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Allscripts Reports Fourth Quarter 2007 Results
Date:2/13/2008

Company Posts Record Revenue and Earnings per Share for the Year

CHICAGO, Feb. 13 /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 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 marciliation of Non-GAAP Adjusted Earnings and Non-GAAP

Adjusted Earnings Per Share

(amounts in thousands, except per-share amounts)

(Unaudited)

Three Months Ended Twelve Months Ended

December 31, December 31,

2007 2006 2007 2006

Net Income $5,944 $4,483 $20,563 $11,895

Stock compensation expense (tax

effected at 40% for 2007 and

38% for 2006) 928 551 2,602 1,443

Deal-related amortization (tax

effected at 40% for 2007 and

38% for 2006) 1,636 1,597 6,382 6,369

Non-GAAP Adjusted Earnings $8,508 $6,631 $29,547 $19,707

Weighted average shares of

common stock outstanding used

in computing diluted non-GAAP

adjusted earnings per share 65,299 63,954 64,671 53,367

Non-GAAP Adjusted Earnings Per

Share - diluted $0.14 $0.11 $0.49 $0.37

ketable 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.

Allscripts Healthcare Solutions, Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands)

(Unaudited)

December 31, December 31,

Assets 2007 2006

Current assets:

Cash and cash equivalents $43,785 $42,461

Marketable securities 5,759 14,553

Accounts receivable, net 81,351 55,579

Deferred taxes, net 16,658 27,437

Inventories 4,178 3,247

Prepaid expenses and other current assets 17,401 10,620

Total current assets 169,132 153,897

Long-term marketable securities 13,459 26,024

Fixed assets, net 19,384 14,094

Software development costs, net 22,969 12,285

Deferred taxes, net 7,850 -

Intangible assets, net 76,333 78,050

Goodwill 257,585 188,261

Other assets 5,252 4,999

Total assets $571,964 $477,610

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $15,911 $9,294

Accrued liabilities 22,707 26,546

Accrued acquisition obligation 8,946 -

Deferred revenue 45,940 35,549

Current portion of long-term debt 279 258

Other current liabilities 274 -

Total current liabilities 94,057 71,647

Long-term debt 135,162 85,441

Deferred taxes, net - 3,915

Other liabilities 2,105 357

Total liabilities 231,324 161,360

Stockholders' equity 340,640 316,250

Total liabilities and stockholders'

equity $571,964 $477,610

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,

2007 2006 2007 2006

Revenue:

Software and related services $57,767 $48,910 $222,673 $173,503

Prepackaged medications 11,887 11,232 43,959 43,688

Information services 3,747 3,418 15,276 10,778

Total revenue 73,401 63,560 281,908 227,969

Cost of revenue:

Software and related services 24,670 18,704 94,866 70,351

Prepackaged medications 10,302 9,419 36,974 36,263

Information services 2,556 1,421 9,655 5,417

Total cost of revenue (a) 37,528 29,544 141,495 112,031

Gross profit 35,873 34,016 140,413 115,938

Operating expenses:

Selling, general and

administrative expenses (b) 26,694 23,952 101,666 85,798

Amortization of intangibles 2,727 2,576 10,636 10,272

Income from operations 6,452 7,488 28,111 19,868

Interest expense (925) (937) (3,715) (3,712)

Interest income and other, net 884 802 3,961 3,163

Gain on sale of equity investment - - 2,392 -

Income before income taxes 6,411 7,353 30,749 19,319

Income taxes (467) (2,870) (10,186) (7,424)

Net income $5,944 $4,483 $20,563 $11,895

Net income per share - basic $0.11 $0.08 $0.37 $0.23

Net income per share - diluted $0.10 $0.08 $0.35 $0.22

Weighted average shares of common

stock outstanding

used in computing basic net

income per share 56,339 53,958 55,712 51,058

Weighted average shares of common

stock outstanding used in

computing diluted net income

per share (c) 65,299 63,954 64,671 53,367

(a) Includes stock-based compensation of $329 and $0 for the three

months ended December 31, 2007 and 2006, respectively, and $761 and

$0 for the years ended December 31, 2007 and 2006, respectively.

(b) Includes stock-based compensation of $1,216 and $888 for the three

months ended December 31, 2007 and 2006, respectively, and $3,575

and $2,328 for the years ended December 31, 2007 and 2006,

respectively.

(c) Weighted average diluted shares for the three months ended December

31, 2007 and 2006 and for the year ended December 31, 2007 include

7,329 common shares related to the Company's 3.5% Senior Convertible

Notes. Such shares were antidilutive for the year ended December 31,

2006. Interest expense, net of tax, has been added back to net

income for the net income per diluted share calculation for the

three months ended December 31, 2006 and 2007 and the year ended

December 31, 2007.

Allscripts Healthcare Solutions, Inc.

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SOURCE Allscripts
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