Results Reflect Early Success of Merger with Misys Healthcare Creating Clear
Leader in Physician Healthcare IT
CHICAGO, Jan. 8 /PRNewswire-FirstCall/ — Allscripts-Misys Healthcare
Solutions, Inc., formerly Allscripts Healthcare Solutions, Inc. (Allscripts or
the Company), today announced its financial results for the three and six
months ended November 30, 2008.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b)
The Company’s results for the three and six months ended November 30, 2008
include results from legacy Allscripts for the period of October 11, 2008
through November 30, 2008, and from Misys Healthcare Systems, LLC for all
periods presented. A subsidiary of Allscripts merged with Misys Healthcare
Systems (MHS), formerly a division of Misys plc, on October 10, 2008, at which
time the Company changed its name to Allscripts-Misys Healthcare Solutions,
Inc. and adopted a new fiscal reporting year of May 31st to conform with the
fiscal year of Misys plc.
Total revenue for the three months ended November 30, 2008 was
$128.6 million, compared to $96.4 million for the same period last year.
Non-GAAP revenue for the three months ended November 30, 2008 was
$173.3 million, compared to non-GAAP revenue of $166.1 million for the same
period last year. Non-GAAP revenue for the three months ended November 30,
2008 and 2007 are comprised of revenue from Allscripts and MHS for the full
three-month period of each respective year, giving effect to the add-back of a
deferred revenue adjustment of $2.1 million recorded for GAAP purposes in the
three month period ended November 30, 2008. Total GAAP revenue for software
and related services during the three months ended November 30, 2008 was
$123.9 million, compared to $96.4 million for the same period last year.
Non-GAAP revenue for software and related services for the three months ended
November 30, 2008 and 2007 was $163.3 million and $154.2 million,
respectively, a 6% increase. Please see “Explanation of Non-GAAP Financial
Measures” below for a discussion of non-GAAP measures.
Gross margin percentage was 51.9% for the second quarter of fiscal 2009,
compared to 55.9% during the second quarter of fiscal 2008. Based on non-GAAP
revenue for each respective quarter, gross margin percentage was 52.9% for the
second quarter of fiscal 2009, compared to 53.3% during the second quarter of
fiscal 2008.
Net income (loss) for the three months ended November 30, 2008 was ($6.0)
million compared to net income of $5.5 million for the same period last year.
Non-GAAP net income for the three months ended November 30, 2008 was
$16.8 million, compared to non-GAAP net income of $15.9 million for the same
period last year. Non-GAAP net income for the three months ended November 30,
2008 and 2007 are comprised of net income giving effect to the add-back of
legacy Allscripts net income for respective periods prior to the consummation
date of the merger of $4.9 million and $5.5 million, respectively, net of tax,
acquisition-related amortization of $2.7 million and $4.7 million,
respectively, net of tax, total stock-based compensation expense of
$0.6 million and $1.2 million, respectively, net of tax, and
transaction-related expenses of $13.3 million and $1.1 million, net of tax.
Non-GAAP net income for the three months ended November 30, 2008 also gives
effect to the deferred revenue adjustment of $1.3 million, net of tax and
non-GAAP net income for the three months ended November 30, 2007 also gives
effect to the tax adjustment of ($2.1) million, net of tax.
As of November 30, 2008, the Company had cash and marketable securities of
$77.1 million.
“Our results this quarter reflect the early success of the merger of
Allscripts and Misys Healthcare and our solid operating performance as a
company,” said Glen Tullman, Chief Executive Officer of Allscripts. “We
expect the Obama Administration’s focus on healthcare information technology
to drive exciting new opportunities, and we continue to believe that
Allscripts is in the right place at the right time, with the right solutions
to make the most of the opportunity.”
Total revenue for the six months ended November 30, 2008 was
$221.4 million, compared to $189.6 million for the six months ended
November 30, 2007. Non-GAAP revenue for the six months ended November 30,
2008 was $347.9 million, compared to non-GAAP revenue of $329.1 million for
the same period last year. Non-GAAP revenue for the six months ended
November 30, 2008 and 2007 are comprised of revenue from Allscripts and MHS
for the first six months of each respective year giving effect to the add-back
of a deferred revenue adjustment of $2.1 million recorded for GAAP purposes in
the six month period ended November 30, 2008. Total GAAP revenue for software
and related services during the six months ended November 30, 2008 was
$216.7 million, compared to $189.6 million for the same period last year.
Non-GAAP revenue for software and related services for the six months ended
November 30, 2008 and 2007 was $327.9 million and $306.3 million,
respectively, a 7% increase.
Gross margin percentage was 52.7% for the six months ended November 30,
2008, compared to 54.6% for the comparable period a year ago. Based on
non-GAAP revenue for each respective six-month period, gross margin percentage
was 52.4% for the first six months of fiscal 2009, compared to 52.9% during
the first six months of fiscal 2008.
Net income (loss) for the six months ended November 30, 2008 was
($0.6) million compared to net income of $4.4 million, for the same period
last year.
Non-GAAP net income for the six months ended November 30, 2008 was
$32.2 million compared to non-GAAP net income of $27.2 million for the same
period last year. Non-GAAP net income for the six months ended November 30,
2008 and 2007 is comprised of net income giving effect to the add-back of
Allscripts net income for respective periods prior to the consummation date of
the merger of $6.7 million and $9.6 million, respectively, net of tax,
acquisition-related amortization of $5.2 million and $9.7 million,
respectively, net of tax, total stock-based compensation expense of
$2.1 million and $2.7 million, respectively, net of tax, and
transaction-related expenses of $17.5 million and $2.8 million, net of tax.
Non-GAAP net income for the six months ended November 30, 2008 also gives
effect to the deferred revenue adjustment of $1.3 million, net of tax, and
non-GAAP net income for the six months ended November 30, 2007 also gives
effect to the tax adjustment of ($2.0) million, net of tax.
Allscripts will conduct a conference call on Thursday, January 8, 2009 at
4:30 PM Eastern Time. The conference call can be accessed via the Internet at
https://www.allscripts.com, or by dialing (800) 374-1376 and requesting the
Allscripts earnings call. A Microsoft Windows Media Player web replay will be
available three hours after the conclusion of the call for a period of two
weeks at https://www.allscripts.com or by calling (800) 642-1687,
ID # 77297201.
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,
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 but then includes legacy Allscripts revenue for periods prior to
the consummation date of the merger and adds-back the deferred revenue
adjustment booked for GAAP purposes. Non-GAAP net income consists of GAAP net
income but then includes legacy Allscripts net income for periods prior to the
consummation date of the merger, adds-back the deferred revenue adjustment and
excludes acquisition-related amortization, stock-based compensation expense
under SFAS No. 123R, and transaction-related expenses, in each case net of any
related tax benefit.
— Deferred Revenue Adjustment. Deferred revenue adjustment reflects the
fair value adjustment to deferred revenues acquired in connection with the
transactions consummated with Misys 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
deferred revenue adjustment for non-GAAP revenue and non-GAAP net income
because it believes the amount directly correlates to the underlying
performance of Allscripts’ operations.
— 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.
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.
RECONCILIATION.
About Allscripts
Allscripts (Nasdaq: MDRX) uses innovation technology to bring health to
healthcare. More than 150,000 physicians, 700 hospitals and nearly 7,000
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, medication
services, 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 https://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 (“MHS”); the integration of MHS
with the Company and the possible disruption of current plans and operations
as a result thereof; 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 2007 Annual Report on Form
10-K available through the Web site maintained by the Securities and Exchange
Commission at 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
(amounts in millions)
November 30, May 31,
2008 2008
(Unaudited)
Assets
Current Assets
Cash and Cash Equivalents $68.9 $0.3
Marketable Securities 5.5 -
Accounts Receivable, Net 148.0 48.3
Deferred Income Tax Assets 6.8 0.9
Inventories, Net 6.0 1.9
Prepaid Expenses and Other Current
Assets 31.9 9.9
Total Current Assets 267.1 61.3
Long-term Marketable Securities 2.7 -
Fixed Assets, Net 18.8 6.1
Software Development Costs, Net 2.3 -
Deferred Income Tax Assets - 8.3
Intangible Assets, Net 244.4 8.6
Goodwill, Net 432.0 82.4
Other Long-Term Assets 14.0 12.6
Total Assets $981.3 $179.3
Liabilities
Current Liabilities
Accounts Payable $22.8 $14.3
Accrued Expenses 46.2 12.6
Accrued Compensation 22.0 9.7
Deferred Revenue 66.0 27.2
Current Portion of Long-term Debt,
Line of Credit and Capital Lease
Obligation 1.0 4.3
Total Current Liabilities 158.0 68.1
Long-Term Liabilities
Long-term Debt 77.9 0.6
Deferred Income Tax Liabilities 38.1 -
Other Liabilities 2.4 -
Total Liabilities 276.4 68.7
Total Stockholders' Equity 704.9 110.6
Total Liabilities and Stockholders'
Equity $981.3 $179.3
Allscripts-Misys Healthcare Solutions, Inc.
Condensed Consolidated Statements of Operations
(amounts in millions, except per-share amounts)
(Unaudited)
Three Months Ended Six Months Ended
November 30, November 30,
2008 2007 2008 2007
Revenue
System sales $20.8 $16.7 $33.8 $31.3
Professional services 11.8 7.9 19.2 15.0
Maintenance 46.7 35.3 83.4 70.2
Transaction processing and other 44.6 36.5 80.3 73.1
Prepackaged medications 4.7 - 4.7 -
Total revenue 128.6 96.4 221.4 189.6
Cost of revenue
System sales 11.7 8.5 19.4 16.2
Professional services 11.9 6.5 18.3 13.1
Maintenance 16.7 14.2 31.6 28.4
Transaction processing and other 17.6 13.3 31.4 28.3
Prepackaged medications 3.9 - 3.9 -
Total cost of revenue 61.8 42.5 104.6 86.0
Gross profit 66.8 53.9 116.8 103.6
Selling, general and administrative 64.1 31.4 97.0 65.9
Research and development 10.9 8.1 18.9 19.6
Amortization of intangibles 1.3 5.5 1.5 10.9
Income (loss) from operations (9.5) 8.9 (0.6) 7.2
Interest expense (0.6) (0.1) (0.7) (0.1)
Interest income and other, net 0.2 - 0.3 -
Net income (loss) before tax (9.9) 8.8 (1.0) 7.1
Income tax (provision) benefit 3.9 (3.3) 0.4 (2.7)
Net income (loss) ($6.0) $5.5 ($0.6) $4.4
Net income (loss) per share - basic ($0.05) $0.07 ($0.01) $0.05
Net income (loss) per share - diluted ($0.05) $0.07 ($0.01) $0.05
Weighted average shares of common
stock outstanding used in computing
basic net income per share 118.9 82.9 100.8 82.9
Weighted average shares of common
stock outstanding used in computing
diluted net income per share 118.9 82.9 100.8 82.9
Allscripts-Misys Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(amounts in millions, except per-share amounts)
(Unaudited)
Non-GAAP Revenue Three Months Ended Six Months Ended
November 30, November 30,
2008 2007 2008 2007
Software and related services
revenue, as reported $123.9 $96.4 $216.7 $189.6
AHS revenue pre-merger 37.3 57.8 109.1 116.7
Deferred revenue adjustment 2.1 - 2.1 -
Total non-GAAP software and
related services revenue 163.3 154.2 327.9 306.3
Prepackaged medications revenue, as
reported 4.7 - 4.7 -
AHS revenue pre-merger 5.3 11.9 15.3 22.8
Total non-GAAP prepackaged
medications revenue 10.0 11.9 20.0 22.8
Total Non-GAAP Revenue $173.3 $166.1 $347.9 $329.1
Non-GAAP Net Income (All adjustments
tax effected at 40% for fiscal 2009
and 39% for fiscal 2008) Three Months Ended Six Months Ended
November 30, November 30,
2008 2007 2008 2007
Net income (loss), as reported ($6.0) $5.5 ($0.6) $4.4
AHS net income pre-merger (A) 4.9 5.5 6.7 9.6
Deferred revenue adjustment 1.3 - 1.3 -
Stock-based compensation expense (A) 0.6 1.2 2.1 2.7
Acquisition-related amortization
expense 2.7 4.7 5.2 9.7
Transaction-related expense 13.3 1.1 17.5 2.8
Tax adjustment for fiscal 2008 to 39% - (2.1) - (2.0)
Non-GAAP Net Income $16.8 $15.9 $32.2 $27.2
Weighted average shares of common
stock outstanding used in computing
diluted non-GAAP adjusted net income
per share 118.9 82.9 100.8 82.9
Non-GAAP Net Income Per Share -
diluted $0.14 $0.19 $0.32 $0.33
(A) Excludes $28.1M of transaction-related expenses, including $13.1M of
stock-based compensation, incurred by AHS in the pre-merger period,
net of tax.
SOURCE Allscripts – 01/08/2009
CONTACT: Dan Michelson, Chief Marketing Officer, +1-312-506-1217,
dan.michelson@allscripts.com,
or Todd Stein, Senior Manager|Public Relations,
+1-312-506-1216, todd.stein@allscripts.com, both of Allscripts; or
Jonathan
Evans, Director of Business Solutions of Tully-Wihr, +1-530-320-1924,
jevans@tullywihr.com
(MDRX)
CO: Allscripts; Tully-Wihr Company; Ray Morgan Company