Breaking News

German November IFO Confidence at 104.7; Median Forecast 103.0
Tweet TWEET

WebMD Announces First Quarter Financial Results and Increases 2013 Financial Guidance

 WebMD Announces First Quarter Financial Results and Increases 2013 Financial
                                   Guidance

WebMD Announces Executive Management Changes

PR Newswire

NEW YORK, May 7, 2013

NEW YORK, May 7, 2013 /PRNewswire/ -- WebMD Health Corp. (NASDAQ: WBMD), the
leading source of health information, today announced financial results for
the three months ended March 31, 2013 and certain executive management
changes.

Executive Management Changes
The Board of Directors has appointed David J. Schlanger to serve as Interim
Chief Executive Officer. Cavan M. Redmond, CEO and member of the Board of
Directors, will be leaving the Company, effective immediately. The Board is
commencing a search for a new CEO.

Mr. Schlanger has been with WebMD and its predecessor companies for 18 years,
most recently as Senior Vice President, Strategic and Corporate Development.
In this role, he was responsible for providing strategic support throughout
the organization, including sales, marketing, client relationship management,
and product development. Mr. Schlanger and his team have led all aspects of
the structuring, negotiating and management of key strategic partnerships with
some of WebMD's largest clients as well as its media, technology and content
partners. Additionally, he was the lead executive responsible for the
strategy, sourcing, negotiation and diligence on the numerous acquisitions
that form the core of WebMD's current business. He has also been responsible
for international initiatives, including WebMD's joint venture with Boots in
the United Kingdom, which since its creation has grown to be the largest
commercial online health destination in the UK.

Martin J. Wygod, Chairman of WebMD, said, "The change announced today will
best position us to build on the momentum that our senior management team has
created to date. Under David's leadership, we will accelerate the development
and implementation of strategies to diversify our revenue base and capture the
opportunities arising from the rapidly changing healthcare landscape." Mr.
Wygod added, "On behalf of the Board of Directors, we wish Cavan well in his
future endeavors."

Anthony Vuolo will be transitioning his responsibilities to Peter Anevski who
is assuming the role of Chief Financial Officer. Mr. Anevski has served in
senior finance and operations roles during the past 14 years at WebMD and its
predecessor companies. He was most recently Senior Vice President, Finance,
responsible for all aspects of internal accounting, SEC reporting and
compliance, financial planning, merger and acquisition analysis and
integration. Mr. Anevski played an integral role in WebMD's recent
restructuring as well as developing the changes initiated in early 2012
related to WebMD's pricing structure and market positioning, both of which are
driving improved financial results.

"I have worked closely with Pete and believe his in-depth knowledge of all
aspects of our business will make him an effective partner to our sales,
marketing and operations teams and an invaluable member of the executive team.
I expect a seamless transition to his new responsibilities," said Mr. Wygod.

Anthony Vuolo will continue with the Company as Senior Vice President focusing
on strategic projects. Mr. Wygod said, "I have worked with Tony for over 25
years in several different public companies. Each of these companies,
including WebMD, has benefited tremendously from Tony's financial acumen,
business insight and extensive M&A and operational expertise. I am pleased
that Tony will assist David and Pete in the transition to their new roles and
I look forward to continuing to work closely with Tony."

Financial Highlights
For the three months ended March 31, 2013:

  oRevenue was $112.8 million, compared to $106.9 million in the prior year
    period. Public portal advertising and sponsorship revenue was $93.4
    million, compared to $87.8 million in the prior year period. Private
    portal services revenue was $19.3 million, compared to $19.2 million in
    the prior year period.
  oEarnings before interest, taxes, non-cash and other items ("Adjusted
    EBITDA") was $21.3 million, or 18.9% of revenue, compared to $11.3
    million, or 10.5% of revenue, in the prior year period.
  oNet loss was $(1.5) million or $(0.03) per diluted share, compared to
    $(7.8) million or $(0.14) per diluted share in the prior year period. Net
    loss in the prior year period includes an after-tax gain on investments of
    $5.2 million, an after-tax severance expense of $0.8 million and an
    after-tax stock compensation expense of $5.3 million related to the
    voluntary surrender of options.

Traffic Highlights
Traffic to the WebMD Health Network continued to grow, reaching an average of
132 million unique users per month and total traffic of 2.78 billion page
views during the first quarter of 2013, increases of 23% and 10%,
respectively, from a year ago.

Balance Sheet Highlights
As of March 31, 2013, WebMD had $999.2 million in cash and cash equivalents
and $800 million in aggregate principal amount of convertible notes
outstanding.

Financial Guidance
WebMD raised its financial guidance for 2013 to reflect its improved outlook
in its public portal advertising business, particularly as it relates to its
pharmaceutical clients.

In summary, for 2013, WebMD expects:

  oRevenue to be approximately $450 million to $470 million;
  oAdjusted EBITDA to be approximately $75 million to $88 million; and
  oNet loss to be approximately $(13.0) million to $(1.5) million, or $(0.26)
    to $(0.03) per diluted share.

For the second quarter of 2013, WebMD expects:

  oRevenue to be in excess of $115 million;
  oAdjusted EBITDA to be in excess of 18% of revenue; and
  oNet loss to be approximately 1% of revenue.

WebMD is providing a schedule (attached to this press release) with additional
detail.

Analyst and Investor Conference Call
WebMD will hold a conference call with investors and analysts to discuss its
first quarter results at 4:45 p.m. (Eastern) today. The call can be accessed
at www.wbmd.com (in the Investor Relations section). A replay of the audio
webcast will be available at the same web address.

About WebMD
WebMD Health Corp. (NASDAQ: WBMD) is the leading provider of health
information services, serving consumers, physicians, healthcare professionals,
employers, and health plans through our public and private online portals,
mobile platforms and health-focused publications.

The WebMD Health Network includes WebMD Health, Medscape, MedicineNet,
eMedicineHealth, RxList, theheart.org, Medscape Education and other owned
WebMD sites.



*****************************

All statements contained in this press release and the related analyst and
investor conference call, other than statements of historical fact, are
forward-looking statements, including those regarding: guidance on our
future financial results and other projections or measures of our future
performance; market opportunities and our ability to capitalize on them; and
the benefits expected from new or updated products or services and from other
potential sources of additional revenue. These statements speak only as of the
date of this press release, are based on our current plans and expectations,
and involve risks and uncertainties that could cause actual future events or
results to be different than those described in or implied by such
forward-looking statements. These risks and uncertainties include those
relating to: the management changes announced today; market acceptance of our
products and services; our relationships with customers and other factors
affecting their use of our products and services, including regulatory matters
affecting their products; our ability to successfully implement changes to,
among other things, our product and service offerings, capital allocation
plans and cost structure; our ability to attract and retain qualified
personnel; and changes in economic, political or regulatory conditions or
other trends affecting the healthcare, Internet and information technology
industries. Further information about these matters can be found in our
Securities and Exchange Commission filings. Except as required by applicable
law or regulation, we do not undertake any obligation to update our
forward-looking statements to reflect future events or circumstances.

*************************************

This press release, and the accompanying tables, include both financial
measures in accordance with accounting principles generally accepted in the
United States of America, or GAAP, as well as certain non-GAAP financial
measures. The tables attached to this press release include reconciliations
of these non-GAAP financial measures to GAAP financial measures. In addition,
an "Explanation of Non-GAAP Financial Measures" is attached to this press
release as Annex A.

*****************************

WebMD®, Medscape®, CME Circle®, Medpulse®, eMedicine®, MedicineNet®,
theheart.org® and RxList® are among the trademarks of WebMD Health Corp. or
its subsidiaries.



WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
                                             Three Months Ended
                                             March 31,
                                             2013             2012
Revenue                                      $    112,762  $    106,947
Cost of operations                           46,943           53,471
Sales and marketing                          30,933           30,103
General and administrative                   23,534           29,022
Depreciation and amortization                6,853            6,930
Interest income                              21               11
Interest expense                             5,832            5,836
Gain on investments                          -                8,074
Other expense                                -                1,200
Loss before income tax provision (benefit)   (1,312)          (11,530)
 Income tax provision (benefit)           226              (3,753)
Net loss                                     $            $    
                                             (1,538)         (7,777)
Net loss per common share - Basic and        $           $     
Diluted                                      (0.03)          (0.14)
Weighted-average shares outstanding - Basic  49,007           55,769
and Diluted



WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
                                           Three Months Ended
                                           March 31,
                                           2013              2012
Revenue
     Public portal advertising and         $    93,438   $    87,776
     sponsorship
     Private portal services               19,324            19,171
                                           $   112,762    $   106,947
Earnings before interest, taxes, non-cash
     and other items ("Adjusted EBITDA")  $    21,289   $    11,251
     (a)
Interest, taxes, non-cash and other
items (b)
     Interest income                       21                11
     Interest expense                      (5,832)           (5,836)
     Income tax (provision) benefit        (226)             3,753
     Depreciation and amortization        (6,853)           (6,930)
     Non-cash stock-based compensation     (9,937)           (16,900)
     Gain on investments                   -                 8,074
     Other expense                         -                 (1,200)
Net loss                                 $    (1,538)  $    (7,777)
(a)  See Annex A-Explanation of Non-GAAP
     Financial Measures.
(b)  Reconciliation of Adjusted EBITDA to
     net loss.



WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                 March 31, 2013       December 31, 2012
                                 (unaudited)
Assets
Cash and cash equivalents        $            $           
                                 999,221              991,835
Accounts receivable, net         101,813              106,622
Prepaid expenses and other       14,999               13,882
current assets
Deferred tax assets              10,339               10,328
 Total current assets     1,126,372            1,122,667
Property and equipment, net     62,808               66,604
Goodwill                         202,104              202,104
Intangible assets, net           15,538               16,105
Deferred tax assets              55,436               56,039
Other assets                     25,260               27,106
Total Assets                     $              $         
                                 1,487,518           1,490,625
Liabilities and Stockholders'
Equity
Accrued expenses                 $           $           
                                 49,107                64,256
Deferred revenue                 97,220               92,176
Liabilities of discontinued      1,506                1,506
operations
 Total current liabilities  147,833              157,938
2.25% convertible notes due      400,000              400,000
2016
2.50% convertible notes due      400,000              400,000
2018
Other long-term liabilities      22,742               22,698
Stockholders' equity             516,943              509,989
Total Liabilities and            $              $         
Stockholders' Equity             1,487,518            1,490,625



WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
                                         Three Months Ended
                                         March 31,
                                         2013                 2012
Cash flows from operating activities:
 Net loss                                $      (1,538)  $    (7,777)
 Adjustments to reconcile net loss to
 net cash provided by
  operating activities:
    Depreciation and amortization        6,853                6,930
    Non-cash interest, net               1,082                1,082
    Non-cash stock-based compensation    9,937                16,900
    Deferred income taxes                (99)                 (3,971)
    Gain on investments                  -                    (8,074)
    Changes in operating assets and
    liabilities:
       Accounts receivable               4,809                23,890
       Prepaid expenses and other, net   (193)                (4,023)
       Accrued expenses and other        (14,850)             (11,694)
       long-term liabilities
       Deferred revenue                  5,044                2,266
         Net cash provided by operating  11,045               15,529
         activities
Cash flows from investing activities:
 Proceeds received from ARS option       -                    9,269
 Purchases of property and equipment     (2,876)              (3,377)
         Net cash (used in) provided by  (2,876)              5,892
         investing activities
Cash flows from financing activities:
 Proceeds from exercise of stock         672                  754
 options
 Cash used for withholding taxes due on  (174)                (911)
 stock-based awards
 Purchases of treasury stock            (1,281)              (415)
         Net cash used in financing      (783)                (572)
         activities
Net increase in cash and cash            7,386                20,849
equivalents
Cash and cash equivalents at beginning   991,835              1,121,217
of period
Cash and cash equivalents at end of      $     999,221    $  1,142,066
period





WebMD Health Corp.
Financial Guidance for the Year Ending December 31, 2013
(In millions, except per share amounts)
                                              Guidance Range
Revenue                                       $   450.0     $   470.0
Earnings before interest, taxes,
non-cash
 and other items ("Adjusted EBITDA")         $    75.0    $    88.0
(a)
Interest, taxes, non-cash and other
items (b)
Interest expense, net                         (23.0)          (23.0)
Depreciation and amortization                 (30.0)          (28.0)
Non-cash stock-based compensation             (38.0)          (34.0)
Pre-tax (loss) income                         (16.0)          3.0
Income tax benefit (provision)                3.0             (4.5)
Net loss                                      $   (13.0)    $     (1.5)
Net loss per share:
 Basic and Diluted                          $   (0.26)    $    (0.03)
Weighted-average shares outstanding
used in computing per share amounts:
 Basic and Diluted                          50.0            50.0
(a) See Annex A - Explanation of
Non-GAAP Financial Measures
(b) Reconciliation of Adjusted EBITDA
to Net Loss
Additional information regarding forecast for the quarter
ending June 30, 2013:
 - Revenue is forecasted to be in
excess of $115 million.
 - Adjusted EBITDA as a percentage of revenue is
forecasted to be in excess of 18%.
 - Net loss as a percentage of revenue is
forecasted to be approximately (1%).
Additional information regarding full year
forecast:
 - The distribution of the annual revenue is expected to be
approximately 82% public portals advertising and sponsorship
 and18% private portal licensing. Quarterly revenue distributions
may vary from this annual estimate.
 - Convertible Notes are not expected to be
dilutive for the full year or any quarter.
The above guidance does not include the impact, if any, of future deployment
of capital for items such as share repurchases
or acquisitions, gains or losses from discontinued operations, severance
charges related to the management change
announced today or other non-recurring,
one-time or unusual items.



ANNEX A

Explanation of Non-GAAP Financial Measures

The accompanying WebMD Health Corp. press release and attachments include both
financial measures in accordance with U.S. generally accepted accounting
principles, or GAAP, as well as non-GAAP financial measures. The non-GAAP
financial measures represent earnings before interest, taxes, non-cash and
other items (which we refer to as "Adjusted EBITDA") and related per share
amounts. Adjusted EBITDA should be viewed as supplemental to, and not as an
alternative for net income or loss calculated in accordance with GAAP
(referred to below as "net income"). The attachments to the press release
include reconciliations of non-GAAP financial measures to GAAP financial
measures.

Adjusted EBITDA is used by our management as an additional measure of our
company's performance for purposes of business decision-making, including
developing budgets, managing expenditures, and evaluating potential
acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA
help our management identify additional trends in our company's financial
results that may not be shown solely by period-to-period comparisons of net
income. In addition, we may use Adjusted EBITDA in the incentive compensation
programs applicable to some of our employees in order to evaluate our
company's performance. Our management recognizes that Adjusted EBITDA has
inherent limitations because of the excluded items, particularly those items
that are recurring in nature. In order to compensate for those limitations,
management also reviews the specific items that are excluded from Adjusted
EBITDA, but included in net income, as well as trends in those items. The
amounts of those items are set forth, for the applicable periods, in the
reconciliations of Adjusted EBITDA to net income that accompany our press
releases and disclosure documents containing non-GAAP financial measures,
including the reconciliations contained in the accompanying press release
attachments.

We believe that the presentation of Adjusted EBITDA is useful to investors in
their analysis of our results for reasons similar to the reasons why our
management finds it useful and because it helps facilitate investor
understanding of decisions made by management in light of the performance
metrics used in making those decisions. In addition, as more fully described
below, we believe that providing Adjusted EBITDA, together with a
reconciliation of Adjusted EBITDA to net income, helps investors make
comparisons between our company and other companies that may have different
capital structures, different effective income tax rates and tax attributes,
different capitalized asset values and/or different forms of employee
compensation. However, Adjusted EBITDA is intended to provide a supplemental
way of comparing our company with other public companies and is not intended
as a substitute for comparisons based on net income. In making any
comparisons to other companies, investors need to be aware that companies use
different non-GAAP measures to evaluate their financial performance.
Investors should pay close attention to the specific definition being used and
to the reconciliation between such measures and the corresponding GAAP
measures provided by each company under applicable SEC rules.

The following is an explanation of the items excluded by us from Adjusted
EBITDA but included in net income:

  oDepreciation and Amortization. Depreciation and amortization expense is a
    non-cash expense relating to capital expenditures and intangible assets
    arising from acquisitions that are expensed on a straight-line basis over
    the estimated useful life of the related assets. We exclude depreciation
    and amortization expense from Adjusted EBITDA because we believe that (i)
    the amount of such expenses in any specific period may not directly
    correlate to the underlying performance of our business operations and
    (ii) such expenses can vary significantly between periods as a result of
    new acquisitions and full amortization of previously acquired tangible and
    intangible assets. Accordingly, we believe that this exclusion assists
    management and investors in making period-to-period comparisons of
    operating performance. Investors should note that the use of tangible and
    intangible assets contributed to revenue in the periods presented and will
    contribute to future revenue generation and should also note that such
    expense will recur in future periods.

  oStock-Based Compensation Expense. Stock-based compensation expense is a
    non-cash expense arising from the grant of stock-based awards to
    employees. We believe that excluding the effect of stock-based
    compensation from Adjusted EBITDA assists management and investors in
    making period-to-period comparisons in our company's operating performance
    because (i)the amount of such expenses in any specific period may not
    directly correlate to the underlying performance of our business
    operations and (ii)such expenses can vary significantly between periods
    as a result of the timing of grants of new stock-based awards, including
    grants in connection with acquisitions. Additionally, we believe that
    excluding stock-based compensation from Adjusted EBITDA assists management
    and investors in making meaningful comparisons between our company's
    operating performance and the operating performance of other companies
    that may use different forms of employee compensation or different
    valuation methodologies for their stock-based compensation. Investors
    should note that stock-based compensation is a key incentive offered to
    employees whose efforts contributed to the operating results in the
    periods presented and are expected to contribute to operating results in
    future periods. Investors should also note that such expenses will recur
    in the future. Stock-based compensation expenses included in the
    Consolidated Statements of Operations are summarized as follows:



                                               Three Months Ended
                                               March 31,
                                               2013       2012
Non-cash stock-based compensation included in:
    Cost of operations                         $  1,870 $  2,757
    Sales and marketing                        $  2,523 $  2,161
    General and administrative                 $  5,544 $ 11,982



  oInterest Income and Expense. Interest income is associated with the level
    of marketable debt securities and other interest bearing accounts in which
    we invest, and interest expense is related to our company's capital
    structure (including non-cash interest expense relating to our convertible
    notes). Interest income and expense varies over time due to a variety of
    financing transactions and due to acquisitions and divestitures that we
    have entered into or may enter into in the future. We have, in the past,
    issued convertible debentures, repurchased shares in cash tender offers
    and repurchased shares and convertible debentures through other repurchase
    transactions, and completed the divestiture of certain businesses. We
    exclude interest income and interest expense from Adjusted EBITDA (i)
    because these items are not directly attributable to the performance of
    our business operations and, accordingly, their exclusion assists
    management and investors in making period-to-period comparisons of
    operating performance and (ii) to assist management and investors in
    making comparisons to companies with different capital structures.
    Investors should note that interest income and expense will recur in
    future periods. The following provides detail regarding the components of
    interest expense of our convertible notes:



                          Three Months Ended
                          March 31,
                          2013          2012
Non-cash interest expense
 2.50% Convertible Notes  $     452 $    452
 2.25% Convertible Notes  $     630 $    630


Cash interest expense
 2.50% Convertible Notes  $   2,500  $  2,500
 2.25% Convertible Notes  $   2,250  $  2,250



  oIncome Tax Provision (Benefit). We maintain a valuation allowance on a
    portion of our net deferred tax assets (including our net operating loss
    carryforwards), the amount of which may change from quarter to quarter
    based on factors that are not directly related to our results for the
    quarter. The valuation allowance is either adjusted through the statement
    of operations or additional paid-in capital. The timing of such
    adjustments has not been consistent and as a result, our income tax
    expense can fluctuate significantly from period to period in a manner not
    directly related to our operating performance. We exclude the income tax
    provision (benefit) from Adjusted EBITDA (i) because we believe that the
    income tax provision (benefit) is not directly attributable to the
    underlying performance of our business operations and, accordingly, its
    exclusion assists management and investors in making period-to-period
    comparisons of operating performance and (ii)to assist management and
    investors in making comparisons to companies with different tax
    attributes. Investors should note that income tax provision (benefit)
    will recur in future periods.

  oOther Items. We engage in other activities and transactions that can
    impact our net income. In recent periods, these other items have
    included, but were not limited to: (i) gain or loss on investments; and
    (ii) a restructuring charge. We exclude these other items from Adjusted
    EBITDA because we believe these activities or transactions are not
    directly attributable to the performance of our business operations and,
    accordingly, their exclusion assists management and investors in making
    period-to-period comparisons of operating performance. Investors should
    note that some of these other items may recur in future periods.



SOURCE WebMD Health Corp.

Website: http://www.wbmd.com
Contact: Investors: Risa Fisher, rfisher@webmd.net, 212-624-3817, Media: Kate
Hahn, khahn@webmd.net, 212-624-3760
 
Press spacebar to pause and continue. Press esc to stop.