NEW YORK, Aug. 3 WebMD Health Corp. (Nasdaq: WBMD), the leading source of health information, today announced financial results for the three months ended June 30, 2010.
For the three months ended June 30, 2010:
"WebMD is steadily establishing itself as an essential marketing channel for the nation's largest biopharma and consumer products companies," said Wayne Gattinella, President and CEO. "With advertising revenue growth of 32% and expanding operating margins, our core online business continues to outpace the growth of the online advertising markets overall."
Revenue for the second quarter was $122.7 million, compared to $98.6 million in the prior year period, an increase of 24%. Specifically:
Adjusted EBITDA for the second quarter was $34.3 million, compared to $20.0 million in the prior year period, an increase of 71%.
Net income was $7.7 million or $0.13 per share, compared to a net loss of $(11.7) million or $(0.25) per share in the prior year period. Net income in the current period included the after tax impact of a gain on investments of $3.6 million and a loss on convertible notes of $(6.6) million. Net loss in the prior year period included the after tax impact of a gain on convertible notes of $2.2 million, a loss from discontinued operations of $(13.3) million and non-controlling interest of $(0.4) million. Net income would have been $10.7 million in the current period as compared to a net loss of $(0.2) million in the prior year period excluding these items.
During the second quarter:
As of June 30, 2010, WebMD had $535 million in cash and investments and had approximately $121 million in aggregate principal amount of its 3 1/8% convertible notes outstanding.
WebMD's penetration into the mobile health information market continued to expand this quarter:
WebMD is increasing its financial guidance for 2010 today.
WebMD is providing a schedule (attached to this press release) to reflect these increases as well as updates for non-cash and other items primarily to reflect the impact of the sale of investments and convertible note conversions and repurchases completed by WebMD during the second quarter of 2010.
For the third quarter of 2010, WebMD expects:
Analyst and Investor Conference Call
As previously announced, WebMD will hold a conference call with investors and analysts to discuss its second quarter results at 4:45 p.m. (Eastern) today. The call can be accessed at www.wbmd.com (in the Investor Relations section). A replay of the audio webcast will be available at the same web address.
WebMD Health Corp. (Nasdaq: WBMD) is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers and health plans through our public and private online portals and health-focused publications. Approximately 80 million unique visitors access the WebMD Health Network each month.
The WebMD Health Network includes WebMD Health, Medscape, MedicineNet, eMedicine, eMedicine Health, RxList, theHeart.org and drugs.com.
All statements contained in this press release and the related analyst and investor conference call, other than statements of historical fact, are forward-looking statements, including those regarding: guidance on our future financial results and other projections or measures of our future performance; market opportunities and our ability to capitalize on them; the benefits expected from new or updated products or services and from other potential sources of additional revenue; and expectations regarding the market for investments in auction rate securities (ARS). These statements speak only as of the date of this press release, are based on our current plans and expectations, and involve risks and uncertainties that could cause actual future events or results to be different than those described in or implied by such forward-looking statements. These risks and uncertainties include those relating to: market acceptance of our products and services; our relationships with customers and strategic partners; changes in the markets for ARS; and changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet and information technology industries. Further information about these matters can be found in our Securities and Exchange Commission filings. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.
This press release, and the accompanying tables, include both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as certain non-GAAP financial measures. The tables attached to this press release include reconciliations of these non-GAAP financial measures to GAAP financial measures. In addition, an "Explanation of Non-GAAP Financial Measures" is attached to this press release as Annex A.
WebMD®, Medscape®, eMedicine®, MedicineNet®, RxList®, Subimo®, Medsite®, Summex®, WebMD® Health Exchange and Medscape® Mobile are trademarks of WebMD Health Corp. or its subsidiaries.
Explanation of Non-GAAP Financial Measures
(All dollar amounts in thousands)
The accompanying WebMD Health Corp. press release and financial tables include both financial measures in accordance with U.S. generally accepted accounting principles, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures represent earnings before interest, taxes, non-cash and other items (which we refer to as "Adjusted EBITDA") and related per share amounts. Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for, "consolidated income (loss) from continuing operations" or "net income (loss) attributable to Company stockholders" calculated in accordance with GAAP. The accompanying financial tables include reconciliations of non-GAAP financial measures to GAAP financial measures.
Adjusted EBITDA is used by our management as an additional measure of our company's performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our company's financial results that may not be shown solely by period-to-period comparisons of consolidated income (loss) from continuing operations or net income (loss) attributable to Company stockholders. In addition, we use Adjusted EBITDA in the incentive compensation programs applicable to many of our employees in order to evaluate our company's performance. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in consolidated income (loss) from continuing operations or net income (loss) attributable to Company stockholders, as well as trends in those items. The amounts of those items are set forth, for the applicable periods, in the reconciliations of Adjusted EBITDA to consolidated income (loss) from continuing operations or to net income (loss) attributable to Company stockholders that accompany our press releases and disclosure documents containing non-GAAP financial measures, including the reconciliations contained in the accompanying financial tables.
We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to consolidated income (loss) from continuing operations or to net income (loss) attributable to Company stockholders, helps investors make comparisons between our company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is intended to provide a supplemental way of comparing our company with other public companies and is not intended as a substitute for comparisons based on "consolidated income (loss) from continuing operations" or "net income (loss) attributable to Company stockholders" calculated in accordance with GAAP. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable SEC rules.
The following is an explanation of the items excluded by us from Adjusted EBITDA but included in consolidated income (loss) from continuing operations:
-- Revenue was $122.7 million, compared to $98.6 million in the prior year period, an increase of 24%. -- Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") was $34.3 million, compared to $20.0 million in the prior year period, an increase of 71%. -- Net income was $7.7 million or $0.13 per share, compared to a net loss of $(11.7) million or $(0.25) per share in the prior year period.