EX-99.1 3 dex991.htm PRESS RELEASE DATED APRIL 30, 2003 PRESS RELEASE DATED APRIL 30, 2003

 

Exhibit 99.1

 

40 IDX Drive

P.O. Box 1070

Burlington, VT 05402-1070

www.idx.com

 

Contacts:

  

Margo Happer

   

Director – Investor Relations and Corporate Communications

   

802-859-6169

 

FOR IMMEDIATE RELEASE

 

IDX SYSTEMS CORPORATION REPORTS

2003 FIRST QUARTER RESULTS

 

Strong Revenue and Earnings Growth

 

BURLINGTON, VT – April 30, 2003 – IDX Systems Corporation (NASDAQ:IDXC) reported results today for the first quarter ended March 31, 2003.

 

Revenues for the first quarter 2003 increased 12.2% to $121.1 million compared to $107.9 million in the first quarter of 2002. Revenues reflect the adoption of EITF 01-14, and all periods presented, including 2002, have been reclassified to reflect this on a consistent basis.

 

IDX reported first quarter 2003 net income of $3.8 million, or $0.13 per fully diluted share, compared to 2002 net income of $4.1 million, or $0.14 per fully diluted share. 2002 results include a one-time pre-tax gain of $4.3 million associated with the sale of ChannelHealth, a subsidiary. Excluding the gain, 2002 first quarter net income was $1.3 million or $0.04 per fully diluted share.

 

On April 10, 2003 IDX announced it had reached an agreement to sell EDiX, its medical transcription subsidiary, to Total eMed. The sale is expected to be finalized in the second quarter of 2003, subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Act. EDiX will be accounted for as a discontinued operation beginning in the second quarter of 2003.

 

Excluding EDiX, IDX reported 2003 first quarter revenues of $92.4 million, a 14.2% increase over 2002 first quarter revenues of $80.9 million. Excluding EDiX, first quarter 2003 net income increased to $4.1 million, or $0.14 per fully diluted share, compared to first quarter 2002 net income of $1.3 million, or $0.04 per fully diluted share, excluding EDiX and the one-time gain.

 

IDX considers operating results excluding special items and EDiX to be the most relevant benchmark of the company’s core operating performance. Management believes this pro forma measure helps indicate underlying trends in the company’s business performance and uses this measure to manage the business and evaluate its performance. A reconciliation of pro forma to GAAP is included in the attached financial statements.

 

“We are well positioned for continued growth in the healthcare information technology market,” said Richard E. Tarrant, Chairman of IDX. “2002 was a watershed year for us, marking a successful transition and turnaround, and we’re off to a strong start in 2003. We believe we are firmly established in the growing clinical arena, the group practice market is strong, and hospitals as well as integrated delivery networks are intensifying their concentration on improving business performance. With the divestiture of EDiX, we are poised to focus on our core strength – delivering leading software solutions across the care continuum. We believe customers today, more than ever, value what IDX has to offer: a partnership approach to relationships coupled with robust and proven solutions.”

 

“We continued to demonstrate our ability to execute against our plan in the first quarter, achieving strong results across the company,” said James H. Crook, Jr., President and Chief Executive Officer of IDX. “Sales growth in Flowcast and Groupcast was strong, fueled by our well-established track record of helping customers achieve business performance success. We successfully brought a number of customers live on Carecast, reflecting our ability to help customers progress toward achieving fail-safe care. Finally, we signed a number of Imagecast PACS deals – evidence that our single-database solution, coupled with our experience in imaging, is recognized and rewarded in the market.”

 

IDX remains comfortable with 2003 revenue guidance of $400—$406 million from continuing operations. Earnings per share from continuing operations are expected to amount to $0.73 per share. EDiX will be accounted for as a discontinued operation beginning in the second quarter of 2003.

 

A conference call with investors will be held on April 30, 2003 at 11:00 am EDT to discuss these results. An audio Webcast of the call is available at our Internet site: www.idx.com, Investor Relations, Multimedia.

 

About IDX

 

Founded in 1969, IDX Systems Corporation provides information technology solutions to maximize value in the delivery of healthcare, improve the quality of patient service, enhance medical outcomes, and reduce the costs of care. IDX supports these objectives with a broad range of complementary and functionally rich products installed at 3,600 customer sites. Customers include 138,000 physicians who utilize practice management systems to improve patient care and other workflow processes. IDX Systems are installed at:

 

380 Integrated delivery networks (IDNs) representing more than 700 hospitals

 

175 large group practices with more than 200 physicians

 

665 mid-size group practices with less than 200 physicians

 

The IDX web strategy includes browser technology, e-commerce and web-based tools – built using Internet architecture – that facilitates access for patients, physicians and care providers to vital health information and data managed by the IDX clinical, administrative, financial, and managed care products. EDiX Corporation, an IDX subsidiary, offers medical transcription and clinical documentation services to physicians groups and hospital customers. IDX has approximately 5,000 full-time employees.

 

This press release contains forward-looking statements about IDX Systems Corporation that involve a number of risks and uncertainties, including statements relating to the future financial performance and operating results of IDX and the probability and expected timing of the closing of the sale of EDiX. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are uncertainties in difficulties in developing new services, including the IDX eCommerce Services gateway system, difficulties in implementing systems, possible deferral, delay or cancellation by customers of computer system or service purchase decisions, possible delay of system installations and service implementations, development by competitors of new or superior technologies, changing economic, political and regulatory influences on the healthcare and e-commerce industries, possible disruptions in the national economy caused by terrorist activities and foreign conflicts, changes in product pricing policies, governmental regulation of IDX’s software and operations, the possibility of product-related liabilities, and factors detailed from time to time in IDX’s periodic reports and registration

 

2

 

statements filed with the Securities and Exchange Commission, including those described under the caption “Forward-looking Information and Factors Affecting Future Performance” in IDX’s Annual Report on Form 10-K for the year ended December 31, 2002,which important factors are incorporated herein by reference. IDX undertakes no obligation to update forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in future operating results, financial condition or business over time.

 

3

 

IDX SYSTEMS CORPORATION

Consolidated Balance Sheets

(in thousands)

 

    

March 31,

   

December 31,

    

2003

   

2002

    

(unaudited)

   

(unaudited)

Assets

              

Cash and marketable securities

   

$

56,129

   

$

54,435

Accounts receivable, net

   

 

105,731

   

 

109,806

Refundable income taxes

   

 

6,133

   

 

7,590

Prepaid and other current assets

   

 

10,025

   

 

8,716

Deferred tax asset

   

 

3,603

   

 

3,603

    
  

Total current assets

   

 

181,621

   

 

184,150

    
  

Property and equipment, net

   

 

92,524

   

 

88,759

Capitalized software costs, net

   

 

2,211

   

 

2,676

Goodwill, net

   

 

2,508

   

 

2,411

Other assets

   

 

14,357

   

 

13,849

    
  

Total assets

   

$

293,221

   

$

291,845

    
  

Liabilities and stockholders' equity

              

Accounts payable, accrued expenses and other liabilities

   

$

53,835

   

$

62,476

Deferred revenue

   

 

19,404

   

 

18,429

Notes payable to bank

   

 

23,727

   

 

18,727

    
  

Total current liabilities

   

 

96,966

   

 

99,632

    
  

Stockholders' equity

   

 

196,255

   

 

192,213

    
  

Total liabilities and stockholders' equity

   

$

293,221

   

$

291,845

    
  

 

4

 

IDX SYSTEMS CORPORATION

Consolidated Statements of Operations

(in thousands, except for per share data)

(Unaudited)

 

    

Three Months Ended March 31,

  
    

2003

     

2002

  

Revenues

                  

Systems sales

   

$

32,541

 

   

$

27,216

 

Maintenance and service fees

   

 

88,535

 

   

 

80,655

 

    
  

Total revenues

   

 

121,076

 

   

 

107,871

 

Operating expenses

                  

Cost of systems sales

   

 

11,792

 

   

 

9,224

 

Cost of maintenance and services

   

 

65,094

 

   

 

62,912

 

Selling, general and administrative

   

 

24,604

 

   

 

21,990

 

Software development costs

   

 

14,240

 

   

 

12,134

 

    
  

Total operating expense

   

 

115,730

 

   

 

106,260

 

    
  

Operating income

   

 

5,346

 

   

 

1,611

 

Other income

                  

Other income

   

 

127

 

   

 

276

 

Gain on sale of investment in subsidiary

   

 

—  

 

   

 

4,273

 

    
  

Total other income

   

 

127

 

   

 

4,549

 

    
  

Income before income taxes

   

 

5,473

 

   

 

6,160

 

Income tax provision

   

 

(1,642

)

   

 

(2,033

)

    
  

Net income

   

$

3,831

 

   

$

4,127

 

    
  

Basic earnings per share

   

$

0.13

 

   

$

0.14

 

    
  

Basic weighted average shares outstanding

   

 

29,172

 

   

 

28,841

 

    
  

Diluted earnings per share

   

$

0.13

 

   

$

0.14

 

    
  

Diluted weighted average shares outstanding

   

 

29,415

 

   

 

29,015

 

    
  

Earnings per share numbers may not foot due to rounding.

                  

The above financial statement includes the following special items:

                  
    

Three Months Ended March 31,

  
    

2003

     

2002

  

Gain on sale of investment in subsidiary

   

$

—

 

   

$

(4,273

)

Tax effect of included special items

   

 

—  

 

   

 

1,410

 

    
  

Total net effect of included special items

   

$

—

 

   

$

(2,863

)

    
  

 

5

 

IDX SYSTEMS CORPORATION

Consolidated Statements of Operations

(in thousands, except for per share data)

Including one-time charges

 

    

Three Months Ended

March 31, 2003

     

Three Months Ended

March 31, 2002

  
           

(Unaudited)

                   

(Unaudited)

         
    

IDX

     

EDiX

     

Total

     

IDX

     

EDiX

     

Total

  

Revenues

                                                      

Systems sales

   

$

32,541

 

   

$

—

 

   

$

32,541

 

   

$

27,216

 

   

$

—

 

   

$

27,216

 

Maintenance and service fees

   

 

59,900

 

   

 

28,635

 

   

 

88,535

 

   

 

53,707

 

   

 

26,948

 

   

 

80,655

 

    
  
  
  
  
  

Total revenues

   

 

92,441

 

   

 

28,635

 

   

 

121,076

 

   

 

80,923

 

   

 

26,948

 

   

 

107,871

 

Operating expenses

                                                      

Cost of systems sales

   

 

11,792

 

   

 

—  

 

   

 

11,792

 

   

 

9,224

 

   

 

—  

 

   

 

9,224

 

Cost of maintenance and services

   

 

41,661

 

   

 

23,433

 

   

 

65,094

 

   

 

41,110

 

   

 

21,802

 

   

 

62,912

 

Selling, general and administrative

   

 

20,090

 

   

 

4,514

 

   

 

24,604

 

   

 

18,149

 

   

 

3,841

 

   

 

21,990

 

Software development costs

   

 

13,350

 

   

 

890

 

   

 

14,240

 

   

 

11,663

 

   

 

471

 

   

 

12,134

 

    
  
  
  
  
  

Total operating expense

   

 

86,893

 

   

 

28,837

 

   

 

115,730

 

   

 

80,146

 

   

 

26,114

 

   

 

106,260

 

    
  
  
  
  
  

Operating income (loss)

   

 

5,548

 

   

 

(202

)

   

 

5,346

 

   

 

777

 

   

 

834

 

   

 

1,611

 

Other income (expense)

   

 

124

 

   

 

3

 

   

 

127

 

   

 

1,146

 

   

 

(870

)

   

 

276

 

Gain on sale of investment in subsidiary

   

 

—  

 

   

 

—  

 

   

 

—  

 

   

 

4,273

 

   

 

—  

 

   

 

4,273

 

    
  
  
  
  
  

Other income (expense)

   

 

124

 

   

 

3

 

   

 

127

 

   

 

5,419

 

   

 

(870

)

   

 

4,549

 

    
  
  
  
  
  

Income (loss) before income taxes

   

 

5,672

 

   

 

(199

)

   

 

5,473

 

   

 

6,196

 

   

 

(36

)

   

 

6,160

 

Income tax provision

   

 

(1,531

)

   

 

(111

)

   

 

(1,642

)

   

 

(2,033

)

   

 

—  

 

   

 

(2,033

)

    
  
  
  
  
  

Net income (loss)

   

$

4,141

 

   

$

(310

)

   

$

3,831

 

   

$

4,163

 

   

$

(36

)

   

$

4,127

 

    
  
  
  
  
  

Basic earnings (loss) per share

   

$

0.14

 

   

$

(0.01

)

   

$

0.13

 

   

$

0.14

 

   

$

(0.00

)

   

$

0.14

 

    
  
  
  
  
  

Basic weighted average shares outstanding

   

 

29,172

 

   

 

29,172

 

   

 

29,172

 

   

 

28,841

 

   

 

28,841

 

   

 

28,841

 

    
  
  
  
  
  

Diluted earnings (loss) per share

   

$

0.14

 

   

$

(0.01

)

   

$

0.13

 

   

$

0.14

 

   

$

(0.00

)

   

$

0.14

 

    
  
  
  
  
  

Diluted weighted average shares outstanding

   

 

29,415

 

   

 

29,415

 

   

 

29,415

 

   

 

29,015

 

   

 

29,015

 

   

 

29,015

 

    
  
  
  
  
  

Earnings per share numbers may not foot due to rounding.

The above financial statement includes the following special items:

 

    

Three Months Ended

                              
    

March 31,

                              
    

2003

     

2002

                              

Gain on sale of investment in subsidiary

   

$

—  

 

   

$

(4,273

)

                                    

Tax effect of included special items

   

 

—  

 

   

 

1,410

 

                                    
    
  
                                   

Total net effect of included special items

   

$

—  

 

   

$

(2,863

)

                                    
    
  
                                   

 

6

 

IDX SYSTEMS CORPORATION

Consolidated Statements of Operations

(in thousands, except for per share data)

* Excluding one-time charges

 

    

Three Months Ended

March 31, 2003

     

Three Months Ended

March 31, 2002

  
           

(Unaudited)

                   

(Unaudited)

         
    

IDX

     

EDiX

     

Total

     

IDX

     

EDiX

     

Total

  

Revenues

                                                      

Systems sales

   

$

32,541

 

   

$

—

 

   

$

32,541

 

   

$

27,216

 

   

$

—

 

   

$

27,216

 

Maintenance and service fees

   

 

59,900

 

   

 

28,635

 

   

 

88,535

 

   

 

53,707

 

   

 

26,948

 

   

 

80,655

 

    
  
  
  
  
  

Total revenues

   

 

92,441

 

   

 

28,635

 

   

 

121,076

 

   

 

80,923

 

   

 

26,948

 

   

 

107,871

 

Operating expenses

                                                      

Cost of systems sales

   

 

11,792

 

   

 

—  

 

   

 

11,792

 

   

 

9,224

 

   

 

—  

 

   

 

9,224

 

Cost of maintenance and services

   

 

41,661

 

   

 

23,433

 

   

 

65,094

 

   

 

41,110

 

   

 

21,802

 

   

 

62,912

 

Selling, general and administrative

   

 

20,090

 

   

 

4,514

 

   

 

24,604

 

   

 

18,149

 

   

 

3,841

 

   

 

21,990

 

Software development costs

   

 

13,350

 

   

 

890

 

   

 

14,240

 

   

 

11,663

 

   

 

471

 

   

 

12,134

 

    
  
  
  
  
  

Total operating expense

   

 

86,893

 

   

 

28,837

 

   

 

115,730

 

   

 

80,146

 

   

 

26,114

 

   

 

106,260

 

    
  
  
  
  
  

Operating income (loss)

   

 

5,548

 

   

 

(202

)

   

 

5,346

 

   

 

777

 

   

 

834

 

   

 

1,611

 

Other income (expense)

   

 

124

 

   

 

3

 

   

 

127

 

   

 

1,146

 

   

 

(870

)

   

 

276

 

    
  
  
  
  
  

Income (loss) before income taxes

   

 

5,672

 

   

 

(199

)

   

 

5,473

 

   

 

1,923

 

   

 

(36

)

   

 

1,887

 

Income tax provision

   

 

(1,531

)

   

 

(111

)

   

 

(1,642

)

   

 

(623

)

   

 

—  

 

   

 

(623

)

    
  
  
  
  
  

Net income (loss)

   

$

4,141

 

   

$

(310

)

   

$

3,831

 

   

$

1,300

 

   

$

(36

)

   

$

1,264

 

    
  
  
  
  
  

Basic earnings (loss) per share

   

$

0.14

 

   

$

(0.01

)

   

$

0.13

 

   

$

0.05

 

   

$

(0.00

)

   

$

0.04

 

    
  
  
  
  
  

Basic weighted average shares outstanding

   

 

29,172

 

   

 

29,172

 

   

 

29,172

 

   

 

28,841

 

   

 

28,841

 

   

 

28,841

 

    
  
  
  
  
  

Diluted earnings (loss) per share

   

$

0.14

 

   

$

(0.01

)

   

$

0.13

 

   

$

0.04

 

   

$

(0.00

)

   

$

0.04

 

    
  
  
  
  
  

Diluted weighted average shares outstanding

   

 

29,415

 

   

 

29,415

 

   

 

29,415

 

   

 

29,015

 

   

 

29,015

 

   

 

29,015

 

    
  
  
  
  
  

Earnings per share numbers may not foot due to rounding.

The above financial statement excludes the following special items:

    

Three Months Ended March 31,

                              
    

2003

     

2002

                              

Gain on sale of investment in subsidiary

   

$

—  

 

   

$

(4,273

)

                                    

Tax effect of included special items

   

 

—  

 

   

 

1,410

 

                                    
    
  
                                   

Total net effect of included special items

   

$

—  

 

   

$

(2,863

)

                                    
    
  
                                   

 

7

 

IDX Systems Corporation

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

 

    

Three Months Ended

March,

  
    

2003

     

2002

  

OPERATING ACTIVITIES:

                  

Net income

   

$

3,831

 

   

$

4,127

 

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

                  

Depreciation

   

 

4,666

 

   

 

3,826

 

Amortization

   

 

655

 

   

 

432

 

Increase in allowance for doubtful accounts

   

 

644

 

   

 

444

 

Gain on sale of subsidiary common stock

   

 

—  

 

   

 

(4,273

)

Changes in operating assets and liabilities:

                  

Accounts receivable

   

 

3,431

 

   

 

(8,544

)

Prepaid expenses and other assets

   

 

(1,933

)

   

 

(2,576

)

Accounts payable and accrued expenses

   

 

(6,426

)

   

 

(2,598

)

Federal and state income taxes

   

 

1,457

 

   

 

2,957

 

Deferred revenue

   

 

975

 

   

 

(244

)

    
  

Net cash provided by (used in) operating activities

   

 

7,300

 

   

 

(6,449

)

INVESTING ACTIVITIES:

                  

Purchase of property and equipment, net

   

 

(9,746

)

   

 

(4,994

)

Other assets

   

 

(997

)

   

 

—  

 

    
  

Net cash used in investing activities

   

 

(10,743

)

   

 

(4,994

)

FINANCING ACTIVITIES:

                  

Proceeds from sale of common stock

   

 

137

 

   

 

171

 

Proceeds from debt issuance

   

 

23,727

 

   

 

18,727

 

Repayment of debt issuance

   

 

(18,727

)

   

 

(15,000

)

    
  

Net cash provided by financing activities

   

 

5,137

 

   

 

3,898

 

    
  

Increase (decrease) in cash and marketable securities

   

 

1,694

 

   

 

(7,532

)

Cash and marketable securities at beginning of period

   

 

54,435

 

   

 

56,373

 

    
  

Cash and marketable securities at end of period

   

$

56,129

 

   

$

48,841

 

    
  

 

8