Allscripts Healthcare Solutions (MDRX)
Q3 2012 Earnings Call
November 08, 2012 4:30 pm ET
Seth Frank - Vice President of Investor Relations
Glen E. Tullman - Chief Executive Officer and Director
Richard J. Poulton - Chief Financial Officer
W. David Morgan - Senior Vice President of Finance
Lee A. Shapiro - President and Corporate Secretary
Charles Rhyee - Cowen and Company, LLC, Research Division
Gregory T. Bolan - Sterne Agee & Leach Inc., Research Division
Glen J. Santangelo - Crédit Suisse AG, Research Division
Jamie Stockton - Wells Fargo Securities, LLC, Research Division
George Hill - Citigroup Inc, Research Division
David H. Windley - Jefferies & Company, Inc., Research Division
Zachary William Sopcak - Morgan Stanley, Research Division
Sean W. Wieland - Piper Jaffray Companies, Research Division
Previous Statements by MDRX
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Thanks, Anna. This is Seth Frank, Vice President of Investor Relations with Allscripts. Thanks, everyone, for joining us today. On the call are Glen Tullman, our Chief Executive Officer; Lee Shapiro, our President; Rick Poulton, our new Chief Financial Officer; and Dave Morgan, our Interim Chief Financial Officer. Before we begin, I'll 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 our ability to achieve the strategic benefit of the merger with Eclipsys and other factors outlined from time to time in our most recent -- or on Form 10-K, 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.
And now with that behind us, I'd like to turn the call over to Allscripts' CEO, Glen Tullman.
Glen E. Tullman
Thank you, Seth. Good afternoon. Thank you for joining us today on our third quarter 2012 earnings call. We hope all of you, as well as your family and loved ones impacted by Hurricane Sandy, are recovering from this devastating event. For our part, we have been working closely with our clients to help them deal with the impact of the storm, enabling them to continue providing care to their patients. I want to acknowledge the efforts of our team members who worked with -- who worked to help our clients even if they encountered serious challenges of their own at home.
Today, I'll start with some brief remarks regarding our third quarter results. I will then update you on the progress we have made in solutions development and client experience. And before taking your questions, I will comment briefly on the strategic alternatives process.
Turning to the third quarter. Bookings came in at $161.9 million. Our results were impacted for 2 reasons: First, clients' delayed decisions in the quarter due to speculation about Allscripts' future corporate autonomy; and second, clients who continued to delay purchase decisions as they wait for new product releases.
I do want to highlight a few important new contracts across our solutions portfolio in Q3. We signed one new Sunrise client, Appalachian Health System, a 3-hospital system in North Carolina. This was a competitive opportunity and resulted in the displacement of a legacy system vendor. In terms of other notable agreements in Q3, we signed a new care management contract with Orlando Health and added a new enterprise EHR relationship with Hoag Medical Foundation in California. We also expanded important relationships with several clients, including Dignity Health, Summit Medical Group and Catholic Health Initiatives. And we saw improvements quarter-over-quarter in Performance Management solutions, including EPSi and Sunrise Clinical Analytics as health systems continue to focus on preparing for the shift to value-based care.
Mid-market ambulatory sales of our professional EHR also were in line with our expectations. The message to take away is despite all of the noise, we continue to compete and sell in the ambulatory, acute and post-acute segments of our business, and we remain increasingly competitive for new opportunities, as well as selling into our client base. Relative to our client base, maintenance revenue increased close to 5% year-over-year demonstrating strong retention and stability.
Turning to health care -- the Healthcare IT market. Our view is that industry demand will continue to accelerate, especially now that the uncertainty around Obamacare is gone. We expect to shift to value-based payments and away from fee-for-service to continue. To effectuate this change, providers of all sizes will increasingly move to accept both financial and health care quality risk for the care they deliver. At a minimum, providers need robust data capture and systems to drive care coordination and population health management. Further, regulatory changes such as Meaningful Use and ICD-10 will drive growth in Practice Management and revenue cycle solutions. These forces will support continued long-term industry transformation. In addition, managing chronic disease states is a burden on health care. Experts systems will be required to manage care of these populations more efficiently, and new entrants on the retail front will increasingly assume this burden.