Exhibit 99.2
WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data, unaudited)
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Revenue | $ | 158,553 | $ | 143,343 | ||||
Cost of operations | 62,513 | 57,877 | ||||||
Sales and marketing | 33,756 | 32,476 | ||||||
General and administrative | 23,756 | 21,453 | ||||||
Depreciation and amortization | 7,487 | 8,245 | ||||||
Interest income | 206 | 17 | ||||||
Interest expense | 5,100 | 6,172 | ||||||
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Income before income tax provision | 26,147 | 17,137 | ||||||
Income tax provision | 10,429 | 7,133 | ||||||
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Net income | $ | 15,718 | $ | 10,004 | ||||
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Net income per common share: | ||||||||
Basic | $ | 0.42 | $ | 0.27 | ||||
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Diluted | $ | 0.36 | $ | 0.25 | ||||
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Weighted-average shares outstanding used in computing income per common share: | ||||||||
Basic | 37,267 | 36,393 | ||||||
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Diluted | 52,335 | 43,465 | ||||||
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WEBMD HEALTH CORP.
CONSOLIDATED SUPPLEMENTAL FINANCIAL INFORMATION
(In thousands, unaudited)
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Revenue | ||||||||
Advertising and sponsorship | ||||||||
Biopharma and medical device | $ | 88,685 | $ | 75,845 | ||||
OTC, CPG and other | 33,754 | 29,948 | ||||||
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122,439 | 105,793 | |||||||
Private portal services | 28,255 | 29,322 | ||||||
Information services | 7,859 | 8,228 | ||||||
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$ | 158,553 | $ | 143,343 | |||||
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Earnings before interest, taxes, non-cash and other items (“Adjusted EBITDA”) (a) | $ | 47,056 | $ | 38,918 | ||||
Interest, taxes, non-cash and other items (b) | ||||||||
Interest income | 206 | 17 | ||||||
Interest expense | (5,100 | ) | (6,172 | ) | ||||
Income tax provision | (10,429 | ) | (7,133 | ) | ||||
Depreciation and amortization | (7,487 | ) | (8,245 | ) | ||||
Non-cash stock-based compensation | (8,528 | ) | (7,381 | ) | ||||
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Net income | $ | 15,718 | $ | 10,004 | ||||
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(a) | See Annex A-Explanation of Non-GAAP Financial Measures. |
(b) | Reconciliation of Adjusted EBITDA to net income. |
WEBMD HEALTH CORP. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
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March 31, 2016 | December 31, 2015 | |||||||
(unaudited) | ||||||||
Assets | ||||||||
Cash and cash equivalents | $ | 592,871 | $ | 641,165 | ||||
Accounts receivable, net | 177,383 | 174,313 | ||||||
Prepaid expenses and other current assets | 20,505 | 18,998 | ||||||
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Total current assets | 790,759 | 834,476 | ||||||
Property and equipment, net | 86,835 | 81,027 | ||||||
Goodwill | 202,980 | 202,980 | ||||||
Intangible assets, net | 10,114 | 10,894 | ||||||
Deferred tax assets, net | 14,591 | 15,694 | ||||||
Other assets | 10,631 | 10,852 | ||||||
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Total Assets | $ | 1,115,910 | $ | 1,155,923 | ||||
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Liabilities and Stockholders’ Equity | ||||||||
Accrued expenses | $ | 63,540 | $ | 80,664 | ||||
Deferred revenue | 116,313 | 102,715 | ||||||
2.25% convertible notes due 2016, net | — | 102,523 | ||||||
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Total current liabilities | 179,853 | 285,902 | ||||||
2.50% convertible notes due 2018, net | 396,727 | 396,281 | ||||||
1.50% convertible notes due 2020, net | 294,558 | 294,266 | ||||||
Other long-term liabilities | 23,909 | 23,246 | ||||||
Stockholders’ equity | 220,863 | 156,228 | ||||||
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Total Liabilities and Stockholders’ Equity | $ | 1,115,910 | $ | 1,155,923 | ||||
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WEBMD HEALTH CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 15,718 | $ | 10,004 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 7,487 | 8,245 | ||||||
Non-cash interest, net | 897 | 1,128 | ||||||
Non-cash stock-based compensation | 8,528 | 7,381 | ||||||
Deferred income taxes | 1,177 | (1,535 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (3,070 | ) | 6,425 | |||||
Prepaid expenses and other, net | 1,731 | (4,587 | ) | |||||
Accrued expenses and other long-term liabilities | (20,147 | ) | (17,515 | ) | ||||
Deferred revenue | 13,598 | 14,831 | ||||||
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Net cash provided by operating activities | 25,919 | 24,377 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (9,229 | ) | (3,670 | ) | ||||
Partial redemption of cost-method investment | 526 | — | ||||||
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Net cash used in investing activities | (8,703 | ) | (3,670 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from exercise of stock options | 30,165 | 4,488 | ||||||
Cash used for withholding taxes due on stock-based awards | (890 | ) | (1,044 | ) | ||||
Maturity of convertible notes | (102,682 | ) | — | |||||
Purchases of treasury stock | — | (3,219 | ) | |||||
Excess tax benefit on stock-based awards | 7,897 | 7,584 | ||||||
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Net cash (used in) provided by financing activities | (65,510 | ) | 7,809 | |||||
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Net (decrease) increase in cash and cash equivalents | (48,294 | ) | 28,516 | |||||
Cash and cash equivalents at beginning of period | 641,165 | 706,776 | ||||||
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Cash and cash equivalents at end of period | $ | 592,871 | $ | 735,292 | ||||
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WEBMD HEALTH CORP.
NET INCOME PER COMMON SHARE
(In thousands, except per share data, unaudited)
Three Months Ended March 31, | ||||||||
2016 | 2015 | |||||||
Numerator: | ||||||||
Net income – Basic | $ | 15,718 | $ | 10,004 | ||||
Interest expense on 1.50% convertible notes, net of tax | 878 | 864 | ||||||
Interest expense on 2.50% convertible notes, net of tax | 1,827 | — | ||||||
Interest expense on 2.25% convertible notes, net of tax | 457 | — | ||||||
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Net income – Diluted | $ | 18,880 | $ | 10,868 | ||||
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Denominator: | ||||||||
Weighted-average shares – Basic | 37,267 | 36,393 | ||||||
Stock options and restricted stock | 1,755 | 1,378 | ||||||
1.50% convertible notes | 5,694 | 5,694 | ||||||
2.50% convertible notes | 6,205 | — | ||||||
2.25% convertible notes | 1,414 | — | ||||||
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Adjusted weighted-average shares after assumed conversions – Diluted | 52,335 | 43,465 | ||||||
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Net income per common share: | ||||||||
Basic | $ | 0.42 | $ | 0.27 | ||||
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Diluted | $ | 0.36 | $ | 0.25 | ||||
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