GAAP EPS of 9 Cents and Non-GAAP EPS of 15 cents CHICAGO, Sept. 29
/PRNewswire-FirstCall/ -- Allscripts-Misys Healthcare Solutions,
Inc. (Allscripts or the Company) today announced its financial
results for the three months ended August 31, 2009, its first
quarter of fiscal 2010. (Logo:
http://www.newscom.com/cgi-bin/prnh/20081013/AQM041LOGO) Total
revenue for the three months ended August 31, 2009 was $164.9
million, compared to $92.8 million for the same period last year.
Non-GAAP revenue for the three months ended August 31, 2009 was
$167.5 million, compared to non-GAAP revenue of $164.7 million for
the same period last year. Non-GAAP revenue for the three months
ended August 31, 2009 and 2008 are comprised of revenue from
Allscripts and Misys Healthcare (Misys), respectively, for the full
three-month period of each respective year, giving effect to the
add-back of a deferred revenue adjustment of $2.6 million recorded
for GAAP purposes in the three month period ended August 31, 2009.
In addition, non-GAAP revenue for three months ended August 31,
2008 excludes $9.9 million in prepackaged medications revenue that
were recorded for GAAP purposes. Allscripts disposed of its
prepackaged medications business on March 16, 2009. Please see
"Explanation of Non-GAAP Financial Measures" below for a discussion
of non-GAAP measures. Gross margin percentage was 54.0% for the
first quarter of fiscal 2010, compared to 53.9% for the same period
last year. Based on non-GAAP revenue for each respective quarter,
gross margin percentage was 54.7% for the first quarter of fiscal
2010, compared to 53.9% during the first quarter of fiscal 2009.
Net income for the three months ended August 31, 2009 was $12.9
million compared to net income of $5.4 million for the same period
last year. Earnings for the three months ended August 31, 2009 were
$0.09 cents per diluted share. Non-GAAP net income for the three
months ended August 31, 2009 was $22.2 million, compared to
non-GAAP net income of $14.8 million for the same period last year,
representing an increase of 50.0%. Non-GAAP net income for the
three months ended August 31, 2009 and 2008 are comprised of net
income from Allscripts and Misys, respectively, for the full
three-month period of each respective year, giving effect to the
add-back of acquisition-related amortization of $3.5 million and
$2.4 million, respectively, net of tax; total stock-based
compensation expense of $2.0 million and $1.5 million,
respectively, net of tax; and transaction-related expenses of $2.4
million and $4.2 million, net of tax. Non-GAAP net income for the
three months ended August 31, 2009 also gives effect to a deferred
revenue adjustment of $1.5 million, net of tax; and the three
months ended August 31, 2008 eliminates prepackaged medications net
income of $0.5 million. Non-GAAP earnings for the three months
ended August 31, 2009 were $0.15 cents per diluted share. As of
August 31, 2009 the Company had cash and marketable securities of
$86.9 million. "Allscripts posted solid results this quarter across
all of our key metrics," said Glen Tullman, Chief Executive Officer
of Allscripts. "Our results are a reflection of a successful
merger, a focused effort on the processes critical to our growth,
and great execution by our team. We're seeing strong demand for our
products, even in advance of the federal stimulus incentives that
we expect will accelerate adoption as we work towards our vision of
transforming healthcare into a connected system of health."
Conference Call Allscripts will conduct a conference call today,
September 29, 2009 at 4:30 PM Eastern Daylight Time to discuss the
Company's earnings and other information. The conference call can
be accessed via the Internet at http://www.allscripts.com/, or by
dialing (877) 230-5050 and requesting the Allscripts earnings call.
International callers can access the audio portion of the webcast
by dialing (973) 532-4923 and requesting the Allscripts Investor
Presentation. A Microsoft Windows Media Player web replay will be
available four hours after the conclusion of the call for a period
of two weeks at http://www.allscripts.com/ or by calling (800)
642-1687 - or (706) 645-9291 for international callers - ID #
27582277. (Minimum requirements to listen to the call online are:
Microsoft Windows Media Player software, downloadable free from
http://windowsmedia.com/download/download.asp, an Internet
connection, and speakers or earphones). Basis of Presentation The
Company's results for the three months ended August 31, 2009
include results of Allscripts for the complete fiscal quarter. The
Company's GAAP results for the three months ended August 31, 2008
include only the results of Misys. A subsidiary of Allscripts
merged with Misys, formerly a division of Misys plc, on October 10,
2008, at which time the legal name of Allscripts became
Allscripts-Misys Healthcare Solutions, Inc. Explanation of Non-GAAP
Financial Measures Allscripts reports its financial results in
accordance with generally accepted accounting principles, or GAAP.
To supplement this information, Allscripts presents in this press
release non-GAAP revenue and net income, including non-GAAP net
income on a per share basis, which are non-GAAP financial measures
under Section 101 of Regulation G under the Securities Exchange Act
of 1934, as amended. Non-GAAP revenue consists of GAAP revenue and
legacy Allscripts revenue for periods prior to the consummation
date of the Misys merger and adds back the deferred revenue
adjustment booked for GAAP purposes and excludes revenue from
prepackaged medications. Non-GAAP net income consists of GAAP net
income and includes legacy Allscripts net income for periods prior
to the consummation date of the Misys merger, excludes
acquisition-related amortization, stock-based compensation expense
under SFAS No. 123R, and transaction-related expenses, adds back
the deferred revenue adjustment and excludes net income from
prepackaged medications, in each case net of any related tax
benefit. -- Acquisition-Related Amortization. Acquisition-related
amortization expense is a non-cash expense arising from the
acquisition of intangible assets in connection with acquisitions or
investments. Allscripts excludes acquisition-related amortization
expense from non-GAAP net income because it believes (i) the amount
of such expenses in any specific period may not directly correlate
to the underlying performance of Allscripts business operations and
(ii) such expenses can vary significantly between periods as a
result of new acquisitions and full amortization of previously
acquired intangible assets. Investors should note that the use of
these intangible assets contributed to revenue in the periods
presented and will contribute to future revenue generation and
should also note that such expense will recur in future periods. --
Stock-Based Compensation Expense. Stock-based compensation expense
is a non-cash expense arising from the grant of stock awards to
employees. Allscripts excludes stock-based compensation expense
from non-GAAP net income because it believes (i) the amount of such
expenses in any specific period may not directly correlate to the
underlying performance of Allscripts business operations and (ii)
such expenses can vary significantly between periods as a result of
the timing of grants of new stock-based awards, including grants in
connection with acquisitions. Investors should note that
stock-based compensation is a key incentive offered to employees
whose efforts contributed to the operating results in the periods
presented and are expected to contribute to operating results in
future periods and should also note that such expense will recur in
future periods. -- Transaction-Related Expenses.
Transaction-related expenses are fees and expenses, including
legal, investment banking and accounting fees, incurred in
connection with announced transactions. Allscripts excludes
transaction-related expenses from non-GAAP net income because it
believes (i) the amount of such expenses in any specific period may
not directly correlate to the underlying performance of Allscripts
business operations and (ii) such expenses can vary significantly
between periods. -- Deferred Revenue Adjustment. Deferred revenue
adjustment reflects the fair value adjustment to deferred revenues
acquired in connection with the transactions consummated with Misys
plc on October 10, 2008. The fair value of deferred revenue
represents an amount equivalent to the estimated cost plus an
appropriate profit margin, to perform services related to legacy
Allscripts software and product support, which assumes a legal
obligation to do so, based on the deferred revenue balances as of
October 10, 2008. Allscripts adds back this deferred revenue
adjustment for non-GAAP revenue and non-GAAP net income because it
believes the inclusion of this amount directly correlates to the
underlying performance of Allscripts operations. -- Prepackaged
Medications. As noted, Allscripts disposed of the prepackaged
medications business on March 16, 2009. The results of this
business have been excluded from non-GAAP revenue and net income
because Allscripts believes this provides the most relevant
comparison of the underlying performance of Allscripts operations.
Management also believes that non-GAAP revenue and net income
provide useful supplemental information to management and investors
regarding the underlying performance of the Company's business
operations and facilitates comparisons to our historical operating
results. Management also uses this information internally for
forecasting and budgeting as it believes that the measure is
indicative of the Company's core operating results. Note, however,
that non-GAAP revenue and net income are performance measures only,
and they do not provide any measure of the Company's cash flow or
liquidity. Non-GAAP financial measures are not in accordance with,
or an alternative for, measures of financial performance prepared
in accordance with GAAP and may be different from non-GAAP measures
used by other companies. Non-GAAP measures have limitations in that
they do not reflect all of the amounts associated with Allscripts'
results of operations as determined in accordance with GAAP.
Investors and potential investors are encouraged to review the
reconciliation of non-GAAP financial measures with GAAP financial
measures contained within the attached condensed consolidated
financial statements. About Allscripts Allscripts (NASDAQ:MDRX)
uses innovation technology to bring health to healthcare. More than
160,000 physicians, 800 hospitals and nearly 8,000 post-acute and
homecare organizations utilize Allscripts to improve the health of
their patients and their bottom line. The Company's award-winning
solutions include electronic health records, electronic
prescribing, revenue cycle management, practice management,
document management, hospital care management, emergency department
information systems and homecare automation. Allscripts is the
brand name of Allscripts-Misys Healthcare Solutions, Inc. To learn
more, visit http://www.allscripts.com/. This news release may
contain forward-looking statements within the meaning of the
federal securities laws. Statements regarding future events,
developments, the Company's future performance, as well as
management's expectations, beliefs, intentions, plans, estimates or
projections relating to the future are forward-looking statements
within the meaning of these laws. These forward-looking statements
are subject to a number of risks and uncertainties, some of which
are outlined below. As a result, actual results may vary materially
from those anticipated by the forward-looking statements. Among the
important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements
are: the volume and timing of systems sales and installations;
length of sales cycles and the installation process; the
possibility that products will not achieve or sustain market
acceptance; the timing, cost and success or failure of new product
and service introductions, development and product upgrade
releases; competitive pressures including product offerings,
pricing and promotional activities; our ability to establish and
maintain strategic relationships; undetected errors or similar
problems in our software products; compliance with existing laws,
regulations and industry initiatives and future changes in laws or
regulations in the healthcare industry; possible regulation of the
Company's software by the U.S. Food and Drug Administration; the
possibility of product-related liabilities; our ability to attract
and retain qualified personnel; our ability to identify and
complete acquisitions, manage our growth and integrate
acquisitions; the ability to recognize the benefits of the merger
with Misys Healthcare Systems, LLC ("Misys"); the integration of
Misys with the Company and the possible disruption of current plans
and operations as a result thereof; the implementation and speed of
acceptance of the electronic record provisions of the American
Recovery and Reinvestment Act of 2009; maintaining our intellectual
property rights and litigation involving intellectual property
rights; risks related to third-party suppliers; our ability to
obtain, use or successfully integrate third-party licensed
technology; breach of our security by third parties; and the risk
factors detailed from time to time in our reports filed with the
Securities and Exchange Commission, including our 2009 Annual
Report on Form 10-K available through the Web site maintained by
the Securities and Exchange Commission at http://www.sec.gov/. The
Company undertakes no obligation to update publicly any
forward-looking statement, whether as a result of new information,
future events or otherwise. Allscripts-Misys Healthcare Solutions,
Inc. Condensed Consolidated Balance Sheets (In millions) August 31,
May 31, 2009 2009 ---- ---- (Unaudited) ASSETS Current assets: Cash
and cash equivalents $84.8 $71.2 Accounts receivable, net 150.3
155.1 Deferred taxes, net 1.5 1.1 Inventories 2.3 2.6 Prepaid
expenses and other current assets 36.5 31.1 ---- ---- Total current
assets 275.4 261.1 Long-term marketable securities 2.1 2.3 Fixed
assets, net 17.5 17.3 Software development costs, net 16.4 13.5
Intangible assets, net 222.4 227.8 Goodwill 417.9 418.4 Other
assets 12.5 12.4 ---- ---- Total assets $964.2 $952.8 ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable $18.9 $19.3 Accrued expenses 41.3 41.5 Accrued compensation
and benefits 10.3 16.6 Deferred revenue 86.6 86.0 Other current
liabilities 1.2 0.8 --- --- Total current liabilities 158.3 164.2
Long-term debt 40.0 63.7 Deferred taxes, net 24.1 20.4 Other
liabilities 4.2 4.1 --- --- Total liabilities 226.6 252.4 Total
stockholders' equity 737.6 700.4 ----- ----- Total liabilities and
stockholders' equity $964.2 $952.8 ====== ====== Allscripts-Misys
Healthcare Solutions, Inc. Condensed Consolidated Statements of
Operations (In millions, except per-share amounts) (Unaudited)
Three Months Ended August 31, ----------- 2009 2008 ---- ----
Revenue: System sales $33.5 $13.0 Professional services 15.9 7.4
Maintenance 59.4 36.7 Transaction processing and other 56.1 35.7
---- ---- Total revenue 164.9 92.8 ----- ---- Cost of revenue: (a)
System sales 19.6 7.2 Professional services 15.5 6.5 Maintenance
20.9 15.1 Transaction processing and other 19.8 14.0 ---- ----
Total cost of revenue 75.8 42.8 ---- ---- Gross profit 89.1 50.0
Selling, general and administrative expenses (b) 52.9 32.8 Research
and development 12.0 8.0 Amortization of intangible assets 2.6 0.2
--- --- Income from operations 21.6 9.0 Interest expense (0.7)
(0.1) Interest income and other, net 0.1 - --- --- Income before
income taxes 21.0 8.9 Provision for income taxes (8.1) (3.5) ----
---- Net income $12.9 $5.4 ===== ==== Net income per share-basic
and diluted $0.09 $0.06 ===== ===== Weighted-average shares of
common stock outstanding used in computing basic net income per
share 143.0 82.9 ===== ==== Weighted-average shares of common stock
outstanding used in computing diluted net income per share 148.0
82.9 ===== ==== (a) Includes amortization of intangibles of $3.1
and $0.4 in the three months ended August 31, 2009 and 2008,
respectively. (b) Includes stock-based compensation of $3.3 and
$0.8 in the three months ended August 31, 2009 and 2008,
respectively. Allscripts-Misys Healthcare Solutions, Inc. Condensed
Non-GAAP Financial Information (In millions, except per-share
amounts) (Unaudited) Three Months Non-GAAP Revenue Ended August 31,
----------- 2009 2008 ---- ---- Total revenue, as reported $164.9
$92.8 AHS revenue pre-merger (a) - 81.8 Deferred revenue adjustment
2.6 - Elimination of prepackaged medications - (9.9) ------ ------
Total Non-GAAP Revenue $167.5 $164.7 ====== ====== Three Months
Non-GAAP Net Income (All adjustments tax effected at 39%) Ended
August 31, ----------- 2009 2008 ---- ---- Net income, as reported
$12.9 $5.4 AHS net income pre-merger (a) - 1.8 Elimination of
prepackaged medications - (0.5) Deferred revenue adjustment 1.5 -
Stock-based compensation expense 2.0 1.5 Acquisition-related
amortization expense 3.5 2.4 Transaction-related expense 2.4 4.2
Tax adjustment for the fiscal year 2010 period to 39% (0.1) - -----
----- Non-GAAP Net Income $22.2 $14.8 ===== ===== Weighted average
shares of common stock outstanding used in computing diluted
non-GAAP adjusted net income per share 148.0 82.9 ----- -----
Non-GAAP Net Income Per Share - diluted $0.15 $0.18 ===== ===== (a)
AHS revenue and net income, pre merger, from continuing operations.
Physicians Interactive was excluded as a discontinued operation in
historical periods and was divested in September 2008.
http://www.newscom.com/cgi-bin/prnh/20081013/AQM041LOGO
http://photoarchive.ap.org/ DATASOURCE: Allscripts-Misys Healthcare
Solutions, Inc. CONTACT: Investors, Seth Frank, Vice President,
Investor Relations, +1-312-506-1213, , or Media, Todd Stein, Senior
Manager/Public Relations, +1-312-506-1216, , or Dan Michelson,
Chief Marketing Officer, +1-312-506-1217, , all of Allscripts Web
Site: http://www.allscripts.com/
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