Emdeon Reports First Quarter 2013 Results -- Revenue of $305.7 million for First Quarter 2013 -- Adjusted EBITDA of $76.0 million for First Quarter 2013 PR Newswire NASHVILLE, Tenn., May 9, 2013 NASHVILLE, Tenn., May 9, 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 first quarter ended March 31, 2013 as summarized below: (In millions) 1Q 2013 1Q 2012 % Change Revenue $ 305.7 $ 286.0 6.9% Net Income (Loss) $ (13.5) $ (17.5) 23.3% Non-GAAP Adjusted EBITDA $ 76.0 $ 78.4 -3.1% "Our operating results for the first quarter were solid, and particularly strong in payment distribution services and revenue cycle solutions," said George Lazenby, chief executive officer for Emdeon. "We remain pleased with the overall performance of our businesses and continue to invest in new initiatives to support our long-term growth strategies." First quarter revenue was $305.7 million, an increase of 6.9%, compared to $286.0 for the same period in 2012. Net loss for the first quarter of 2013 was $13.5 million compared to $17.5 million for the same period in 2012. This improvement in net loss compared to the corresponding prior year period was primarily due to the impact of business growth and lower interest expense as a result of the repricing of Emdeon's term debt in April 2012. First quarter 2013 Non-GAAP Adjusted EBITDA decreased 3.1% to $76.0 million, or 24.9% of revenue, from Non-GAAP Adjusted EBITDA of $78.4 million, or 27.4% of revenue, for the comparable period in 2012. This decline in Adjusted EBITDA as compared to the same period in 2012 is primarily due to increased investments related to sales and other growth initiatives and one less business day in the first quarter of 2013. 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 Annual Report filed on Form 10-K for the year ended December 31, 2012, as well as other reports filed by Emdeon 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) Three Months Three Months Ended March 31, Ended March 31, 2013 2012 Revenue $ 305,702 $ 286,035 Costs and expenses: Cost of operations (exclusive of depreciation and amortization below) 189,307 173,146 Development and engineering 7,722 9,085 Sales, marketing, general and 39,111 36,127 administrative Depreciation and amortization 46,815 45,156 Accretion 4,140 3,768 Operating income 18,607 18,753 Interest expense, net 41,415 45,739 Income (loss) before income tax provision (22,808) (26,986) (benefit) Income tax provision (benefit) (9,357) (9,452) Net income (loss) $ (13,451) $ (17,534) Emdeon Inc Condensed Consolidated Balance Sheets (unaudited and amounts in thousands, except share and per share amounts) March 31, December 31, 2013 2012 ASSETS Current assets: Cash and cash equivalents $ 53,321 $ 31,763 Accounts receivable, net of allowance for doubtful accounts of $4,062 and $3,585 at March 31, 2013 and December 31, 206,804 190,021 2012, respectively Deferred income tax assets 3,788 4,184 Prepaid expenses and other current assets 28,985 28,160 Total current assets 292,898 254,128 Property and equipment, net 275,936 272,088 Goodwill 1,481,889 1,481,889 Intangible assets, net 1,702,811 1,730,089 Other assets, net 31,471 29,694 Total assets $ 3,785,005 $ 3,767,888 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 13,518 $ 6,223 Accrued expenses 115,916 102,069 Deferred revenues 10,285 9,342 Current portion of long-term debt 23,498 17,330 Total current liabilities 163,217 134,964 Long-term debt, excluding current portion 2,006,198 1,999,392 Deferred income tax liabilities 457,851 467,912 Tax receivable agreement obligations to related 129,142 125,003 parties Other long-term liabilities 7,729 8,466 Commitments and contingencies Equity: Common stock (par value, $.01), 100 shares authorized and outstanding at March 31, 2013 and December 31, 2012, - - respectively Additional paid-in capital 1,132,743 1,130,968 Accumulated other comprehensive income (loss) (3,396) (3,789) Accumulated deficit (108,479) (95,028) Total equity 1,020,868 1,032,151 Total liabilities and equity $ 3,785,005 $ 3,767,888 Emdeon Inc Condensed Consolidated Statements of Cash Flows (unaudited and amounts in thousands) Three Months Ended Three Months Ended March 31, 2013 March 31, 2012 Operating activities Net income (loss) $ (13,451) $ (17,534) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 46,815 45,156 Accretion 4,140 3,768 Equity compensation 1,775 - Deferred income tax expense (9,917) (9,956) (benefit) Amortization of debt discount 2,601 2,545 and issuance costs Other (34) 149 Changes in operating assets and liabilities: Accounts receivable (16,783) (188) Prepaid expenses and other (971) (6,655) Accounts payable 6,922 1,754 Accrued expenses, deferred 17,817 2,802 revenue and other liabilities Tax receivable agreement (103) (114) obligations to related parties Net cash provided by (used in) 38,811 21,727 operating activities Investing activities Purchases of property and (13,551) (15,146) equipment Net cash provided by (used in) (13,551) (15,146) investing activities Financing activities Debt principal payments (3,252) (3,060) Payments on revolver - (15,000) Other (450) (68) Net cash provided by (used in) (3,702) (18,128) financing activities Net increase (decrease) in cash and 21,558 (11,547) cash equivalents Cash and cash equivalents at beginning 31,763 37,925 of period Cash and cash equivalents at end of $ 53,321 $ 26,378 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) Three Months Three Months Ended March Ended March 31, 31, 2013 2012 Net income (loss) $ (13,451) $ (17,534) Interest expense, net 41,415 45,739 Income tax provision (benefit) (9,357) (9,452) Depreciation and amortization 46,815 45,156 EBITDA 65,422 63,909 EBITDA Adjustments: Equity compensation 1,775 - Acquisition accounting adjustments 274 1,937 Acquisition-related costs 497 927 Transaction-related costs and advisory 1,500 2,148 fees Strategic initiatives, duplicative and 2,045 5,216 transition costs Accretion expense 4,140 3,768 Other 391 538 EBITDA Adjustments 10,622 14,534 Adjusted EBITDA $ 76,044 $ 78,443 SOURCE Emdeon Inc. Website: http://www.emdeon.com Contact: Investor Relations, Bob East, Westwicke Partners, 443.213.0502, email@example.com or Emdeon@westwicke.com
Emdeon Reports First Quarter 2013 Results
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