Allscripts-Misys Healthcare Solutions, Inc F4Q10 (Qtr End 31/05/2010) Earnings Call Transcript

Allscripts-Misys Healthcare Solutions Inc. (MDRX)

F4Q10 Earnings Call

July 20, 2010; 04:30pm ET


Glen Tullman - Chief Executive Officer

Bill Davis - Chief Financial Officer

Lee Shapiro - President

Seth Frank - Vice President, Investor Relations


Richard Close - Jefferies & Co.

Charles Rhyee - Oppenheimer

George Hill - Leerink Swann

Corey Tobin - William Blair & Co.

Glen Garmont - ThinkEquity

Gene Mannheimer - Auriga USA

Greg Bolan - Wells Fargo Advisors

Frank Sparacino - First Analysis Corp

Anthony Vendetti - Maxim Group



Good afternoon, my name is Amanda and I will be your conference operator today. At this time, I would like to welcome everyone to the Allscripts fourth quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions)

I would now like to turn the call over to Seth Frank, Vice President of Investor Relations at Allscripts. You may begin.

Seth Frank

Thank you Amanda, this is Seth Prank, Allscripts’ Vice President and Investor Relations. On the call today are Glen Tullman, our Chief Executive Officer, Bill Davis, our Chief Financial Officer, and Lee Shapiro, our President. To start the call, I’ll read the Safe Harbor statement and then I’ll turn it over to Glen and Bill.

I want to inform everyone listening on this call today and via the internet that certain statements and comments made during the course of this call including statements regarding the expected completion and effects of the proposed merger involving Allscripts and Eclipsys are considered forward-looking statements as defined by the Securities Litigation Reform Act of 1995.

These statements include risk, uncertainties and assumptions that may cause actual results to differ. For a description of risk that could cause actual results to differ materially from these forward-looking statements, please review the reports filed by Allscripts and Eclipsys with the SEC.

All forward-looking statements are based on information available to the companies on the date of this call and the companies do not undertake any obligation to publicly update or revise any forward-looking statements as result to the new information or in the future. In connection with the proposed transaction, Allscripts and Eclipsys have each filed to the SEC a definitive Joint Proxy Statement, which also constitutes a prospectus of Allscripts and an Information Statement for Allscripts stockholders.

Allscripts and Eclipsys have each mailed a definitive Joint Proxy Statement, prospectus, Information Statement to the respective stockholders on or about July 15, 2010.

Before making any voting or investment decision, the investors and stockholders are urged to read carefully in their entirety the definitive Joint Proxy Statement, prospectus, Information Statement regarding the proposed transaction and any other relevant documents filed by either Allscripts or Eclipsys with the SEC when they become available. They will contain important information about the proposed transaction.

And with this I’d like to turn it over to Glen Tullman, Chief Executive Officer of Allscripts.

Glen Tullman

Thanks Seth, and thanks everyone for joining us today. I’m excited to share with you our performance for the fourth quarter and fiscal year to talk about the latest market development, specifically the announcement of the final rule on meaningful use and to update you on the progress of our proposed merger with Eclipsys. After I speak, Bill Davis will review our financial highlights in more detail and provide guidance on 2011, and then we will open it up to your questions. So, let’s begin with results.

I’m exceptionally proud of the job our team did in delivering results for both our clients and our stockholders. Bookings for the fourth quarter total about $118.5 million, a quarterly record for Allscripts. Bookings for the year totalled $415.3 million, up 24% versus fiscal 2009 and another record. These results are indicative of a market that continues to expand paired with excellent sales execution led by our President of Sales, Jeff Surges.

For the forth quarter, we posted revenue in excess of $190 million, continuing our track record of consistent performance in growth. We made significant progress in our ability to scale and efficiently implement driving a 42% year-over-year increase in our professional services revenue. Our ability to rapidly implement our Electronic Health Record solutions is a point of differentiation and will continue to be mission critical as we head into the stimulus.

I give a lot of credit to our Chief Operating Officer, Eileen McPartland, and to Richard Sills who joined us only five months ago as Senior Vice President of Client Services and has already had a measurable impact.

Net income on a non-GAAP basis totaled $26.5 million or $0.18 per share. I’m especially pleased with this number in light of the investments we have made in addressing meaningful use, in better serving our clients with better processes, and in developing innovative new products. Our fiscal year results were also very strong, total non-GAAP revenue was $709.6 million and non-GAAP net income for the year was $98.2 million, an increase of 28% year-over-year.

Our results evidence our leadership in the industry as well as our momentum in the market. Building on our success, our proposed merger with Eclipsys, a leader in hospital solutions, opens up even more opportunity to grow. I will discuss the proposed merger in more detail, but the bottom-line is that the reaction of the market that is the people in organization to actually buy our solutions has been one of excitement and very strong interest.

Though excited about our future with the merger, you can see from our results in the quarter that we are very focused on delivering right now. We continue to win additional share on the physician market led by our Electronic Health Record solutions for physician groups and organizations of all sizes. One of the largest agreements signed during the fourth quarter was a significant expansion of our partnership with Catholic Health Initiatives or CHI, the nation’s second largest catholic health system.

In January, we announced that CHI, which has 75 hospitals in 19 states and 7,200 affiliated physicians, selected our enterprise Electronic Health Record for their 1,050 employed physicians, which was a big win. In the fourth quarter, CHI expanded our partnership by selecting our Enterprise Practice Management System for all of their employed physicians. CHI will also deploy our Payerpath solution for claims management and EDI and our clinical quality solution, which automates the collection and reporting of data for pay per performance award, as well as other metrics that practices need to demonstrate meaningful use to qualify for stimulus funding.

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