Healtheon/WebMD Announces 1999 Third Quarter Financial Results
Mergers With WebMD, MEDE America and Medcast Completed
ATLANTA, Nov. 12 /PRNewswire/ -- Healtheon/WebMD Corporation
(Nasdaq: HLTH) today announced the results of Healtheon Corporation for the
third quarter of 1999.
Financial Highlights
Revenues for the third quarter ended September 30, 1999 grew 128% to
$28.7 million, compared to revenue of $12.6 million for the year ago quarter.
The sequential growth in revenue was 26% higher than the $22.7 million
reported for the second quarter of 1999.
The company reported a net loss per share of $(0.24) for the three months
ended September 30, 1999, compared to a net loss of $(0.26) for the same
period a year ago. The operating loss before depreciation and amortization
(EBITDA) declined to $(12.4) million in the third quarter of 1999 from
$(13.3) million in the second quarter of 1999.
For the nine months ended September 30, 1999, the company reported revenue
of $68.9 million, 107% higher than the $33.2 million reported for the year ago
nine month period. The net loss per share was $(0.79) for the first nine
months of 1999, compared to a net loss per share of $(1.24) for the first nine
months of 1998.
Mike Long, Chairman and COO of Healtheon/WebMD, commented, "We continue to
execute on our business plan of securing new customers and strategic
partnerships that will help drive Healtheon/WebMD's e-health transaction
volumes, expand the company's base of physician users and enhance the breadth
and functionality of our offerings. This rapid growth demonstrates the
continued and growing acceptance of our Internet-based suite of solutions to
connect all participants in the $1.4 trillion U.S. healthcare industry."
Merger Completion and Integration
As announced yesterday, Healtheon Corporation (Nasdaq: HLTH), WebMD, Inc.,
MEDE America Corporation and Medcast (Greenberg News Networks, Inc.) completed
the merger of the four companies to form Healtheon/WebMD. The mergers follow
the approval by the stockholders of Healtheon, WebMD, MEDE America and Medcast
at their respective stockholder meetings.
The combined company brings together the Internet-based information and
transaction platform of Healtheon, the brand awareness, marketing strategy and
strategic relationships of WebMD, the connectivity to over 650 payers of MEDE
America and the daily medical news content of Medcast. Currently,
Healtheon/WebMD has over 70 health systems and is actively deploying services
to 280,000 physicians, of which 60,000 are current subscribers. The company
enrolled approximately 33,000 physicians in the third quarter and an
additional 15,000 in October. Additionally, Healtheon/WebMD is processing
transactions with 11,000 dentists, 1,100 hospitals and 46,000 pharmacies.
In the third quarter of 1999, page views increased 230% to 47.8 million
from 14.5 million in the second quarter of 1999. For the month of October,
page views exceeded 26 million, unique users totaled over 2.7 million and
presently, over 510,000 consumers are enrolled in one of its support
communities.
As the mergers did not close until after the end of the third quarter, the
reported results are those of Healtheon Corporation only. On a proforma
combined basis, the company would have reported revenues for the quarter of
almost $50 million.
As of closing, Healtheon/WebMD has over 1,800 employees and over
$300 million in cash.
"We are very pleased to have completed the merger between Healtheon,
WebMD, MEDE America and Medcast, which positions Healtheon/WebMD as the first
end-to-end Internet-enabled business model serving the healthcare industry,"
commented Jeff Arnold, CEO of Healtheon/WebMD. "We have already made
substantial progress in integrating the four organizations into one seamless
company, and this is best epitomized by the swift development of
Healtheon/WebMD's new portals for consumers and healthcare professionals."
Healtheon/WebMD's new portals are expected to launch next week and can be
accessed at www.webmd.com. The portals were designed by WebMD and engineered
by Healtheon, with connectivity to large-volume institutions provided through
MEDE America and content driven by Medcast.
The new company combines the strengths of all four companies into one
united offering and will connect the key players in healthcare through five
key methods:
-- intensive branding
-- superior connectivity and technology
-- strategic partnerships
-- comprehensive content
-- extensive distribution
Branding
Healtheon/WebMD will deliver its message globally and locally via a
multi-channel approach encompassing television, print, radio, Internet
alliances and direct marketing. Evidencing continued enhancement of the
brand, the company recently created the "Healthier Holidays" program,
launching in November 1999, with strategic partner HEALTHSOUTH, a national
healthcare provider with over 2,200 facilities throughout the U.S. The
program incorporated additional partners, Global Sports Inc. and The Sports
Authority, to create a comprehensive sports medicine and fitness e-commerce
channel.
Connectivity
Healtheon/WebMD is working to connect, via the Internet, all of the
decision-makers involved in the delivery of healthcare -- from the
patient/consumer to the physician to healthcare institutions.
The Company is currently deploying services to 280,000 physicians,
60,000 of whom are subscribers, and 11,000 dentists. The Company has received
11 million physician subscriber months from Microsoft and DuPont with most of
the subscribing physicians having been added since June 30. The Company is
processing transactions with 1,100 hospitals, 46,000 pharmacies, 650 payers
and 5 labs and is generating an annual run rate of over 500 million
transactions per year.
Partnerships
Through its existing strategic partnerships with key players such as
Microsoft, Intel, CNN, UnitedHealth Group, Quest Diagnostics and DuPont,
Healtheon/WebMD has created a platform to establish itself as the leader in
Internet healthcare and information. The company continues to sign key
partnership agreements. During the third quarter, Healtheon/WebMD announced a
long-term agreement with Intel Corporation, in which the Company will use the
physician credentials being developed and provided by the American Medical
Association (AMA) and Intel's Internet Authentication Services, to provide a
highly secure and trusted environment to thousands of physicians and
healthcare providers who use the Healtheon/WebMD site. This partnership will
enable more secure, trusted access and transactions for both physicians and
consumers.
Content
Through combined content from Healtheon, WebMD and Medcast, the company
provides exclusive content to serve the personal, professional and business
needs of consumers and physicians. A newly integrated and interactive
consumer web site is expected to launch next week under the WebMD URL.
Distribution
Through exclusive distribution agreements with Lycos, Microsoft Network,
Excite, CNN and CBS Sportsline, Healtheon/WebMD is quickly aggregating
consumers. The number of page views increased from 7.5 million in June to
26.6 million in October. In order to reach even more users during the third
quarter, WebMD established a partnership with News Corporation to create a
national awareness campaign about breast cancer. Under the agreement, News
Corporation promoted WebMD's recently announced free screening mammogram
program, which was initiated in conjunction with HEALTHSOUTH and Tenet
Healthcare. As previously announced, the Company expects to expand the
relationship with News Corporation to include other distribution channels.
"Through our intensive branding efforts, superior connectivity, strategic
partnerships, trusted content, and extensive distribution efforts, we are well
positioned to become the market leader in eliminating the $250 billion
administrative waste in the healthcare industry," concluded Mr. Arnold.
New Customers and Strategic Relationships
WebMD Practice, an Internet-based service that provides targeted content
and automated workflow services, enables faster claim processing, increased
productivity, reduced operating costs and improved cash flows for its
physician customers. The new customers during the quarter that signed up for
administrative transactions and claims were Advocate Health Care,
HealthPartners, HEALTHSOUTH, HealthUTAH and Option Care Inc. During the
quarter new customers who signed up for lab connectivity were Dianon Systems,
Urocor and LabCorp.
During the quarter, Healtheon was awarded a contract by the General
Services Administration (GSA) enabling it to provide certain information
technology solutions and services to all agencies of the U.S. government
through the Federal Supply Schedule. With this contract, any federal agency
can choose Healtheon/WebMD for a wide range of information services including
systems analysis and design, systems integration, software programming and
related support.
In addition, Healtheon/WebMD licensed technology to EDS and is working
with them to integrate the EDS MetaVance(TM) Healthcare Portfolio with
Practice. The integrated product will give payer organizations access to a
suite of managed care applications via a network service at a low
administrative cost.
Also during the quarter, the company renewed its contract with
UnitedHealth Group for five years to manage the electronic submission and
processing of financial and administrative transactions. This agreement will
expand the number of United's contracted physicians who use the company's
services. Under the agreement, Healtheon/WebMD will be United's preferred
gateway for administrative and financial transactions.
About Healtheon
Healtheon, founded in 1996, is a pioneer in providing Internet-based,
business-to-business and consumer-to-business electronic commerce services
that link physicians and consumers with healthcare institutions, enabling them
to efficiently and conveniently manage their business and personal healthcare
needs. Healtheon's services simplify the business and clinical processes of
healthcare, provide more timely access to information, provide faster and more
convenient service, and lead to higher quality, more affordable care.
Healtheon can be reached through its Website at healtheon.com.
About WebMD
WebMD, founded in 1998, offers a comprehensive suite of Internet-based
services and information for physicians as well as healthcare information
services and online communities for consumers enabling healthcare
professionals to efficiently manage their business and consumers to become
equal partners in taking care of their personal healthcare needs. WebMD can
be reached through its Website at webmd.com.
About MEDE AMERICA
MEDE AMERICA is a leading provider of healthcare transaction solutions to
a broad range of providers and payers in the healthcare industry. The company
offers an integrated suite of electronic transaction solutions that allows
hospitals, pharmacies, physicians, dentists and other healthcare providers and
provider groups to electronically edit, process and transmit claims,
eligibility and enrollment data, track claims submissions throughout the
claims payment process and obtain faster reimbursement for their services.
MEDE AMERICA can be reached through its Website at mede.com.
About Medcast
Medcast (Greenberg News Networks) provides breaking medical news,
education and other vital information electronically every morning to
physicians throughout the United States. The editorial and design staff
numbers over 50 professionals -- including 11 M.D.s -- making it among the
world's largest medical news organizations. Medcast can be reached through
its Website at medcast.com.
Other than historical information set forth herein, this announcement
contains forward-looking statements that involve risks and uncertainties,
including those relating to the ability of Healtheon's services to decrease
costs and improve patient care. Actual results could be materially different
from those discussed in this announcement. Factors that could cause actual
results to differ include, among others: Healtheon's limited operating
history, continued growth in the use of the Internet, and acceptance of the
Internet as a secure medium over which to conduct transactions. Additional
risks associated with Healtheon's business can be found in its recent
Registration Statement on Form S-4 and other periodic filings with the SEC.
HEALTHEON CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data; unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenue $28,653 $12,578 $68,906 $33,231
Operating costs and expenses:
Cost of operations 20,282 12,515 53,714 29,361
Development and engineering 6,612 4,400 20,867 12,399
Sales and marketing 8,255 2,157 18,610 5,676
General and administrative 5,858 2,436 15,290 10,548
Depreciation and amortization 5,119 4,686 15,214 10,690
Total operating costs
and expenses 46,126 26,194 123,695 68,674
Loss from operations (17,473) (13,616) (54,789) (35,443)
Interest income 459 197 1,895 834
Interest expense (95) (110) (349) (361)
Dividends on ActaMed's
convertible redeemable
preferred stock -- -- -- (890)
Net loss $(17,109) $(13,529) $(53,243) $(35,860)
Basic and diluted net
loss per common share $(0.24) $(0.26) $(0.79) $(1.24)
Weighted average shares
outstanding used in
computing basic and
diluted net loss
per common share 70,596 51,538 67,723 28,934
SOURCE Healtheon/WebMD Corporation
-0- 11/12/1999
/CONTACT: media, Dave Faupel, 404-897-2300, or
dfaupel@alexanderogilvy.com, or investors, Renee Hartmann, 415-923-1660,
ext. 149, or Rhartmann@alexanderogilvy.com, both of Alexander Ogilvy Public
Relations, for Healtheon/WebMD Corporation/
/Web site: medcast.com
/Web site: mede.com
/Web site: webmd.com
/Web site: healtheon.com
(HLTH)
CO: Healtheon/WebMD Corporation; Healtheon Corporation; WebMD, Inc.; MEDE
AMERICA Corporation; Medcast; Greenberg News Networks, Inc.
ST: Georgia, California
IN: HEA MLM
SU: ERN TNM
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