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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Webmd Health Corp | NASDAQ:WBMD | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 66.48 | 66.49 | 66.50 | 0 | 00:00:00 |
NEW YORK, May 2, 2017 /PRNewswire/ -- WebMD Health Corp. (NASDAQ: WBMD), the leading source of health information, today announced financial results for the three months ended March 31, 2017.
"As expected, our first quarter results were below last year's reflecting a more challenging macro environment for many of our biopharma customers and disappointing sales in 2016 in our Health Services business," said Dr. Steven Zatz, CEO of WebMD. "We remain focused on restoring WebMD's growth by providing the highest-quality health content, guidance and tools for both consumers and healthcare professionals, as well as delivering superior results for our advertisers and value for our shareholders."
Financial Highlights
For the three months ended March 31, 2017:
Balance Sheet Highlights
As of March 31, 2017, WebMD had: approximately $1.034 billion in cash and investments; $1.06 billion in aggregate principal amount of convertible notes outstanding; and approximately 37.8 million shares of its common stock outstanding (including approximately 700 thousand unvested shares of restricted stock).
During the first quarter, WebMD did not repurchase any shares of its common stock under its stock repurchase program. As of March 31, 2017, approximately $45.6 million remained available for repurchases under WebMD's stock repurchase program. Under its stock repurchase program, WebMD may repurchase shares from time to time in the open market, through block trades or in private transactions, depending on market conditions and other factors.
Financial Guidance
Today, WebMD reaffirmed its guidance for 2017 that was previously provided on February 16, 2017.
For the full year ending December 31, 2017, WebMD continues to expect:
Dr. Zatz continued, "Our first quarter results were at the high end of our financial guidance provided in February and we are reaffirming our 2017 guidance today. We have considered the near term pressures facing many of our biopharma customers in our financial guidance; however, we believe a strong drug pipeline, the continued shift toward digital advertising and the increased consumerization of healthcare present longer-term growth opportunities for WebMD across all areas of our business."
For the second quarter of 2017, WebMD expects:
A schedule summarizing the Company's financial guidance is attached to this press release.
Analyst and Investor Conference Call
WebMD will hold a conference call with investors and analysts at 4:45 p.m. (Eastern) today. The call can be accessed at www.wbmd.com (in the Investor Relations section). A replay of the audio webcast will be available at the same web address.
About WebMD
WebMD Health Corp. (NASDAQ: WBMD) is the leading provider of health information services, serving consumers, physicians, healthcare professionals, employers, and health plans through our public and private online portals, mobile platforms and health-focused publications.
The WebMD Health Network includes WebMD.com, Medscape.com, MedicineNet.com, eMedicineHealth.com, RxList.com, OnHealth.com, Medscape Education (Medscape.org) and other WebMD owned sites and apps.
*****************************
All statements contained in this press release and the related analyst and investor conference call, other than statements of historical fact, are forward-looking statements, including those regarding: explorations of possible transactions and other strategic alternatives; guidance on our future financial results and other projections or measures of our future performance; market opportunities or momentum and our ability to capitalize on them; and the benefits expected from new or expected contracts with customers, from new or updated products or services and from other potential sources of additional revenue. These statements speak only as of the date of this press release, are based on our current plans and expectations, and 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: the nature and timing of any possible transaction or other strategic alternative or of any potential benefits from any such transaction or other alternative; market acceptance of our products and services; our relationships with customers and other factors affecting their use of our services and the timing of entry into and implementation of specific contracts with customers, including regulatory matters affecting their products and services; our ability to deploy new or updated services and to create new or enhanced revenue streams from those services; our ability to attract and retain qualified personnel; and changes in economic, political or regulatory conditions or other trends affecting the healthcare, Internet and information technology industries. Further information about these matters can be found in our Securities and Exchange Commission filings and this press release is intended to be read in conjunction with information contained in those filings. Except as required by applicable law or regulation, we do not undertake any obligation to update our forward-looking statements to reflect future events or circumstances.
*************************************
This press release, and the accompanying tables, include both financial measures in accordance with accounting principles generally accepted in the United States of America, or GAAP, as well as certain non-GAAP financial measures. The tables attached to this press release include reconciliations of these non-GAAP financial measures to GAAP financial measures. In addition, an "Explanation of Non-GAAP Financial Measures" is attached to this press release as Annex A.
*****************************
WebMD®, Medscape®, CME Circle®, Medpulse®, eMedicine®, MedicineNet®, theheart.org® and RxList® are among the trademarks of WebMD Health Corp. or its subsidiaries.
WEBMD HEALTH CORP. | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands, except per share data, unaudited) | |||||||
Three Months Ended |
|||||||
March 31, |
|||||||
2017 |
2016 |
||||||
Revenue |
$ 154,058 |
$ 158,553 |
|||||
Cost of operations |
63,501 |
62,513 |
|||||
Sales and marketing |
36,008 |
33,756 |
|||||
General and administrative |
22,619 |
23,756 |
|||||
Depreciation and amortization |
7,061 |
7,487 |
|||||
Interest income |
1,953 |
206 |
|||||
Interest expense |
7,066 |
5,100 |
|||||
Other expense |
262 |
- |
|||||
Income before income tax provision |
19,494 |
26,147 |
|||||
Income tax provision |
7,161 |
10,429 |
|||||
Net income |
$ 12,333 |
$ 15,718 |
|||||
Net income per common share: |
|||||||
Basic |
$ 0.33 |
$ 0.42 |
|||||
Diluted |
$ 0.30 |
$ 0.36 |
|||||
Weighted-average shares outstanding used in |
|||||||
computing income per common share: |
|||||||
Basic |
36,866 |
37,267 |
|||||
Diluted |
49,828 |
52,335 |
WEBMD HEALTH CORP. | |||||||
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION | |||||||
(In thousands, unaudited) | |||||||
Three Months Ended |
|||||||
March 31, |
|||||||
2017 |
2016 |
||||||
Revenue |
|||||||
Advertising and sponsorship |
|||||||
Biopharma and medical device |
$ 89,480 |
$ 88,685 |
|||||
OTC, CPG and other |
31,998 |
33,754 |
|||||
121,478 |
122,439 |
||||||
Health services |
24,539 |
28,255 |
|||||
Information services |
8,041 |
7,859 |
|||||
$ 154,058 |
$ 158,553 |
||||||
Net income |
$ 12,333 |
$ 15,718 |
|||||
Interest, taxes, non-cash and other items (a) |
|||||||
Interest income |
(1,953) |
(206) |
|||||
Interest expense |
7,066 |
5,100 |
|||||
Income tax provision |
7,161 |
10,429 |
|||||
Depreciation and amortization |
7,061 |
7,487 |
|||||
Non-cash stock-based compensation |
9,023 |
8,528 |
|||||
Other expense |
262 |
- |
|||||
Earnings before interest, taxes, non-cash |
|||||||
and other items ("Adjusted EBITDA") (b) |
$ 40,953 |
$ 47,056 |
|||||
(a) Reconciliation of net income to Adjusted EBITDA. |
|||||||
(b) See Annex A-Explanation of Non-GAAP Financial Measures. |
WEBMD HEALTH CORP. | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(In thousands) | |||||
March 31, |
December 31, | ||||
2017 |
2016 | ||||
(unaudited) |
|||||
Assets |
|||||
Cash and cash equivalents |
$ 88,567 |
$ 492,424 | |||
Accounts receivable, net |
158,228 |
179,454 | |||
Investments |
945,885 |
498,500 | |||
Prepaid expenses and other current assets |
21,381 |
15,294 | |||
Total current assets |
1,214,061 |
1,185,672 | |||
Property and equipment, net |
81,870 |
83,296 | |||
Goodwill |
202,980 |
202,980 | |||
Intangible assets, net |
7,124 |
7,774 | |||
Deferred tax assets, net |
212,690 |
14,544 | |||
Other assets |
7,382 |
6,920 | |||
Total Assets |
$ 1,726,107 |
$ 1,501,186 | |||
Liabilities and Stockholders' Equity |
|||||
Accrued expenses |
$ 56,082 |
$ 78,597 | |||
Deferred revenue |
123,411 |
105,310 | |||
2.50% convertible notes due 2018, net |
398,512 |
- | |||
Total current liabilities |
578,005 |
183,907 | |||
2.50% convertible notes due 2018, net |
- |
398,066 | |||
1.50% convertible notes due 2020, net |
295,724 |
295,432 | |||
2.625% convertible notes due 2023, net |
351,531 |
351,190 | |||
Other long-term liabilities |
28,067 |
28,731 | |||
Stockholders' equity |
472,780 |
243,860 | |||
Total Liabilities and Stockholders' Equity |
$ 1,726,107 |
$ 1,501,186 |
WEBMD HEALTH CORP. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands, unaudited) | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2017 |
2016 | |||||||
Cash flows from operating activities: |
||||||||
Net income |
$ 12,333 |
$ 15,718 | ||||||
Adjustments to reconcile net income to net cash provided by |
||||||||
operating activities: |
||||||||
Depreciation and amortization |
7,061 |
7,487 | ||||||
Non-cash interest, net |
1,079 |
897 | ||||||
Non-cash stock-based compensation |
9,023 |
8,528 | ||||||
Deferred income taxes |
6,621 |
9,074 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
21,226 |
(3,070) | ||||||
Prepaid expenses and other, net |
(7,850) |
1,731 | ||||||
Accrued expenses and other long-term liabilities |
(22,722) |
(20,147) | ||||||
Deferred revenue |
18,101 |
13,598 | ||||||
Net cash provided by operating activities |
44,872 |
33,816 | ||||||
Cash flows from investing activities: |
||||||||
Purchases of property and equipment |
(5,427) |
(9,229) | ||||||
Purchases of investments |
(446,042) |
- | ||||||
Partial redemption of cost-method investment |
- |
526 | ||||||
Net cash used in investing activities |
(451,469) |
(8,703) | ||||||
Cash flows from financing activities: |
||||||||
Proceeds from exercise of stock options |
6,604 |
30,165 | ||||||
Cash used for withholding taxes due on stock-based awards |
(3,864) |
(890) | ||||||
Maturity of convertible notes |
- |
(102,682) | ||||||
Net cash provided by (used in) financing activities |
2,740 |
(73,407) | ||||||
Net decrease in cash and cash equivalents |
(403,857) |
(48,294) | ||||||
Cash and cash equivalents at beginning of period |
492,424 |
641,165 | ||||||
Cash and cash equivalents at end of period |
$ 88,567 |
$ 592,871 |
WEBMD HEALTH CORP. | ||||||
NET INCOME PER COMMON SHARE | ||||||
(In thousands, except per share data, unaudited) | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2017 |
2016 | |||||
Numerator: |
||||||
Net income – Basic |
$ 12,333 |
$ 15,718 | ||||
Interest expense on 1.50% convertible notes, net of tax |
878 |
878 | ||||
Interest expense on 2.50% convertible notes, net of tax |
1,827 |
1,827 | ||||
Interest expense on 2.25% convertible notes, net of tax |
- |
457 | ||||
Net income – Diluted |
$ 15,038 |
$ 18,880 | ||||
Denominator: |
||||||
Weighted-average shares – Basic |
36,866 |
37,267 | ||||
Stock options and restricted stock |
1,007 |
1,755 | ||||
1.50% convertible notes |
5,721 |
5,694 | ||||
2.50% convertible notes |
6,234 |
6,205 | ||||
2.25% convertible notes |
- |
1,414 | ||||
Adjusted weighted-average shares after assumed conversions – Diluted |
49,828 |
52,335 | ||||
Net income per common share: |
||||||
Basic |
$ 0.33 |
$ 0.42 | ||||
Diluted |
$ 0.30 |
$ 0.36 |
WEBMD HEALTH CORP. | |||||||||
FINANCIAL GUIDANCE FOR THE YEAR ENDING DECEMBER 31, 2017 | |||||||||
(In millions, except per share amounts) | |||||||||
Guidance Range |
|||||||||
Revenue |
|||||||||
Advertising and sponsorship |
|||||||||
Biopharma and medical device |
$ 437.0 |
$ 450.0 |
|||||||
OTC, CPG and other |
143.0 |
148.0 |
|||||||
580.0 |
598.0 |
||||||||
Health services |
99.0 |
100.0 |
|||||||
Information services |
31.0 |
32.0 |
|||||||
$ 710.0 |
$ 730.0 |
||||||||
Net income |
$ 89.0 |
$ 98.0 |
|||||||
Interest, taxes, non-cash and other items (a) |
|||||||||
Interest expense, net |
21.0 |
21.0 |
|||||||
Income tax provision (d) |
53.7 |
59.7 |
|||||||
Depreciation and amortization |
32.0 |
30.0 |
|||||||
Non-cash stock-based compensation |
37.0 |
34.0 |
|||||||
Other expense |
0.3 |
0.3 |
|||||||
Earnings before interest, taxes, non-cash and other items ("Adjusted EBITDA") (b) |
$ 233.0 |
$ 243.0 |
|||||||
Income per share: |
|||||||||
Basic |
$ 2.41 |
$ 2.61 |
|||||||
Diluted (c) |
$ 1.97 |
$ 2.10 |
|||||||
Calculation of income per share: |
|||||||||
Net income (numerator for basic income per share) |
$ 89.0 |
$ 98.0 |
|||||||
Add-back of interest expense, net of tax, related to: |
|||||||||
1.50% convertible notes |
3.5 |
3.5 |
|||||||
2.50% convertible notes |
7.3 |
7.3 |
|||||||
2.625% convertible notes |
6.7 |
6.7 |
|||||||
Numerator for diluted income per share |
$ 106.5 |
$ 115.5 |
|||||||
Weighted average shares outstanding (denominator for basic income per share) |
37.0 |
37.5 |
|||||||
Stock options and restricted stock |
1.0 |
1.5 |
|||||||
Weighted average shares issuable upon conversion of: |
|||||||||
1.50% convertible notes |
5.7 |
5.7 |
|||||||
2.50% convertible notes |
6.2 |
6.2 |
|||||||
2.625% convertible notes |
4.2 |
4.2 |
|||||||
Denominator for diluted income per share |
54.1 |
55.1 |
|||||||
(a) Reconciliation of net income to Adjusted EBITDA. |
|||||||||
(b) See Annex A - Explanation of Non-GAAP Financial Measures. |
|||||||||
(c) See Supplemental 2017 Guidance for Income Per Share Calculation below. |
|||||||||
(d) The income tax provision included in the 2017 financial guidance excludes any adjustments for excess tax benefits, |
|||||||||
except for actual activity for the year-to-date period ended March 31, 2017, because such adjustments will be |
|||||||||
based on actual exercise or settlement activity of stock-based awards in future periods, |
|||||||||
Additional information regarding forecast for the quarter ending June 30, 2017: |
|||||||||
- Revenue is forecasted to be between $170 million to $173 million. |
|||||||||
- Revenue distribution is forecasted to be: approximately 62.5% from Advertising and sponsorship - Biopharma and |
|||||||||
- Net income is forecasted to be between $16.9 million to $18.5 million. |
|||||||||
- Adjusted EBITDA is forecasted to be between $49 million to $51 million. |
|||||||||
- In calculating Adjusted EBITDA, the Company excluded the following expense items that are included in the calculation of Net Income: interest expense, net of $5.2 million; depreciation and amortization of $7.6 to $7.4 million; non-cash stock-based compensation of $9.0 to $8.6 million; and income tax provision of $10.3 to $11.3 million. See Annex A - Explanation of Non-GAAP Financial Measures. |
|||||||||
The above guidance does not include the impact if any, of future deployment of capital for items such as share repurchases, convertible note repurchases or acquisitions, gains or losses from discontinued operations, other non-recurring, one-time or unusual items or the impact, if any, of the Board of Directors' review of potential strategic alternatives. | |||||||||
WEBMD HEALTH CORP. | ||||||||||||
SUPPLEMENTAL 2017 GUIDANCE FOR INCOME PER SHARE CALCULATION | ||||||||||||
Based on the Company's Financial Guidance for the Year Ending December 31, 2017, the 1.50% convertible notes, the 2.50% convertible notes and the 2.625% convertible notes are expected to be dilutive to net income on both the low end and high end of the full year guidance range. Additionally, the 1.50% convertible notes, the 2.50% convertible notes and the 2.625% convertible notes may be dilutive in certain future quarters, depending on the amount of net income for such quarter. The following table contains the approximate level of net income for an individual future quarter and for the full year 2017 at which each of the series of convertible notes would become dilutive to income per share. To the extent this net income is exceeded for any such period, the table also includes the amounts by which the numerator and denominator should each be adjusted for purposes of the diluted income per share calculation. |
||||||||||||
Quarterly Amounts |
Annual Amounts |
|||||||||||
All amounts in millions |
1.50% |
2.50% |
2.625% |
1.50% |
2.50% |
2.625% |
||||||
Approximate net income at which |
$ 5.8 |
$ 11.9 |
$ 17.5 |
$ 23.3 |
$ 47.7 |
$ 69.8 |
||||||
Interest expense, net of tax to add-back to |
$ 0.9 |
$ 1.8 |
$ 1.7 |
$ 3.5 |
$ 7.3 |
$ 6.7 |
||||||
Additional shares to include in weighted- |
5.7 |
6.2 |
4.2 |
5.7 |
6.2 |
4.2 |
||||||
(a) These net income amounts assume a weighted-average diluted share count of 38.0 million shares attributable to common shares, stock options | ||||||||||||
and restricted stock (prior to the effect of convertible notes) and are subject to change as such weighted-average share count changes for a given quarter or annual period. |
ANNEX A
Explanation of Non-GAAP Financial Measures
The accompanying WebMD Health Corp. press release and attachments include 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 represent earnings before interest, taxes, non-cash and other items (which we refer to as "Adjusted EBITDA"). Adjusted EBITDA should be viewed as supplemental to, and not as an alternative for net income or loss calculated in accordance with GAAP (referred to below as "net income"). The attachments to the press release include reconciliations of non-GAAP financial measures to GAAP financial measures.
Adjusted EBITDA is used by our management as an additional measure of our company's performance for purposes of business decision-making, including developing budgets, managing expenditures, and evaluating potential acquisitions or divestitures. Period-to-period comparisons of Adjusted EBITDA help our management identify additional trends in our company's financial results that may not be shown solely by period-to-period comparisons of net income. In addition, we may use Adjusted EBITDA in the incentive compensation programs applicable to some of our employees in order to evaluate our company's performance. Our management recognizes that Adjusted EBITDA has inherent limitations because of the excluded items, particularly those items that are recurring in nature. In order to compensate for those limitations, management also reviews the specific items that are excluded from Adjusted EBITDA, but included in net income, as well as trends in those items. The amounts of those items are set forth, for the applicable periods, in the reconciliations of net income to Adjusted EBITDA that accompany our press releases and disclosure documents containing non-GAAP financial measures, including the reconciliations contained in the accompanying press release attachments.
We believe that the presentation of Adjusted EBITDA is useful to investors in their analysis of our results for reasons similar to the reasons why our management finds it useful and because it helps facilitate investor understanding of decisions made by management in light of the performance metrics used in making those decisions. In addition, as more fully described below, we believe that providing Adjusted EBITDA, together with a reconciliation of net income to Adjusted EBITDA, helps investors make comparisons between our company and other companies that may have different capital structures, different effective income tax rates and tax attributes, different capitalized asset values and/or different forms of employee compensation. However, Adjusted EBITDA is intended to provide a supplemental way of comparing our company with other public companies and is not intended as a substitute for comparisons based on net income. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable SEC rules.
The following is an explanation of the items excluded by us from Adjusted EBITDA but included in net income:
Three Months Ended |
|||||||||||
March 31, |
|||||||||||
2017 |
2016 |
||||||||||
Non-cash stock-based compensation included in: |
|||||||||||
Cost of operations |
$ 1,576 |
$ 1,290 |
|||||||||
Sales and marketing |
$ 1,777 |
$ 1,562 |
|||||||||
General and administrative |
$ 5,670 |
$ 5,676 |
|||||||||
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2017 |
2016 | |||||||||||
Non-cash interest expense |
||||||||||||
2.25% Convertible Notes |
$ |
— |
$ |
159 | ||||||||
2.50% Convertible Notes |
$ |
446 |
$ |
446 | ||||||||
1.50% Convertible Notes |
$ |
292 |
$ |
292 | ||||||||
2.625% Convertible Notes |
$ |
341 |
$ |
— | ||||||||
Cash interest expense |
||||||||||||
2.25% Convertible Notes |
$ |
— |
$ |
577 | ||||||||
2.50% Convertible Notes |
$ |
2,500 |
$ |
2,500 | ||||||||
1.50% Convertible Notes |
$ |
1,125 |
$ |
1,125 | ||||||||
2.625% Convertible Notes |
$ |
2,362 |
$ |
— | ||||||||
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/webmd-reports-first-quarter-financial-results-and-reaffirms-2017-guidance-300449920.html
SOURCE WebMD Health Corp.
Copyright 2017 PR Newswire
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