Company Reports Earnings per Share of 9 cents and Non-GAAP Earnings per
Share of 15 cents
CHICAGO, April 2 /PRNewswire-FirstCall/ — Allscripts-Misys Healthcare
Solutions, Inc. (Allscripts) today announced its financial results for the
three and nine months ended February 28, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081013/AQM041LOGO)
The Company’s results for the three months ended February 28, 2009 include
results of Allscripts for the complete fiscal quarter. The Company’s results
for the three months ended February 29, 2008 include only the results of Misys
Healthcare Systems, LLC (Misys). The Company’s results for the nine months
ended February 28, 2009 include results from legacy Allscripts for the period
of October 11, 2008 through February 28, 2009, and from Misys for all periods
presented. A subsidiary of Allscripts merged with Misys, formerly a division
of Misys plc, on October 10, 2008, at which time Allscripts changed its legal
name to Allscripts-Misys Healthcare Solutions, Inc.
Total revenue for the three months ended February 28, 2009 was $160.7
million, compared to $97.1 million for the same period last year. Non-GAAP
revenue for the three months ended February 28, 2009 was $163.8 million,
compared to non-GAAP revenue of $165.3 million for the same period last year.
Non-GAAP revenue for the three months ended February 28, 2009 and February 29,
2008 are comprised of revenue from Allscripts and Misys for the full
three-month period of each respective year, giving effect to the add-back of a
deferred revenue adjustment of $3.1 million recorded for GAAP purposes in the
three month period ended February 28, 2009. Please see “Explanation of
Non-GAAP Financial Measures” below for a discussion of non-GAAP measures.
Total GAAP revenue for software and related services during the three
months ended February 28, 2009 was $152.2 million, compared to $97.1 million
for the same period last year. Non-GAAP revenue for software and related
services for the three months ended February 28, 2009 and February 29, 2008
was $155.3 million and $155.7 million, respectively.
Gross margin percentage was 51.8% for the third quarter of fiscal 2009,
compared to 54.0% during the third quarter of fiscal 2008. Based on non-GAAP
revenue for each respective quarter, gross margin percentage was 52.7% for the
third quarter of fiscal 2009, compared to 52.6% during the third quarter of
fiscal 2008.
Net income for the three months ended February 28, 2009 was $13.2 million
compared to net income of $10.0 million for the same period last year.
Earnings for the three months ended February 28, 2009 were 9 cents per share.
Non-GAAP net income for the three months ended February 28, 2009 was $22.3
million, compared to non-GAAP net income of $16.2 million for the same period
last year, representing an increase of 38%. Non-GAAP net income for the
three months ended February 28, 2009 and 2008 are comprised of net income
giving effect to the add-back of acquisition-related amortization of $3.7
million and $2.1 million, respectively, net of tax; total stock-based
compensation expense of $1.4 million and $1.6 million, respectively, net of
tax; and transaction-related expenses of $2.1 million and $2.7 million, net of
tax. Non-GAAP net income for the three months ended February 28, 2009 also
gives effect to the deferred revenue adjustment of $1.9 million, net of tax.
Non-GAAP net income for the three months ended February 29, 2008 gives effect
to the tax adjustment of ($0.1) million, net of tax, and the add-back of
legacy Allscripts net loss for the period prior to the consummation date of
the merger of ($0.1) million, net of tax. Non-GAAP earnings for the three
months ended February 28, 2009 were 15 cents per share.
As of February 28, 2009 the Company had cash and marketable securities of
$77.5 million, of which approximately $24.9 million has been used to fund
purchases of shares of the Company’s common stock pursuant to the Company’s
previously announced stock buy-back program since February 28, 2009
“Our results reflect the continuing success of the merger of Allscripts
and Misys Healthcare and our solid operating performance,” said Glen Tullman,
Chief Executive Officer of Allscripts. “I’m especially pleased with the way
Allscripts is positioned to capitalize on the substantial incentives that
exist for physicians today and that are coming on line as a part of the HITECH
provisions of the American Reinvestment and Recovery Act of 2009.”
Total revenue for the nine months ended February 28, 2009 was $382.2
million, compared to $286.7 million for the nine months ended February 29,
2008. Non-GAAP revenue for the nine months ended February 28, 2009 was $511.7
million, compared to non-GAAP revenue of $494.4 million for the same period
last year. Non-GAAP revenue for the nine months ended February 28, 2009 and
February 29, 2008 are comprised of revenue from Allscripts and Misys for the
first nine months of each respective year giving effect to the add-back of a
deferred revenue adjustment of $5.2 million recorded for GAAP purposes in the
nine month period ended February 28, 2009. Total GAAP revenue for software and
related services during the nine months ended February 28, 2009 was $369.0
million, compared to $286.7 million for the same period last year. Non-GAAP
revenue for software and related services for the nine months ended February
28, 2009 and February 29, 2008 was $483.3 million and $462.0 million.
Gross margin percentage was 52.4% for the nine months ended February 28,
2009, compared to 54.4% for the comparable period a year ago. Based on
non-GAAP revenue for each respective nine-month period, gross margin
percentage was 52.5% for the first nine months of fiscal 2009, compared to
52.8% during the first nine months of fiscal 2008.
Net income for the nine months ended February 28, 2009 was $12.7 million
compared to net income of $14.5 million, for the same period last year.
Earnings for the nine months ended February 28, 2009 were 11 cents per share.
Non-GAAP net income for the nine months ended February 28, 2009 was $54.5
million compared to non-GAAP net income of $43.5 million for the same period
last year, representing an increase of 25%. Non-GAAP net income for the nine
months ended February 28, 2009 and February 29, 2008 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 $9.5
million, respectively, net of tax; acquisition-related amortization of $8.8
million and $11.8 million, respectively, net of tax; total stock-based
compensation expense of $3.5 million and $4.3 million, respectively, net of
tax; and transaction-related expenses of $19.6 million and $5.5 million, net
of tax. Non-GAAP net income for the nine months ended February 28, 2009 also
gives effect to the deferred revenue adjustment of $3.2 million, net of tax.
Non-GAAP net income for the nine months ended February 29, 2008 gives effect
to the tax adjustment of ($2.1) million, net of tax. Non-GAAP earnings for the
nine months ended February 28, 2009 were 46 cents per share.
Conference Call
Allscripts will conduct a conference call on Thursday, April 2, 2009 at
4:30 PM Eastern Time. The conference call can be accessed via the Internet at
www.allscripts.com, or by dialing (800) 374-1376 and requesting the Allscripts
investor presentation. International callers can access the audio portion of
the webcast by dialing (706) 679-4010 and requesting the Allscripts investor
presentation. 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
www.allscripts.com or by calling (800) 642-1687 – or (706) 645-9291 for
international callers – ID # 88991513.
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 Misys 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 Misys 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 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.
-- 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.
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 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 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)
February 28, May 31,
2009 2008
---- ----
(Unaudited)
Assets
Current Assets
Cash and Cash Equivalents $69.9 $0.3
Marketable Securities 5.0 -
Accounts Receivable, Net 168.0 48.3
Deferred Income Tax Assets 6.1 0.9
Inventories, Net 6.1 1.9
Prepaid Expenses and Other Current Assets 30.0 9.9
----- ----
Total Current Assets 285.1 61.3
Long-term Marketable Securities 2.6 -
Fixed Assets, Net 19.0 6.1
Software Development Costs, Net 7.7 -
Deferred Income Tax Assets - 8.3
Intangible Assets, Net 238.7 8.6
Goodwill, Net 412.3 82.4
Other Long-Term Assets 14.6 12.6
------ ------
Total Assets $980.0 $179.3
------ ------
Liabilities
Current Liabilities
Accounts Payable $21.6 $14.3
Accrued Expenses 40.8 12.6
Accrued Compensation 17.2 9.7
Deferred Revenue 90.9 27.2
Current Portion of Long-term Debt, Line of
Credit and Capital Lease Obligation 0.9 4.3
----- ----
Total Current Liabilities 171.4 68.1
Long-Term Liabilities
Long-term Debt 66.7 0.6
Deferred Income Tax Liabilities 20.1 -
Other Liabilities 2.4 -
----- ----
Total Liabilities 260.6 68.7
Total Stockholders' Equity 719.4 110.6
------ ------
Total Liabilities and Stockholders' Equity $980.0 $179.3
------ ------
Allscripts-Misys Healthcare Solutions, Inc.
Condensed Consolidated Statements of Operations
(amounts in millions, except per-share amounts)
(Unaudited)
Three Months Nine Months
Ended Ended
February 28, February 28,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue
System sales $27.4 $17.9 $61.2 $49.2
Professional services 15.9 7.4 35.1 22.4
Maintenance 56.1 35.5 139.5 105.7
Transaction processing and other 52.8 36.3 133.2 109.4
Prepackaged medications 8.5 - 13.2 0.0
--- --- ---- ----
Total revenue 160.7 97.1 382.2 286.7
----- ---- ----- ------
Cost of revenue
System sales 15.0 10.1 34.4 26.3
Professional services 16.2 6.5 34.6 19.6
Maintenance 20.0 14.2 51.7 42.6
Transaction processing and other 19.5 13.9 50.8 42.2
Prepackaged medications 6.7 - 10.6 0.0
--- --- ---- ----
Total cost of revenue 77.4 44.7 182.1 130.7
---- ---- ----- ------
Gross profit 83.3 52.4 200.1 156.0
Selling, general and administrative 47.7 27.1 144.7 93.0
Research and development 9.9 8.7 28.8 28.3
Amortization of intangibles 2.9 0.2 4.3 11.1
--- --- --- -----
Income from operations 22.8 16.4 22.3 23.6
Interest expense (1.0) (0.1) (1.7) (0.2)
Interest income and other, net 0.1 0.0 0.4 0.1
--- --- --- ----
Net income from operations before tax 21.9 16.3 21.0 23.5
Income tax provision (8.7) (6.3) (8.3) (9.0)
---- ---- ---- -----
Net income $13.2 $10.0 $12.7 $14.5
----- ----- ----- -----
Net income per share - basic and diluted $0.09 $0.12 $0.11 $0.18
===== ===== ===== =====
Weighted average shares of common stock
outstanding used in computing basic net
income per share 146.1 82.9 115.7 82.9
===== ==== ===== =====
Weighted average shares of common stock
outstanding used in computing diluted net
income per share 151.1 82.9 118.1 82.9
===== ==== ===== =====
Allscripts-Misys Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(amounts in millions, except per-share amounts)
(Unaudited)
Three Months Nine Months
Non-GAAP Revenue Ended Ended
February 28, February 28,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Software and related services revenue,
as reported $152.2 $97.1 $369.0 $286.7
AHS revenue pre-merger - 58.6 109.1 175.3
Deferred revenue adjustment 3.1 - 5.2 -
----- ----- ----- -----
Total non-GAAP software and related
services revenue 155.3 155.7 483.3 462.0
Prepackaged medications revenue, as reported 8.5 - 13.2 -
AHS revenue pre-merger - 9.6 15.2 32.4
--- --- ---- ----
Total non-GAAP prepackaged medications
revenue 8.5 9.6 28.4 32.4
------ ------ ------ ------
Total Non-GAAP Revenue $163.8 $165.3 $511.7 $494.4
====== ====== ====== ======
Non-GAAP Net Income (All adjustments
tax effected at 40% for fiscal 2009 Three Months Nine Months
and 39% for fiscal 2008) Ended Ended
February 28, February 28,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Net income, as reported $13.2 $10.0 $12.7 $14.5
AHS net income (loss) pre-merger (A) 0.0 (0.1) 6.7 9.5
Deferred revenue adjustment 1.9 - 3.2 -
Stock-based compensation expense (A) 1.4 1.6 3.5 4.3
Acquisition-related amortization expense 3.7 2.1 8.8 11.8
Transaction-related expense 2.1 2.7 19.6 5.5
Tax adjustment for fiscal 2008 to 39% 0.0 (0.1) 0.0 (2.1)
----- ----- ----- -----
Non-GAAP Net Income $22.3 $16.2 $54.5 $43.5
----- ----- ----- -----
Weighted average shares of common stock
outstanding used in computing diluted
non-GAAP adjusted net income per share 151.1 82.9 118.1 82.9
----- ----- ----- -----
Non-GAAP Net Income Per Share - diluted $0.15 $0.20 $0.46 $0.52
===== ===== ===== =====
(A) Excludes $28.1M of transaction-related expenses for the nine months
ended February 28, 2009, including $13.1M of stock-based compensation,
incurred by AHS in the pre-merger period, net of tax.
SOURCE Allscripts-Misys Healthcare Solutions, Inc.
– 04/02/2009
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, or
William Davis, Chief Financial
Officer, +1-312-506-1211, bill.davis@allscripts.com,
all of Allscripts
Web Site: https://www.allscripts.com
(MDRX)