NASHVILLE, Tenn., April 10, 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 fourth quarter ended December 31, 2011, as summarized below:
(In millions) |
Combined | 4Q 10 | % Change |
Combined | FY 10 | % Change | |
Revenue | $ 283.9 | $ 275.7 | 3.0% | $ 1,119.6 | $ 1,002.2 | 11.7% | |
Net Income (Loss) | $ (70.8) | $ 15.0 | -571.1% | $ (37.0) | $ 33.2 | -211.7% | |
Non-GAAP Adjusted EBITDA | $ 80.3 | $ 74.1 | 8.4% | $ 300.5 | $ 268.1 | 12.1% |
"We are pleased with our operating results for the fourth quarter and for the full 2011 year. Completing our acquisition by Blackstone was a significant highlight of 2011," said George Lazenby, Emdeon's chief executive officer. "Entering 2012, we remain focused on our business strategy to make healthcare more efficient and look forward to delivering continued solid financial performance."
Fourth quarter revenue was $283.9 million, an increase of 3.0%, compared to $275.7 million for the same period in 2010. Fourth quarter revenue was reduced by $2.0 million due to acquisition method adjustments related to the Blackstone transaction, which occurred in the fourth quarter of 2011 (the "2011 Transaction").
Net income (loss) for the fourth quarter of 2011 was ($70.8) million compared to net income of $15.0 million for the same period in 2010. This loss was primarily due to costs and expenses, including increased interest expense, associated with the 2011 Transaction, which more than offset the impact of business growth as compared to the prior year period.
Fourth quarter Non-GAAP Adjusted EBITDA grew 8.4% to $80.3 million, or 28.3% of revenue, from Non-GAAP Adjusted EBITDA of $74.1 million, or 26.9% of revenue, in the comparable period in 2010.
For the year ended December 31, 2011, revenue was $1,119.6 million compared to $1,002.2 million for 2010, an increase of 11.7%.
Net income (loss) for 2011 was ($37.0) million compared to net income of $33.2 million in 2010. This loss was primarily due to costs and expenses, including increased interest expense, associated with the 2011 Transaction, which more than offset the impact of business growth as compared to the prior year.
Non-GAAP Adjusted EBITDA for 2011 grew 12.1% to $300.5 million, or 26.8% of revenue, from Non-GAAP Adjusted EBITDA of $268.1 million, or 26.8% of revenue, in 2010.
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 discussed in the "Risk
Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of
Operations" sections and elsewhere in Emdeon's
Annual Report for the year ended December 31, 2011, as well
as any public reports, press releases, filings or other
public statements made by Emdeon.
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 | ||||||||||
November 2 | October 1 through November 1, 2011 | Combined Three Months Ended December 31, 2011 | Three Months Ended December 31, 2010 | November 2 through December 31, 2011 | January 1 through November 1, 2011 | Combined Year Ended December 31, 2011 | Year Ended December 31, 2010 | ||||||
Revenue | $ 190,384 | $ 93,506 | $ 283,890 | $ 275,661 | $ 190,384 | $ 929,264 | $ 1,119,648 | $ 1,002,152 | |||||
Costs and expenses: | |||||||||||||
Cost of operations (exclusive of depreciation and amortization below) | 117,421 | 57,062 | 174,483 | 169,246 | 117,421 | 572,541 | 689,962 | 612,367 | |||||
Development and engineering | 5,153 | 2,487 | 7,640 | 9,670 | 5,153 | 26,090 | 31,243 | 30,638 | |||||
Sales, marketing, general and administrative | 21,778 | 10,668 | 32,446 | 30,987 | 21,778 | 111,463 | 133,241 | 116,947 | |||||
Depreciation and amortization | 28,772 | 11,975 | 40,747 | 37,667 | 28,772 | 128,761 | 157,533 | 124,721 | |||||
Accretion | 2,916 | - | 2,916 | - | 2,916 | - | 2,916 | - | |||||
Transaction related costs | 17,857 | 61,813 | 79,670 | - | 17,857 | 66,625 | 84,482 | - | |||||
Operating income (loss) | (3,513) | (50,499) | (54,012) | 28,091 | (3,513) | 23,784 | 20,271 | 117,479 | |||||
Interest income | (1) | (2) | (3) | (2) | (1) | (12) | (13) | (14) | |||||
Interest expense | 29,344 | 5,355 | 34,699 | 13,284 | 29,344 | 43,213 | 72,557 | 61,031 | |||||
Other | (5,843) | - | (5,843) | (5,144) | (5,843) | (8,036) | (13,879) | (9,284) | |||||
Income (loss) before income tax provision (benefit) | (27,013) | (55,852) | (82,865) | 19,953 | (27,013) | (11,381) | (38,394) | 65,746 | |||||
Income tax provision (benefit) | (9,560) | (2,533) | (12,093) | 4,931 | (9,560) | 8,201 | (1,359) | 32,579 | |||||
Net income (loss) | (17,453) | (53,319) | (70,772) | 15,022 | (17,453) | (19,582) | (37,035) | 33,167 | |||||
Net income (loss) attributable to noncontrolling interest | - | (4,105) | (4,105) | 5,331 | - | 5,109 | 5,109 | 13,621 | |||||
Net income (loss) attributable to Emdeon Inc. | $ (17,453) | $ (49,214) | $ (66,667) | $ 9,691 | $ (17,453) | $ (24,691) | $ (42,144) | $ 19,546 | |||||
Emdeon Inc. | |||
Condensed Consolidated Balance Sheets | |||
(unaudited and amounts in thousands, except share and per share amounts) | |||
Successor | Predecessor | ||
December 31, | December 31, | ||
2011 | 2010 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 37,925 | $ 99,188 | |
Accounts receivable, net of
allowance for doubtful accounts of $1,201 and
$5,394 | 188,960 | 174,191 | |
Deferred income tax assets | 6,042 | 7,913 | |
Prepaid expenses and other current assets | 16,926 | 25,020 | |
Total current assets | 249,853 | 306,312 | |
Property and equipment, net | 278,090 | 231,307 | |
Goodwill | 1,470,216 | 908,310 | |
Intangible assets, net | 1,821,897 | 1,035,886 | |
Other assets, net | 39,403 | 9,750 | |
Total assets | $ 3,859,459 | $ 2,491,565 | |
Liabilities and equity | |||
Current liabilities: | |||
Accounts payable | $ 8,827 | $ 4,732 | |
Accrued expenses | 132,137 | 112,245 | |
Deferred revenues | 5,561 | 12,130 | |
Current portion of long-term debt | 16,034 | 12,494 | |
Total current liabilities | 162,559 | 141,601 | |
Long-term debt, excluding current portion | 1,945,074 | 933,749 | |
Deferred income tax liabilities | 518,037 | 200,357 | |
Tax receivable agreement obligations to related parties | 139,713 | 138,533 | |
Other long-term liabilities | 1,413 | 22,037 | |
Commitments and contingencies | |||
Equity: | |||
Common stock (par value, $0.01), 100 shares authorized, issued and outstanding at December 31, 2011 | - | - | |
Preferred stock (par value,
$0.00001), 25,000,000 shares authorized and 0
shares issued | - | - | |
Class A common stock (par
value, $0.00001), 400,000,000 shares
authorized and | - | 1 | |
Class B common stock,
exchangeable (par value, $0.00001), 52,000,000
shares authorized | - | - | |
Additional paid-in capital | 1,110,310 | 738,888 | |
Contingent consideration | - | 1,955 | |
Accumulated other comprehensive loss | (194) | (2,569) | |
Retained earnings | (17,453) | 53,250 | |
Emdeon Inc. equity | 1,092,663 | 791,525 | |
Noncontrolling interest | - | 263,763 | |
Total equity | 1,092,663 | 1,055,288 | |
Total liabilities and equity | $ 3,859,459 | $ 2,491,565 | |
Emdeon Inc. | ||||||
Condensed Consolidated Statements of Cash Flows | ||||||
(unaudited and amounts in thousands) | ||||||
Successor | Predecessor | |||||
November 2, |
January 1, |
Combined |
Year Ended | |||
Operating activities | ||||||
Net income (loss) | $ (17,453) | $ (19,582) | $ (37,035) | $ 33,167 | ||
Adjustments to reconcile net
income (loss) to
net cash provided by | ||||||
Depreciation and amortization | 28,772 | 128,761 | 157,533 | 124,721 | ||
Equity compensation | - | 54,932 | 54,932 | 17,721 | ||
Deferred income tax expense (benefit) | (5,771) | (15,045) | (20,816) | 12,236 | ||
Accretion expense | 2,916 | - | 2,916 | - | ||
Amortization of debt discount and issuance costs | 1,642 | 11,673 | 13,315 | 12,911 | ||
Amortization of discontinued
cash flow hedge | - | 3,167 | 3,167 | 5,800 | ||
Change in fair value of interest
rate swap (not subject to hedge | (2,755) | (7,983) | (10,738) | (3,908) | ||
Change in contingent consideration | (5,843) | (8,036) | (13,879) | (9,284) | ||
Other | 489 | 1,119 | 1,608 | 419 | ||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | (13,447) | 660 | (12,787) | (2,429) | ||
Prepaid expenses and other | 982 | 6,638 | 7,620 | (12,552) | ||
Accounts payable | (2,912) | 8,505 | 5,593 | (7,499) | ||
Accrued expenses, deferred revenue and other liabilities | (15,401) | 47,613 | 32,212 | 451 | ||
Tax receivable agreement obligations to related parties | - | (3,519) | (3,519) | 95 | ||
Net cash provided (used in) by operating activities | (28,781) | 208,903 | 180,122 | 171,849 | ||
Investing activities | ||||||
Purchases of property and equipment | (8,279) | (51,902) | (60,181) | (79,988) | ||
Payments for acquisitions, net of cash acquired | - | (39,422) | (39,422) | (251,464) | ||
Purchase of Emdeon Inc., net of cash acquired | (1,932,852) | - | (1,932,852) | - | ||
Other | - | - | - | (3,000) | ||
Net cash used in investing activities | (1,941,131) | (91,324) | (2,032,455) | (334,452) | ||
Financing activities | ||||||
Proceeds from issuance of stock | 852,879 | - | 852,879 | 306 | ||
Proceeds from Term Loan Facility | 1,185,114 | - | 1,185,114 | - | ||
Proceeds from Revolving Facility | 25,000 | - | 25,000 | - | ||
Proceeds from Senior Notes | 729,375 | - | 729,375 | - | ||
Payments on Revolving Facility | (10,000) | - | (10,000) | - | ||
Payment of debt issuance costs | (35,901) | - | (35,901) | - | ||
Proceeds from incremental loan | - | - | - | 97,982 | ||
Debt principal payments and data sublicense obligation payments | (942,138) | (10,128) | (952,266) | (11,423) | ||
Repayment of assumed debt obligations | - | - | - | (35,254) | ||
Other | (2,868) | (263) | (3,131) | (1,819) | ||
Net cash provided by (used in) financing activities | 1,801,461 | (10,391) | 1,791,070 | 49,792 | ||
Net increase (decrease) in cash and cash equivalents | (168,451) | 107,188 | (61,263) | (112,811) | ||
Cash and cash equivalents at beginning of period | 206,376 | 99,188 | 99,188 | 211,999 | ||
Cash and cash equivalents at end of period | $ 37,925 | $ 206,376 | $ 37,925 | $ 99,188 | ||
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 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 precise 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 (Loss) to Adjusted EBITDA | ||||||||||
(unaudited and amounts in thousands) | ||||||||||
Combined |
Three Months |
Combined 2011 |
Year Ended | |||||||
Net income (loss) | $ (70,772) | $ 15,022 | $ (37,035) | $ 33,167 | ||||||
Interest expense, net | 34,696 | 13,282 | 72,544 | 61,017 | ||||||
Income tax provision | (12,093) | 4,931 | (1,359) | 32,579 | ||||||
Depreciation and amortization | 40,747 | 37,667 | 157,533 | 124,721 | ||||||
EBITDA | (7,422) | 70,902 | 191,683 | 251,484 | ||||||
Non-2011 Transaction related adjustments: | ||||||||||
Equity compensation | 2,036 | 5,030 | 19,646 | 17,721 | ||||||
Acquisition-related costs | 3,066 | 1,079 | 7,140 | 4,521 | ||||||
Strategic initiatives costs | 417 | 1,796 | 1,128 | 3,347 | ||||||
Loss on disposal | 1,684 | - | 1,684 | - | ||||||
Contingent consideration adjustments | (5,843) | (5,144) | (13,879) | (9,284) | ||||||
Other | 1,416 | 462 | 2,271 | 349 | ||||||
2011 Transaction related adjustments: | ||||||||||
Equity compensation | 35,285 | - | 35,285 | - | ||||||
Costs and fees | 44,385 | - | 49,197 | - | ||||||
Acquisition accounting adjustments | 2,104 | - | 2,104 | - | ||||||
Accretion expense | 2,916 | - | 2,916 | - | ||||||
Other | 280 | - | 1,349 | - | ||||||
EBITDA Adjustments | 87,746 | 3,223 | 108,841 | 16,654 | ||||||
Adjusted EBITDA | $ 80,324 | $ 74,125 | $ 300,524 | $ 268,138 | ||||||
Note: | Adjusted EBITDA set forth above excludes pro forma adjustments to reflect certain acquisitions, cost savings initiatives and other items that are permitted to be added back under the terms of our credit facilities. Such pro forma adjustments were approximately $6.0 million for the year ended December 31, 2011. |
SOURCE Emdeon Inc.
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