Allscripts Healthcare Solutions
), a leading player in the health care information technology
("HCIT") market, reported first quarter adjusted (excluding
one-time items other than stock-based compensation expense)
earnings per share of 10 cents, trailing the Zacks Consensus
Estimate of 20 cents.
Reported net income for the quarter was $5.8 million (or 3 cents
per share) compared with a net income of $12.6 million (or 7 cents
per share) in the year-ago quarter. The lower profit was on account
of several factors such as deterioration in sales mix and
expenditures for marketing and product development.
Allscripts reported sales of $364.7 million in the first
quarter, lagging the Zacks Consensus Estimate of $388 million.
Adjusted revenues were $365.5 million, up 5.6% year over year.
Sales were below forecast on account of deferred purchases by
clients and restructuring of the sales force. Bookings came to
$194.6 million, a decrease of 8.4% year over year.
Reported revenues consisted of System Sales, Professional
Services, Maintenance and Transaction Processing, which constituted
11.1%, 19.6%, 31.5% and 37.8%, respectively, of total revenues in
the reported quarter.
Adjusted gross margin dropped to 42.9% of sales in the reported
quarter, lower than 49.3% in the prior-year quarter. Adjusted
operating margin was 11.2% of sales, lower than 20.8% in the
As of March 31, 2012, Allscripts had cash and marketable
securities of $175.7 million, up 11.3% on a sequential basis. The
company had long-term debt of $295.2 million, down 8.5%
The company adjusted its guidance for 2012. It currently expects
adjusted revenues in the range of $1,480 million to $1,520 million.
Adjusted operating margin is projected at about 16% to 17%.
Adjusted earnings per share are forecast between 74 cents and 80
The health care information technology market is competitive and
price sensitive. Among others, Allscripts faces strong competition
However, optimism about the growth prospects of select HCIT
service providers remains high under the Obama Administration,
which passed the Stimulus package in May 2009, aimed at increasing
the use of electronic health record ("EHR") systems by medical
The company has widened its user base after its mergers with
Misys and Eclipsys and increased cross-selling opportunities.
We believe that Allscripts is well positioned in the fast growing
business of selling EHR/EMR to physician practices as well as
The acquisition of Eclipsys provides the company with an acute
care product for sale in concert with its ambulatory services. We
opine that acute and ambulatory care will continue to converge in
future and that Allscripts is well positioned to provide integrated
clinical applications that will permit health care providers to
satisfy HITECH Act requirements and eventually comply with an
outcomes-based reimbursement system.
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