23,602
 engineering
 Sales, marketing,
 general and           35,308          38,342       107,382          105,604
 administrative
 Depreciation and      48,572          39,830       140,354          116,786
 amortization
 Accretion             2,758           -            15,104           -
Operating income       17,649          23,049       47,941           74,285
Interest expense,      41,898          12,573       130,539          37,848
net
Loss on
extinguishment of      -               -            21,853           -
debt
Other                  -               (4,398)      -                (8,036)
Income (loss)
before income tax      (24,249)        14,874       (104,451)        44,473
provision
(benefit)
Income tax
provision              (9,093)         8,601        (36,364)         21,696
(benefit)
Net income (loss)      (15,156)        6,273        (68,087)         22,777
Net income
attributable to        -               2,906        -                9,214
noncontrolling
interest
Net income (loss)
attributable to     $  (15,156)    $   3,367     $  (68,087)     $   13,563
Emdeon Inc.



Emdeon Inc.
Condensed Consolidated Balance Sheets
(unaudited and amounts in thousands, except share and per share amounts)
                                                   September 30,  December 31,
                                                   2012           2011
ASSETS
Current assets:
 Cash and cash equivalents                         $  50,337      $  37,925
 Accounts receivable, net of allowance for
 doubtful accounts of $4,276
  and $1,201 at September 30, 2012 and December       197,169        188,960
  31, 2011, respectively
 Deferred income tax assets                           4,772          5,862
 Prepaid expenses and other current assets            20,914         16,926
Total current assets                                  273,192        249,673
Property and equipment, net                           268,381        277,768
Goodwill                                              1,481,951      1,443,574
Intangible assets, net                                1,757,783      1,821,897
Other assets, net                                     30,797         39,403
Total assets                                       $  3,812,104   $  3,832,315
LIABILITIES AND EQUITY
Current liabilities:
 Accounts payable                                  $  13,567      $  8,827
 Accrued expenses                                     119,461        132,096
 Deferred revenues                                    8,967          5,561
 Current portion of long-term debt                    16,805         16,034
Total current liabilities                             158,800        162,518
Long-term debt, excluding current portion             2,005,368      1,945,074
Deferred income tax liabilities                       469,578        502,044
Tax receivable agreement obligations to related       132,581        117,477
parties
Other long-term liabilities                           6,145          1,413
Commitments and contingencies
Equity:
 Common stock (par value, $.01), 100 shares
 authorized and outstanding
  at September 30, 2012 and December 31, 2011,        -              -
  respectively
 Additional paid-in capital                           1,128,320      1,120,676
 Accumulated other comprehensive income (loss)        (3,908)        (194)
 Accumulated deficit                                  (84,780)       (16,693)
Total equity                                          1,039,632      1,103,789
Total liabilities and equity                       $  3,812,104   $  3,832,315



Emdeon Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited and amounts in thousands)
                                       Successor            Predecessor
                                       Nine Months Ended    Nine Months Ended
                                       September 30, 2012   September 30, 2011
Operating activities
  Net income (loss)                    $      (68,087)      $      22,777
  Adjustments to reconcile net income
  (loss) to net cash provided by
  operating activities:
      Depreciation and amortization           140,354              116,786
      Accretion                               15,104               -
      Equity compensation                     3,969                17,610
      Deferred income tax expense             (37,369)             2,611
      (benefit)
      Amortization of debt discount           7,613                10,470
      and issuance costs
      Amortization of discontinued
      cash flow hedge from other              -                    2,843
      comprehensive loss
      Change in contingent                    -                    (8,036)
      consideration
      Change in fair value of
      interest rate swap (not subject         -                    (7,983)
      to hedge accounting)
      Loss on extinguishment of debt          18,293               -
      Other                                   1,927                36
  Changes in operating assets and
  liabilities:
      Accounts receivable                     (5,547)              (7,040)
      Prepaid expenses and other              (3,686)              10,843
      Accounts payable                        5,153                5,888
      Accrued expenses, deferred              (8,444)              16,329
      revenue and other liabilities
      Tax receivable agreement                (114)                (2,593)
      obligations to related parties
Net cash provided by operating                69,166               180,541
activities
Investing activities
  Purchases of property and equipment         (40,949)             (48,207)
  Payments for acquisitions, net of           (59,011)             (39,422)
  cash acquired
Net cash used in investing activities         (99,960)             (87,629)
Financing activities
  Proceeds from Term Loan Facility            70,351               -
  Debt principal payments                     (9,565)              (6,412)
  Payments on revolver                        (15,000)             -
  Payment of loan costs                       (2,060)              -
  Repurchase of Parent common stock           (317)                -
  Other                                       (203)                (620)
Net cash provided by (used in)                43,206               (7,032)
financing activities
Net increase in cash and cash                 12,412               85,880
equivalents
Cash and cash equivalents at                  37,925               99,188
beginning of period
Cash and cash equivalents at end of    $      50,337        $      185,068
period



Explanation of Non-GAAP Financial Measures

Emdeon's management believes that, in order to properly understand Emdeon's
short-term and long-term financial trends, investors may wish to consider the
impact of certain non-cash or non-operating items, when used as a supplement
to financial performance measures prepared in accordance with U.S. Generally
Accepted Accounting Principles (GAAP). These items result from facts and
circumstances that vary in frequency and/or impact continuing operations. In
addition, management uses results of operations before such excluded items to
evaluate the operational performance of Emdeon as a basis for strategic
planning and as a performance evaluation metric in determining achievement of
certain executive and management incentive compensation programs. Investors
should consider these non-GAAP measures in addition to, and not as a
substitute for, financial performance measures prepared in accordance with
GAAP. In addition to the description provided below, reconciliations of GAAP
to non-GAAP results are provided in the financial statement tables included in
this release.

In this release, Emdeon defines Adjusted EBITDA as EBITDA (which is defined as
net income before income tax provision (benefit), net interest expense and
depreciation and amortization), plus certain other non-cash or non-operating
items (collectively, "EBITDA Adjustments").

To properly evaluate Emdeon's business, Emdeon encourages investors to review
the GAAP financial information included in this release, and not rely on any
single financial measure to evaluate Emdeon's business. Emdeon also strongly
encourages investors to review the reconciliation of net income (loss) to the
non-GAAP measure of Adjusted EBITDA. Adjusted EBITDA, as Emdeon defines it,
may differ from and may not be comparable to similarly titled measures used by
other companies, because Adjusted EBITDA is not a measure of financial
performance under GAAP and is susceptible to varying calculations. Adjusted
EBITDA calculations are also used in our credit facilities and indentures,
although the adjustments used to calculate Adjusted EBITDA as used in our
credit facilities and indentures vary in certain respects among such
agreements and from those presented below.

Management uses Adjusted EBITDA to facilitate a comparison of Emdeon's
operating performance on a consistent basis from period to period that, when
viewed in combination with Emdeon's GAAP results, management believes provides
a more complete understanding of factors and trends affecting Emdeon's
business than GAAP measures alone. Management believes this non-GAAP measure
assists Emdeon's board of directors, management, lenders and investors in
comparing Emdeon's operating performance on a consistent basis because it
removes where applicable, the impact of Emdeon's capital structure, asset
base, acquisition accounting, non-cash charges and non-operating items from
Emdeon's operations.



Emdeon Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(unaudited and amounts in thousands)
                                   For the Three Months    For the Nine Months
                                   Ended September 30,     Ended September 30,
                                   2012         2011       2012        2011
Net income (loss)                $ (15,156)   $ 6,273    $ (68,087)  $ 22,777
Interest expense, net              41,898       12,573     130,539     37,848
Income tax provision (benefit)     (9,093)      8,601      (36,364)    21,696
Depreciation and amortization      48,572       39,830     140,354     116,786
EBITDA                             66,221       67,277     166,442     199,107
Non-2011 Transactions related
adjustments:
 Equity compensation               3,969        6,126      3,969       17,610
 Acquisition-related costs         609          1,448      4,264       4,237
 Strategic initiatives,
 duplicative running and           2,059        198        5,592       711
 transition costs
 Contingent consideration          -            (4,398)    -           (8,036)
 adjustments
 Loss on extinguishment of debt    -            -          25,411      -
 and other related costs
 Other                             390          321        2,960       547
2011 Transactions related
adjustments:
 Costs and fees                    2,237        5,689      6,899       6,024
 Acquisition accounting            937          -          4,370       -
 adjustments
 Strategic initiatives costs       -            -          2,709       -
 Accretion expense                 2,758        -          15,104      -
 EBITDA Adjustments                12,959       9,384      71,277      21,093
Adjusted EBITDA                  $ 79,180     $ 76,661   $ 237,720   $ 220,200





SOURCE Emdeon Inc.

Website: http://www.emdeon.com
Contact: Investor Relations, Bob East, Westwicke Partners, +1-443-213-0502,
bob.east@westwicke.com or Emdeon@westwicke.com