Emdeon Reports Fourth Quarter and Full Year 2012 Results

           Emdeon Reports Fourth Quarter and Full Year 2012 Results

--Fourth Quarter 2012 Revenue of $300.7 million and Adjusted EBITDA of $78.7
million

--Full Year 2012 Revenue of $1.178 billion and Adjusted EBITDA of $316.4
million

PR Newswire

NASHVILLE, Tenn., March 18, 2013

NASHVILLE, Tenn., March 18, 2013 /PRNewswire/ --Emdeon Inc., a leading
provider of healthcare revenue and payment cycle management and clinical
information exchange solutions, today announced financial results for the
fourth quarter and year ended December 31, 2012, as summarized below:



                           Combined                        Combined
 (In millions)   4Q 12     4Q 11      %         FY 12      FY 11      % Change
                                      Change
 Revenue       $ 300.7   $ 283.9      5.9%    $ 1,178.3  $ 1,119.6    5.2%
 Net Income    $ (10.2)  $ (70.0)     85.4%   $ (78.3)   $ (36.3)     -115.9%
 (Loss)
 Non-GAAP
 Adjusted      $ 78.7    $ 80.3       -2.0%   $ 316.4    $ 300.5      5.3%
 EBITDA



"During the first full year following our acquisition by Blackstone, Emdeon
achieved solid financial results and made tremendous progress in establishing
a firm foundation for our future growth," said George Lazenby, chief executive
officer for Emdeon. "Of particular note, we saw volumes steadily improve
across Emdeon's entire business during the second half of 2012, and our
pharmacy business and payment integrity solutions continued to perform very
well. We are excited about continuing to execute on our growth strategy in
2013."

Fourth quarter 2012 revenue was $300.7 million, an increase of 5.9%, compared
to $283.9 million for the same period in 2011. Net loss for the fourth quarter
of 2012 was $10.2 million compared to $70.0 million for the same period in
2011. This improvement in net loss compared to the corresponding prior year
period was primarily due to the impact of business growth and reduced
transaction costs and expenses in the fourth quarter of 2012 associated with
the November 2011 acquisition of Emdeon by affiliates of Blackstone and the
related financing. These two factors were partially offset by increased
interest, depreciation and amortization expense in the fourth quarter of 2012
related to the Blackstone transactions.

Fourth quarter 2012 Non-GAAP Adjusted EBITDA decreased 2.0% to $78.7 million,
or 26.2% of revenue, from Non-GAAP Adjusted EBITDA of $80.3 million, or 28.3%
of revenue, for the comparable period in 2011. This decline was primarily due
to one less business day in the fourth quarter of 2012 and additional
investments in sales and other initiatives to support our growth strategy.

For the year ended December 31, 2012, revenue was $1,178.3 million compared to
$1,119.6 million for 2011, an increase of 5.2%. Net loss for full year 2012
was $78.3 million compared to $36.3 million in full year 2011. The 2012 net
loss was primarily due to increased interest, depreciation and amortization
expense related to the Blackstone transactions, partially offset by the impact
of business growth.

Full year 2012 Non-GAAP Adjusted EBITDA increased 5.3% to $316.4 million, or
26.9% of revenue, from Non-GAAP Adjusted EBITDA of $300.5 million, or 26.8% of
revenue, for the comparable period in 2011. This increase was primarily due to
the impact of business growth.

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.
Consolidated Statements of Operations
(unaudited and amounts in thousands)
                   Successor               Predecessor    Combined    Successor                Predecessor    Combined
                   Three       November    October 1      Three       Fiscal       November    January 1      Fiscal
                   Months      2                          Months                   2
                   Ended       through     through        Ended       Year         through     through        Year
                                                                      Ended                                   Ended
                   December    December    November 1,    December    December     December    November 1,    December
                   31,         31,                        31,         31,          31,                        31,
                   2012        2011        2011           2011        2012         2011        2011           2011
Revenue          $ 300,694   $ 190,384   $ 93,506       $ 283,890   $ 1,178,271  $ 190,384   $ 929,264      $ 1,119,648
Costs and
expenses:
 Cost of
 operations
 (exclusive of
 depreciation
 and               188,972     117,421     57,062         174,483     731,525      117,421     572,541        689,962
 amortization
 below)
 Development
 and               7,548       5,153       2,487          7,640       31,794       5,153       26,090         31,243
 engineering
 Sales,
 marketing,
 general
  and             34,805      21,778      10,668         32,446      142,186      21,778      111,463        133,241
 administrative
 Depreciation
 and               46,871      29,094      11,975         41,069      187,225      29,094      128,761        157,855
 amortization
 Accretion         (6,439)     2,459       -              2,459       8,666        2,459       -              2,459
 Transaction       1,250       17,857      61,813         79,670      1,250        17,857      66,625         84,482
 related costs
Operating          27,687      (3,378)     (50,499)       (53,877)    75,625       (3,378)     23,784         20,406
income (loss)
Interest           41,714      29,343      5,353          34,696      172,253      29,343      43,201         72,544
expense, net
Loss on
extinguishment     -           -           -              -           21,853       -           -              -
of debt
Other              -           (5,843)     -              (5,843)     -            (5,843)     (8,036)        (13,879)
Loss before
income tax
provision
 (benefit)         (14,027)    (26,878)    (55,852)       (82,730)    (118,481)    (26,878)    (11,381)       (38,259)
Income tax
provision          (3,781)     (10,185)    (2,533)        (12,718)    (40,146)     (10,185)    8,201          (1,984)
(benefit)
Net loss           (10,246)    (16,693)    (53,319)       (70,012)    (78,335)     (16,693)    (19,582)       (36,275)
 Net income
 attributable
 to
 
 noncontrolling    -           -           (4,105)        (4,105)     -            -           5,109          5,109
 interest
Net loss
attributable to  $ (10,246)  $ (16,693)  $ (49,214)     $ (65,907)  $ (78,335)   $ (16,693)  $ (24,691)     $ (41,384)
Emdeon Inc.



Emdeon Inc.
Consolidated Balance Sheets
(unaudited and amounts in thousands, except share and per share amounts)
                                                   December 31,  December 31,
                                                   2012          2011
ASSETS
Current assets:
 Cash and cash equivalents                         $  31,763     $  37,925
 Accounts receivable, net of allowance for
 doubtful accounts of $3,585
  and $1,201 at December 31, 2012 and December        190,021       188,960
  31, 2011, respectively
 Deferred income tax assets                           4,184         5,614
 Prepaid expenses and other current assets            28,160        15,869
Total current assets                                  254,128       248,368
Property and equipment, net                           272,088       277,768
Goodwill                                              1,481,889     1,443,574
Intangible assets, net                                1,730,089     1,821,897
Other assets, net                                     29,694        40,460
Total assets                                       $  3,767,888  $  3,832,067
LIABILITIES AND EQUITY
Current liabilities:
 Accounts payable                                  $  6,223      $  8,827
 Accrued expenses                                     102,069       132,096
 Deferred revenues                                    9,342         4,671
 Current portion of long-term debt                    17,330        16,034
Total current liabilities                             134,964       161,628
Long-term debt, excluding current portion             1,999,392     1,945,074
Deferred income tax liabilities                       467,912       501,796
Tax receivable agreement obligations to related       125,003       117,477
parties
Other long-term liabilities                           8,466         2,303
Commitments and contingencies
Equity:
 Common stock (par value, $.01), 100 shares
 authorized, issued and
  outstanding at December 31, 2012 and December       -             -
  31, 2011, respectively
 Additional paid-in capital                           1,130,968     1,120,676
 Accumulated other comprehensive loss                 (3,789)       (194)
 Accumulated deficit                                  (95,028)      (16,693)
Total equity                                          1,032,151     1,103,789
Total liabilities and equity                       $  3,767,888  $  3,832,067



Emdeon Inc.
Consolidated Statements of Cash Flows
(unaudited and amounts in thousands)
                      Successor                     Predecessor
                      Fiscal        November 2      January 1    Combined
                      Year Ended    through         through      Year Ended
                      December 31,  December 31,    November 1,  December 31,
                      2012          2011            2011         2010
Operating activities
 Net Income (loss)    $  (78,335)   $ (16,693)      $  (19,582)  $  33,167
 Adjustments to
 reconcile net
 income (loss) to
 net cash
  provided by (used
  in) operating
  activities:
  Depreciation and       187,225      29,094           128,761      124,721
  amortization
  Equity
  compensation           6,842        -                54,932       17,721
  expense
  Deferred income
  tax expense            (38,447)     (6,397)          (15,045)     12,236
  (benefit)
  Accretion expense      8,666        2,459            -            -
  Loss on
  extinguishment of      18,293       -                -            -
  debt
  Amortization of
  debt discount and      10,185       1,642            11,673       12,911
  issuance costs
  Amortization of
  discontinued cash
  flow hedge from
  other                  -            -                -            5,800

   comprehensive
  loss
  Amortization of        -            -                3,167        -
  interest rate swap
  Change in fair
  value of interest
  rate swap (not
  subject to
   hedge               -            (2,755)          (7,983)      (3,908)
  accounting)
  Change in
  contingent             -            (5,843)          (8,036)      (9,284)
  consideration
  Other                  2,685        489              1,119        419
 Changes in
 operating assets
 and liabilities:
  Accounts               1,601        (13,447)         660          (2,429)
  receivable
  Prepaid expenses       (12,096)     3,126            6,638        (12,552)
  and other
  Accounts payable       (2,149)      (2,912)          8,505        (7,499)
  Accrued expenses,
  deferred revenue,      (25,218)     (17,544)         47,613       451
  and other
  liabilities
  Tax receivable
  agreement              (334)        -                (3,519)      95
  obligations to
  related parties
Net cash provided by
(used in) operating      78,918       (28,781)         208,903      171,849
activities
Investing activities
 Purchases of
 property and            (62,054)     (8,279)          (51,902)     (79,988)
 equipment
 Payments for
 acquisitions, net       (59,011)     -                (39,422)     (251,464)
 of cash acquired
 Purchase of Emdeon
 Inc, net of cash        -            (1,943,218)      -            -
 acquired
 Other                   -            -                -            (3,000)
Net cash used in         (121,065)    (1,951,497)      (91,324)     (334,452)
investing activities
Financing activities
 Proceeds from           -            863,245          -            306
 issuance of stock
 Proceeds from Term      -            1,185,114        -            -
 Loan Facility
 Proceeds from           -            25,000           -            -
 Revolving Facility
 Proceeds from           -            729,375          -            -
 Senior Notes
 Payments on             (15,000)     (10,000)         -            -
 Revolving Facility
 Payment of debt         (2,060)      (35,901)         -            -
 issue costs
 Proceeds from
 incremental term        70,351       -                -            97,982
 loan
 Debt principal and
 data sublicense         (16,613)     (942,138)        (10,128)     (11,423)
 obligation payments
 Repayment of
 assumed debt            -            -                -            (35,254)
 obligations
 Other                   (693)        (2,868)          (263)        (1,819)
Net cash provided by
(used in) financing      35,985       1,811,827        (10,391)     49,792
activities
Net increase
(decrease) in cash       (6,162)      (168,451)        107,188      (112,811)
and cash equivalents
Cash and cash
equivalents at           37,925       206,376          99,188       211,999
beginning of period
Cash and cash
equivalents at end    $  31,763     $ 37,925        $  206,376   $  99,188
of 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)
                                              Combined
                                  Three       Three                   Combined
                                  Months      Months
                                  Ended       Ended       Year        Year
                                                          Ended       Ended
                                  December    December    December    December
                                  31,         31,         31,         31,
                                  2012        2011        2012        2011
Net income (loss)               $ (10,246)  $ (70,012)  $ (78,335)  $ (36,275)
Interest expense, net             41,714      34,696      172,253     72,544
Income tax provision (benefit)    (3,781)     (12,718)    (40,146)    (1,984)
Depreciation and amortization     46,871      41,069      187,225     157,855
EBITDA                            74,558      (6,965)     240,997     192,140
Non-2011 Transaction related
adjustments:
 Equity compensation              2,873       2,036       6,842       19,646
 Acquisition-related costs        2,649       3,066       6,913       7,140
 Strategic initiatives,
 duplicative running and          1,428       2,101       7,020       2,812
 transition costs
 Contingent consideration         -           (5,843)     -           (13,879)
 adjustments
 Loss on extinguishment of        -           -           25,411      -
 debt and other related costs
 Other                            302         1,416       3,261       2,271
2011 Transaction related
adjustments:
 Equity compensation              -           35,285      -           35,285
 Costs and fees                   3,009       44,385      9,908       49,197
 Acquisition accounting           327         2,104       4,697       2,104
 adjustments
 Strategic initiatives costs      -           280         2,709       1,349
 Accretion expense                (6,439)     2,459       8,666       2,459
 EBITDA Adjustments               4,149       87,289      75,427      108,384
Adjusted EBITDA                 $ 78,707    $ 80,324    $ 316,424   $ 300,524



SOURCE Emdeon Inc.

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