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Emdeon Reports Fourth Quarter and Full Year 2010 Results
Mar 08, 2011 (03:03 PM EST)
NASHVILLE, Tenn., March 8, 2011 /PRNewswire/ --
Emdeon Inc. (NYSE: EM), 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, 2010, as summarized below:
"We are pleased with our financial results in the fourth quarter. Our revenue cycle management and payment services solutions continued to lead our growth with solid performance. Despite a challenging healthcare utilization environment, we continued to gain share and signed 12 new sole source payer agreements in the fourth quarter alone," said George Lazenby, Emdeon's chief executive officer. "In addition to our operating performance, we also closed our acquisition of Chamberlin Edmonds (CEA). This acquisition continued our strategy of expanding into technology-based services that leverage our existing healthcare information network, products and data in the area of revenue cycle management."
Lazenby continued, "Emdeon was successful in advancing many of our strategic growth initiatives during 2010. In addition to CEA, we closed strategic acquisitions to complete our provider-based ePayment suite, expand our revenue cycle management denial and recovery services and extend our payer solutions to include strategic consulting. We also continued our momentum in the government sector through a new relationship with Noridian, which has already served to improve the visibility of our solutions in this growing area. And finally, we expanded our position in the emerging area of clinical information exchange with our national lab hub and electronic prescription network, and by entering into an exclusive relationship with LabCorp to provide a low-cost EHR Lite solution for physician practices nationwide to assist them in qualifying for HITECH stimulus dollars."
Commenting on 2011, Lazenby added, "We are confident the investments we have made position us solidly for future growth, especially in the areas of revenue cycle management, payment integrity, payment automation and clinical information exchange. We remain focused on our strategy of layering value-added products and technology-enabled services on top of our leading health information network to drive efficiency in healthcare."
Fourth quarter revenue was $275.7 million, an increase of 15.5%, compared to $238.6 million for the same period in 2009. GAAP operating income for the fourth quarter of 2010 was $28.1 million compared to $26.5 million for the same period in 2009, an increase of 6.0%, primarily due to margin from revenue growth offset partially by higher depreciation and amortization. Fourth quarter Adjusted EBITDA grew 18.4% to $74.1 million, or 26.9% of revenue, from Adjusted EBITDA of $62.6 million, or 26.2% of revenue, in the comparable period in 2009.
GAAP net income (before noncontrolling interest) for the fourth quarter of 2010 was $15.0 million compared to GAAP net income of $4.7 million for the same period in 2009. GAAP net income per diluted share for the fourth quarter of 2010 was $0.11 compared to $0.03 for the same period in 2009. Adjusted Net Income per fully diluted share for the fourth quarter of 2010 was $0.25, using a weighted average fully diluted share count of 122.6 million, compared to $0.20, using a weighted average fully diluted share count of 121.0 million, for the same period in 2009.
For the year ended December 31, 2010, revenue was $1,002.2 million, an increase of 9.1%, compared to $918.4 million for 2009. GAAP operating income for 2010 was $117.5 million compared to $101.0 million for the prior year, an increase of 16.3%. Adjusted EBITDA grew 11.6% to $268.1 million, or 26.8% of revenue, from Adjusted EBITDA of $240.3 million, or 26.2% of revenue, in 2009.
GAAP net income (before noncontrolling interest) for 2010 was $33.2 million compared to GAAP net income of $14.0 million in 2009. GAAP net income per diluted share for 2010 was $0.21 compared to $0.12 in the prior year. Adjusted Net Income per fully diluted share for 2010 was $0.92, using a weighted average fully diluted share count of 122.3 million, compared to $0.87, using a weighted average fully diluted share count of 112.6 million, for 2009.
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."
Emdeon currently anticipates its annual revenue, Adjusted EBITDA and Adjusted Net Income per fully diluted share for 2011 to be as follows:
Notice of Conference Call and Webcast
Emdeon will conduct a conference call/webcast for investors and institutional analysts on Tuesday, March 8, 2011 at 5:00 pm Eastern Time/4:00 pm Central Time to discuss Emdeon's financial results.
To access Emdeon's live conference call and webcast, dial 800-299-7928 (617-614-3926 for international calls) using conference code 13253625 or visit the Investors section of Emdeon's website: www.emdeon.com. Please go to the website at least 15 minutes prior to the event to register, download and install any necessary audio/video software to access the webcast. For those unable to listen to the live broadcast, a conference call replay will be available for one week following the conference call by calling 888-286-8010 (617-801-6888 for international calls) using conference code 43366927. A webcast replay will also be archived on Emdeon's website for at least 30 days following the conference call.
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 product and service 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 products and services, 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.
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, which Emdeon intends to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. 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, including but not limited to: effects of competition, including competition from entities that are customers for certain of Emdeon's products and services; Emdeon's ability to maintain relationships with its customers and channel partners; Emdeon's ability to effectively cross-sell its products and services to existing customers and to continue to generate revenue and maintain profitability by developing or acquiring and successfully deploying new or updated products and services; pricing pressures on Emdeon's products and services; 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 on Form 10-K for the year ended December 31, 2009, as well as Emdeon's periodic and other reports, filed 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.
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, in the case of Adjusted EBITDA, 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").
In this release, Emdeon defines Adjusted Net Income as the sum of (i) GAAP net income, (ii) EBITDA Adjustments, (iii) non-cash interest expense and (iv) depreciation and amortization expense resulting from adjustments of assets to fair value in connection with acquisition accounting, less income taxes computed based on a normalized income tax rate. Emdeon defines Adjusted Net Income per fully diluted share as the quotient of Adjusted Net Income and weighted average shares outstanding, assuming all potentially dilutive securities (except for contingently issuable shares subject to performance conditions) are fully dilutive and outstanding shares from their date of grant or issuance.
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 GAAP net income and GAAP net income per diluted share to the applicable non-GAAP measures of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per fully diluted share. These non-GAAP measures, as Emdeon defines them, may not be similar to non-GAAP measures used by other companies.
Management uses Adjusted EBITDA and Adjusted Net Income per fully diluted share 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 these non-GAAP measures assist Emdeon's board of directors, management, lenders and investors in comparing Emdeon's operating performance on a consistent basis because they remove 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 also presents Adjusted EBITDA and Adjusted Net Income per fully diluted share on a forward-looking basis as part of its Financial Outlook for 2011. Emdeon is unable to present a quantitative reconciliation of these forward-looking non-GAAP financial measures to the most directly comparable forward-looking GAAP financial measures because management cannot predict, with sufficient reliability, contingent payments relating to past and possible future acquisitions, changes in the fair value of Emdeon's interest rate swap agreement and the effect on income taxes of these and other items attributable to Emdeon's capital structure, all of which are difficult to estimate and primarily dependent on future events.
SOURCE Emdeon Inc.