Allscripts Reports Record Fourth Quarter 2006 Results
Revenue From Software and Related Services Up 168% Over Prior Year
CHICAGO (February 13, 2007) –
Allscripts (Nasdaq: MDRX), 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, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b )
Total revenue for the three months ended December 31, 2006 was $63.6 million, compared to $34.2 million for the same period last year. Total revenue for the three months ended December 31, 2006 includes the results of A4 Health Systems, Inc., which Allscripts acquired on March 2, 2006. Revenue from software and related services for the three months ended December 31, 2006 was $48.9 million, compared to $18.2 million for the same period last year, increasing by 168%.
Gross margin percentage was 53.5% for the fourth quarter of 2006, compared to 45.5% during the fourth quarter of 2005.
Net income for the three months ended December 31, 2006 was $4.5 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. Reported net income for 2006 reflects stock-based compensation pursuant to Allscripts adoption of new accounting rules effective as of January 1, 2006 and reflects tax provisioning and acquisition related amortization not included in prior periods. In order to facilitate further comparison of results against periods prior to January 1, 2006, Allscripts began reporting non-GAAP adjusted earnings in 2006. Adjusted 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 Health Systems integration costs. Such adjusted earnings for the three months ended December 31, 2006 were $12.5 million, or $0.21 per diluted share, compared to adjusted earnings of $5.7 million, or $0.13 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 adjusted earnings per share.
As of December 31, 2006, the Company had cash and marketable securities of $83.0 million.
“By virtually every measure, 2006 was a record year for Allscripts. We extended our leadership across all segments of the market and proved that, together with our clients, we can transform our healthcare system into an interoperable, connected electronic network that lets physicians spend their time with patients, not paperwork,” said Glen Tullman, Chief Executive Officer of Allscripts. “As we move into 2007, healthcare’s challenges remain front- page news and every trend supports the adoption of software and technology as the solution. We’re just getting started in terms of market penetration, and there’s lots of runway ahead.”
Total revenue for the year ended December 31, 2006 was $228.0 million, compared to $120.6 million for 2005. Revenue from software and related services for the year ended December 31, 2006 was $173.5 million, compared to $65.2 million for 2005, increasing by 166%. Total revenue for the year ended December 31, 2006 includes the results of A4 Health Systems from the acquisition date of March 2, 2006 through the end of the fourth quarter of 2006.
Total gross margin percentage was 50.9% for the year ended December 31, 2006, compared to 45.5% for the year ended December 31, 2005.
Net income for the year ended December 31, 2006 was $11.9 million, or $0.22 per diluted share, compared to net income of $9.7 million, or $0.23 per diluted share, for 2005. Non-GAAP adjusted earnings for the year ended December 31, 2006 was $39.2 million, or $0.74 per diluted share, compared to adjusted earnings of $16.8 million, or $0.39 per diluted share, for the same period last year.
Non-GAAP Financial Measures
Allscripts reports its financial results in accordance with generally accepted accounting principles (“GAAP”). Allscripts management also evaluates and makes operating decisions using various other measures. These measures are generally based on revenues generated by Allscripts products and services and certain costs of producing that revenue, such as costs of selling, general and administrative expenses. One such measure is non-GAAP adjusted earnings, which is a non-GAAP financial measure under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. Non-GAAP adjusted earnings consists of GAAP income (loss) before taxes, excluding as applicable, depreciation and amortization, stock-based compensation expense under SFAS No. 123R, realized losses on marketable securities and integration costs associated with the March 2, 2006 acquisition of A4 Health Systems.
Management believes that it is useful in measuring Allscripts operations to exclude, as applicable, depreciation and amortization, realized losses on marketable securities and A4 Health Systems integration costs because these costs are essentially fixed and cannot be influenced by management in the short or medium term. In addition, management believes that excluding share- based compensation expense under SFAS No. 123R is appropriate because this is not a cash expense, but instead is a significant accounting charge that the Company was not required to record for its share-based compensation awards prior to 2006. Accordingly, management believes that excluding these items from non-GAAP adjusted earnings will provide information that is more generally comparable to prior periods and that reflects the Company’s core operating results.
Management believes that non-GAAP adjusted earnings provides useful supplemental information to management and investors regarding the 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 adjusted earnings is a performance measure only, and it does not provide any measure of the Company’s cash flow or liquidity. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance in accordance with GAAP, and investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures contained within the attached condensed consolidated financial statements.
Allscripts will conduct a conference call on Tuesday, February 13, 2007 at 4:30 PM Eastern Time. The conference call can be accessed by dialing 1-888-644-5594 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 #7427360.
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 on the Web at http://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 http://www.sec.gov .
Allscripts Healthcare Solutions, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except per-share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Revenue:
Software and related services $48,910 $18,249 $173,503 $65,166
Prepackaged medications 11,232 12,789 43,688 45,609
Information services 3,418 3,159 10,778 9,789
Total revenue 63,560 34,197 227,969 120,564
Cost of revenue:
Software and related services 18,704 6,908 70,351 23,507
Prepackaged medications 9,419 10,873 36,263 38,046
Information services 1,421 849 5,417 4,136
Total cost of revenue 29,544 18,630 112,031 65,689
Gross profit 34,016 15,567 115,938 54,875
Operating expenses:
Selling, general and
administrative expenses (a) 23,952 12,068 85,798 43,908
Amortization of intangibles 2,576 436 10,272 1,744
Income from operations 7,488 3,063 19,868 9,223
Interest expense (937) (880) (3,712) (3,516)
Interest income 813 1,230 3,308 4,128
Other expense, net (11) (10) (145) (125)
Income before income taxes 7,353 3,403 19,319 9,710
Income taxes (2,870) – (7,424) –
Net income $4,483 $3,403 $11,895 $9,710
Net income per share – basic $0.08 $0.08 $0.23 $0.24
Net income per share – diluted $0.08 $0.08 $0.22 $0.23
Weighted average shares of common
stock outstanding used in computing
basic net income per share 53,958 40,812 51,058 40,045
Weighted average shares of diluted
common stock outstanding used in
computing diluted net income
per share (b) 63,954 43,890 53,367 43,068
(a) Includes stock-based compensation of $888 and $558; and $2,328 and
$604, for the three months ended and for the year ended December 31,
2006 and 2005, respectively.
(b) Weighted average shares for the three months ended December 31, 2006
include 7,329 common shares related to the Company’s 3.5% Senior
Convertible Notes. Such shares were antidilutive for all other periods
presented.
Allscripts Healthcare Solutions, Inc.
Reconciliation of Non-GAAP Measure of Adjusted Earnings and Adjusted
Earnings Per Share
(amounts in thousands, except per-share amounts)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2006 2005 2006 2005
Net income, as reported $4,483 $3,403 $11,895 $9,710
Add back:
Income taxes 2,870 – 7,424 –
Depreciation and amortization 4,285 1,746 16,461 6,528
Stock-based compensation 888 558 2,328 604
Realized losses on marketable
securities (a) – – 118 –
A4 Health Systems integration costs – – 1,021 –
Adjusted earnings 12,526 5,707 39,247 16,842
Add back:
Interest expense and debt cost
amortization 872 (b) (b) (b)
Adjusted earnings for adjusted diluted
EPS calculation $13,398 $5,707 $39,247 $16,842
Adjusted earnings per share – basic $0.23 $0.14 $0.77 $0.42
Adjusted earnings per share – diluted $0.21 $0.13 $0.74 $0.39
Weighted average shares of common stock
outstanding used in computing basic
adjusted earnings per share 53,958 40,812 51,058 40,045
Weighted average shares of common stock
outstanding used in computing diluted
adjusted earnings per share (c) 63,954 43,890 53,367 43,068
(a) — Realized losses incurred as a result of the early maturity of
marketable securities due to cash requirements related to the
acquisition of A4 Health Systems, Inc.
(b) — Not applicable due to convertible shares being antidilutive for
GAAP earnings per share purposes.
(c) — Weighted average shares for the three months ended December 31,
2006 include 7,329 common shares related to the Company’s 3.5%
Senior Convertible Notes. Such shares were antidilutive for all
other periods presented.
Allscripts Healthcare Solutions, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands)
(Unaudited)
December 31, December 31,
Assets 2006 2005
Current assets:
Cash and cash equivalents $42,461 $60,905
Marketable securities 14,553 54,408
Accounts receivable, net 55,579 29,746
Deferred taxes, net 27,437 –
Inventories 3,247 2,174
Prepaid expenses and other
current assets 10,620 5,811
Total current assets 153,897 153,044
Long-term marketable securities 26,024 30,750
Fixed assets, net 14,094 2,753
Software development costs, net 12,285 6,409
Intangible assets, net 78,050 9,151
Goodwill 188,261 13,760
Other assets 4,999 5,097
Total assets $477,610 $220,964
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $9,294 $8,630
Accrued liabilities 26,546 13,791
Deferred revenue 35,549 17,306
Current portion of long-term debt 258 –
Total current liabilities 71,647 39,727
Long-term debt 85,441 82,500
Deferred income taxes 3,915 –
Other liabilities 357 318
Total liabilities 161,360 122,545
Stockholders’ equity 316,250 98,419
Total liabilities and
stockholders’ equity $477,610 $220,964
SOURCE Allscripts
-0- 02/13/2007
/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 Bill Davis, Chief Financial
Officer, +1-312-506-1211, bill.davis@allscripts.com , all of Allscripts/
/Photo: http://www.newscom.com/cgi-bin/prnh/20061005/ALLSCRIPTSLOGO-b
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com/
/Web site: http://www.allscripts.com /
(MDRX)
CO: Allscripts
ST: Illinois
IN: MTC HEA CPR STW
SU: ERN CCA
JR-AM
— CGTU052 —
6741 02/13/2007 16:01 EST http://www.prnewswire.com
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