Emdeon Reports Second Quarter Results

NASHVILLE, Tenn., July 24, 2015 /PRNewswire/ -- Emdeon Inc., a leading provider of software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights by leveraging its intelligent healthcare platform, today announced financial results for the second quarter and six months ended June 30, 2015, as summarized below:

Highlights include:

• Solutions revenue increased 5.9% and 7.6% for the three and six month periods, respectively, compared to the prior year periods led by volume gains within network solutions and the continued acceleration of Emdeon's software and analytics suite of solutions.
• Adjusted EBITDA increased 8.4% and 10.0% for the three and six month periods, respectively, compared to the prior year periods as a result of revenue growth, operational efficiencies and other productivity improvements.
• In July, Emdeon entered into a definitive agreement to acquire Altegra Health, a cloud-based analytics platform and related healthcare consumer engagement provider that combines data aggregation and analytics with unique member engagement and reporting capabilities to achieve actionable insights and improved management for value-based healthcare.  The transaction is subject to customary closing conditions and expected to close in the third quarter.

"We are pleased with our financial performance, which resulted in 10.0% Adjusted EBITDA growth for the year-to-date period. During the second quarter, we continued to experience positive sales momentum and network volume gains throughout our platform," commented Neil de Crescenzo, president and chief executive officer for Emdeon. "Going forward, the strong strategic fit of our pending acquisition of Altegra Health will further position Emdeon for success by helping our customers address the needs of value-based healthcare. The combination of Altegra Health's data and analytic solutions and our Intelligent Healthcare Network will accelerate growth in our software and analytics segment and allow us to further expand our suite of solutions to create new, innovative platforms and deliver actionable insights to our customers."

Operating Performance
Second quarter solutions revenue was $263.8 million, an increase of 5.9%, compared to $249.1 million for the same period in 2014. Year-to-date solutions revenue was $522.2 million, an increase of 7.6%, compared to $485.2 million for the same period in 2014. This increase in solutions revenue as compared to the prior year periods was primarily due to continued volume gains in network solutions as a result of increases in the number of insured lives of customers from the ongoing expansion of Medicaid, Medicare Advantage and federal and state exchanges and growth in recently developed and acquired solutions.

Second quarter net income was $7.9 million compared to a net loss of $59.5 million for the same period in 2014. Year-to-date net income was $2.2 million compared to a net loss of $62.5 million for the same period in 2014. This increase in net income as compared to the prior year periods was primarily due to the absence of an impairment charge related to the partial loss of a customer contract recognized in the prior year periods and a recent change to state tax laws impacting the current year periods.

Second quarter Non-GAAP Adjusted EBITDA increased 8.4% to $97.9 million, or 37.1% of solutions revenue, from $90.3 million, or 36.3% of solutions revenue, for the comparable period in 2014. Year-to-date 2015 Non-GAAP Adjusted EBITDA increased 10.0% to $185.5 million, or 35.5% of solutions revenue, from $168.6 million, or 34.8% of solutions revenue, for the comparable period in 2014. This increase in Adjusted EBITDA and as a percentage of solutions revenue compared to the prior year periods is primarily due to business growth and productivity improvements throughout the business.

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 software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights by leveraging its intelligent healthcare platform, which includes one of the largest financial and administrative networks in the United States healthcare system. Emdeon's platform and solutions integrate and automate key functions of its payer, provider and pharmacy customers throughout the patient encounter, from consumer engagement and pre-care eligibility and enrollment through payment. By using 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 complex workflows. 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; the anticipated benefits from acquisitions (including the pending acquisition of Altegra Health) 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 filed on Form 10-K for the year ended December 31, 2014, as well as other reports filed by Emdeon with the Securities and Exchange Commission.

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.

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).  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 (loss) before net interest expense, income tax provision (benefit) 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 also are used in Emdeon's credit facilities and indentures, although the adjustments used to calculate Adjusted EBITDA as used in Emdeon's credit facilities and indentures may 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 operating performance.

SOURCE Emdeon Inc.

Related Links

http://www.emdeon.com