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): May 13, 2014

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 May 13, 2014, Emdeon Inc. (the “Company”) issued a press release announcing its results of operations for the first quarter ended March 31, 2014. 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 May 13, 2014

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: May 13, 2014	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 May 13, 2014

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Emdeon Reports First Quarter 2014 Results

• Revenue of $319.2 million for First Quarter 2014

• Adjusted EBITDA of $78.3 million for First Quarter 2014

NASHVILLE, Tenn. (May 13, 2014) – Emdeon Inc., a leading provider of healthcare revenue and payment cycle management and clinical information exchange solutions, today announced financial results for the first quarter ended March 31, 2014 as summarized below:

(In millions)	1Q 2014		1Q 2013		% Change
Revenue	$	319.2	$	299.4		6.6	%
Net Loss	$	3.0	$	13.5		77.8	%
Non-GAAP Adjusted EBITDA	$	78.3	$	76.0		3.0	%

“Looking back on another successful quarter, we are encouraged by our revenue growth over the prior year period and the significant traction our products and services are gaining in the market, especially in light of the negative impact on our business volumes caused by the weather in January and February,” said Neil de Crescenzo, president and chief executive officer for Emdeon. “We continue to see increasing positive momentum throughout our business in 2014 as evidenced by a greater than 30% increase in new sales during the first quarter as compared to the prior year period.”

First quarter revenue was $319.2 million, an increase of 6.6%, compared to $299.4 million for the same period in 2013. This increase in revenue was primarily due to business growth. Net loss for the first quarter of 2014 was $3.0 million compared to $13.5 million for the same period in 2013. This decrease in net loss compared to the corresponding prior year period was primarily due to the income tax effects of changes in our corporate structure effective in January 2014.

First quarter 2014 Non-GAAP Adjusted EBITDA increased 3.0% to $78.3 million, or 24.5% of revenue, from Non-GAAP Adjusted EBITDA of $76.0 million, or 25.4% of revenue, for the comparable period in 2013. This increase in Adjusted EBITDA as compared to the same period in 2013 is primarily due to business growth, partially offset by increased investments related to sales and other product development expenses.

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, pharmacies and patients in the U.S. healthcare system. Emdeon’s offerings integrate and automate key business and administrative functions of its payer, provider and pharmacy customers throughout the patient encounter. Through the use of Emdeon’s comprehensive suite of solutions, which are

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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 Annual Report filed on Form 10-K for the year ended December 31, 2013, as well as other reports filed by Emdeon 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

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Emdeon Inc.

Condensed Consolidated Statements of Operations

(unaudited and amounts in thousands)

	Three Months			Three Months
	Ended March 31,			Ended March 31,
	2014			2013
Revenue	$	319,207		$	299,359
Costs and expenses:
Cost of operations (exclusive of depreciation and amortization below)		194,133			183,424
Development and engineering		9,236			7,698
Sales, marketing, general and administrative		55,184			38,675
Depreciation and amortization		46,463			46,815
Accretion		(77	)		4,140
Operating income		14,268			18,607
Interest expense, net		36,563			41,415
Contingent consideration		1,960			—
Income (loss) before income tax provision (benefit)		(24,255	)		(22,808	)
Income tax provision (benefit)		(21,266	)		(9,357	)
Net income (loss)	$	(2,989	)	$	(13,451	)

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Emdeon Inc.

Condensed Consolidated Balance Sheets

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

	March 31,			December 31,
	2014			2013
ASSETS
Current assets:
Cash and cash equivalents	$	76,899		$	76,538
Accounts receivable, net of allowance for doubtful accounts of $4,011 and $3,856 at March 31, 2014 and December 31, 2013, respectively		215,198			214,247
Deferred income tax assets		14,371			6,317
Prepaid expenses and other current assets		29,635			27,019
Total current assets		336,103			324,121
Property and equipment, net		254,494			269,470
Goodwill		1,508,759			1,502,434
Intangible assets, net		1,610,658			1,632,688
Other assets, net		19,855			19,169
Total assets	$	3,729,869		$	3,747,882
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	6,889		$	8,367
Accrued expenses		135,578			131,149
Deferred revenues		10,416			10,881
Current portion of long-term debt		18,972			31,330
Total current liabilities		171,855			181,727
Long-term debt, excluding current portion		2,001,956			1,999,026
Deferred income tax liabilities		422,659			436,263
Tax receivable agreement obligations to related parties		150,419			150,496
Other long-term liabilities		13,751			11,824
Commitments and contingencies
Equity:
Common stock (par value, $.01), 100 shares authorized and outstanding at March 31, 2014 and December 31, 2013, respectively		—			—
Additional paid-in capital		1,143,244			1,139,375
Accumulated other comprehensive income (loss)		(1,540	)		(1,343	)
Accumulated deficit		(172,475	)		(169,486	)
Total equity		969,229			968,546
Total liabilities and equity	$	3,729,869		$	3,747,882

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Emdeon Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited and amounts in thousands)

	Three Months			Three Months
	Ended March 31,			Ended March 31,
	2014			2013
Operating activities
Net income (loss)	$	(2,989	)	$	(13,451	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		46,463			46,815
Accretion		(77	)		4,140
Equity compensation		1,892			1,775
Deferred income tax expense (benefit)		(22,132	)		(9,917	)
Amortization of debt discount and issuance costs		1,909			2,601
Contingent consideration		1,960			—
Impairment of property and equipment		3,067			—
Other		—			(34	)
Changes in operating assets and liabilities:
Accounts receivable		(950	)		(16,783	)
Prepaid expenses and other		(4,279	)		(971	)
Accounts payable		(984	)		6,922
Accrued expenses, deferred revenue and other liabilities		2,787			17,817
Tax receivable agreement obligations to related parties		—			(103	)
Net cash provided by (used in) operating activities		26,667			38,811
Investing activities
Purchases of property and equipment		(14,511	)		(13,551	)
Payments for acquisitions, net of cash acquired		(779	)		—
Net cash provided by (used in) investing activities		(15,290	)		(13,551	)
Financing activities
Debt principal payments		(7,669	)		(3,252	)
Repayment of deferred financing arrangements		(3,447	)		—
Capital contribution from Parent		1,977			—
Other		(1,877	)		(450	)
Net cash provided by (used in) financing activities		(11,016	)		(3,702	)
Net increase (decrease) in cash and cash equivalents		361			21,558
Cash and cash equivalents at beginning of period		76,538			31,763
Cash and cash equivalents at end of period	$	76,899		$	53,321

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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). 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 net interest expense, income tax provision (benefit) 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 may 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 operating performance.

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Emdeon Inc.

Reconciliation of GAAP Net Income to Adjusted EBITDA

(unaudited and amounts in thousands)

	Three Months			Three Months
	Ended March 31,			Ended March 31,
	2014			2013
Net income (loss)	$	(2,989	)	$	(13,451	)
Interest expense, net		36,563			41,415
Income tax provision (benefit)		(21,266	)		(9,357	)
Depreciation and amortization		46,463			46,815
EBITDA		58,771			65,422
EBITDA Adjustments:
Equity compensation		1,892			1,775
Acquisition accounting adjustments		252			274
Acquisition-related costs		1,407			497
Transaction-related costs and advisory fees		1,500			1,500
Strategic initiatives, duplicative and transition costs		5,094			1,159
Severance and retention costs		2,928			886
Accretion		(77	)		4,140
(Gain) loss on disposal of assets		3,067			(31	)
Contingent consideration		1,960			—
Other		1,511			422
EBITDA Adjustments		19,534			10,622
Adjusted EBITDA	$	78,305		$	76,044

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