WebMD Health's CEO Discusses Q1 2012 Results - Earnings Call Transcript

WebMD Health Corporation (WBMD)

Q1 2012 Earnings Call

May 1, 2012 4:45 PM ET

Executives

Risa Fisher – VP, IR

Martin Wygod – Chairman

Anthony Vuolo – Interim CEO and CFO

Analysts

Heath Terry – Goldman Sachs

Steve Rubis – Stifel Nicolaus

Kevin Copeland – Cowen & Company

Ignatius Njoku – Wells Fargo Securities

Mark May – Barclays

Andrew O’Hara – William Blair

Gerard Heymann – JP Morgan

Scott Kessler – S&P Capital IQ

Presentation

Operator

Good afternoon and welcome to the WebMD Health Corp’s First Quarter 2012 Conference Call. Today’s call is being recorded. I will now turn the conference over to Risa Fisher, Vice President of Investor Relations.

Risa Fisher

Good afternoon. This conference call is to discuss WebMD’s first quarter results. The earnings release issued today by WebMD is available at wbmd.com 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 projections 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 CEO and CFO. At the conclusion of our prepared remarks, we will open the call and take questions.

Now I’d like to turn the call over to our Chairman, Marty Wygod.

Martin Wygod

Thank you, Risa. Good afternoon and thank you for joining us today. As you saw in the press release issued today, our first quarter results were in line with the expectations we outlined on our last conference call. While the near-term outlook remains challenging, we believe that our long-term growth opportunities are significant and we are actively making investments to capture these opportunities.

In early April, we completed a Tender Offer, we repurchased approximately 5.8 million of our shares at a price of $26 representing approximately 10% of our outstanding shares prior to the Tender completion. We will continue to evaluate opportunities to create shareholder value with our strong balance sheets since the Tender and subsequent two weeks waiting period has been completed we have acquired an additional 127,000 shares in the open market purchases under our buyback program.

The CEO search is of great importance to our company and I know that you’re all interested in the status of our process. Through our own network, as well as working with a nationally recognized search firm, we are identifying individuals with experiences and expertise that balance a cross section of critical skill sets. We have been 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 hope to complete the search as promptly as possible. Importantly, though, we are making progress in key areas while the search is underway.

As Tony will discuss, we continue to make significant progress on the initiatives we discussed on our last call. We continue to have strong traffic growth. We are executing on improving our site experience for our audience by focusing on personalization and tools that provide a greater capability to manage ones health. We are making good progress in both re-designing and developing new content areas to further drive user engagement. We continue our efforts to better illustrate the value we are delivering to our advertisers. Our discussions in securing commitments from new pharmaceutical brands expected to be approved later this year and early next year have been very encouraging. We continue to invest in our products to provide our advertisers with the most efficient and effective communication shadow to both patients and physicians.

Looking longer-term, we are also engaged in key discussions regarding strategic partnership, alliances and potential acquisitions in a number of important areas. We’ll be launching a German language version of Medscape for physicians later this year and we’re in discussions with strategic partners to launch in other international markets as well. We are dedicating resources to evaluate and develop functionality that facilitates patient-physician connectivity in a variety of different ways. We’re also evaluating opportunities to create new revenue streams beyond our traditional pharmaceutical and consumer products customer base. We have recruited new talent to help execute on these new initiatives and will continue to recruit additional management while we complete our CEO search.

I want to thank all of our employees for their efforts in the last few months. Teams across the organization are working tirelessly to execute on these and other initiatives. We are committed to doing all that we can to restore the company’s growth rate. The assets assemble that WebMD cannot be easily replicated and are strategic advantages make us a strong market leader. We are focused on improving all the elements that are within our control to drive shareholder value.

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

Anthony Vuolo

Thanks, Marty. Turning to our first quarter results. Our results are in line with the guidance we provided in February on our last earnings call. Our first quarter revenue was $106.9 million compared to $131.6 million last year. Public portal advertising and sponsorship revenue was $87.8 million, and private portal services revenue was $19.2 million. First quarter adjusted EBITDA was $11.3 million or 10.5% of revenue.

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