Allscripts Reports Fourth Quarter 2007 Results

Company Posts Record Revenue and Earnings per Share for the Year

CHICAGO (February 13, 2008) –

Allscripts, the leading provider of clinical software, connectivity and information solutions that physicians use to improve healthcare, today announced results for the three months and year ended December 31, 2007.

(Logo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b)

Total revenue for the three months ended December 31, 2007 was $73.4 million, compared to $63.6 million for the same period last year. Revenue from software and related services for the three months ended December 31, 2007 was $57.8 million, compared to $48.9 million for the same period last year, increasing by 18.1%. Gross margin percentage was 48.9% for the fourth quarter of 2007, compared to 53.5% during the fourth quarter of 2006.

Net income for the three months ended December 31, 2007 was $5.9 million, or $0.10 per diluted share, compared to net income of $4.5 million, or $0.08 per diluted share, for the same period last year. Non-GAAP adjusted earnings for the three months ended December 31, 2007 were $8.5 million, or $0.14 per diluted share, compared to non-GAAP adjusted earnings of $6.6 million, or $0.11 per diluted share for the same period last year. Non-GAAP adjusted earnings for the three months ended December 31, 2007 and 2006 are comprised of net income giving effect to the add-back of acquisition-related amortization of $1.6 million or $0.03 per diluted share for both reported periods, net of tax, and total stock-based compensation expense of $0.9 million and $0.6 million, respectively, or $0.01 per diluted share for both reported periods, net of tax. Please see “Explanation of Non-GAAP Financial Measures” below for a discussion of non-GAAP adjusted earnings and earnings per share.

As of December 31, 2007 the Company had cash and marketable securities of $63.0 million.

“2007 was a record year for Allscripts in earnings and revenue, demonstrating the interest in and importance of automating our healthcare system,” said Glen Tullman, Chief Executive Officer of Allscripts. “In 2008, we will focus on taking advantage of our market-leading position across all segments in which we compete, including leveraging our ECIN acquisition. Our objective is to connect healthcare while continuing to help our clients effectively implement and use all of our solutions to make a difference in the lives of physicians and patients.”

Total revenue for the year ended December 31, 2007 was a record $281.9 million, compared to $228.0 million for 2006, an increase of 23.7%. Revenue from software and related services for the year ended December 31, 2007 was $222.7 million, compared to $173.5 million for 2006, increasing by 28.3%.

Total gross margin percentage was 49.8% for the year ended December 31, 2007, compared to 50.9% for the year ended December 31, 2006.

Net income for the year ended December 31, 2007 was $20.6 million, or $0.35 per diluted share, compared to net income of $11.9 million, or $0.22 per diluted share, for 2006. Non-GAAP adjusted earnings for the year ended December 31, 2007 was $29.5 million, or $0.49 per diluted share, compared to adjusted earnings of $19.7 million, or $0.37 per diluted share, for the same period last year. Non-GAAP adjusted earnings for the year ended December 31, 2007 and 2006 are comprised of net income giving effect to the add-back of acquisition-related amortization of $6.4 million for both reported periods, or $0.10 and $0.12 per diluted share, respectively, net of tax, and total stock-based compensation of $2.6 million and $1.4 million, respectively, or $0.04 and $0.03 per diluted share, respectively, net of tax.

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.

Allscripts will conduct a conference call on Wednesday, February 13, 2008 at 4:30 PM Eastern Time. The conference call can be accessed by dialing 1-800-374-1376 and requesting the Allscripts earnings call, or at http://www.allscripts.com. A recording of the conference call will be available three hours after the conclusion of the call for a period of two weeks at http://www.allscripts.com or by calling 1-800-642-1687, ID #30156822.

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 unique solutions inform, connect and transform healthcare, delivering improved care at lower cost. More than 40,000 physicians and thousands of other healthcare professionals in clinics and hospitals nationwide utilize Allscripts to automate and connect everyday tasks such as writing prescriptions, documenting patient care, managing billing and scheduling, and safely discharging patients. To learn more, visit Allscripts at 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; 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.

Source: Allscripts