Allscripts Reports Record Third-Quarter Results

Revenue From Software and Related Services Up 200% Over Prior Year

CHICAGO (October 26, 2006) –

Allscripts Healthcare Solutions (Nasdaq: MDRX), the leading provider of clinical software, connectivity and information solutions that physicians use to improve healthcare, announced its results for the three and nine months ended September 30, 2006. Total revenue for the three months ended September 30, 2006, was $62.2 million, compared to $30.6 million for the same period last year. Total revenue for the three months ended September 30, 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 September 30, 2006, was $49.5 million, compared to $16.5 million for the same period last year, increasing by approximately 200%.

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

Gross margin percentage was 49.1% for the third quarter of 2006, compared to 43.3% during the third quarter of 2005.

Net income for the three months ended September 30, 2006, was $3.3 million, or $0.06 per diluted share, compared to net income of $2.9 million, or $0.07 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 cash earnings in 2006. 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 Health Systems integration costs. Cash earnings for the three months ended September 30, 2006 were $10.4 million, or $0.19 per diluted share, compared to cash earnings of $4.6 million, or $0.10 per diluted share, for the same period last year. Please see “Financial Measures” below for a discussion of cash earnings and cash earnings per share.

As of September 30, 2006, the Company had cash and marketable securities of $71.5 million.

“Strong demand for Electronic Health Records and our entire suite of solutions continues to drive impressive results for Allscripts,” said Glen Tullman, Chief Executive Officer of Allscripts. “Physicians and healthcare organizations increasingly understand that technology is the answer to the challenges facing our health system, and Allscripts has demonstrated that we provide solutions that physicians use to deliver improved patient safety, quality of care, and bottom line benefits.”

Total revenue for the nine months ended September 30, 2006, was $164.4 million, compared to $86.4 million for the nine months ended September 30, 2005. Revenue from software and related services for the nine months ended September 30, 2006, was $124.6 million, compared to $46.9 million for the same period last year, increasing by approximately 166%. Total revenue for the nine months ended September 30, 2006 includes the results of A4 Health Systems from the acquisition date of March 2, 2006 through the end of the third quarter of 2006.

Gross margin percentage was 49.8% for the nine months ended September 30, 2006, compared to 45.5% for the nine months ended September 30, 2005.

Net income for the nine months ended September 30, 2006, was $7.4 million, or $0.14 per diluted share, compared to net income of $6.3 million, or $0.15 per diluted share, for the same period last year. Cash earnings for the nine months ended September 30, 2006 were $26.6 million, or $0.51 per diluted share, compared to cash earnings of $11.1 million, or $0.26 per diluted share, for the same period last year.

Allscripts will conduct a conference call on Thursday, October 26, 2006, at 4:30 p.m. Eastern Daylight Time. The conference call also can be accessed by dialing 1-888-644-5594. 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 http://www.allscripts.com or by calling 1-800-642-1687, ID # 8543739.

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. These non-GAAP financial measures should be viewed as supplemental to, and not as an alternative for, “net income” calculated in accordance with GAAP. 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.

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 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 Balance Sheets
(amounts in thousands)
(Unaudited)

September 30, December 31,
Assets 2006 2005

Current assets:
Cash and cash equivalents $35,734 $60,905
Marketable securities 11,250 54,408
Accounts receivable, net 57,394 29,244
Other receivables 219 502
Deferred taxes, net 3,464 –
Inventories 3,609 2,174
Prepaid expenses and other
current assets 9,106 5,811
Total current assets 120,776 153,044

Long-term marketable securities 24,510 30,750
Fixed assets, net 13,560 2,753
Software development costs, net 9,987 6,409
Deferred taxes, net 28,305 –
Intangible assets, net 80,611 9,151
Goodwill 182,802 13,760
Other assets 5,168 5,097
Total assets $465,719 $220,964

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable $13,703 $8,630
Accrued liabilities 25,997 13,791
Deferred revenue 33,732 17,306
Current portion of long-term debt 253 0
Total current liabilities 73,685 39,727

Long-term debt 85,508 82,500
Other liabilities 346 318
Total liabilities 159,539 122,545

Stockholders’ equity 306,180 98,419

Total liabilities and stockholders’
equity $465,719 $220,964

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,
2006 2005 2006 2005
Revenue:
Software and related services $49,534 $16,462 $124,593 $46,917
Prepackaged medications 10,438 11,496 32,456 32,820
Information services 2,219 2,680 7,360 6,630
Total revenue 62,191 30,638 164,409 86,367

Cost of revenue:
Software and related services 21,631 6,114 51,616 16,599
Prepackaged medications 8,802 9,753 26,844 27,173
Information services 1,202 1,511 3,996 3,287
Total cost of revenue 31,635 17,378 82,456 47,059

Gross profit 30,556 13,260 81,953 39,308

Operating expenses:
Selling, general and
administrative expenses 21,330 10,025 60,437 31,840
Stock-based compensation
expense 617 – 1,440 –
Amortization of intangibles 3,045 436 7,696 1,308
Income from operations 5,564 2,799 12,380 6,160

Interest expense (940) (880) (2,775) (2,636)
Interest income 657 1,064 2,495 2,898
Other expense, net (8) (43) (134) (115)
Income before income taxes 5,273 2,940 11,966 6,307

Income taxes 2,011 – 4,554 –
Net income $3,262 $2,940 $7,412 $6,307

Net income per share – basic $0.06 $0.07 $0.15 $0.16

Net income per share – diluted $0.06 $0.07 $0.14 $0.15

Weighted average shares of common
stock outstanding used in
computing basic net income
per share 53,048 40,895 50,081 39,938

Weighted average shares of common
stock outstanding used in
computing diluted net
income per share 55,676 44,223 52,572 43,003

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 Nine Months Ended
September 30, September 30,
2006 2005 2006 2005

Net income, as reported $3,262 $2,940 $7,412 $6,307
Add back:

Income taxes 2,011 – 4,554 –
Depreciation and amortization 4,489 1,657 12,026 4,782
Stock-based compensation 617 – 1,440 –
Realized losses on marketable
securities (Note 1) – – 118 –
A4 Health Systems integration costs – – 1,021 –

Cash earnings $10,379 $4,597 $26,571 $11,089

Cash earnings per share – basic $0.20 $0.11 $0.53 $0.28

Cash earnings per share – diluted $0.19 $0.10 $0.51 $0.26

Weighted average shares of common
stock outstanding used in
computing basic cash earnings
per share 53,048 40,895 50,081 39,938

Weighted average shares of common
stock outstanding used in
computing diluted cash earnings
per share 55,676 44,223 52,572 43,003

Note 1 — 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.

SOURCE Allscripts
-0- 10/26/2006
/CONTACT: Dan Michelson, Chief Marketing Officer, +1-312-506-1217,
dan.michelson@allscripts.com , or Bill Davis, Chief Financial Officer,
+1-312-506-1211, bill.davis@allscripts.com , both of Allscripts/
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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 CPR STW HEA
SU: ERN CCA

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— CGTH080 —
4091 10/26/2006 16:00 EDT http://www.prnewswire.com

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