8-K

UNITED STATES 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

May 4, 2006

Date of Report (Date of earliest event reported)

EMDEON CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	0-24975	94-3236644
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer Identification
incorporation)		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)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

     All statements contained in this Current Report on Form 8-K , 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 our future performance; the amount and timing of the benefits expected from acquisitions or other transactions or from new or updated products or services; other potential sources of additional revenue; and explorations regarding possible transactions or other alternatives with respect to Emdeon Business Services and Emdeon Practice Services. These statements speak only as of the date of this Current Report and are based on our current plans and expectations, and they involve risks and uncertainties that could cause actual future events or results to be different from 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 ability to develop and maintain relationships with healthcare industry participants, including healthcare payers and providers and vendors of services to those payers and providers; difficulties in integrating acquired businesses; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the Health Insurance Portability and Accountability Act of 1996 (HIPAA); our ability to attract and retain qualified personnel; and uncertainties regarding the outcome of the process of exploring alternatives with respect to Emdeon Business Services and Emdeon Practice Services and its effects on those segments. Further information about these matters can be found in our other Securities and Exchange Commission filings. We expressly disclaim any intent or obligation to update these forward-looking statements.

* * * *

     The exhibits furnished with this Current Report on Form 8-K include financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as non-GAAP financial measures and reconciliations of the non-GAAP financial measures to GAAP financial measures. The non-GAAP financial measures include: our company’s earnings before interest, taxes, depreciation, amortization and other non-cash items (which we refer to as “Adjusted EBITDA”) and related per share amounts. We believe that those non-GAAP measures, and changes in those measures, provide additional information that our management finds useful in evaluating our company’s performance and in planning for future periods. Accordingly, we believe 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.

Item 2.02. Results of Operations and Financial Condition

     On May 4, 2006, we issued a press release announcing our results for the quarter ended March 31, 2006. A copy of the press release is attached as Exhibit 99.1. Exhibit 99.2 to this Current Report includes the financial tables that accompanied the press release. Exhibits 99.1 and 99.2 are being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), nor shall either of those exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 7.01. Regulation FD Disclosure

Exhibit 99.1 is also being furnished for purposes of Item 7.01.

2

     Exhibit 99.3 to this Current Report includes forward-looking financial information that is expected to be discussed on the previously announced conference call with investors and analysts to be held by us at 4:45 p.m., Eastern time, today (May 4, 2006). The call can be accessed at www.emdeon.com (in the About Emdeon section) and a replay will be available at the same location. Exhibit 99.3 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

(c)	Exhibits
	The following exhibits are furnished herewith:

99.1	Press Release, dated May 4, 2006, regarding the Registrant’s results for the quarter ended March 31, 2006
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary

3

SIGNATURE

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

	EMDEON CORPORATION
Dated: May 4, 2006	By:	/s/ Lewis H. Leicher
		Lewis H. Leicher
		Senior Vice President

4

EXHIBIT INDEX

Exhibit
Number	Description
99.1	Press Release, dated May 4, 2006, regarding the Registrant’s results for the quarter ended March 31, 2006
99.2	Financial Tables accompanying Exhibit 99.1
99.3	Financial Guidance Summary

5

EX-99.1

EXHIBIT 99.1

Contacts:
Investors:	Media:
Risa Fisher	Jennifer Newman
rfisher@emdeon.com	jnewman@emdeon.com
201-414-2002	212-624-3912

EMDEON ANNOUNCES FIRST QUARTER RESULTS

EMDEON REPORTS RECORD REVENUE AND ADJUSTED EBITDA

EMDEON NET INCOME INCREASES 67% FROM A YEAR AGO

ELMWOOD PARK, NJ (May 4, 2006) – Emdeon Corporation (NASDAQ: HLTH) today announced financial results for the quarter ended March 31, 2006.

Kevin Cameron, Chief Executive Officer of Emdeon, said: “I am pleased with our results for the quarter. Our execution is improving and many of the process improvements and new product initiatives we recently focused on are beginning to drive results.”

Key Financial Highlights
Revenue for the first quarter was $339.1 million compared to $303.9 million in the prior year period, an increase of 11.6%. Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) for the first quarter was $54.2 million or $0.18 per share compared to $39.3 million or $0.12 per share a year ago, an increase of 37.9%. Net income for the first quarter was $16.4 million or $0.06 per share compared to net income of $9.8 million or $0.03 per share a year ago, an increase of 66.8%. Net income for the first quarter includes $12.5 million of non-cash stock compensation expense, compared to $1.7 million a year ago, reflecting the January 1, 2006 adoption of SFAS 123R.

As of March 31, 2006, Emdeon had approximately $376.8 million in cash and short-term investments on a consolidated basis, including $132.8 million in cash and short-term investments held by WebMD Health Corp., its 85.8% owned subsidiary.

Segment Operating Results
Emdeon Business Services segment revenue was $201.2 million for the first quarter compared to $185.7 million in the prior year period, an increase of 8.3%. The increase in Emdeon Business Services revenue was attributable to strong performance in our remittance and payment, patient statement, provider and ViPS businesses and the impact of the January 8, 2006 US Postal Service rate increase. Segment Adjusted EBITDA was $43.2 million compared to $38.3 million in the prior year period, an increase of 12.9%. Operating margins increased to 21.5% compared to 20.6% a year ago primarily as a result of higher revenue and the continued achievement of operating efficiencies and cost savings.

Emdeon Practice Services segment revenue was $75.7 million for the first quarter compared to $73.0 million in the prior year period, an increase of 3.7%. Segment Adjusted EBITDA was $10.2 million compared to $4.4 million in the prior year period, an increase of 131.4%. Operating margins increased from 6% in the prior year period to 13.4% as a result of changes in revenue mix and improvements in our delivery and service infrastructure.

As previously announced on May 2, 2006, WebMD segment revenue was $50.1 million for the first quarter compared to $33.6 million in the prior year period, an increase of 49.1%, driven by continued growth in online services. Segment Adjusted EBITDA was $6.5 million compared to $3.2 million in the prior year, primarily as a result of the increase in revenues.

Porex segment revenue was $20.6 million for the first quarter compared to $19.9 million in the prior year period. Segment Adjusted EBITDA for the first quarter was $5.6 million compared to $5.4 million in the prior year period.

Financial Guidance
A schedule outlining the Company’s financial guidance is being furnished as an exhibit to a Current Report on Form 8-K being filed by the Company today with the Securities and Exchange Commission.

Analyst and Investor Conference Call
As previously announced, Emdeon will hold a conference call with investors and analysts to discuss these results at 4:45 pm (eastern) on May 4, 2006. The call can be accessed at www.emdeon.com (in the About Emdeon section). A replay of the audio webcast will be available at the same web address.

ABOUT EMDEON
Emdeon (Nasdaq: HLTH) is a leading provider of business, technology and information solutions that transform both the financial and clinical aspects of healthcare delivery. At the core of Emdeon’s vision is the commitment to connect providers, payers, employers, physicians and consumers in order to simplify business processes, to provide actionable knowledge at the right time and place and to improve healthcare quality.

Emdeon Business Services provides revenue cycle management and clinical communication solutions that enable payers, providers and patients to improve healthcare business processes. Emdeon Practice Services provides physician practice management and electronic health record software and services that increase practice efficiency and enhance patient care. WebMD (Nasdaq: WBMD) provides health information services for consumers, physicians, healthcare professionals, employers and health plans through its public and private online portals and health-focused publications. Porex is a developer, manufacturer and distributor of proprietary porous plastic products and components used in healthcare, industrial and consumer applications.

*****************************

All statements contained in this press release, 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; the amount and timing of the benefits expected from acquisitions or other transactions, from deployment of new or updated technologies, products, services or applications or from other potential sources of additional revenue; and explorations regarding possible transactions or other alternatives with respect to Emdeon Business Services and Emdeon Practice Services. These statements speak only as of the date of this release and are based on our current plans and expectations, and they 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 ability to develop and maintain relationships with healthcare industry participants, including healthcare payers and providers and vendors of services to those payers and providers; difficulties in integrating acquired businesses; changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet, information technology and plastics industries, including matters relating to the Health Insurance Portability and Accountability Act of 1996 (HIPAA); our ability to attract and retain qualified personnel; and uncertainties regarding the outcome of the process of exploring alternatives with respect to Emdeon Business Services and Emdeon Practice Services and its effects on those segments. Further information about these matters can be found in our Securities and Exchange Commission filings. We expressly disclaim any intent or obligation to update these forward-looking statements.

*****************************

This press release includes 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 include: our company’s earnings before restructuring, interest, taxes, non-cash and other items (which we refer to as “Adjusted EBITDA”); and related per share amounts. We believe that those non-GAAP measures, and changes in those measures, are meaningful indicators of our company’s performance and provide additional information that our management finds useful in evaluating such performance and in planning for future periods. Accordingly, we believe 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 include a reconciliation of historical non-GAAP financial measures to historical GAAP financial measures. The guidance summary being furnished as an exhibit to a Current Report on Form 8-K we are filing with the SEC today includes a reconciliation of forward-looking non-GAAP information to forward-looking GAAP financial information.

*****************************

WebMD^®, WebMD Health^®, Emdeon™, Emdeon Business Services™, Emdeon Practice Services™ and POREX^® are trademarks of Emdeon Corporation or its subsidiaries.

-Tables Follow-

EX-99.2

Exhibit 99.2

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

	Three Months Ended
	March 31,
	2006			2005
Revenue	$	339,119		$	303,934
Costs and expenses:
Cost of operations		195,267			172,163
Development and engineering		14,914			14,640
Sales, marketing, general and administrative		88,832			82,137
Depreciation and amortization		18,928			16,504
Legal expense		542			4,160
Loss on investments		—			3,832
Interest income		4,419			4,321
Interest expense		4,691			4,781
Income before income tax provision and minority interest		20,364			10,038
Income tax provision		4,562			189
Minority interest in WebMD Health Corp., net of tax		(629	)		—
Net income	$	16,431		$	9,849
Net income per common share:
Basic and diluted	$	0.06		$	0.03
Weighted-average shares outstanding used in computing net income per common share:
Basic		287,195			325,334
Diluted		295,492			335,689

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

	Three Months Ended
	March 31,
	2006			2005
Revenues
Emdeon Business Services	$	201,154		$	185,733
Emdeon Practice Services		75,706			73,018
WebMD		50,051			33,575
Porex		20,587			19,856
Inter-segment eliminations		(8,379	)		(8,248	)
	$	339,119		$	303,934
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)
Emdeon Business Services	$	43,193		$	38,253
Emdeon Practice Services		10,173			4,397
WebMD (a)		6,527			3,230
Porex		5,554			5,397
Corporate (a)		(11,274	)		(12,005	)
	$	54,173		$	39,272
Adjusted EBITDA per basic common share (b)	$	0.19		$	0.12
Adjusted EBITDA per diluted common share (b)	$	0.18		$	0.12
Interest, taxes, non-cash and other items (c)
Depreciation and amortization	$	(18,928	)	$	(16,504	)
Amortization of non-cash advertising		(1,605	)		(2,627	)
Non-cash stock-based compensation (d)		(12,462	)		(1,651	)
Legal expense		(542	)		(4,160	)
Loss on investments		—			(3,832	)
Interest income		4,419			4,321
Interest expense		(4,691	)		(4,781	)
Minority interest in WebMD Health Corp., net of tax		629			—
Income tax provision		(4,562	)		(189	)
Net income	$	16,431		$	9,849
Net income per common share:
Basic and diluted	$	0.06		$	0.03
Weighted-average shares outstanding used in computing net income per common share:
Basic		287,195			325,334
Diluted		295,492			335,689

(a)	Adjusted EBITDA during prior periods, for the Corporate and WebMD segments, has been reclassified to conform to the current period presentation.
(b)	Adjusted EBITDA per basic and diluted common share is based on the weighted-average shares outstanding used in computing net income per common share (basic and diluted).
(c)	Reconciliation of Adjusted EBITDA to net income.
(d)	Reflects the adoption of SFAS 123R effective January 1, 2006.

EMDEON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	March 31,		December 31,
	2006		2005
	(Unaudited)
Assets
Cash and cash equivalents	$	137,145	$	159,510
Short-term investments		239,653		267,387
Accounts receivable, net		236,057		233,070
Inventory		13,852		14,251
Prepaid expenses and other current assets		33,605		34,615
Total current assets		660,312		708,833
Marketable equity securities		4,265		4,481
Property and equipment, net		120,791		116,032
Goodwill		1,087,731		1,075,549
Intangible assets, net		240,095		240,510
Other assets		49,116		50,278
Total Assets	$	2,162,310	$	2,195,683
Liabilities and Stockholders’ Equity
Accounts payable	$	10,525	$	11,611
Accrued expenses		172,179		186,381
Deferred revenue		125,705		115,840
Total current liabilities		308,409		313,832
Convertible notes		650,000		650,000
Other long-term liabilities		15,372		15,353
Minority interest in WebMD Health Corp.		48,005		43,229
Convertible redeemable exchangeable preferred stock		98,591		98,533
Stockholders’ equity		1,041,933		1,074,736
Total Liabilities and Stockholders’ Equity	$	2,162,310	$	2,195,683

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

	Three Months Ended
	March 31,
	2006			2005
Cash flows from operating activities:
Net income	$	16,431		$	9,849
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		18,928			16,504
Minority interest in WebMD Health Corp., net of tax		(629	)		—
Amortization of debt issuance costs		728			726
Non-cash advertising		1,605			2,627
Non-cash stock-based compensation		12,462			1,651
Bad debt expense		1,050			2,283
Loss on investments		—			3,832
Reversal of income tax valuation allowance applied to goodwill		2,157			—
Changes in operating assets and liabilities:
Accounts receivable		(2,245	)		(14,122	)
Inventory		446			253
Prepaid expenses and other, net		(710	)		2,812
Accounts payable		(1,133	)		(8,631	)
Accrued expenses and other long-term liabilities		(9,886	)		(106	)
Deferred revenue		7,557			5,279
Net cash provided by operating activities		46,761			22,957
Cash flows from investing activities:
Proceeds from maturities and sales of available-for-sale securities		166,228			45,846
Purchases of available-for-sale securities		(137,815	)		(2,550	)
Purchases of property and equipment		(14,168	)		(11,892	)
Proceeds received from sale of property and equipment		—			400
Cash paid in business combinations, net of cash acquired		(27,328	)		(70,775	)
Net cash used in investing activities		(13,083	)		(38,971	)
Cash flows from financing activities:
Proceeds from issuance of common stock		10,565			13,170
Purchases of treasury stock		(66,633	)		—
Payments of notes payable and other		(94	)		(63	)
Net cash (used in) provided by financing activities		(56,162	)		13,107
Effect of exchange rates on cash		119			(358	)
Net decrease in cash and cash equivalents		(22,365	)		(3,265	)
Cash and cash equivalents at beginning of period		159,510			46,019
Cash and cash equivalents at end of period	$	137,145		$	42,754

EX-99.3

Exhibit 99.3

2006 Consolidated Financial Guidance Summary

(in millions, except per share amounts)

						Quarterly Mix
	Range					Q1		Q2		Q3		Q4
Revenue	$	1,380.0		$	1,430.0		24%		25%		25%		26%
Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”)	$	225.0		$	255.0		23%		24%		25%		28%
Interest expense, net		3.0			4.0
Depreciation and amortization		75.5			80.1		24%		24%		26%		26%
Non-cash stock-based compensation		48.0			50.0		25%		27%		27%		21%
Amortization of non-cash advertising		7.3			7.5		22%		24%		20%		34%
Income tax provision		21.0			22.6		21%		21%		26%		32%
Legal expense		0.5			0.5
Minority interest in WebMD Health Corp., net of tax		(0.3	)		0.3
Net income	$	70.0		$	90.0		21%		23%		23%		33%
Adjusted EBITDA per diluted share	$	0.75		$	0.85
Net income per diluted share	$	0.23		$	0.30

Operating Segments

Revenue:

*	Emdeon Business Services — Approximately 59% of consolidated revenue in Q2 decreasing to 57% in Q3 and 56% by Q4.
*	Emdeon Practice Services — Approximately 22% of consolidated revenue in Q2 increasing to 23% in Q3 and Q4.
*	WebMD — Approximately 15% of consolidated revenue in Q2 increasing to approximately 18% by Q4.
*	Porex — Approximately 6% of consolidated revenue throughout the year.
*	Eliminations — Approximately 2.5% of consolidated revenue.

Adjusted EBITDA:

*	Emdeon Business Services — Approximately 21% of segment revenue throughout 2006.
*	Emdeon Practice Services — Approximately 12% of segment revenue in Q2, improving to 14% by Q4.
*	WebMD — Approximately 16% of segment revenue in Q2, increasing to about 29% in Q4.
*	Porex — Approximately 27% of segment revenue throughout the year, slightly higher margins in the seasonally stronger Q2.
*	Corporate — Approximately 3.3% of consolidated revenue.

Other Assumptions

*	The 2006 Guidance includes actual expense for Q1 2006, but does not reflect any projected expenses related to the on-going Department of Justice Investigation.
*	Adjusted EBITDA per diluted share and net income per diluted share are both calculated on an assumed share count of approximately 299 million.
*	Non-cash stock-based compensation expense considers the January 1, 2006 adoption of SFAS 123R.