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

Date of Report (date of earliest event reported): November 8, 2012

EMDEON INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	333-182786	20-5799664
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
3055 Lebanon Pike, Suite 1000 Nashville, TN		37214
(Address of Principal Executive Offices)		(Zip Code)

(615) 932-3000

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name or former 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):

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

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

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

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

Item 2.02. Results of Operations and Financial Condition.

On November 8, 2012, Emdeon Inc. (the “Company”) issued a press release announcing its results of operations for the third quarter ended September 30, 2012. A copy of the press release is furnished herewith as Exhibit 99.1 to this Current Report on

Form 8-K.

The information included in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company under the Exchange Act or Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith to this Current Report on Form 8-K.

Exhibit No.	Description
99.1	Press Release dated November 8, 2012

SIGNATURES

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 hereunto duly authorized.

	EMDEON INC.
Date: November 8, 2012	By:	/s/ Gregory T. Stevens
	Name:	Gregory T. Stevens
	Title:	Executive Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

Exhibit No.	Description
99.1	Press Release dated November 8, 2012

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Emdeon Reports Third Quarter 2012 Results

• Revenue of $297.1 million, increased 5.3% over third quarter 2011

• Adjusted EBITDA of $79.2 million, increased 3.3% over third quarter 2011

NASHVILLE, Tenn. (November 8, 2012) – Emdeon Inc., a leading provider of healthcare revenue and payment cycle management and clinical information exchange solutions, today announced financial results for the third quarter ended September 30, 2012 as summarized below:

(In millions)	3Q 2012			3Q 2011		% Change
Revenue	$	297.1		$	282.1		5.3	%
Net Income (Loss)	$	(15.2	)	$	6.3		-341.3	%
Non-GAAP Adjusted EBITDA	$	79.2		$	76.7		3.3	%

“We continue to make significant progress towards our financial goals as demonstrated by our operational performance in the third quarter,” said George Lazenby, chief executive officer for Emdeon. “The third quarter also proved productive strategically with the recently announced patient medication history initiative in our pharmacy services division and the launch of our integrated payment integrity suite, Emdeon Edge^TM. We are looking forward to continued success to round out the year.”

Third quarter revenue was $297.1 million, an increase of 5.3%, compared to $282.1 for the same period in 2011. Net loss for the third quarter of 2012 was $15.2 million compared to net income of $6.3 million for the same period in 2011. This loss was primarily due to increased interest and other expenses associated with the November 2011 acquisition of Emdeon by affiliates of Blackstone, which more than offset the impact of business growth as compared to the prior year period. Third quarter 2012 Non-GAAP Adjusted EBITDA grew 3.3% to $79.2 million, or 26.7% of revenue, from Non-GAAP Adjusted EBITDA of $76.7 million, or 27.2% of revenue, for the comparable period in 2011.

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.”

About Emdeon

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 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 solutions, 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.

Forward-Looking Statements

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. 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. Such factors related to Emdeon’s actual financial results or results of operations include: effects of competition, including competition from entities that are customers for certain of Emdeon’s solutions; Emdeon’s ability to maintain relationships with its customers and channel partners; Emdeon’s ability to effectively cross-sell its solutions to existing customers and to continue to generate revenue and maintain profitability by developing or acquiring and successfully deploying new or updated solutions; pricing pressures on Emdeon’s solutions; 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 Registration Statement on Form S-4 (File No. 333-182786) and the accompanying Prospectus thereto, 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.

# # #

Contacts:

Investor Relations

Bob East

Westwicke Partners

443.213.0502

bob.east@westwicke.com or

Emdeon@westwicke.com

Emdeon Inc.

Condensed Consolidated Statements of Operations

(unaudited and amounts in thousands)

	Successor			Predecessor			Successor			Predecessor
	Three Months Ended September 30, 2012			Three Months Ended September 30, 2011			Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Revenue	$	297,075		$	282,149		$	877,577		$	835,758
Costs and expenses:
Cost of operations (exclusive of depreciation and amortization below)		184,794			173,455			542,550			515,481
Development and engineering		7,994			7,473			24,246			23,602
Sales, marketing, general and administrative		35,308			38,342			107,382			105,604
Depreciation and amortization		48,572			39,830			140,354			116,786
Accretion		2,758			—			15,104			—
Operating income		17,649			23,049			47,941			74,285
Interest expense, net		41,898			12,573			130,539			37,848
Loss on extinguishment of debt		—			—			21,853			—
Other		—			(4,398	)		—			(8,036	)
Income (loss) before income tax provision (benefit)		(24,249	)		14,874			(104,451	)		44,473
Income tax provision (benefit)		(9,093	)		8,601			(36,364	)		21,696
Net income (loss)		(15,156	)		6,273			(68,087	)		22,777
Net income attributable to noncontrolling interest		—			2,906			—			9,214
Net income (loss) attributable to Emdeon Inc.	$	(15,156	)	$	3,367		$	(68,087	)	$	13,563

Emdeon Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands, except share and per share amounts)

	September 30, 2012			December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents	$	50,337		$	37,925
Accounts receivable, net of allowance for doubtful accounts of $4,276 and $1,201 at September 30, 2012 and December 31, 2011, respectively		197,169			188,960
Deferred income tax assets		4,772			5,862
Prepaid expenses and other current assets		20,914			16,926
Total current assets		273,192			249,673
Property and equipment, net		268,381			277,768
Goodwill		1,481,951			1,443,574
Intangible assets, net		1,757,783			1,821,897
Other assets, net		30,797			39,403
Total assets	$	3,812,104		$	3,832,315
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	13,567		$	8,827
Accrued expenses		119,461			132,096
Deferred revenues		8,967			5,561
Current portion of long-term debt		16,805			16,034
Total current liabilities		158,800			162,518
Long-term debt, excluding current portion		2,005,368			1,945,074
Deferred income tax liabilities		469,578			502,044
Tax receivable agreement obligations to related parties		132,581			117,477
Other long-term liabilities		6,145			1,413
Commitments and contingencies
Equity:
Common stock (par value, $.01), 100 shares authorized and outstanding at September 30, 2012 and December 31, 2011, respectively		—			—
Additional paid-in capital		1,128,320			1,120,676
Accumulated other comprehensive income (loss)		(3,908	)		(194	)
Accumulated deficit		(84,780	)		(16,693	)
Total equity		1,039,632			1,103,789
Total liabilities and equity	$	3,812,104		$	3,832,315

Emdeon Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited and amounts in thousands)

	Successor			Predecessor
	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011
Operating activities
Net income (loss)	$	(68,087	)	$	22,777
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		140,354			116,786
Accretion		15,104			—
Equity compensation		3,969			17,610
Deferred income tax expense (benefit)		(37,369	)		2,611
Amortization of debt discount and issuance costs		7,613			10,470
Amortization of discontinued cash flow hedge from other comprehensive loss		—			2,843
Change in contingent consideration		—			(8,036	)
Change in fair value of interest rate swap (not subject to hedge accounting)		—			(7,983	)
Loss on extinguishment of debt		18,293			—
Other		1,927			36
Changes in operating assets and liabilities:
Accounts receivable		(5,547	)		(7,040	)
Prepaid expenses and other		(3,686	)		10,843
Accounts payable		5,153			5,888
Accrued expenses, deferred revenue and other liabilities		(8,444	)		16,329
Tax receivable agreement obligations to related parties		(114	)		(2,593	)
Net cash provided by operating activities		69,166			180,541
Investing activities
Purchases of property and equipment		(40,949	)		(48,207	)
Payments for acquisitions, net of cash acquired		(59,011	)		(39,422	)
Net cash used in investing activities		(99,960	)		(87,629	)
Financing activities
Proceeds from Term Loan Facility		70,351			—
Debt principal payments		(9,565	)		(6,412	)
Payments on revolver		(15,000	)		—
Payment of loan costs		(2,060	)		—
Repurchase of Parent common stock		(317	)		—
Other		(203	)		(620	)
Net cash provided by (used in) financing activities		43,206			(7,032	)
Net increase in cash and cash equivalents		12,412			85,880
Cash and cash equivalents at beginning of period		37,925			99,188
Cash and cash equivalents at end of period	$	50,337		$	185,068

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 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”).

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 net income (loss) to the non-GAAP measure of Adjusted EBITDA. Adjusted EBITDA, as Emdeon defines it, may differ from and may not be comparable to similarly titled measures used by other companies, because Adjusted EBITDA is not a measure of financial performance under GAAP and is susceptible to varying calculations. Adjusted EBITDA calculations are also used in our credit facilities and indentures, although the adjustments used to calculate Adjusted EBITDA as used in our credit facilities and indentures vary in certain respects among such agreements and from those presented below.

Management uses Adjusted EBITDA 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 this non-GAAP measure assists Emdeon’s board of directors, management, lenders and investors in comparing Emdeon’s operating performance on a consistent basis because it removes 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 Inc.

Reconciliation of GAAP Net Income to Adjusted EBITDA

(unaudited and amounts in thousands)

	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2012			2011			2012			2011
Net income (loss)	$	(15,156	)	$	6,273		$	(68,087	)	$	22,777
Interest expense, net		41,898			12,573			130,539			37,848
Income tax provision (benefit)		(9,093	)		8,601			(36,364	)		21,696
Depreciation and amortization		48,572			39,830			140,354			116,786
EBITDA		66,221			67,277			166,442			199,107
Non-2011 Transactions related adjustments:
Equity compensation		3,969			6,126			3,969			17,610
Acquisition-related costs		609			1,448			4,264			4,237
Strategic initiatives, duplicative running and transition costs		2,059			198			5,592			711
Contingent consideration adjustments		—			(4,398	)		—			(8,036	)
Loss on extinguishment of debt and other related costs		—			—			25,411			—
Other		390			321			2,960			547
2011 Transactions related adjustments:
Costs and fees		2,237			5,689			6,899			6,024
Acquisition accounting adjustments		937			—			4,370			—
Strategic initiatives costs		—			—			2,709			—
Accretion expense		2,758			—			15,104			—
EBITDA Adjustments		12,959			9,384			71,277			21,093
Adjusted EBITDA	$	79,180		$	76,661		$	237,720		$	220,200