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WebMD Health Corp (



Q4 2011 Earnings Call

February 23, 2012, 4:45 p.m. ET


Risa Fisher – VP Investor Relations

Martin J. Wygod – Executive Chairman of the Board

Anthony Vuolo – CFO, COO Interim CEO


Mark S. Mahaney – Citi

Heath Terry – Goldman Sachs

Steve Rubis – Stifel Nicolaus

Kevin Kopelman – Cowen & Company

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Peter Stabler – Wells Fargo Securities

Kevin Allen – Barclays Capital

Scott Devitt – Morgan Stanley



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Good afternoon and welcome to WebMD Health Corp.’s fourth quarter 2011 conference call. Today’s call is being recorded. I will now turn the call over to Risa Fisher, Vice President of Investor Relations.

Risa Fisher

Good afternoon. This conference call is to discuss WebMD’s fourth quarter and year-end results. The earnings release issued today by WebMD is available at

in the investor relations section. The release includes reconciliations between GAAP and non-GAAP financial measures, which will be discussed during this call. The explanatory paragraphs in the release concerning forward-looking disclosures and related risks and uncertainties also apply to forward-looking disclosures made during this call including those regarding our guidance on future financial results and other projects or measures of WebMD’s future performance. Information concerning the risks and uncertainties can be found in WebMD’s SEC filings.

Joining us on today’s call are Marty Wygod, Chairman of WebMD, and Tony Vuolo, Interim CFO and CFO. At the conclusion of our prepared remarks we’ll open the call and take questions. Now, I’d like to turn the call over our Chairman, Marty Wygod.

Martin Wygod

Thanks Risa. Good afternoon and thank you for joining us today. As you have seen in our financial results, 2011 was a difficult year. We expect the market challenges that impacted revenue trends in the latter half of 2011 to continue in 2012. Clearly our term outlook is difficult – our near-term outlook is difficult. However, we believe that our long-term growth opportunities are significant and we’ll continue to invest to best position ourselves to capture these opportunities. We’re the most recognized and trusted source of online healthcare information for consumers and healthcare professionals, and we are focused on continuing to strengthen our position as the market leader, to support our long-term growth.

With regard to our CEO search, we have created a board committee to oversee the selection of a permanent CEO and are meeting with potential candidates. The board is committed to conducting a thorough search process to identify the right person to lead the company, and we’ll complete the search as expeditiously as possible.

Importantly though, as you will hear from Tony, we are not standing still while this process is under way. Today we announced that we intend to commence a tender offer to repurchase 150 million of our shares through a modified Dutch Auction tender at a price within the range of 24.50 to $26 per share. At the minimum price of $24.50 per-share we would repurchase a maximum of approximately 6.1 million shares, which represents approximately 11% of our currently outstanding shares. We expect to commence this tender offer promptly at the filing of our company’s Form 10-K.

In considering capital allocation, the board recognizes that as we sit in early 2012, this will be a difficult year. We are just at the beginning of the necessary transition. Among other things, we need to hire a CEO, we may choose to add further depth to the senior management team, and as Tony will discuss, we have several initiatives that are focused on addressing the needs of the evolving market and positioning us for return to growth.

We have much to do to take advantage of the long-term opportunities, however, we want to provide some ability for shareholders to tender their shares for cash if they chose to do so. Details related to the tender offer will be set forth in our offer [inaudible] purchase to be filed with the SEC.

The entire executive management team and I are committed to doing all that we can to restore the company’s growth. The company needs to be in the best position to attract, retain, and motivate the talent necessary to reach our goals. In order to help accomplish this, all of our directors and executive officers, including Tony and myself, have decided to voluntarily surrender certain money stock options totaling approximately 1 million shares. These shares will be added to the 1.1 million shares still left available under our existing stock option plan, and will be available to attract new employees as well as incentivize current key employees. None of the executive officers of course will receive any consideration in exchange for the surrender of their options.

I’d now like to turn the call over to Tony.

Anthony Vuolo

Thanks, Marty. Before reviewing the financial results and outlook, I wanted to make a few comments. First, no one in the company is satisfied with our current situation. In the last six weeks we’ve committed ourselves to prioritizing the initiatives that will best position the company to take advantage of future growth opportunity. The management team is working hard to insure that the entire organization is aligned around our key initiatives.

Second, we are taking nothing for granted. We’re reexamining the way we do business to insure that we are as productive and as efficient as possible. We have realigned certain parts of the organization and we’ll continue to do so to insure that we function as efficiently as possible.

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