Emdeon Reports First Quarter 2013 Results

                  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,
bob.east@westwicke.com or Emdeon@westwicke.com
 
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