8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

November 6, 2003

Date of Report (Date of earliest event reported)

WEBMD CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-24975	94-3236644
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

669 River Drive, Center 2
Elmwood Park, New Jersey 07407-1361

(Address of principal executive offices, including zip code)

(201) 703-3400

(Registrant’s telephone number, including area code)

(Former name or address, if changed since last report)

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE DATED NOVEMBER 6, 2003

EX-99.2 THIRD QUARTER FINANCIAL TABLES

EX-99.3 CERTAIN FORWARD-LOOKING STATEMENTS

     All statements contained in this Current Report on Form 8-K, other than statements of historical fact, are forward-looking statements, including those regarding WebMD’s guidance on future financial results and other projections or measures of future performance of WebMD; the amount and timing of the benefits expected from strategic initiatives and acquisitions or from deployment of new or updated technologies, products, services or applications; the prospects for new applications of porous plastics and other porous media; and other potential sources of additional revenue. These statements are based on WebMD’s 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 WebMD’s products and services; operational difficulties relating to combining acquired companies and businesses; WebMD’s ability to form and maintain mutually beneficial relationships with customers and strategic partners; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the manner and timing of implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the healthcare industry’s responses; and the ability of WebMD to attract and retain qualified personnel. Further information about these matters can be found in WebMD’s other Securities and Exchange Commission filings. WebMD expressly disclaims any intent or obligation to update these forward-looking statements.

*            *            *            *

     Exhibit 99.1 furnished with this Current Report on Form 8-K includes both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures include income before taxes, non-cash, restructuring and other items and related per share amounts. WebMD believes that those non-GAAP measures, and changes in those measures, are meaningful indicators of WebMD’s performance and provide additional information that WebMD management finds useful in evaluating such performance and in planning for future periods. Accordingly, WebMD believes that such additional information may be useful to investors. The non-GAAP financial measures should be viewed as supplemental to, and not as an alternative for, the GAAP financial measures. Exhibit 99.2 to this Current Report on Form 8-K includes a reconciliation of the non-GAAP financial measures to the GAAP financial measures. Exhibit 99.3 to this Current Report includes a reconciliation of certain forward-looking non-GAAP financial information to GAAP financial information, which are expected to be discussed on the Analyst and Investor Conference Call referred to in Exhibit 99.1.

*            *            *            *

     ITEM  5.   OTHER EVENTS

     On November 6, 2003, WebMD Corporation announced its results for the quarter ended September 30, 2003. Attached hereto as Exhibit 99.2 and incorporated by reference herein are financial tables that accompanied the press release issued by WebMD announcing the results.

2

     ITEM  7.   FINANCIAL STATEMENTS AND EXHIBITS

(c)	Exhibits
	The following exhibits are filed or furnished herewith:
	99.1      Press Release issued by WebMD Corporation, dated November 6, 2003, regarding WebMD’s third quarter results
	99.2      Third Quarter Financial Tables accompanying Exhibit 99.1
	99.3      Certain Forward-Looking Information — Reconciliation of Non-GAAP to GAAP

     ITEM  9.   REGULATION FD DISCLOSURE

     Exhibit 99.3 to this Current Report includes certain forward-looking information and a reconciliation of certain forward-looking non-GAAP financial information to GAAP financial information, which are expected to be discussed on the Analyst and Investor Conference Call referred to in Exhibit 99.1. Exhibit 99.3 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

     ITEM  12.   DISCLOSURE OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

     On November 6, 2003, WebMD Corporation issued a press release announcing its third quarter 2003 results. A copy of the press release is attached as Exhibit 99.1. Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.

     The press release was accompanied by the financial tables incorporated by reference into Item 5, above.

3

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, WebMD Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WEBMD CORPORATION

Dated: November 6, 2003 By: /s/ Lewis H. Leicher
Lewis H. Leicher
Senior Vice President

4

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release issued by WebMD Corporation, dated November 6, 2003, regarding WebMD’s third quarter results
99.2	Third Quarter Financial Tables accompanying Exhibit 99.1
99.3	Certain Forward-Looking Information — Reconciliation of Non-GAAP to GAAP

5 EX-99.1 3 g85668exv99w1.htm EX-99.1 PRESS RELEASE DATED NOVEMBER 6, 2003

Exhibit 99.1

FOR IMMEDIATE RELEASE
Contacts:
Investors:	Media:
Risa Fisher	Jennifer Meyer
rfisher@webmd.net	jmeyer@webmd.net
201-414-2002	212-624-3912

WEBMD REPORTS THIRD QUARTER RESULTS

ELMWOOD PARK, NJ (November 6, 2003) — WebMD Corporation (NASDAQ: HLTH) today reported financial results for its third quarter ended September 30, 2003.

Key Financial Highlights

Revenue for the quarter was $250.6 million compared to $217.0 million in the prior year. Income before taxes, non-cash, restructuring and other items for the quarter was $28.7 million or $0.09 per share compared to $31.1 million or $0.10 per share in the prior year. Income from continuing operations for the quarter was $9.5 million or $0.03 per share as compared to $3.4 million or $0.01 per share in the prior year. Net income for the quarter was $6.1 million or $0.02 per share compared to $4.5 million or $0.01 per share in the prior year. As of September 30, 2003, WebMD had $974 million in cash and short and long-term marketable debt securities.

Roger C. Holstein, CEO of WebMD, said, “I am disappointed in our third quarter results. The results, particularly in the month of September, reflect the difficulties we encountered responding to increased demand for our physician software and services and the challenges of assisting thousands of providers and payers implement the HIPAA transaction standards in the face of uncertainty concerning the October 16th deadline.” He continued, “We recognize the need to make significant investments in all areas of our business to strengthen and streamline our service and delivery infrastructure and to create new products and services. By continuing to transform our business through internal investment and acquisitions, I am confident that we will create sustained revenue and earnings growth and significant long-term benefits for our customers and shareholders.”

Segment Operating Results

WebMD Envoy revenues were $132.0 million for the September 2003 quarter, an increase of 15% from the prior year, reflecting the acquisition of Advanced Business Fulfillment on July 17, 2003. Income before taxes, non-cash, restructuring and other items was $21.8 million, a decrease of approximately 11% from prior year, primarily reflecting the previously anticipated investment associated with the Company’s HIPAA-related initiatives.

WebMD Practice Services revenues were $75.5 million for the September 2003 quarter, an increase of 7% from the prior year, driven by continued strong sales of the Company’s Network Services products. Income before taxes, non-cash, restructuring and other items was $3.7 million, a decrease of approximately 49% from prior year, reflecting the increased investment associated with HIPAA installation of the Company’s Network Services solutions and lower than anticipated systems implementations and professional services revenues.

WebMD Health revenues were $31.2 million for the September 2003 quarter, an increase of 57% from the prior year, driven by the strong increase in consumer and physician online revenues from large pharmaceutical, medical device and employer-sponsored programs. Income before taxes, non-cash, restructuring and other items was $8.7 million, an increase of 144% from the prior year, reflecting the strong increase in revenues.

Porex revenues were $19.1 million for the September 2003 quarter, an increase of 14% from the prior year, driven by strong sales of certain new products as well as generally strong demand for the Company’s porous products components. Income before taxes, non-cash, restructuring and other items was $5.7 million, an increase of 11% from prior year. These results do not include the revenues or earnings from the two subsidiaries of Porex, which were divested on August 1, 2003.

“We continue to see demand for our products and services in all areas of our business as we respond to three key trends driving the transformation of the healthcare system. First, physicians are adopting clinical software and services. Second, transactions are shifting from paper to electronic. Third, the Internet is becoming the primary source of health information for consumers and physicians as consumers bear a greater burden of overall healthcare costs,” said Martin J. Wygod, Chairman of WebMD. “We recognize that improving the Company’s top-line requires long-term planning, significant investments and strong execution. With a healthy balance sheet and strong positive cash flow, we are able to make the investments necessary to provide for the long-term success of WebMD.”

Analyst and Investor Conference Call

As previously announced, WebMD will hold a conference call with investors and analysts to discuss these results at 4:45 p.m. (EDT) on November 6, 2003. Investors and the general public are invited to listen to a live audio webcast of the call at www.webmd.com (in the About WebMD section).

ABOUT WEBMD

WebMD Corporation provides services that help physicians, consumers, providers and health plans navigate the complexity of the healthcare system. Our products and services streamline administrative and clinical processes, promote efficiency and reduce costs by facilitating information exchange, communication and electronic transactions between healthcare participants.

WebMD Health is a leading provider of online information, educational services and communities for physicians and consumers. WebMD Practice Services is a leading provider of physician practice management software and related services. WebMD Envoy is a leading provider of electronic data interchange services for healthcare providers and commercial health plans.

Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications. Porex customers include both end-users of its finished products as well as manufacturers that include Porex components in their products.

All statements contained in this press release, other than statements of historical fact, are forward-looking statements, including those regarding our guidance on future financial results and other projections or measures of future performance of WebMD; the amount and timing of the benefits expected from strategic initiatives and acquisitions or from deployment of new or updated technologies, products, services or applications; the prospects for new applications of porous plastics and other porous media; and other potential sources of additional revenue. These statements are based on WebMD’s 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 WebMD’s products and services; operational difficulties relating to combining acquired companies and businesses; WebMD’s ability to form and maintain mutually beneficial relationships with customers and strategic partners; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the manner and timing of implementation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the healthcare industry’s responses; and the ability of WebMD to attract and retain qualified personnel. Further information about these matters can be found in WebMD’s Securities and Exchange Commission filings. WebMD expressly disclaims any intent or obligation to update these forward-looking statements.

This press release includes both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP financial measures. The non-GAAP financial measures include: income before taxes, non-cash, restructuring and other

items; and related per share amounts. WebMD believes that those non-GAAP measures, and changes in those measures, are meaningful indicators of WebMD’s performance and provide additional information that WebMD management finds useful in evaluating such performance and in planning for future periods. Accordingly, WebMD believes that such additional information may be useful to investors. The non-GAAP financial measures should be viewed as supplemental to, and not as an alternative for, the GAAP financial measures. The tables attached to this press release contain historical GAAP financial measures and a reconciliation between historical GAAP and non-GAAP financial measures.

-Tables Follow-

EX-99.2 4 g85668exv99w2.htm EX-99.2 THIRD QUARTER FINANCIAL TABLES

EXHIBIT 99.2

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)

			Three Months Ended						Nine Months Ended
			September 30,						September 30,
			2003			2002			2003			2002
Revenue			$	250,635		$	217,004		$	705,584		$	642,220
Costs and expenses:
		Cost of operations		149,270			123,360			410,556			379,101
		Development and engineering		11,334			10,869			32,654			32,640
		Sales, marketing, general and administrative		72,450			66,883			209,917			218,501
		Depreciation, amortization and other		11,097			32,073			52,961			95,575
		Legal expense		493			—			493			—
		Restructuring and integration benefit		—			2,100			—			5,850
		Gain on investments		3,039			681			3,222			6,547
		Interest income		6,401			5,222			16,434			14,341
		Interest expense		4,703			2,819			10,444			5,677
		Other income		—			2,323			1,118			2,323
Income (loss) from continuing operations before income tax provision (benefit)				10,728			(8,674	)		9,333			(60,213	)
		Income tax provision (benefit)		1,273			(12,103	)		3,261			(10,700	)
Income (loss) from continuing operations				9,455			3,429			6,072			(49,513	)
Income (loss) from discontinued operations, net of income taxes				(3,366	)		1,109			(33,611	)		2,240
Net income (loss)			$	6,089		$	4,538		$	(27,539	)	$	(47,273	)
Basic income (loss) per common share:
		Income (loss) from continuing operations	$	0.03		$	0.01		$	0.02		$	(0.16	)
		Income (loss) from discontinued operations		(0.01	)		0.01			(0.11	)		0.01
Net income (loss)			$	0.02		$	0.02		$	(0.09	)	$	(0.15	)
Diluted income (loss) per common share:
		Income (loss) from continuing operations	$	0.03		$	0.01		$	0.02		$	(0.16	)
		Income (loss) from discontinued operations		(0.01	)		0.00			(0.10	)		0.01
Net income (loss)			$	0.02		$	0.01		$	(0.08	)	$	(0.15	)
Weighted-average shares outstanding used in computing income (loss) per common share:
	Basic			305,471			297,352			304,121			306,161
	Diluted			328,463			308,537			326,396			306,161

WebMD CORPORATION
CONSOLIDATED SEGMENT INFORMATION
(In thousands, except per share data, unaudited)

		Three Months Ended						Nine Months Ended
		September 30,						September 30,
		2003			2002			2003			2002
Revenues
	Transaction services	$	131,977		$	115,026		$	365,491		$	350,157
	Physician services		75,487			70,581			224,295			202,738
	Portal services		31,164			19,851			79,882			54,991
	Plastic technologies (a)		19,093			16,803			55,015			49,552
	Inter-segment eliminations		(7,086	)		(5,257	)		(19,099	)		(15,218	)
		$	250,635		$	217,004		$	705,584		$	642,220
Income (loss) before restructuring, taxes, non-cash and other items
	Transaction services	$	21,767		$	24,327		$	68,160		$	60,129
	Physician services		3,686			7,174			16,342			19,660
	Portal services		8,712			3,577			18,922			(3,479	)
	Plastic technologies (a)		5,690			5,125			15,857			15,526
	Corporate		(12,809	)		(11,493	)		(37,652	)		(38,741	)
	Interest income		6,401			5,222			16,434			14,341
	Interest expense		(4,703	)		(2,819	)		(10,444	)		(5,677	)
			28,744			31,113			87,619			61,759
	Basic income per common share before restructuring, taxes, non-cash and other items (b)	$	0.09		$	0.10		$	0.29		$	0.20
	Diluted income per common share before restructuring, taxes, non-cash and other items (b)	$	0.09		$	0.10		$	0.27		$	0.20
Restructuring, taxes, non-cash and other items (c)
	Depreciation, amortization and other		(11,097	)		(32,073	)		(52,961	)		(95,575	)
	Amortization of prepaid content and services (included in cost of operations)		(1,105	)		(453	)		(1,932	)		(2,176	)
	Amortization of prepaid content and services (included in sales, marketing, general and administrative)		(4,970	)		(5,696	)		(16,292	)		(17,382	)
	Non-cash stock compensation (included in sales, marketing, general and administrative)		(3,390	)		(6,669	)		(10,948	)		(21,559	)
	Restructuring and integration benefit		—			2,100			—			5,850
	Legal expense		(493	)		—			(493	)		—
	Gain on investments		3,039			681			3,222			6,547
	Income tax (provision) benefit		(1,273	)		12,103			(3,261	)		10,700
	Other income		—			2,323			1,118			2,323
Income (loss) from continuing operations			9,455			3,429			6,072			(49,513	)
Income (loss) from discontinued operations, net of income taxes			(3,366	)		1,109			(33,611	)		2,240
Net income (loss)		$	6,089		$	4,538		$	(27,539	)	$	(47,273	)
Basic income (loss) per common share:
	Income (loss) from continuing operations	$	0.03		$	0.01		$	0.02		$	(0.16	)
	Income (loss) from discontinued operations		(0.01	)		0.01			(0.11	)		0.01
Net income (loss)		$	0.02		$	0.02		$	(0.09	)	$	(0.15	)
Diluted income (loss) per common share:
	Income (loss) from continuing operations	$	0.03		$	0.01		$	0.02		$	(0.16	)
	Income (loss) from discontinued operations		(0.01	)		0.00			(0.10	)		0.01
Net income (loss)		$	0.02		$	0.01		$	(0.08	)	$	(0.15	)
Weighted-average shares outstanding used in computing income (loss) per common share:
	Basic		305,471			297,352			304,121			306,161
	Diluted		328,463			308,537			326,396			306,161

(a)	Effective August 1, 2003, the Company completed the sale of two operating units of its Plastic Technologies segment, Porex Bio Products, Inc. and Porex Medical Products, Inc., in two separate transactions. Beginning in the quarter ended September 30, 2003, the Company’s consolidated financial statements reflect these operating units as discontinued operations for all prior periods. The above segment information reflects these operating units as discontinued operations for the current and prior periods.
(b)	Basic and diluted income (loss) per common share before restructuring, taxes, non-cash and other items is based on the weighted-average shares outstanding used in computing basic and diluted income (loss) per common share.
(c)	Reconciliation of income (loss) before restructuring, taxes, non-cash and other items to income (loss) from continuing operations.

WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

			September 30,		December 31,
			2003		2002
			(Unaudited)
Assets
Cash and cash equivalents			$	83,872	$	175,596
Short-term investments				211,378		10,888
Accounts receivable, net				172,988		163,244
Inventory				11,120		9,976
Current portion of prepaid content and distribution services				23,582		25,406
Assets of discontinued operations				—		94,056
Other current assets				23,810		25,814
		Total current assets		526,750		504,980
Marketable debt securities				678,315		449,289
Marketable equity securities				5,681		7,427
Property and equipment, net				80,264		70,488
Prepaid content and distribution services				32,670		48,532
Goodwill				667,444		586,043
Intangible assets, net				91,806		73,222
Other assets				34,733		26,267
			$	2,117,663	$	1,766,248
Liabilities and Stockholders’ Equity
Accounts payable			$	10,389	$	10,063
Accrued expenses				217,479		208,342
Deferred revenue				83,959		81,179
Liabilities of discontinued operations				—		12,365
	Total current liabilities			311,827		311,949
Convertible subordinated notes				649,999		300,000
Other long-term liabilities				1,338		498
Stockholders’ equity				1,154,499		1,153,801
			$	2,117,663	$	1,766,248

WebMD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

					Nine Months Ended
					September 30,
					2003			2002
Cash flows from operating activities:
Net loss					$	(27,539	)	$	(47,273	)
Adjustments to reconcile net loss to net cash provided by operating activities:
		(Income) loss from discontinued operations				33,611			(2,240	)
		Depreciation, amortization and other				52,961			95,575
		Amortization of debt issuance costs				1,505			740
		Non-cash content and distribution services				18,224			19,558
		Non-cash stock based compensation				10,948			21,559
		Gain on investments				(3,222	)		(6,547	)
		Changes in operating assets and liabilities:
			Accounts receivable			3,580			5,226
			Inventory			(1,144	)		711
			Federal income tax receivable			—			(12,887	)
			Prepaid content and distribution services			(537	)		(201	)
			Accounts payable			(775	)		(3,220	)
			Accrued expenses			(12,174	)		(10,216	)
			Deferred revenue			(2,228	)		6,822
			Other, net			5,685			(8,001	)
				Net cash provided by continuing operations		78,895			59,606
				Net cash provided by discontinued operations		5,130			5,809
				Net cash provided by operating activities		84,025			65,415
Cash flows from investing activities:
	Proceeds from maturities and sales of available-for-sale securities					11,322			106,108
	Proceeds from maturities and redemptions of held-to-maturity securities					157,919			59,095
	Purchases of available-for-sale securities					(7,754	)		(206,983	)
	Purchases of held-to-maturity securities					(590,113	)		(300,970	)
	Purchases of property and equipment					(13,643	)		(20,737	)
	Proceeds received from sale of discontinued operations					46,500			—
	Cash paid in business combinations, net of cash acquired					(133,471	)		(9,929	)
	Other changes in equity of discontinued operations					1,754			7,511
				Net cash used in continuing operations		(527,486	)		(365,905	)
				Net cash used in discontinued operations		(2,529	)		(9,184	)
				Net cash used in investing activities		(530,015	)		(375,089	)
Cash flows from financing activities:
	Proceeds from issuance of common stock					35,367			14,313
	Payments of notes payable and other					(211	)		(2,899	)
	Redemption of Series B Preferred Stock					—			(10,000	)
	Purchases of treasury shares					(18,125	)		(103,784	)
	Net proceeds from issuance of convertible debt					339,125			292,000
				Net cash provided by continuing operations		356,156			189,630
				Net cash used in discontinued operations		(6,546	)		(1,147	)
				Net cash provided by financing activities		349,610			188,483
Effect of exchange rates on cash						711			765
Net decrease in cash and cash equivalents						(95,669	)		(120,426	)
Changes in cash attributable to discontinued operations						3,945			4,522
Cash and cash equivalents at beginning of period						175,596			278,513
Cash and cash equivalents at end of period					$	83,872		$	162,609

EX-99.3 5 g85668exv99w3.htm EX-99.3 CERTAIN FORWARD-LOOKING STATEMENTS

Exhibit 99.3

Certain Forward-Looking Information — Reconciliation of Non-GAAP to GAAP

      In an Analyst and Investor Conference Call today, the Company intends to indicate that, with respect to 2004, including acquisitions announced to date, it expects to see consolidated revenue growth of 20-25%, growth in income from continuing operations before restructuring, taxes, non-cash and other items of 25-40% and growth in income from continuing operations in excess of 200%.

      The Company is in the process of completing its strategic planning process for 2004 and 2005 and this guidance is preliminary and subject to numerous assumptions, including the assumption that the primary factor responsible for the difference in growth between income from continuing operations and income from continuing operations before restructuring, taxes, non-cash and other items will be year-to-year decreases in non-cash expenses, including those for depreciation and amortization, stock compensation and content and distribution services. -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

EX-99.1 PRESS RELEASE DATED NOVEMBER 6, 2003

EX-99.2

EX-99.2 THIRD QUARTER FINANCIAL TABLES

EX-99.3

exv99w3