Delaware | 0-51547 | 20-2783228 | ||
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification | ||
incorporation) | No.) |
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)) |
Exhibit | ||
Number | Description | |
99.1
|
Press Release, dated July 18, 2011, regarding expected results for the quarter ended June 30, 2011 | |
99.2
|
Preliminary Financial Information for the Quarter Ended June 30, 2011 and Updated Financial Guidance Summary | |
99.3
|
Annex A to Exhibits 99.1 and 99.2 | |
99.4
|
Press Release, dated July 18, 2011, entitled Chairman of the Board of WebMD Comments on WebMDs Growth Prospects |
2
WEBMD HEALTH CORP. |
||||
Dated: July 18, 2011 | By: | /s/ Lewis H. Leicher | ||
Lewis H. Leicher | ||||
Senior Vice President | ||||
3
Exhibit | ||
Number | Description | |
99.1
|
Press Release, dated July 18, 2011, regarding expected results for the quarter ended June 30, 2011 | |
99.2
|
Preliminary Financial Information for the Quarter Ended June 30, 2011 and Updated Financial Guidance Summary | |
99.3
|
Annex A to Exhibits 99.1 and 99.2 | |
99.4
|
Press Release, dated July 18, 2011, entitled Chairman of the Board of WebMD Comments on WebMDs Growth Prospects |
| Revenue for the June quarter is expected to be approximately $141 million, an increase of approximately 15% over the prior year period. Advertising revenue increased approximately 20% over the prior year period. | ||
| Earnings before interest, taxes, non-cash and other items (Adjusted EBITDA) for the June quarter is expected to be approximately $45 million or 32% of revenues, an increase of approximately 31% over the prior year period. | ||
| Income from continuing operations for the June quarter is expected to be approximately $14 million or $0.23 per diluted share, an increase of 82%. Income from continuing operations includes an after tax gain on investments of approximately $1.0 million, or $0.02 per diluted share. | ||
| Net income for the June quarter is expected to be approximately $21.4 million or $0.35 per diluted share which includes an after tax gain from investments of approximately $1.0 million, or $0.02 per diluted share and an after tax gain from discontinued operations of approximately $7.4 million, or $0.12 per diluted share attributable to the final resolution of a Department of Justice investigation relating to a business that was divested in 2006. |
| Revenue of $580 million to $600 million, | ||
| Adjusted EBITDA of $200 million to $210 million, and | ||
| Income from continuing operations of $71 million to $80 million. |
| Approximately 86% from public portals advertising and sponsorship, representing growth of approximately 12% to 15% over the prior year, and | ||
| Approximately 14% from private portal licensing, representing a decrease of 4% to 7% over the prior year. |
| Revenue of $610 million to $640 million, | ||
| Adjusted EBITDA of $215 million to $230 million, and | ||
| Income from continuing operations of $79.8 million to $91.8 million. |
| Revenue of $135 million to $140 million, with approximately 85% from public portals advertising and sponsorship and 15% from private portal licensing. Advertising revenue is expected to increase 1% to 5%, while private portal revenue is expected to decrease 5% to 9%, compared to the prior year period, | ||
| Adjusted EBITDA is expected to be approximately 29% of revenue, and | ||
| Income from continuing operations is expected to be approximately 6.4% of revenue. |
| Extended internal legal and regulatory review of larger biopharmaceutical sponsorship programs in both the consumer and professional markets that were sold in previous quarters which is causing longer delays in the launch of these programs than was previously anticipated, | ||
| Unexpected delays and cancellations of new consumer sponsorships sold in previous quarters that were scheduled to launch later this year. The cancellations were due to budget cuts on the part of several consumer products companies, | ||
| A reduction in sales estimates and related revenue contribution for the second half of 2011 due to the impact of the items mentioned above, and | ||
| Lower licensing revenue as a result of less than anticipated new customer additions that would have offset customer attrition in the private portals business. |
3
4
Quarter Ended | Year Ended | |||||||||||
June 30, 2011 | December 31, 2011 | |||||||||||
Preliminary | Guidance Range | |||||||||||
Revenue |
$ | 141.0 | $ | 580.0 | $ | 600.0 | ||||||
Earnings before interest, taxes, depreciation, amortization
and other non-cash items (Adjusted EBITDA) (a) |
$ | 45.0 | $ | 200.0 | $ | 210.0 | ||||||
Interest, taxes, depreciation, amortization and other
non-cash items (b) |
||||||||||||
Interest income |
| 0.5 | 0.5 | |||||||||
Interest expense |
(5.8 | ) | (20.7 | ) | (20.7 | ) | ||||||
Depreciation and amortization |
(6.8 | ) | (30.0 | ) | (28.0 | ) | ||||||
Non-cash stock-based compensation |
(9.4 | ) | (41.0 | ) | (38.0 | ) | ||||||
Gain on investments |
1.8 | 13.5 | 13.5 | |||||||||
Other expense, net |
| (0.1 | ) | (0.1 | ) | |||||||
Pre-tax income from continuing operations |
24.8 | 122.2 | 137.2 | |||||||||
Income tax provision |
(10.8 | ) | (51.2 | ) | (57.2 | ) | ||||||
Income from continuing operations |
$ | 14.0 | $ | 71.0 | $ | 80.0 | ||||||
Income from discontinued operations, net of tax |
7.4 | 7.4 | 7.4 | |||||||||
Net income |
$ | 21.4 | $ | 78.4 | $ | 87.4 | ||||||
Income from continuing operations per share: |
||||||||||||
Basic |
$ | 0.24 | $ | 1.19 | $ | 1.35 | ||||||
Diluted |
$ | 0.23 | $ | 1.16 | $ | 1.29 | ||||||
Net income per share: |
||||||||||||
Basic |
$ | 0.37 | $ | 1.32 | $ | 1.47 | ||||||
Diluted |
$ | 0.35 | $ | 1.26 | $ | 1.39 | ||||||
Weighted-average shares outstanding used in computing per
share amounts: |
||||||||||||
Basic |
58.1 | 59.0 | 59.0 | |||||||||
Diluted |
60.2 | 71.0 | 71.0 | |||||||||
(a) | See Annex A Explanation of Non-GAAP Financial Measures | |
(b) | Reconciliation of Adjusted EBITDA to income from continuing operations |
| Revenue is forecasted to be $135 million to $140 million in the quarter ending September 30, 2011 | ||
| Adjusted EBITDA as a percentage of revenue is forecasted to be approximately 29% in the quarter ending September 30, 2011 | ||
| Income from continuing operations as a percentage of revenue is forecasted to be approximately 6.4% in the quarter ending September 30, 2011 | ||
| Basic and diluted share count is forecasted to be approximately 59 million and 61 million, respectively. The 2.50% and 2.25% Convertible Notes are not expected to be dilutive to income from continuing operations per share during the quarter ended September 30, 2011. | ||
| Basic and diluted income from continuing operations per share is forecasted to be in excess of $0.15 and $0.14, respectively. |
| Income tax rate for 2011 is forecasted to be approximately 42% of pretax income. | ||
| The distribution of the annual revenue is expected to be approximately 86% public portals advertising and sponsorship and 14% private portal licensing. Quarterly revenue distributions may vary from this annual estimate | ||
| 2011 guidance includes actual gains on investments during the six months ended June 30, 2011 and forecasted amortization of the ARS Option for the six months ended December 31, 2011, but excludes any potential gains on investments during the six months ended December 31, 2011 |
| Basic income per share: Reflects a reduction to income of $0.6 million to consider the effect of restricted stock. | ||
| Diluted income per share: Reflects an increase to income of $6.7 million and $5.2 million for the interest expense (net of tax) on the 2.50% and 2.25% Convertible Notes, respectively, offset by a reduction to income of $0.6 million to consider the effect of restricted stock. The diluted share count reflects an additional 6 million and 4 million shares, related to the 2.50% and 2.25% Convertible Notes, respectively. |
| Depreciation and Amortization. Depreciation and amortization expense is a non-cash expense relating to capital expenditures and intangible assets arising from acquisitions that are expensed on a straight-line basis over the estimated useful life of the related assets. We exclude depreciation and amortization expense from Adjusted EBITDA because we believe that (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired tangible and intangible assets. Accordingly, we believe that this exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that the use of tangible and intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also note that such expense will recur in future periods. |
| Stock-Based Compensation Expense. Stock-based compensation expense is a non-cash expense arising from the grant of stock-based awards to employees. We believe that excluding the effect of stock-based compensation from Adjusted EBITDA assists management and investors in making period-to-period comparisons in its operating performance because (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations and (ii) such expenses can vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Additionally, we believe that excluding stock-based compensation from Adjusted EBITDA assists management and investors in making meaningful comparisons between our operating performance and the operating performance of other companies that may use different forms of employee compensation or different valuation methodologies for their stock-based compensation. Investors should note that stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to operating results in future periods. Investors should also note that such expenses will recur in the future | ||
| Interest Income and Expense. Interest income is associated with the level of marketable debt securities and other interest bearing accounts in which we invest, as well as with interest expense arising from our companys capital structure (including non-cash interest expense relating to our convertible notes). Interest income and expense varies over time due to a variety of financing transactions and due to acquisitions and divestitures that we have entered into or may enter into in the future. We have, in the past, issued convertible debentures, repurchased shares in cash tender offers and repurchased shares and convertible debentures through other repurchase transactions, and completed the divestiture of certain businesses. We exclude interest income and interest expense from Adjusted EBITDA (i) because these items are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different capital structures. Investors should note that interest income and expense will recur in future periods. | ||
| Income Tax Provision (Benefit). We maintain a valuation allowance on a portion of our net deferred tax assets (including our net operating loss carryforwards), the amount of which may change from quarter to quarter based on factors that are not directly related to our results for the quarter. The valuation allowance is either reversed through the statement of operations or additional paid-in capital. The timing of such reversals has not been consistent and as a result, our income tax expense can fluctuate significantly from period to period in a manner not directly related to our operating performance. We exclude the income tax provision (benefit) from Adjusted EBITDA (i) because we believe that the income tax provision (benefit) is not directly attributable to the underlying performance of our business operations and, accordingly, its exclusion assists management and investors in making period-to-period comparisons of operating performance and (ii) to assist management and investors in making comparisons to companies with different tax attributes. Investors should note that income tax provision (benefit) will recur in future periods. | ||
| Other Items. We engage in other activities and transactions that can impact our income from continuing operations and net income. In recent periods, these other items have included, but were not limited to, (i) legal expenses relating to the Department of Justice investigation, (ii) gain or loss on repurchases and conversions of our convertible notes, (iii) a reduction of certain sales and use tax contingencies resulting from the expiration of certain applicable statutes of limitations, and (iv) gain or loss on investments. We exclude these other items from Adjusted EBITDA because we believe these activities or transactions are not directly attributable to the performance of our business operations and, accordingly, their exclusion assists management and investors in making period-to-period comparisons of operating performance. Investors should note that some of these other items may recur in future periods. |
2
*V)I2=)I#"@@_2:B1!4)B#R,+#/2TL6Y/3*P>C(BSX*]DC\@T'!S)JE_QRV MBW,0B%!L%O\P]9/@X`T]<+"A89((0%<`E@8(Z-7'`R,P;E]\/1BVCY,C0=OY M"5&*!+EV>??V/<@!#3832PIW_0"V9:\PB_)PZ34&V,$K8WH!8-9);KLF$1F= M"`Q:J5YL!-9J\)8FX@"%K!=5:"%'@5AIBAH8Z+,&@Z(8`Y0L4#+`=H"S-!%= M&;!@_(`C,/[XOFO"BM9%(2CZB6(#FP052V%#P5I_L.,'!1H@\EPOT2EB`0)% ML#"0`HN``8T`AR2R01!8(!/$5QBLT,<+!OT10!"]8!'$'3O()]0)WA`07"+# M79-`-]?\%^`U`ZZU%VH**C3%(@[,@,`*4PR$1?\>B4R@A%MN-/!'"0Z@8$$+ M*UC'`P`E_,&%&7T8T``,8'CP14L(?.$$&!/X5H"!$M"B2`:`79,"CG[H^,=G M1E"@TD$92'`:#8B@H)`!TK6`@`\+]E'B'PZ(T`<6%D"*`0`M*"```%J(]4,# M$X#0D@='++#UNPP$,^$;#0@6\/)'#:$D\HPL=#YE#1WS5HI##"'\3%0<%H MVY`@E!$F2("(%P?T\H4B7K`@AP`U"9`/'HF@<)9D97C0(025(@)F$15T$$8? M17`Q0PL@2#G!`"WT`@$`L+(A*(^<(3+"O62$<$,!V*21@$K!#BO1"/I=TT4B MS?;Q;",6*F`!DW5TB.C_11M@$<$91QB#A0(@9($(#`.9`<9TW`7!@P7Q(;+# M#+T@8`&L?QQU#1Q`)(%(-7YT(<,3_P8\,+#7"$ML*5`DW#/#O:R02`P61$`M M(GB4C`C4DP*P0;-AS#"'AA%$\$(6`J$%LLB)E#$%8SK0_(1IUT2AQA\CT'`- M&1G\$?0U`A-.HC5*D")-(`B,C,+]0`B(6!C1`%L,-!%SS)HM;?1/MA]$2&7NS M!/6LY!HB9?@0P1AH0]JP=SG(,:T%;H7AQ;):'!-$!24TX$8O+PQP7R)/1H,! M_\WV`*%1$^08H0$4B-R>>\%'=R(&.R840!0B-0Q?@A)%*(#!]W]P@UB&!+,B M:&$Q10!!!38`@BTH``)30$%\N'`,!&"@2]^Q`&/<@`+RU8PX?C`"4M(@A$2X M;VCP.P@4:%`5"O3@5_ASS0[P8+P#)`\14W#+L];0!QYL`$QR@,`/?O`%`P`` M#&5`A`/&(!8>2&D1G$.+!4K@02*8KQWK,R'`KD&')N!`=[S;1@@^\XT"P/`/ M6G!+'S#0O\4!\`\`@`8"=B`'!-1`"4T$00X6`(8&\&8"%J(-!A4!`-=@R$77 M6!TBGA`"$/:LA%H\#04`E,)2N$`/58E""MI`!=6DJ/\/TTJ,0CI4.0#0QC:+ MHJD M57Y)'#A$@5",>`(.FD`<$_1`#694!`9621#8=.) 2 M,`(`-@H!`_A:)^[`F`.480(+$,L%1)"%*USA"$IP`@*VT$>9^#`15RCDHI+8 M)#$4TP:6R$#>&$$GUR6`!$_[`*$1XF""KG8U#B*T"@UZD``BZ`R*ASK(!ACC MA$+Q<"8S\(`'G*``!%R@)CMP0P3.%@,4B``+/ZA!XQ#!!A?`2&$NT.@VGO"$ M*MPKA"=@P!!,4!7-M,,$:+!"%6PPA#?^(29HR5`IRH"FKY3``C\02R\B@(4+ MU$"F$^`"#^P*@CL$804"<.8B<``$"IC#'&F0@D28(`4)_/:W;\#!">APW.9V M00)H`%X(0H"#D#*B!`)```O6,ML7##(+>[@``L8+`0-,9F08R!0"%/`"QUB" M!#98@GSG*]R##$$*\\VO#4AP@QX4(+_S+4`/7"`%ZQ+HP`A.L((7S.!$!`(` !.S\_ ` end
V=\B8J+C",NA(,=8(R)*F&080I[E$YJ")\(
M:ALUE*5\*YZ?/U"@K:Z@HBLV1F]\1B*B%WQ,.CE]?70P%@T>?\;'R,DJ3P"_
M?3$Q' %#1@"EA-QAKR@%HL,&$"
M#'"!4G*@(!*0H`,>V,,4Y+75%BA@"G@@0TA^C`'B_F$(L4%66YYKC"QD`4_'
M&(,=%N<'*0P!`E06$CN:!H4!#.`$.%*H%Q8K)O,>8PT.H$`V9E#D/SQ`!2UP
M$0Q:X(`IJ."<[9P!-NA``6W=X`827<$2_D+HZ#&Y)6FX,J'_`@0D0,$)@U[T
MHB\0`#9$H00R2`-:%F&%(V2```XP12*LH(`,'($)/IA`(K2PAPRX.@)[>,"G
M%.$#)HS`U1D8`6P?0(E\>OG7F=:`J!.1!2?\^M