Allscripts Healthcare Solutions (MDRX)
Q4 2011 Earnings Call
February 16, 2012 4:30 pm ET
Seth Frank - Vice President of Investor Relations
Glen E. Tullman - Chief Executive Officer, Executive Vice President and Director
William J. Davis - Chief Financial Officer and Principal Accounting Officer
Michael Cherny - Deutsche Bank AG, Research Division
Jamie Stockton - Morgan Keegan & Company, Inc., Research Division
Charles Rhyee - Cowen and Company, LLC, Research Division
Atif A Rahim - JP Morgan Chase & Co, Research Division
Eric W. Coldwell - Robert W. Baird & Co. Incorporated, Research Division
Stephen B. Shankman - UBS Investment Bank, Research Division
Richard C. Close - Avondale Partners, LLC, Research Division
Previous Statements by MDRX
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Thanks, Adam. Good afternoon, and thanks for joining us, everyone. With me on the call today are Glen Tullman, Allscripts' Chief Executive Officer; Bill Davis, our Chief Financial Officer; and Lee Shapiro, our President. We would like to take as many questions as possible today, so we appreciate it if you limit yourselves to one question and one follow-up.
Before we begin, I'll briefly read the 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 factors outlined from time to time in our most recent transition report on Form 10-KT, our earnings announcements and other reports we file with the Securities and Exchange Commission. These are available at 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.
With that complete, I'd like to now turn the call over to Allscripts' CEO, Glen Tullman
Glen E. Tullman
Thanks, Seth, and welcome, everyone. I'm excited to share with you what we believe are some very strong financial and operating results for both the fourth quarter and the full year. So let's begin with a quick overview of the financial highlights.
Bookings were a record $327.4 million, up 26% from the fourth quarter of 2010. Non-GAAP revenue in the fourth quarter grew approximately 15% over the prior year, our strongest topline growth quarter of 2011. Non-GAAP earnings per share in the fourth quarter were $0.25, up 22% over the prior year. For the year, Allscripts grew EPS by 23%, a very strong result.
Allscripts also reported record operating cash flow during the fourth quarter of over $100 million. In addition, we continued to repay outstanding balances on our debt while maintaining very solid cash reserves. We're fortunate to enjoy a very significant amount of our annual cash flow, thanks in part to our large client base that provides high recurring revenue, which for the year was approximately 64%.
When you look at our accomplishments, I hope you take away 2 key points. First, we have consistently delivered on our financial commitments. In fact, we exceeded the guidance we provided in 2010 and then updated during the year. Second, we are positioned perfectly in this market, both where it is today and where it's going. Our presence in over 50,000 physician practices not only gives us word-of-mouth in bringing on new practices, but, and this is a really critical point, it is also central to any hospital CEO's strategy of connecting to affiliated physicians. Coupling our client base with a solution set that now covers all points of care, we're the only comprehensive solution available for organizations that truly want to operate across the continuum of care.
Recent developments show that the market is moving in our direction in important ways. Earlier this month, for example, UnitedHealth Group, the nation's largest insurer, announced it will be replacing its current fee-for-service payment model with a value-based plan that compensates hospitals and physicians for reaching quality benchmarks. This is not a pilot program. UnitedHealth is implementing this value-based model across its nationwide network. And they're not done. Forward-looking payers like BlueCross BlueShield of North Carolina, HighMark and Humana, who, by the way, signed a major fourth quarter agreement with us that I'll discuss in a moment, have already made similar moves. And the largest the payer of all, the U.S. Government, is moving in this direction as well. To succeed in this new world of value-based reimbursement, healthcare organizations will require systems that allow them to connect providers across the community, coordinate care and track and report quality outcomes. And that's exactly where Allscripts excels with our sophisticated acute and ambulatory analytics solutions. It is becoming more clear that healthcare continues to move away from the hospital, the most expensive setting, and into lower-cost settings of the physician's office, post-acute care facilities and the patient's home. And Allscripts is the leader in all 3. Many large payers, as well as hospitals, also continue to provide subsidies to physician practices that want to take advantage of federal stimulus dollars for Electronic Health Record adoption. More than 1/2 of physicians in the market have yet to purchase an Electronic Health Record, providing Allscripts with significant opportunities to grow.