Skip to content

CHICAGO–(BUSINESS WIRE)–Aug. 1, 2006–Allscripts (Nasdaq:MDRX),
the leading provider of clinical software, connectivity and
information solutions that physicians use to improve healthcare, today
announced its results for the three and six months ended June 30,
2006.

Total revenue for the three months ended June 30, 2006 was $60.0
million, compared to $29.5 million for the same period last year.
Revenue from software and related services for the three months ended
June 30, 2006 was a record $46.7 million, compared to $16.1 million
for the same period last year, increasing by approximately 190%.
Revenue from software and related services reflects the first full
quarter of integration with A4 Health Systems.

Gross margin percentage was approximately 52% for the second
quarter of 2006, compared to 47% during the second quarter of 2005.

Net income for the three months ended June 30, 2006 was $2.8
million, or $0.05 per diluted share, compared to net income of $2.0
million, or $0.05 per diluted share, for the same period last year.
Cash earnings for the three months ended June 30, 2006 was $9.8
million, or $0.18 per diluted share, compared to cash earnings of $3.6
million, or $0.08 per diluted share, for the same period last year.
Cash earnings are comprised of net income giving effect to the
add-back of income taxes, depreciation and amortization, stock-based
compensation and one-time A4 integration costs. Please see “Financial
Measures” below for a discussion of cash earnings and cash earnings
per share.

As of June 30, 2006 the Company had cash and marketable securities
of $65.8 million.

“The second quarter was the strongest in Allscripts history, with
record earnings and strong sales growth, confirming that we continue
to gain traction in the market by offering the right solutions at the
right time,” commented Glen Tullman, Chief Executive Officer of
Allscripts. “A4 contributed solid results in the first full quarter
since the acquisition, confirming Allscripts as the clear leader
across all segments of the ambulatory market, and demonstrating our
ability to grow quickly while also investing in the future.”

Total revenue for the six months ended June 30, 2006 was $102.2
million, compared to $55.7 million for the six months ended June 30,
2005. Revenue from software and related services for the six months
ended June 30, 2006 was $75.1 million, compared to $30.5 million for
the same period last year, increasing by approximately 146%. Total
revenue for the six months ended June 30, 2006 includes the results of
A4 Health Systems, Inc. from the acquisition date of March 2, 2006
through the end of the second quarter of 2006.

Gross margin percentage was approximately 50% for the six months
ended June 30, 2006 compared to 47% for the six months ended June 30,
2005.

Net income for the six months ended June 30, 2006 was $4.2
million, or $0.08 per diluted share, compared to net income of $3.4
million, or $0.08 per diluted share, for the same period last year.
Cash earnings for the six months ended June 30, 2006 was $16.2
million, or $0.31 per diluted share, compared to cash earnings of $6.5
million, or $0.15 per diluted share, for the same period last year.

Financial Measures

Allscripts reports its financial results in accordance with
generally accepted accounting principles (“GAAP”). In addition, the
Company reports on non-GAAP financial measures, such as cash earnings
and cash earnings per share. Management believes that these non-GAAP
measures, when viewed in addition to the Company’s reported GAAP
results, provide useful information to investors regarding its
performance and overall results of operations. Reconciliations to
comparable GAAP measures are included as part of this release.

Conference Call

Allscripts will conduct a conference call on Tuesday, August 1,
2006 at 4:30 PM eastern time. The conference call can be accessed by
dialing 1-888-644-5594, or via the Internet at www.allscripts.com. A
recording of the conference call will be available for review for a
period of two weeks at www.allscripts.com or by calling
1-800-642-1687, ID # 3303435.

About Allscripts

Allscripts is the leading provider of clinical software,
connectivity and information solutions that physicians use to improve
healthcare. The Company’s business groups provide unique solutions
that inform, connect and transform healthcare. The Clinical Solutions
Group’s award-winning software applications include electronic health
record, practice management, electronic prescribing, document imaging,
emergency department and care management solutions. Additionally,
Allscripts provides clinical product education and connectivity
solutions for physicians and patients through its Physicians
Interactive(TM) Group and medication fulfillment services through its
Medication Services Group. To learn more, visit Allscripts at
www.allscripts.com.

This announcement may contain forward-looking statements about
Allscripts Healthcare Solutions that involve risks and uncertainties.
These statements are developed by combining currently available
information with Allscripts beliefs and assumptions. Forward-looking
statements do not guarantee future performance. Because Allscripts
cannot predict all of the risks and uncertainties that may affect it,
or control the ones it does predict, Allscripts’ actual results may be
materially different from the results expressed in its forward-looking
statements. For a more complete discussion of the risks, uncertainties
and assumptions that may affect Allscripts, see the Company’s 2005
Annual Report on Form 10-K, available through the Web site maintained
by the Securities and Exchange Commission at www.sec.gov.

                 Allscripts Healthcare Solutions, Inc.
                 Condensed Consolidated Balance Sheets
                        (amounts in thousands)
                              (Unaudited)

                                              June 30,    December 31,
Assets                                          2006         2005
------                                      ------------  ------------

 Current assets:
    Cash and cash equivalents                   $32,978       $60,905
    Marketable securities                        14,212        54,408
    Accounts receivable, net                     44,610        29,244
    Other receivables                               150           502
    Deferred taxes, net                           5,467             -
    Inventories                                   5,124         2,174
    Prepaid expenses and other current
     assets                                       6,800         5,811
                                            ------------  ------------
          Total current assets                  109,341       153,044

 Long-term marketable securities                 18,626        30,750
 Fixed assets, net                               12,821         2,753
 Software development costs, net                  8,176         6,409
 Deferred taxes, net                             28,305             -
 Intangible assets, net                          83,641         9,151
 Goodwill                                       182,801        13,760
 Other assets                                     5,356         5,097
                                            ------------  ------------
          Total assets                         $449,067      $220,964
                                            ============  ============


Liabilities and Stockholders' Equity
------------------------------------

 Current liabilities:
    Accounts payable                            $10,434        $8,630
    Accrued liabilities                          22,834        13,791
    Deferred revenue                             32,967        17,306
    Current portion of long-term debt               248             0
                                            ------------  ------------
          Total current liabilities              66,483        39,727

 Long-term debt                                  85,573        82,500
 Other liabilities                                  313           318
                                            ------------  ------------
          Total  liabilities                    152,369       122,545


 Stockholders' equity                           296,698        98,419
                                            ------------  ------------

          Total liabilities and
           stockholders' equity                $449,067      $220,964
                                            ============  ============


                 Allscripts Healthcare Solutions, Inc.
            Condensed Consolidated Statements of Operations
           (amounts in thousands, except per-share amounts)
                              (Unaudited)

                                 Three Months Ended  Six Months Ended
                                       June 30,          June 30,
                                 ------------------  -----------------
                                   2006      2005      2006     2005
                                 --------- --------  -------- --------

Revenue:
      Software and related
       services                   $46,745  $16,145   $75,059  $30,455
      Prepackaged medications      10,508   11,489    22,018   21,324
      Information services          2,761    1,900     5,141    3,950
                                 --------- --------  -------- --------
          Total revenue            60,014   29,534   102,218   55,729

Cost of revenue:
      Software and related
       services                    18,504    5,231    29,985   10,485
      Prepackaged medications       8,716    9,697    18,042   17,420
      Information services          1,522      725     2,794    1,776
                                 --------- --------  -------- --------
          Total cost of revenue    28,742   15,653    50,821   29,681
                                 --------- --------  -------- --------

Gross profit                       31,272   13,881    51,397   26,048

Operating expenses:
      Selling, general and
       administrative expenses     22,706   11,458    39,107   21,815
      Stock-based compensation
       expense                        416        -       823        -
      Amortization of intangibles   3,281      436     4,651      872
                                 --------- --------  -------- --------
          Income from operations    4,869    1,987     6,816    3,361

Interest expense                     (940)    (881)   (1,835)  (1,758)
Interest income                       639      957     1,838    1,834
Other expense, net                     (8)     (30)     (126)     (70)
                                 --------- --------  -------- --------
Income before income taxes          4,560    2,033     6,693    3,367

Income taxes                        1,733        -     2,543        -
                                 --------- --------  -------- --------
Net income                         $2,827   $2,033    $4,150   $3,367
                                 ========= ========  ======== ========

Net income per share - basic        $0.05    $0.05     $0.09    $0.09
                                 ========= ========  ======== ========

Net income per share - diluted      $0.05    $0.05     $0.08    $0.08
                                 ========= ========  ======== ========

Weighted average shares of common
 stock outstanding used in
 computing basic net income per
 share                             52,202   39,824    48,573   39,451
                                 ========= ========  ======== ========

Weighted average shares of common
 stock outstanding used in
 computing diluted net income
 per share                         55,282   43,144    51,665   42,585
                                 ========= ========  ======== ========


                 Allscripts Healthcare Solutions, Inc.
          Reconciliation of Non-GAAP Measure of Cash Earnings
                      and Cash Earnings Per Share
           (amounts in thousands, except per-share amounts)
                              (Unaudited)

                                 Three Months Ended  Six Months Ended
                                       June 30,          June 30,
                                 ------------------  -----------------
                                   2006      2005      2006     2005
                                 --------- --------  -------- --------

Net income,  as reported           $2,827   $2,033    $4,150   $3,367
Add back:

Income taxes                        1,733        -     2,543        -
Depreciation and amortization       4,803    1,556     7,537    3,125
Stock-based compensation              416        -       823        -
Realized losses on marketable
 securities (Note 1)                    -        -       118        -
A4 Health Systems integration
 costs                                  -        -     1,021        -
                                 --------- --------  -------- --------

Cash earnings                      $9,779   $3,589   $16,192   $6,492
                                 ========= ========  ======== ========


Cash earnings per share - basic     $0.19    $0.09     $0.33    $0.16
                                 ========= ========  ======== ========

Cash earnings per share - diluted   $0.18    $0.08     $0.31    $0.15
                                 ========= ========  ======== ========

Weighted average shares of
 common stock outstanding
 used in computing basic cash
 earnings per share                52,202   39,824    48,573   39,451
                                 ========= ========  ======== ========

Weighted average shares of
 common stock outstanding
 used in computing diluted cash
 earnings per share                55,282   43,144    51,665   42,585
                                 ========= ========  ======== ========

Note 1 -- Realized losses incurred as a result of the early maturity
of marketable securites due to cash requirements related to the
acquisition of A4 Health Systems, Inc.

    CONTACT: Allscripts
             Dan Michelson, 312-506-1217
             dan.michelson@allscripts.com
             or
             Bill Davis, 312-506-1211
             bill.davis@allscripts.com

    SOURCE: Allscripts
Scroll To Top