Company Posts Record Sales and Revenue
CHICAGO, Nov. 8 /PRNewswire-FirstCall/ — Allscripts, the leading provider
of clinical software, connectivity and information solutions that physicians
use to improve healthcare, today announced results for the three and nine
months ended September 30, 2007.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b)
Total revenue for the three months ended September 30, 2007 was $73.4
million, a record for the company, compared to $62.2 million for the same
period last year. Revenue from software and related services for the three
months ended September 30, 2007 was $59.0 million, compared to $49.5 million
for the same period last year, increasing by 19.1%.
Gross margin percentage was 50.1% for the third quarter of 2007, compared
to 49.1% during the third quarter of 2006.
Net income for the three months ended September 30, 2007 was $4.1 million,
or $0.07 per diluted share, compared to net income of $3.3 million, or $0.06
per diluted share, for the same period last year. Reported net income for the
three months ended September 30, 2007 and 2006 reflects deal-related
amortization of $1.7 million and $1.9 million, respectively, or $0.03 per
diluted share for both periods, net of tax, and total stock-based compensation
of $0.9 million and $0.4 million, respectively, or $0.01 per diluted share for
both reported periods, net of tax.
Non-GAAP adjusted earnings for the three months ended September 30, 2007
were $6.7 million, or $0.11 per diluted share, compared to non-GAAP adjusted
earnings of $5.5 million, or $0.10 per diluted share for the same period last
year. Please see “Non-GAAP Financial Measures” below for a discussion of
non-GAAP adjusted earnings and earnings per share.
As of September 30, 2007, the Company had cash and marketable securities
of $75.0 million.
“Allscripts made solid progress in the third quarter with record clinical
software sales of $63.2 million, including two of the largest agreements in
our history — Columbia University Medical Center, one of the world’s most
prestigious academic medical centers, and Lahey Clinic, the nation’s first
multi-specialty group practice,” said Glen Tullman, Chief Executive Officer of
Allscripts. “Sales in our clinical software businesses grew 77 percent over
last year, confirming both the acceleration in the market and Allscripts
continuing leadership.”
Total revenue for the nine months ended September 30, 2007 was $208.5
million, compared to $164.4 million for the same period last year. Revenue
from software and related services for the nine months ended September 30,
2007 was $164.9 million, compared to $124.6 million for the same period last
year, increasing by 32.4%.
Gross margin percentage was 50.1% for the first nine months of 2007,
compared to 49.8% during the same period of 2006.
Net income for the nine months ended September 30, 2007 nearly doubled
year-over-year to $14.6 million, or $0.25 per diluted share, compared to net
income of $7.4 million, or $0.14 per diluted share, for the same period last
year. Reported net income for the nine months ended September 30, 2007 and
2006 reflects deal-related amortization of $4.7 million, or $0.07 per diluted
share, net of tax, and $4.8 million, or $0.09 per diluted share, net of tax,
respectively, and total stock-based compensation of $1.7 million or $0.03 per
diluted share, net of tax, and $0.9 million, or $0.02 per diluted share, net
of tax, respectively. Non-GAAP adjusted earnings for the nine months ended
September 30, 2007 were $21.0 million, or $0.35 per diluted share, compared to
non-GAAP adjusted earnings of $13.1 million, or $0.25 per diluted share for
the same period last year.
Outlook
Allscripts has updated its revenue target for the full year 2007 to a
range of $286 million to $288 million. This target represents annualized
growth in total revenue of approximately 25%, and is reflective of
approximately 30% annualized growth from software and related services. The
Company also updated its GAAP earnings per diluted share outlook to a range of
$0.34 to $0.35, representing annualized growth of approximately 55%, and its
Non-GAAP adjusted earnings per diluted share outlook to a range of $0.48 to
$0.49. Non-GAAP adjusted earnings contemplates the add-back of approximately
$6.4 million, or $0.10 per diluted share, of deal-related amortization and
approximately $3.0 million, or $0.04 per diluted share, of stock-based
compensation, both net of tax.
The Company also provided its outlook for 2008 with annualized growth in
total revenue of approximately 20% to 25%, which is reflective of
approximately 25% to 30% in annualized growth from software and related
services. This target represents annualized growth in GAAP earnings per
diluted share of 40% to 50%. Annualized growth in Non-GAAP adjusted earnings
per diluted share is expected to be 40% to 45%, which contemplates
approximately $6.6 million or $0.10 per diluted share of deal-related
amortization, and approximately $6.0 million, or $0.09 per diluted share of
stock-based compensation, both net of tax.
Allscripts will conduct a conference call on Thursday, November 8, 2007 at
4:30 PM Eastern Standard Time to discuss the Company’s earnings and other
information. The conference call can be accessed by dialing 1-888-644-5594 and
requesting the Allscripts earnings call, or via the Internet at
https://www.allscripts.com. A recording of the conference call will be
available for a period of two weeks following the call at
https://www.allscripts.com or by calling 1-800-642-1687, ID # 21783504.
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 net income (and related per
share amounts), which is a non-GAAP financial measure under Section
101 of Regulation G under the Securities Exchange Act of 1934, as amended.
Non-GAAP net income consists of GAAP net income, excluding acquisition-related
amortization and stock-based compensation expense under SFAS No. 123R, 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.
Management also believes that non-GAAP net income (and related per share
amounts) provides 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 net income is a performance measure only, and it does
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) is the leading provider of clinical software,
connectivity and information solutions that physicians use to improve
healthcare. The Company’s business units provide unique solutions that inform,
connect and transform healthcare. Allscripts award-winning software
applications include Electronic Health Records, practice management,
e-prescribing, document imaging, emergency department, and care management
solutions, all offered through the Company’s Clinical Solutions units.
Additionally, Allscripts provides clinical product education and connectivity
solutions for physicians and patients through its Physicians Interactive(TM)
unit, and medication fulfillment services through its Medication Services
unit. To learn more, visit Allscripts on the Web at 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; 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 2006 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 Healthcare Solutions, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
(Unaudited)
Sept. 30, Dec. 31,
Assets 2007 2006
Current assets:
Cash and cash equivalents $31,968 $42,461
Marketable securities 28,384 14,553
Accounts receivable, net 81,225 55,579
Deferred taxes, net 24,391 27,437
Inventories 4,370 3,247
Prepaid expenses and other current assets 16,920 10,620
Total current assets 187,258 153,897
Long-term marketable securities 14,673 26,024
Fixed assets, net 16,662 14,094
Software development costs, net 19,720 12,285
Intangible assets, net 74,717 78,050
Goodwill 181,397 188,261
Other assets 4,552 4,999
Total assets $498,979 $477,610
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $14,695 $9,294
Accrued liabilities 19,929 26,546
Deferred revenue 41,084 35,549
Current portion of long-term debt 274 258
Total current liabilities 75,982 71,647
Long-term debt 85,234 85,441
Deferred income taxes 3,266 3,915
Other liabilities 2,207 357
Total liabilities 166,689 161,360
Stockholders' equity 332,290 316,250
Total liabilities and stockholders' equity $498,979 $477,610
Allscripts Healthcare Solutions, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per-share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Revenue:
Software and related services $58,985 $49,534 $164,906 $124,593
Prepackaged medications 10,904 10,438 32,072 32,456
Information services 3,555 2,219 11,529 7,360
Total revenue 73,444 62,191 208,507 164,409
Cost of revenue:
Software and related services 25,017 21,631 70,196 51,616
Prepackaged medications 9,223 8,802 26,672 26,844
Information services 2,408 1,202 7,099 3,996
Total cost of revenue (a) 36,648 31,635 103,967 82,456
Gross profit 36,796 30,556 104,540 81,953
Operating expenses:
Selling, general and
administrative expenses (b) 27,173 21,947 74,972 61,877
Amortization of intangibles 2,757 3,045 7,909 7,696
Income from operations 6,866 5,564 21,659 12,380
Interest expense (927) (940) (2,790) (2,775)
Interest income and other, net 934 649 3,077 2,361
Gain on sale of equity investment - - 2,392 -
Income before income taxes 6,873 5,273 24,338 11,966
Income taxes (2,749) (2,011) (9,719) (4,554)
Net income $4,124 $3,262 $14,619 $7,412
Net income per share - basic $0.07 $0.06 $0.26 $0.15
Net income per share - diluted $0.07 $0.06 $0.25 $0.14
Weighted average shares of common
stock outstanding used in
computing basic net income per
share 56,191 53,048 55,500 50,081
Weighted average shares of common
stock outstanding used in
computing diluted net income per
share (c) 65,225 55,676 64,541 52,572
(a) Includes stock-based compensation of $247 and $0 for the three
months ended September 30, 2007 and 2006, respectively and $432 and
$0 for the nine months ended September 30, 2007 and 2006,
respectively.
(b) Includes stock-based compensation of $1,262 and $617 for the three
months ended September 30, 2007 and 2006, respectively and $2,358
and $1,440 for the nine months ended September 30, 2007 and 2006,
respectively.
(c) Weighted average diluted shares for the three and nine months ended
September 30, 2007 include 7,329 common shares related to the
Company's 3.5% Senior Convertible Notes. Such shares were
antidilutive for the three and nine months ended September 30, 2006.
Interest expense, net of tax, totaling $521 has been added back to
net income for the net income per diluted share calculation for the
three and nine months ended September 30, 2007.
Allscripts Healthcare Solutions, Inc.
Reconciliation of Non-GAAP Adjusted Earnings and Non-GAAP
Adjusted Earnings Per Share
(amounts in thousands, except per-share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
Net Income $4,124 $3,262 $14,619 $7,412
Stock compensation expense (tax
effected at 40% for 2007 and
38% for 2006) 905 383 1,674 893
Deal-related amortization (tax
effected at 40% for 2007 and
38% for 2006) 1,654 1,888 4,745 4,772
Non-GAAP Adjusted Earnings $6,683 $5,533 $21,038 $13,077
Weighted average shares of
common stock outstanding used
in computing diluted non-GAAP
adjusted earnings per share 65,225 55,676 64,541 52,572
Non-GAAP Adjusted Earnings per
share - diluted $0.11 $0.10 $0.35 $0.25
SOURCE Allscripts Healthcare Solutions, Inc.
CONTACT:
Bill Davis, Chief Financial Officer
Allscripts Healthcare Solutions, Inc.
1-312-506-1211
bill.davis@allscripts.com
or
Dan Michelson, Chief Marketing Officer
Allscripts Healthcare Solutions, Inc.
1-312-506-1217
dan.michelson@allscripts.com
or
Todd Stein, Senior Manager-Public Relations
Allscripts Healthcare Solutions, Inc.
1-312-506-1216
todd.stein@allscripts.com
Web site: https://www.allscripts.com
(MDRX)