Attached files
| file | filename |
|---|---|
| 8-K - 8-K - WebMD Health Corp. | d878126d8k.htm |
| EX-99.1 - EX-99.1 - WebMD Health Corp. | d878126dex991.htm |
| EX-99.4 - EX-99.4 - WebMD Health Corp. | d878126dex994.htm |
| EX-99.3 - EX-99.3 - WebMD Health Corp. | d878126dex993.htm |
Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenue |
$ | 162,727 | $ | 146,277 | $ | 580,449 | $ | 515,293 | ||||||||
| Cost of operations |
60,676 | 57,763 | 224,094 | 209,740 | ||||||||||||
| Sales and marketing |
36,978 | 33,081 | 136,160 | 127,997 | ||||||||||||
| General and administrative |
24,756 | 22,715 | 94,119 | 93,220 | ||||||||||||
| Depreciation and amortization |
7,774 | 6,566 | 29,811 | 26,606 | ||||||||||||
| Interest income |
18 | 22 | 69 | 76 | ||||||||||||
| Interest expense |
6,171 | 5,329 | 24,686 | 22,826 | ||||||||||||
| Loss on convertible notes |
— | 1,575 | — | 4,871 | ||||||||||||
| Other expense |
— | — | — | 1,353 | ||||||||||||
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| Income from continuing operations before income tax provision |
26,390 | 19,270 | 71,648 | 28,756 | ||||||||||||
| Income tax provision |
11,236 | 8,458 | 30,707 | 13,640 | ||||||||||||
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| Income from continuing operations |
15,154 | 10,812 | 40,941 | 15,116 | ||||||||||||
| Income from discontinued operations, net of tax |
1,122 | — | 1,122 | — | ||||||||||||
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| Net income |
$ | 16,276 | $ | 10,812 | $ | 42,063 | $ | 15,116 | ||||||||
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| Basic income per common share: |
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| Income from continuing operations |
$ | 0.42 | $ | 0.27 | $ | 1.08 | $ | 0.32 | ||||||||
| Income from discontinued operations |
0.03 | — | 0.03 | — | ||||||||||||
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| Net income |
$ | 0.45 | $ | 0.27 | $ | 1.11 | $ | 0.32 | ||||||||
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| Diluted income per common share: |
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| Income from continuing operations |
$ | 0.36 | $ | 0.25 | $ | 0.97 | $ | 0.31 | ||||||||
| Income from discontinued operations |
0.02 | — | 0.03 | — | ||||||||||||
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| Net income |
$ | 0.38 | $ | 0.25 | $ | 1.00 | $ | 0.31 | ||||||||
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| Weighted-average shares outstanding used in computing income per common share: |
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| Basic |
36,427 | 40,457 | 37,869 | 46,830 | ||||||||||||
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| Diluted |
53,082 | 44,872 | 45,614 | 48,398 | ||||||||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Revenue (a) |
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| Advertising and sponsorship |
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| Biopharma and medical device |
$ | 93,742 | $ | 86,544 | $ | 329,329 | $ | 304,018 | ||||||||
| OTC, CPG and other |
33,294 | 33,640 | 124,636 | 113,009 | ||||||||||||
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| 127,036 | 120,184 | 453,965 | 417,027 | |||||||||||||
| Private portal services |
28,570 | 21,924 | 103,182 | 82,111 | ||||||||||||
| Information services |
7,121 | 4,169 | 23,302 | 16,155 | ||||||||||||
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| $ | 162,727 | $ | 146,277 | $ | 580,449 | $ | 515,293 | |||||||||
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| Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (b) |
$ | 48,138 | $ | 40,636 | $ | 158,622 | $ | 122,886 | ||||||||
| Interest, taxes, non-cash and other items (c) |
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| Interest income |
18 | 22 | 69 | 76 | ||||||||||||
| Interest expense |
(6,171 | ) | (5,329 | ) | (24,686 | ) | (22,826 | ) | ||||||||
| Income tax provision |
(11,236 | ) | (8,458 | ) | (30,707 | ) | (13,640 | ) | ||||||||
| Depreciation and amortization |
(7,774 | ) | (6,566 | ) | (29,811 | ) | (26,606 | ) | ||||||||
| Non-cash stock-based compensation |
(7,821 | ) | (7,918 | ) | (32,546 | ) | (38,550 | ) | ||||||||
| Loss on convertible notes |
— | (1,575 | ) | — | (4,871 | ) | ||||||||||
| Other expense |
— | — | — | (1,353 | ) | |||||||||||
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| Income from continuing operations |
15,154 | 10,812 | 40,941 | 15,116 | ||||||||||||
| Income from discontinued operations, net of tax |
1,122 | — | 1,122 | — | ||||||||||||
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| Net income |
$ | 16,276 | $ | 10,812 | $ | 42,063 | $ | 15,116 | ||||||||
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| (a) | Revenue consists of the following four groups: |
| • | Advertising and Sponsorship – Biopharma and Medical Device consists of advertising and sponsorship revenue from pharmaceutical, biotechnology and medical device clients relating to ethical pharmaceutical products or other regulated devices or products or for sponsoring educational programs; |
| • | Advertising and Sponsorship – OTC, CPG and Other consists of advertising and sponsorship revenue relating to non-Rx or over-the-counter medications and other healthcare products, food and beverages, beauty products and other consumer products, as well as revenue from clients such as retailers, pharmacies, hospitals, health insurance companies and government agencies; |
| • | Private Portal Services consists of revenue from employers and health plans for subscriptions to the Company’s private portals solution and related services, including health coaching and condition management services; and |
| • | Information Services consists of revenue from the sale of stand-alone information and data products. |
| (b) | See Annex A-Explanation of Non-GAAP Financial Measures. |
| (c) | Reconciliation of Adjusted EBITDA to net income. |
WEBMD HEALTH CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
| December 31, | ||||||||
| 2014 | 2013 | |||||||
| Assets |
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| Cash and cash equivalents |
$ | 706,776 | $ | 824,880 | ||||
| Accounts receivable, net |
136,806 | 124,232 | ||||||
| Prepaid expenses and other current assets |
13,877 | 13,243 | ||||||
| Deferred tax assets |
18,147 | 13,620 | ||||||
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| Total current assets |
875,606 | 975,975 | ||||||
| Property and equipment, net |
59,573 | 64,884 | ||||||
| Goodwill |
202,980 | 202,980 | ||||||
| Intangible assets, net |
14,215 | 13,834 | ||||||
| Deferred tax assets |
18,947 | 38,802 | ||||||
| Other assets |
26,236 | 29,153 | ||||||
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| Total Assets |
$ | 1,197,557 | $ | 1,325,628 | ||||
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| Liabilities and Stockholders’ Equity |
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| Accrued expenses |
$ | 72,658 | $ | 73,739 | ||||
| Deferred revenue |
89,785 | 85,148 | ||||||
| Liabilities of discontinued operations |
— | 1,506 | ||||||
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| Total current liabilities |
162,443 | 160,393 | ||||||
| 2.25% convertible notes due 2016 |
252,232 | 252,232 | ||||||
| 2.50% convertible notes due 2018 |
400,000 | 400,000 | ||||||
| 1.50% convertible notes due 2020 |
300,000 | 300,000 | ||||||
| Other long-term liabilities |
21,293 | 22,103 | ||||||
| Stockholders’ equity |
61,589 | 190,900 | ||||||
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| Total Liabilities and Stockholders’ Equity |
$ | 1,197,557 | $ | 1,325,628 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| Years Ended December 31, |
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| 2014 | 2013 | |||||||
| Cash flows from operating activities: |
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| Net income |
$ | 42,063 | $ | 15,116 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Income from discontinued operations, net of tax |
(1,122 | ) | — | |||||
| Depreciation and amortization |
29,811 | 26,606 | ||||||
| Non-cash interest, net |
4,511 | 4,192 | ||||||
| Non-cash stock-based compensation |
32,546 | 38,550 | ||||||
| Deferred income taxes |
14,717 | 13,070 | ||||||
| Loss on convertible notes |
— | 4,871 | ||||||
| Changes in operating assets and liabilities: |
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| Accounts receivable |
(12,574 | ) | (17,610 | ) | ||||
| Prepaid expenses and other, net |
(673 | ) | 266 | |||||
| Accrued expenses and other long-term liabilities |
(380 | ) | 8,061 | |||||
| Deferred revenue |
4,637 | (7,028 | ) | |||||
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| Net cash provided by continuing operations |
113,536 | 86,094 | ||||||
| Net cash used in discontinued operations |
(384 | ) | — | |||||
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| Net cash provided by operating activities |
113,152 | 86,094 | ||||||
| Cash flows from investing activities: |
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| Cash paid in business combination |
(3,182 | ) | — | |||||
| Purchases of property and equipment |
(23,194 | ) | (22,341 | ) | ||||
| Proceeds from sale of property and equipment |
— | 1,381 | ||||||
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| Net cash used in investing activities |
(26,376 | ) | (20,960 | ) | ||||
| Cash flows from financing activities: |
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| Proceeds from exercise of stock options |
40,602 | 29,724 | ||||||
| Cash used for withholding taxes due on stock-based awards |
(33,385 | ) | (12,526 | ) | ||||
| Net proceeds from issuance of convertible notes |
— | 291,823 | ||||||
| Repurchase of convertible notes |
— | (150,354 | ) | |||||
| Repurchase of shares through tender offers |
(97,588 | ) | (170,516 | ) | ||||
| Purchases of treasury stock |
(128,748 | ) | (220,298 | ) | ||||
| Excess tax benefit on stock-based awards |
14,239 | 58 | ||||||
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| Net cash used in financing activities |
(204,880 | ) | (232,089 | ) | ||||
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| Net decrease in cash and cash equivalents |
(118,104 | ) | (166,955 | ) | ||||
| Cash and cash equivalents at beginning of period |
824,880 | 991,835 | ||||||
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| Cash and cash equivalents at end of period |
$ | 706,776 | $ | 824,880 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
| Three Months Ended December 31, |
Years Ended December 31, |
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| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Numerator: |
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| Income from continuing operations — Basic |
$ | 15,154 | $ | 10,812 | $ | 40,941 | $ | 15,116 | ||||||||
| Interest expense on 1.50% convertible notes, net of tax |
864 | 326 | 3,456 | — | ||||||||||||
| Interest expense on 2.50% convertible notes, net of tax |
1,797 | — | — | — | ||||||||||||
| Interest expense on 2.25% convertible notes, net of tax |
1,103 | — | — | — | ||||||||||||
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| Income from continuing operations — Diluted |
$ | 18,918 | $ | 11,138 | $ | 44,397 | $ | 15,116 | ||||||||
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| Income from discontinued operations, net of tax — Basic and Diluted |
$ | 1,122 | $ | — | $ | 1,122 | $ | — | ||||||||
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| Denominator: |
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| Weighted-average shares — Basic |
36,427 | 40,457 | 37,869 | 46,830 | ||||||||||||
| Stock options and restricted stock |
1,245 | 2,192 | 2,060 | 1,568 | ||||||||||||
| 1.50% convertible notes |
5,694 | 2,223 | 5,685 | — | ||||||||||||
| 2.50% convertible notes |
6,205 | — | — | — | ||||||||||||
| 2.25% convertible notes |
3,511 | — | — | — | ||||||||||||
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| Adjusted weighted-average shares after assumed conversions — Diluted |
53,082 | 44,872 | 45,614 | 48,398 | ||||||||||||
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| Basic income per common share: |
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| Income from continuing operations |
$ | 0.42 | $ | 0.27 | $ | 1.08 | $ | 0.32 | ||||||||
| Income from discontinued operations |
0.03 | — | 0.03 | — | ||||||||||||
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| Net income |
$ | 0.45 | $ | 0.27 | $ | 1.11 | $ | 0.32 | ||||||||
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| Diluted income per common share: |
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| Income from continuing operations |
$ | 0.36 | $ | 0.25 | $ | 0.97 | $ | 0.31 | ||||||||
| Income from discontinued operations |
0.02 | — | 0.03 | — | ||||||||||||
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| Net income |
$ | 0.38 | $ | 0.25 | $ | 1.00 | $ | 0.31 | ||||||||
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WEBMD HEALTH CORP.
2014 REVENUE
(In thousands, unaudited)
| Three Months Ended | Year Ended December 31, 2014 |
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| March 31, 2014 |
June 30, 2014 |
September 30, 2014 |
December 31, 2014 |
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| Revenue |
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| Advertising and sponsorship |
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| Biopharma and medical device |
$ | 68,488 | $ | 81,981 | $ | 85,118 | $ | 93,742 | $ | 329,329 | ||||||||||
| OTC, CPG and other |
34,469 | 29,503 | 27,370 | 33,294 | 124,636 | |||||||||||||||
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| 102,957 | 111,484 | 112,488 | 127,036 | 453,965 | ||||||||||||||||
| Private portal services |
24,629 | 24,188 | 25,795 | 28,570 | 103,182 | |||||||||||||||
| Information services |
6,246 | 4,728 | 5,207 | 7,121 | 23,302 | |||||||||||||||
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| $ | 133,832 | $ | 140,400 | $ | 143,490 | $ | 162,727 | $ | 580,449 | |||||||||||
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| • | See Consolidated Supplemental Financial Information for descriptions of the above revenue groups. |