NASHVILLE, Tenn., Nov. 6, 2015 /PRNewswire/ -- Emdeon Inc., a leading provider of software and analytics, network solutions and technology-enabled services that optimize communications, payments and actionable insights by leveraging its intelligent healthcare platform, today announced financial results for the third quarter and nine months ended September 30, 2015, as summarized below:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(In millions) | 2015 | 2014 | % Change | 2015 | 2014 | % Change | ||||||
Solutions Revenue (exclusive of postage) | $287.9 | $255.0 | 12.9% | $810.2 | $740.2 | 9.4% | ||||||
Net Income (Loss) | ($32.9) | ($13.0) | -153.1% | ($30.7) | ($75.5) | 59.3% | ||||||
Adjusted EBITDA | $101.8 | $94.1 | 8.2% | $287.2 | $262.7 | 9.3% | ||||||
Highlights include:
- In August, closed the previously announced acquisition of Altegra Health.
- In August, shareholders contributed $166.1 million of equity and the Company borrowed an additional $395.0 million under incremental term loan facilities and issued $250.0 million of 6% senior notes due 2021 to fund the acquisition of Altegra Health.
- In September, announced plans to rebrand to Change Healthcare beginning in the fourth quarter of 2015. The Company accelerated amortization of its existing tradename asset and recognized approximately $31.5 million of amortization expense ($18.5 million net of tax) during the third quarter. Excluding the amortization of the existing trade name, net loss in the third quarter would have been approximately $14.4 million.
“We continue to make progress toward our strategic goals by improving existing capabilities and adding new solutions to better serve our customers,” commented Neil de Crescenzo, president and chief executive officer for Emdeon. “During the quarter, we successfully completed the previously announced acquisition of Altegra Health. This acquisition further expands the breadth and quality of our solutions by adding risk analytics and quality reporting capabilities, as well as enhancing our consumer engagement solutions. Additionally, we announced the plan to rebrand our company as Change Healthcare to better reflect our diverse capabilities and solutions as well as our integral position within the U.S. healthcare system.”
Solutions Revenue
Third quarter solutions revenue was $287.9 million, an increase of 12.9%, compared to $255.0 million for the same period in 2014. This increase in solutions revenue as compared to the prior year period was primarily due to recently acquired and developed solutions, including the Altegra Health acquisition, and continued volume gains in network solutions as a result of increases in the number of insured lives of customers from the ongoing expansion of Medicaid, Medicare Advantage and federal and state exchanges.
Year-to-date solutions revenue was $810.2 million, an increase of 9.4%, compared to $740.2 million for the same period in 2014.
Net Income/Loss
Third quarter net loss was $32.9 million compared to $13.0 million for the same period in 2014. Net loss was negatively impacted by the Company’s plan to rebrand as Change Healthcare beginning in the fourth quarter of 2015. The Company accelerated amortization of its existing tradename asset and recognized $31.5 million of amortization expense ($18.5 million net of taxes) during the three months ended September 30, 2015. Excluding the amortization of the existing trade name asset, net loss in the third quarter would have been approximately $14.4 million.
Year-to-date net loss was $30.7 million compared to $75.5 million for the same period in 2014.
Non-GAAP Adjusted EBITDA
Third quarter Non-GAAP Adjusted EBITDA increased 8.2% to $101.8 million, or 35.3% of solutions revenue, from $94.1 million, or 36.9% of solutions revenue, for the comparable period in 2014. This increase in Adjusted EBITDA compared to the prior year period is primarily due to business growth, including the impact of acquisitions. Non-GAAP Adjusted EBITDA decreased as a percentage of solutions revenue due to changes in revenue mix.
Year-to-date 2015 Non-GAAP Adjusted EBITDA increased 9.3% to $287.2 million, or 35.5% of solutions revenue, from $262.7 million, or 35.5% of solutions revenue, for the comparable period in 2014.
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.”
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