Allscripts Healthcare Solutions, Inc. (MDRX)

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Allscripts Healthcare Solutions (MDRX)

Q4 2010 Earnings Call

February 15, 2011 4:30 pm ET


William Davis - Chief Financial Officer and Principal Accounting Officer

Glen Tullman - Chief Executive Officer and Director

Seth Frank - Vice President of Investor Relations


Atif Rahim - JP Morgan Chase & Co

Jeremy Lopez - William Blair & Company

Bret Jones - Brean Murray, Carret & Co., LLC

Benjamin Forest

Lawrence Marsh - Barclays Capital

Jamie Stockton - Morgan Keegan & Company, Inc.

Greg Bolan - Wells Fargo Securities, LLC

Sean Wieland - Piper Jaffray Companies



Good afternoon. My name is Kyle, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Allscripts 2010 Q4 Earnings Conference Call. [Operator Instructions] Mr. Frank, you may begin your conference.

Seth Frank

Hi, good afternoon. Thanks, Kyle. This is Seth Frank, Allscripts' Vice President of Investor Relations. On the call today are Glen Tullman, our Chief Executive Officer; Bill Davis, our Chief Financial Officer; and Lee Shapiro, our President. I'll start the call by reading our Safe Harbor statement.

This presentation will contain forward-looking statements within the meaning of the Federal Securities laws. Statements regarding future events and 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, including our ability to achieve the strategic benefits of the merger with Eclipsys and other factors outlined from time-to-time in our most recent annual report on Form 10-K, our earnings announcements and other reports we file with the Securities and Exchange Commission. URL [ph] available at The company undertakes no obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise.

And now, I'd like to turn the call over to Glen Tullman, CEO of Allscripts.

Glen Tullman

Thanks, Seth, and welcome to the fourth quarter and year-end earnings call. We had a great year-end close and a strong start as one company. Our first full quarter of combined results for Allscripts and Eclipsys.

Today, we're reporting exceptionally strong sales across our entire portfolio, with a number of significant wins and robust cross-selling into our base. Our revenues, our profit and our cash flow all mirror the strength of our sales engine. I'll spend the next few minutes highlighting our financial results for the quarter, as well as some important wins that demonstrate our traction, and I'll discuss the formula that has positioned Allscripts for continued success.

That formula includes our unique ability to deliver on our vision of a connected community of health for our clients and their patients. We believe this will become the new operating system for healthcare, and that Allscripts is uniquely positioned to deliver it.

So let's get started with our fourth quarter results. We delivered record bookings of $288 million, with strong sales across our entire portfolio of acute, ambulatory and Post Acute solutions. Our bookings demonstrate both the strength of our existing client relationships and the attractiveness of our offerings to prospects.

Non-GAAP revenue of $337 million, non-GAAP net income of $38.7 million and non-GAAP earnings per share of $0.20 demonstrate that we are executing on both our operational goals and our integration plan. And at the same time, we continue to generate robust operating cash flow, enabling us to further reduce our debt even as we continue to innovate and invest in our business.

As I've said before, we're at the beginning of the single fastest transformation of any industry in history. Our strong financial performance, paired with our ability to invest in both integration and growth, positions us perfectly to execute on the transformation now underway in the market.

The initial HITECH Act incentive payments to providers started in January. The first hospital in the country to receive payment under the Medicaid portion of the HITECH Act was an Allscripts client, the University of Kentucky Medical Center, which received $2.86 million.

As the stimulus payments from both Medicare and Medicaid are issued in the coming months, we believe the physician office and hospital markets will continue to accelerate. This will result in purchases of net-new systems and upgrades.

We think we're well-positioned to take advantage of both selling opportunities. And while the stimulus is important in driving the market, it's only part of the story. During the fourth quarter, it was clear that our cross-selling effort is already paying off, as a number of our Sunrise Hospital clients selected Allscripts' ambulatory Electronic Health Records for their employed physicians and, often, for their affiliated physicians as well as a part of their community programs. I want to take just a minute to highlight a few of the most prominent cross-sales of our ambulatory and acute solutions into our combined client base.

Yesterday, we announced that Cleveland-based University Hospitals Health System, one of largest healthcare systems in the nation, selected our Electronic Health Record and Practice Management solution for all 1,400 of their employed multi-specialty physicians across Ohio. This agreement, one of the largest in our history, also includes an exclusive endorsement of our Electronic Health Record for independent physicians affiliated with the health system's 10 hospitals.

Our community solution will provide a unified patient record that can be shared by their employed caregivers and by independent physicians. University Hospitals was already a customer for our Sunrise Enterprise suite of Acute Care solution across its hospitals, and now will upgrade to our latest Sunrise Version 5.5, and will actually purchase Sunrise for their newest hospital as well.

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