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Exhibit 99.1
FOR IMMEDIATE RELEASE
Media:
Anne O'Connell
Alexander Ogilvy Public Relations
[email protected]
404-881-2318
Investors:
Lew Belote
Senior Vice President of Finance
Healtheon/WebMD
[email protected]
404-495-7602
HEALTHEON/WEBMD ANNOUNCES SECOND QUARTER 2000 FINANCIAL RESULTS
ATLANTA, GA. AUGUST 9, 2000. Healtheon/WebMD (Nasdaq: HLTH) today announced
financial results for the second quarter and six months ended June 30, 2000.
FINANCIAL HIGHLIGHTS
Revenue for the June 2000 quarter was $101.1 million compared to revenue of
$65.9 million for the March 2000 quarter, an increase of 53% and compared to
revenue of $22.7 million reported in the second quarter of 1999, an increase of
345%.
The loss excluding non-cash charges, primarily depreciation and amortization,
and including interest income for the June 2000 quarter was ($55.5) million or
($0.28) per share, a $17.5 million improvement over the March 2000 quarter which
was ($73.0) million, or ($0.42) per share. This loss compares to ($12.7) million
or ($0.18) per share for the second quarter of 1999.
Revenue for the six-months ending June 30, 2000 was $167.0 million compared to
revenue of $40.3 million for the corresponding period of 1999. The loss
excluding non-cash charges, primarily depreciation and amortization, and
including interest income for the six-months ending June 30, 2000 was ($128.6)
million, or ($0.69) per share compared to ($26.0) million, or ($0.39) per share
for the comparable six-month period in 1999.
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The financial results for the quarter and six months in 2000 reflect the
completion of the merger of Healtheon and WebMD and the acquisitions of MedE
America and Medcast on November 11, 1999, the acquisition of Kinetra and the
transaction with News Corporation completed in late January 2000, and the
acquisition of Quintiles' electronic data interchange unit, ENVOY Corporation,
which was effective May 26, 2000. These transactions have been accounted for as
purchases and are included in the financial results since the acquisition dates.
Jeff Arnold, Chief Executive Officer of Healtheon/WebMD, said, "We are pleased
to report a solid quarter of revenue growth across all revenue categories while
at the same time streamlining our operations. Revenues for the June 2000 quarter
grew by $35 million compared to the March 2000 quarter, while our cash loss
improved by $17.5 million, approximately half of the revenue increase,
demonstrating the leverage in our business model. We are making tremendous
progress on integrating the previous mergers and acquisitions and have
identified in excess of $75 million in additional annual cost savings that will
be achieved over the next few quarters. We are confident that these initiatives
will bring us continued revenue growth and cost reductions that will accelerate
our achievement of positive cash earnings."
REVENUE ANALYSIS
Revenue categories are as follows:
<TABLE>
<CAPTION>
------- ------- -------
Q2 2000 Q1 2000 Q2 1999
------- ------- -------
<S> <C> <C> <C>
Transactions $ 51.8 $ 28.9 $ 11.2
Advertising/e-commerce 23.8 19.4 --
Subscriptions 9.2 6.8 --
Products and services 16.3 10.8 $ 11.5
------ ------ ------
Total Revenue $101.1 $ 65.9 $ 22.7
</TABLE>
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Transaction revenue was $51.8 million, accounting for 51% of total revenue in
the second quarter of 2000 compared to 44% in the first quarter of 2000. The
transaction revenue mix shift is largely due to the additional revenue
contribution from ENVOY, whose results are included since May 26, 2000. Total
electronic transactions were approximately 274 million in the second quarter,
compared to 131 million in the first quarter of 2000, representing a 111%
increase. Total Internet transactions were approximately 7.1 million, compared
to 4.8 million in the first quarter of 2000, representing a 48% increase.
Advertising/e-commerce revenue was $23.8 million accounting for 24% of total
revenue in the second quarter of 2000, an increase of 23% from the first quarter
of 2000, demonstrating the continued strength in physician and consumer demand
for the Company's portal, www.webmd.com. The Company launched Internet
initiatives with several strategic partners during the quarter, including Mead
Johnson, Eli Lilly and Glaxo Wellcome, in addition to expanding current
offerings with Medtronic, DuPont and other partners.
Subscription revenue was $9.2 million, accounting for 9% of total revenue in the
second quarter of 2000, an increase of 35% compared to the first quarter of
2000. At the end of the second quarter there were approximately 130,000
registered physician users of WebMD Practice compared to approximately 100,000
in the first quarter of 2000, representing an increase of 30%. Additionally, at
the end of the second quarter there were approximately 32,000 administrative
users of WebMD Practice compared to approximately 21,500 at the end of the first
quarter of 2000, an increase of 49%.
Products and service revenue was $16.3 million accounting for 16% of total
revenue in the second quarter of 2000. The growth this quarter of 51% was mainly
attributed to product development for strategic partners and content syndication
for News Corporation.
INTERNET UTILIZATION METRICS
Provider Adoption
Internet transactions grew by 48% to 7.1 million in the second quarter of 2000
compared to 4.8 million in the first quarter of 2000. The Company now provides
connectivity through WebMD Practice to approximately 900 payers, including "real
time" connectivity for
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transactions such as eligibility, referrals and claims status to 46 health
plans. Professional page views during the second quarter of 2000 totaled over 35
million.
Consumer Adoption
Consumer page views increased 30% from the first quarter of 2000 to
approximately 142 million from 109 million in the first quarter of 2000.
According to Media Metrix, WebMD.com monthly unique visitors increased 38% to
4.0 million unique visitors in June 2000 from 2.9 million in March 2000.
Additionally, as of June 30, 2000, WebMD had more than 1.4 million community
member registrations compared to 1.1 million in March 2000.
KEY HIGHLIGHTS OF THE SECOND QUARTER OF 2000
The Company continued to foster connectivity and commerce among physician
offices, consumers and healthcare institutions. As of June 30, 2000,
Healtheon/WebMD was deploying services to more than 160,000 WebMD Practice users
and approximately 54,000 dentists, 4,600 hospitals, 46,000 pharmacies, 900
payers and 11 laboratory companies.
Physician Office Management Information Systems (POMIS)
Strategic relationships with leading practice management vendors, Medic, IDX
Systems, InfoCure and the announced merger with Medical Manager, provide
Healtheon/WebMD with access to more than 400,000 physicians, allowing the
Company to Web-enable the nation's physician communities.
Healtheon/WebMD and Medical Manager have developed an integrated co-branded
version of WebMD Practice, the company's physician portal, that will be rolled
out to selected beta sites early next month. The integrated portal allows
Medical Manager users to access their practice management systems and conduct
clinical and administrative transactions over the Internet through WebMD
Practice.
The Company has also launched a customized WebMD Practice portal for Medic users
to selected beta sites, representing approximately 220 Medic physicians. General
availability to all Medic physicians will follow the beta implementations. The
integrated version of the Medic WebMD Practice portal will make administrative
and clinical transactions and data and
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functionality available to Medic users over the Internet, within the security of
the WebMD Practice framework.
Additionally, Healtheon/WebMD announced a new agreement with IDX Systems and
ChannelHealth on June 8, 2000. The new agreement provides physicians using IDX
systems with access to Healtheon/WebMD's comprehensive administrative
transactions, and allows ChannelHealth customers to access Healtheon/WebMD's
content and e-commerce services through the ChannelHealth portal. Implementation
of the new agreement is proceeding quickly. Over 4,000 ChannelHealth physician
customers now have access to Healtheon/WebMD content, and the first IDX
physician site to receive the new transaction services began submitting
administrative transactions to Healtheon/WebMD through the ChannelHealth gateway
in early August.
Development of a customized version of the WebMD Practice portal for InfoCure
physicians is also proceeding, with deployment expected to begin later this
year.
ENVOY Acquisition
Effective May 26, 2000, Healtheon/WebMD acquired ENVOY from Quintiles in
exchange for 35 million shares of Healtheon/WebMD stock and $400 million in
cash. Quintiles issued Healtheon/WebMD a warrant to purchase up to 10 million
shares of Quintiles common stock at $40 per share, exercisable for four years.
The acquisition was treated as a purchase transaction for accounting purposes.
The purchase price has been allocated to the assets acquired and liabilities
assumed based on their fair value, resulting in goodwill and other intangible
assets of approximately $2.4 billion which will be amortized over three years.
Amended Terms of Healtheon/WebMD, Medical Manager and CareInsite Mergers
On June 19, 2000, Healtheon/WebMD announced restructured terms for its proposed
merger with Medical Manager and its publicly traded subsidiary, CareInsite,
Inc., which was originally announced on February 14, 2000. Under the revised
merger agreements, Healtheon/WebMD will issue 2.5 shares of Healtheon/WebMD
common stock for each share of Medical Manager. The exchange ratio for
CareInsite remains at the originally announced 1.3 shares of Healtheon/WebMD
common stock for each share of CareInsite not owned by Medical Manager.
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It was established that the board of directors would have equal representation,
with one additional director, Dennis Gillings, Chairman and CEO of Quintiles.
Additionally, several key management roles were defined, most notably Jeff
Arnold and Marty Wygod are to become Co-CEOs of the merged company and Mike Long
will remain Chairman. Lastly, to create a unified culture and to have one global
brand, the combined company will be renamed WebMD Corporation.
The Securities and Exchange Commission declared the Registration Statement for
the proposed merger transactions effective on August 3, 2000. Along with
stockholder approval, the mergers are subject to regulatory review by the
Federal Trade Commission and the United States Department of Justice. Subject to
receipt of regulatory and stockholder approval, consummation of the transactions
is expected to occur shortly after the stockholders' meetings scheduled for
Tuesday, September 12, 2000.
Additionally, the Securities and Exchange Commission declared the Registration
Statement for the proposed acquisition of OnHealth Network Company effective on
August 4, 2000. Subject to receipt of approval by OnHealth's stockholders,
consummation of the transaction is anticipated to occur shortly after OnHealth's
stockholder meeting on Tuesday, September 12, 2000.
Outlook
"The immediate tasks ahead are the completion of the Medical Manager, CareInsite
and OnHealth mergers and most importantly, streamlining our combined operations.
Management has been working diligently on a detailed integration plan for the
Company's operations, which includes specific initiatives that will achieve
significant revenue growth and operating cost reductions. We remain committed to
implementing these initiatives immediately upon closing of the transactions,"
said Mike Long, Chairman of Healtheon/WebMD. "With our strategic assets, our
strong combined cash position of approximately $1 billion and the depth of
management we have assembled, Healtheon/WebMD is in a very strong position to
capitalize on the transformation that will inevitably occur within our nation's
healthcare system."
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ABOUT HEALTHEON/WEBMD
Healtheon/WebMD (NASDAQ: HLTH) is the first end-to-end Internet healthcare
company connecting physicians and consumers to the entire healthcare industry.
Healtheon/WebMD is using the Internet to facilitate a new system for the
delivery of healthcare, resulting in a single, secure environment for all
communications and transactions that will enable a more efficient and cost
effective healthcare system. Healtheon/WebMD has its corporate headquarters in
Atlanta and its technology headquarters in Silicon Valley. For more information
visit http://www.webmd.com.
****
Other than historical information set forth herein, this announcement contains
forward-looking statements that involve risks and uncertainties, including those
relating to future financial performance. Actual results could be materially
different from those discussed in this announcement. Factors that could cause
actual results to differ include, among others: Healtheon/WebMD's limited
operating history, continued growth in the use of the Internet, acceptance of
the Internet as a secure medium over which to conduct transactions, competition
from other healthcare industry participants, and our ability to close our
pending acquisitions and integrate the acquired businesses with our own.
Additional risks associated with Healtheon/WebMD can be found in its S-4
registration statements, its Annual Report for 1999 on Form 10-K and other
periodic filings with the SEC.
-TABLES FOLLOW-
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HEALTHEON/WebMD CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2000 2000 1999 2000 1999
--------- --------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
Revenue $ 101,074 $ 65,881 $ 22,698 $ 166,955 $ 40,253
--------- --------- -------- --------- --------
Operating costs and expenses:
Cost of operations 78,194 59,365 17,914 137,559 33,432
Development and engineering 14,684 11,574 7,220 26,258 14,255
Sales and marketing 62,072 68,161 5,703 130,233 10,355
General and administrative 15,710 12,653 5,183 28,363 9,432
--------- --------- -------- --------- --------
Total operating costs and expenses 170,660 151,753 36,020 322,413 67,474
--------- --------- -------- --------- --------
Loss from operations (69,586) (85,872) (13,322) (155,458) (27,221)
Interest income, net 14,064 12,829 624 26,893 1,182
--------- --------- -------- --------- --------
Loss before amortization and depreciation $ (55,522) $ (73,043) $(12,698) $(128,565) $(26,039)
--------- --------- -------- --------- --------
Per share $ (0.28) $ (0.42) $ (0.18) $ (0.69) $ (0.39)
--------- --------- -------- --------- --------
Depreciation and amortization of intangibles,
including prepaid content and services and
deferred compensation 462,782 358,422 4,867 821,204 10,095
--------- --------- -------- --------- --------
Net loss $(518,304) $(431,465) $(17,565) $(949,769) $(36,134)
========= ========= ======== ========= ========
Per share $ (2.64) $ (2.46) $ (0.25) $ (5.11) $ (0.55)
========= ========= ======== ========= ========
Weighted average shares outstanding
used in computing basic and diluted
net loss per common share 196,471 175,041 69,907 185,756 66,286
========= ========= ======== ========= ========
</TABLE>
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HEALTHEON/WebMD CORPORATION
RECONCILIATION OF CASH LOSS TO NET LOSS
(In thousands, unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30,
2000 2000 1999 2000 1999
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Loss before non-cash charges $ (55,522) $ (73,043) $ (12,698) $ (128,565) $ (26,039)
Non-cash charges:
Depreciation and amortization 416,428 338,710 4,867 755,138 10,095
Amortization of prepaid content and services
included in sales and marketing 20,706 18,554 -- 39,260 --
Amortization of deferred compensation
included in general and administrative 25,648 1,158 -- 26,806 --
---------- ---------- ---------- ---------- ----------
Total non-cash charges 462,782 358,422 4,867 821,204 10,095
---------- ---------- ---------- ---------- ----------
Net loss $ (518,304) $ (431,465) $ (17,565) $ (949,769) $ (36,134)
========== ========== ========== ========== ==========
</TABLE>
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HEALTHEON/WebMD CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Assets:
Cash, cash equivalents and short-term investments $ 645,218 $ 291,286
Accounts receivable, net 129,789 51,511
Other current assets 37,159 20,808
------------ ------------
Total current assets 812,166 363,605
Property and equipment, net 82,787 48,384
Prepaid content and services 449,216 273,038
Intangible assets, net 5,732,016 3,547,559
Other assets 82,753 9,876
------------ ------------
Total assets $ 7,158,938 $ 4,242,462
============ ============
Liabilities & Stockholders' Equity:
Accounts payable $ 50,413 $ 77,288
Accrued liabilities 97,989 62,841
Current portion of lease obligations 2,249 2,281
Deferred revenue 10,600 4,891
------------ ------------
Total current liabilities 161,251 147,301
Long-term liabilities 127,479 121,489
Stockholders' Equity:
Convertible preferred stock 629,000 --
Common stock, additional paid in capital and other 7,582,397 4,365,092
Accumulated deficit (1,341,189) (391,420)
------------ ------------
Total stockholders' equity 6,870,208 3,973,672
------------ ------------
Total liabilities & stockholders' equity $ 7,158,938 $ 4,242,462
============ ============
</TABLE>
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