CHICAGO, Aug. 8, 2012 /PRNewswire/ -- Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) today announced the following financial results for the three and six months ended June 30, 2012.
Second Quarter Highlights:
Please refer to Table 4 "Condensed Non-GAAP Financial Information" for a complete reconciliation of all GAAP and non-GAAP financial measures discussed in this press release.
"Our second-quarter results were solid and demonstrated improvement in several key business metrics," said Glen Tullman, Chief Executive Officer of Allscripts. "We signed two new Sunrise Clinical Manager (SCM) clients in the quarter plus one SCM footprint expansion within the client base. In addition, ambulatory bookings increased quarter-over-quarter, further expanding Allscripts market reach. We also generated solid operating cash flow of close to $60 million."We are aggressively focused on executing our business plan and delivering on our client commitments. We remain on schedule to release important new solution enhancements during the fourth quarter of 2012. Allscripts remains well positioned in a robust market with a comprehensive portfolio spanning the ambulatory, acute and post-acute care delivery environments."
Stock Repurchase Program and Credit FacilitiesIn April 2012 the Allscripts Board of Directors approved a $200 million increase in the Company's existing stock repurchase program increasing the total repurchase authorization to $400 million.During the three months ended June 30, 2012, Allscripts repurchased approximately 21 million shares of common stock for approximately $225 million at an average price of approximately $10.87 per share. As of June 30, 2012, the amount available for repurchase of common stock under this program was approximately $123 million.
Any common stock repurchases may be made through open market transactions, block trades, privately negotiated transactions (including accelerated share repurchase transactions) or other means. Any repurchase activity will depend on factors such as the Company's working capital needs, cash requirements for investments, debt repayment obligations, the Company's stock price, and economic and market conditions. The Company's stock repurchase program may be accelerated, suspended, delayed or discontinued at any time.
In June 2012, the Company obtained $150 million in the form of an incremental term loan, which was used to partially repay borrowings under the Company's existing revolving credit facility, previously used to fund the Company's share repurchases in the second quarter of 2012.
During the second quarter of 2012, Allscripts repaid approximately $29.5 million of borrowings under its senior secured credit facilities.
As of June 30, 2012, the Company had $488 million of borrowings outstanding and cash and marketable securities of approximately $122 million.
Updated Annual Guidance, Reflects Revised Share CountAllscripts has revised its financial guidance for 2012 as detailed below to reflect the impact of a reduction in shares outstanding and increase in borrowings associated with the stock repurchase activity. Please see the footnotes at the end of this release for a reconciliation of GAAP and non-GAAP financial presentations and other information.
2012 Guidance(2)Non-GAAP Revenue$1,480.0 to $1,520.0 millionNon-GAAP Operating Margin16.0 to 17.0 percentEffective Tax Rate36.5 to 37.0 percentNon-GAAP Diluted EPS$0.77 to $0.83 (Prior $0.74 to $0.80)Diluted Shares182.0 million (Prior 194.0)Conference CallAllscripts will conduct a conference call today, Wednesday, August 8, 2012, at 4:30 PM Eastern Daylight Time to discuss the Company's earnings and other information.
Investors can access the conference via the Internet at http://investor.allscripts.com. Participants also may access the conference call by dialing (877) 303-0543 (toll free in the US) or (973) 935-8787 (international) and requesting Conference ID #97854516.
A replay of the call will be available two hours after the conclusion of the call, for a period of two weeks, at http://www.allscripts.com or by calling (855) 859-2056 or (404) 537-3406 - Conference ID #97854516.
Supplemental and non-GAAP financial information is also available at http://investor.allscripts.com. Footnotes(1)
Bookings reflect the value of executed contracts for software, hardware, services, remote hosting,
outsourcing and SaaS.(2)
Allscripts non-GAAP guidance for calendar year 2012 assumes the following adjustments to GAAP revenue,
operating and net income: an acquisition-related deferred revenue adjustment of approximately $2.1 million;
approximately $63.0 million of acquisition-related amortization; approximately $40.0 million in stock-based
compensation expense; approximately $9.0 million in transaction-related and non-recurring expenses, all on
a pre-tax basis. About AllscriptsAllscripts (NASDAQ: MDRX) delivers the insights that healthcare providers require to generate world-class outcomes. The company's Electronic Health Record, practice management and other clinical, revenue cycle, connectivity and information solutions create a Connected Community of Health™ for physicians, hospitals and post-acute organizations. To learn more about Allscripts, please visit www.allscripts.com, Twitter, YouTube and It Takes A Community: The Allscripts Blog.
Table 1Allscripts Healthcare Solutions, Inc.Condensed Consolidated Balance Sheets(In millions)(Unaudited)June 30,December 31,20122011ASSETSCurrent assets:Cash and cash equivalents
$120.4$157.8Accounts receivable, net
363.0362.8Deferred taxes, net
1.32.0Prepaid expenses and other current assets
130.1117.4Total current assets
655.4680.6Long-term marketable securities
1.61.7Fixed assets, net
139.2122.6Software development costs, net
108.898.4Intangible assets, net
1,039.41,039.4Deferred taxes, net
$2,481.1$2,517.3LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:Accounts payable
99.8103.4Accrued compensation and benefits
308.5288.9Current maturities of long-term debt and capital lease obligations
68.145.5Total current liabilities
19.718.9Deferred taxes, net
1,200.31,040.6Total stockholders' equity
1,280.81,476.7Total liabilities and stockholders' equity
$2,481.1$2,517.3 Table 2Allscripts Healthcare Solutions, Inc.Condensed Consolidated Statements of Operations(In millions, except per-share amounts)(Unaudited)Three Months Ended June 30,Six Months Ended June 30,2012201120122011Revenue:System sales
113.9103.2228.7203.6Transaction processing and other
370.0356.8734.7692.1Cost of revenue: (a)System sales
36.335.172.368.1Transaction processing and other
84.169.6163.8131.5Total cost of revenue
157.5167.8313.2327.6Selling, general and administrative expenses
92.3101.5189.6205.7Research and development
38.224.874.446.8Amortization of intangible assets
9.39.418.518.6Income from operations
(4.4)(5.1)(8.2)(13.0)Interest income and other, net
0.20.40.50.8Income before income taxes
13.527.423.044.3Provision for income taxes
$8.0$15.9$13.8$28.5Earnings per share - basic and diluted
$0.04$0.08$0.07$0.15Weighted average common shares outstanding:Basic
184.6193.2188.4192.8(a) Includes pre-tax amortization of intangibles
$7.2$7.2$14.4$14.6 Table 3Allscripts Healthcare Solutions, Inc.Condensed Consolidated Statements of Cash Flows(In millions)(Unaudited)Three Months Ended June 30,Six Months Ended June 30,2012201120122011Cash flows from operating activities:Net income
$8.0$15.9$13.8$28.5Non-cash adjustments to net income
52.352.698.692.9Cash impact of changes in operating assets and liabilities
(1.5)(16.2)21.0(2.3)Net cash provided by operating activities
58.852.3133.4119.1Cash flows from investing activities:Capital expenditures
(13.6)(14.0)(26.9)(30.3)Net (purchases) sales and maturities of marketable securities and other investments
0.0(8.7)0.0(12.8)Proceeds received from sale of fixed assets
0.020.00.020.0Change in restricted cash
0.00.00.02.2Net cash used in investing activities
(32.9)(12.1)(65.6)(42.1)Cash flows from financing activities:Proceeds from issuance of common stock
184.108.40.2060.0Excess tax benefits from stock-based compensation
0.02.90.17.1Taxes paid related to net share settlement of equity awards
(1.3)0.0(3.6)0.0Net debt borrowings (payments) and refinancing costs
144.5(25.8)119.7(68.3)Repurchase of common stock
(225.4)(50.1)(226.0)(50.1)Net cash used in financing activities
(80.4)(69.9)(105.9)(91.3)Effect of exchange rate changes on cash and cash equivalents
(0.8)0.00.70.6Net decrease in cash and cash equivalents
(55.3)(29.7)(37.4)(13.7)Cash and cash equivalents, beginning of period
175.7145.4157.8129.4Cash and cash equivalents, end of period
$120.4$115.7$120.4$115.7Table 4Allscripts Healthcare Solutions, Inc.Condensed Non-GAAP Financial Information(In millions, except per-share amounts)(Unaudited)Three Months EndedThree Months EndedSix Months EndedSix Months Ended6/30/126/30/116/30/126/30/11Total revenue, as reported
$370.0$356.8$734.7$692.1Deferred revenue adjustment
0.76.71.517.5Total non-GAAP revenue$370.7$363.5$736.2$709.6Gross profit, as reported
$157.5$167.8$313.2$327.6Deferred revenue adjustment
0.76.71.517.5Total non-GAAP gross profit$158.2$174.5$314.7$345.1Operating income, as reported
$17.7$32.1$30.756.5Deferred revenue adjustment
16.516.632.933.3Stock-based compensation expense
9.98.917.615.9Transaction-related & non-recurring expenses (a)
220.127.116.11.3Total non-GAAP operating income$51.0$74.5$91.9$146.5Net income, as reported
$8.0$15.9$13.8$28.5Deferred revenue adjustment
10.310.120.720.3Stock-based compensation expense
6.25.411.19.7Transaction-related & non-recurring expenses (a)
18.104.22.1685.4Tax rate alignment
0.40.80.4(1.5)Non-GAAP net income$29.3$42.5$52.8$83.1Tax Rate
37%39%37%39%Weighted shares outstanding - diluted
184.6193.2188.4192.8Earnings per share - diluted, as reported
$0.04$0.08$0.07$0.15Non-GAAP earnings per share - diluted$0.16$0.22$0.28$0.43Note: all adjustments to reconcile GAAP to non-GAAP net income are net of tax(a) Transaction-related expenses are fees and expenses, including legal, investment banking and accounting fees and other integration-related expenses, incurred in connection with announced transactions. Non-recurring expenses in the second quarter of 2012 include certain legal, consulting and other fees incurred in connection with activities that are considered one-time. Transaction-related and non-recurring expenses were $6.2 million, pretax, in the second quarter of 2012.Explanation of Non-GAAP Financial MeasuresAllscripts reports its financial results in accordance with generally accepted accounting principles, or GAAP. To supplement this information, Allscripts presents in this release non-GAAP revenue, gross profit, operating income and net income, including non-GAAP net income on a per share basis, which are non-GAAP financial measures under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. Non-GAAP revenue consists of GAAP revenue as reported and adds back the acquisition-related deferred revenue adjustment booked for GAAP purposes. Non-GAAP gross profit consists of GAAP gross profit as reported and adds back the acquisition-related deferred revenue adjustment booked for GAAP purposes. Non-GAAP operating income consists of GAAP operating income as reported and adds back the acquisition-related deferred revenue adjustment booked for GAAP purposes and excludes acquisition-related amortization, stock-based compensation expense, transaction-related and non-recurring expenses. Non-GAAP net income consists of GAAP net income as reported, excludes acquisition-related amortization, stock-based compensation expense and transaction-related and non-recurring expenses, and adds back the acquisition-related deferred revenue, in each case net of any related tax effects. Non-GAAP net income also includes a tax rate alignment adjustment.
Acquisition-Related Deferred Revenue. Acquisition-related deferred revenue adjustment reflects the fair value adjustment to deferred revenues acquired in business combinations. The fair value of deferred revenue represents an amount equivalent to the estimated cost plus an appropriate profit margin, to perform services related to the acquiree's software and product support, which assumes a legal obligation to do so, based on the deferred revenue balances as of the acquisition date. Allscripts adds back this deferred revenue for its non-GAAP financial measures because it believes the inclusion of this amount directly correlates to the underlying performance of Allscripts operations.
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 operating income and 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 the related amortization 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 operating income and 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 such expense will recur in future periods.
Transaction-Related and Non-Recurring Expenses. Transaction-related expenses are fees and expenses, including legal, investment banking and accounting fees and other integration-related expenses, incurred in connection with announced transactions. Allscripts excludes transaction-related expenses from non-GAAP operating income and 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. Non-recurring expenses in the second quarter of 2012 include certain legal, consulting and other fees incurred in connection with activities that are considered one-time.
Tax Rate Alignment. Tax adjustment to align the current quarter's effective tax rate to the expected annual effective tax rate.
Management also believes that non-GAAP revenue, gross profit, operating income and net income and non-GAAP net income on a per share basis provide useful supplemental information to management and investors regarding the underlying performance of the Company's business operations. Acquisition accounting adjustments made in accordance with GAAP can make it difficult to make meaningful comparisons of the underlying operations of the business without considering the non-GAAP adjustments that we have provided and discussed herein. Management also uses this information internally for forecasting and budgeting as it believes that these measures are indicative of the Company's core operating results. In addition, the Company uses non-GAAP revenue, operating income and/or net income to measure achievement under the Company's stock and cash incentive compensation plans. Note, however, that non-GAAP revenue, gross profit, operating income and net income and non-GAAP net income on a per share basis are performance measures only, and they do 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.
|SOURCE Allscripts Healthcare Solutions, Inc.|
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