-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HZ/oT/DoJPZKZkKD5fdLucGfmn4lwIRIZhBbkuE4TmlPZuRna7PjuRBJ++AmCWLe tAh2w6HRb0qorGS5a2ZslA== 0001001185-99-000022.txt : 19990423 0001001185-99-000022.hdr.sgml : 19990423 ACCESSION NUMBER: 0001001185-99-000022 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990421 ITEM INFORMATION: FILED AS OF DATE: 19990422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDX SYSTEMS CORP CENTRAL INDEX KEY: 0001001185 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 030222230 STATE OF INCORPORATION: VT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26816 FILM NUMBER: 99598660 BUSINESS ADDRESS: STREET 1: 1400 SHELBURNE RD STREET 2: PO BOX 1070 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05403 BUSINESS PHONE: 8028621022 MAIL ADDRESS: STREET 1: 1400 SHELBURNE RD STREET 2: PO BOX 1070 CITY: SOUTH BURLINGTON STATE: VT ZIP: 05403 8-K 1 FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 April 21, 1999 (Date of Report) April 21, 1999 (Date of earliest event reported) ------------------------- Commission File Number 0-26816 IDX SYSTEMS CORPORATION (Exact name of registrant as specified in its charter) Vermont 03-0222230 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1400 Shelburne Road South Burlington, VT 05403 (Address of principal executive offices) Registrant's telephone number, including area code: (802-862-1022) Exhibit Index on Page 2 of 10 ITEM 5. OTHER EVENTS On April 21, 1999, the Company announced the results of operations for the first quarter of 1999 and discussed expected results for the balance of 1999. In addition, the Company announced the purchase of 80% of the stock of ChannelHealth, Inc. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits.
EXHIBIT NO. DESCRIPTION PAGE ----------- ----------- ---- 99A IDX News Release dated 4 April 21, 1999 99B IDX News Release dated 9 April 21, 1999
Page 2 of 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IDX SYSTEMS CORPORATION (Registrant) Date: April 21, 1999 /S/ JOHN A. KANE ____________________________________ John A. Kane Vice President, Finance and Administration Chief Financial Officer, and Treasurer Page 3 of 10 EX-99 2 EXHIBIT 99A IDX Systems Corporation 1400 Shelburne Road P.O. Box 1070 Burlington, VT 05402-1070 - -------------------------------------------------------------------------------- Contact: Jack Kane Chief Financial Officer 802-862-1022 FOR IMMEDIATE RELEASE IDX SYSTEMS CORPORATION REPORTS FIRST QUARTER 1999 RESULTS BURLINGTON, VT, April 21, 1999--IDX Systems Corporation (Nasdaq: IDXC) reported financial results today for the first quarter ended March 31, 1999. Revenue in the first quarter was $60.2 million, compared with $72.7 million in the first quarter of last year. The company reported a first quarter net loss of ($6.9) million or ($0.26) per share, compared with net income of $4.4 million or $0.16 per share in the same quarter last year. "As we announced on March 5, 1999, our first quarter financial results are below expectation due to the unexpected deferral of purchasing decisions by our customers and prospects," said Richard E. Tarrant, Chief Executive Officer. "We believe that our business is fundamentally sound and that the performance of our core business (excluding Internet initiatives) will improve as the year progresses. We anticipate reporting positive net income in the second quarter and increasing the profitability of our core business during the balance of the year. We expect our Internet tracking division, IDX.com, to lose approximately $9.0 million pretax in 1999, which will result in a pretax loss of approximately $7.0 million for the Company overall. Revenue for the year is expected to reach approximately $310 million." "It is difficult to fully estimate the impact of deferred purchasing decisions on our financial results in 2000," Mr. Tarrant continued. "Given the information currently available, we expect to grow revenue by 15-20% in 2000 and to increase net income substantially in our core business. Once our customers have reached the other side of Y2K computer problems, we may see an increase in sales orders that would help offset the longer sales cycle. We also plan to continue to keep a tight rein on discretionary spending during the year. " Page 4 of 10 As part of its Internet strategy, the Company reported that it purchased 80% of ChannelHealth, Inc. on April 1, 1999. ChannelHealth, based in Bedford, Massachusetts, develops Internet services that provide consumers with extensive health-related information and the ability to purchase medical products on-line. IDX paid $6.5 million in cash for its ownership interest in ChannelHealth, and may pay an additional $3.0 million, contingent upon certain performance goals. A substantial portion of the projected loss for the IDX.com tracking division in 1999 is attributable to ChannelHealth. "We believe the successful healthcare information technology company of the future will combine software expertise with Internet capabilities," Mr. Tarrant said. "Given our established customer base, comprehensive system solutions and our investments in Internet products and services, IDX has solidly defined its position as a leader in the industry." Founded in 1969, IDX Systems Corporation provides complete healthcare information solutions for integrated delivery networks including group practices, MSOs, health plans, and hospitals. To connect systems and sites across the enterprise, IDX offers the IDXtendR @ the Site Series--products and services designed to align physicians and hospitals, streamline patient flow, enhance quality, and reduce costs. IDX products are used by or are under contract to be used by more than 110,000 physicians and are installed at over 1,650 client sites, including more than 250 large group practices, each having 75 physicians or more, 270 multi-entity hospital systems, and over 200 integrated delivery networks. This material contains forward-looking statements that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the possible deferral, delay or cancellation by customers of computer system purchase decisions, variations in the volume and timing of systems sales and installations, timing and quality of development and implementation of year 2000 ready solutions for customers, the potential disruption of customers' purchasing plans due to work on their own year 2000 problems, development and implementation of year 2000 ready products for the Company's internal use, possible delay, varying lengths of sales cycles and installation processes, seasonal patterns of sales and customer buying behaviors, development by competitors of new or superior technologies, possible delays in product development, undetected errors or bugs in software, potential product liability, changing economic, political and regulatory influences on the healthcare industry, changes in product pricing policies, possible regulation of the Company's software by the U.S. Food and Drug Administration, general economic conditions, and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. - tables follow - This release is also available on the Internet at: www.idx.com Page 5 of 10 IDX SYSTEMS CORPORATION Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except for per share data) Three Months Ended March 31 1999 1998 ---- ---- (Unaudited) Revenues Systems sales $ 22,851 $38,966 Maintenance and service fees 37,330 33,771 -------- ------- Total revenues 60,181 72,737 Operating expenses Cost of sales 39,961 37,248 Selling, general, and administrative 18,538 13,752 Research and development 13,548 10,316 Nonrecurring charge - 3,201 -------- ------- Total operating expenses 72,047 64,517 -------- ------- Operating income (loss) (11,866) 8,220 Other (income) expense (1,108) (1,122) Loss on impairment of asset 1,642 - --------- -------- Income (loss) before taxes (12,400) 9,342 Income tax provision (benefit) (5,500) 4,940 --------- -------- Net income (loss) $ (6,900) $ 4,402 ========= ======== Unrealized gain (loss) on securities available-for-sale (58) (3) --------- -------- Comprehensive income (loss) $ (6,958) $ 4,399 ========== ======== Basic earnings (loss) per share $ (0.26) $ 0.17 ========= ======== Basic weighted average shares outstanding 26,654 26,155 ========= ======== Diluted earnings (loss) per share $ (0.26) $ 0.16 ========= ======== Diluted weighted average shares outstanding 26,654 27,007 ========= ======== Page 6 of 10 IDX SYSTEMS CORPORATION Highlights of Consolidated Balance Sheets (in thousands) Unaudited March 31 December 31, 1999 1998 ---- ---- Assets Cash and short term investments $ 113,845 $ 124,517 Accounts receivable, net 85,580 99,345 Other current assets 9,789 4,997 Deferred tax asset 4,720 4,720 ---------- ---------- Total current assets 213,934 233,579 ---------- ---------- Property & equipment, net 35,342 31,905 Capitalized software costs, net 591 665 Other assets 18,426 15,868 Deferred tax asset 2,307 2,307 ---------- ----------- Total assets $ 270,600 $ 284,324 ========== =========== Liabilities and stockholders' equity Accounts payable and accrued expenses $ 29,535 $ 31,162 Income taxes - 5,429 Deferred revenue 15,931 18,239 --------- ----------- Total current liabilities 45,466 54,830 --------- ----------- Minority interest 9,259 8,988 Stockholders' equity 215,875 220,506 --------- ----------- Total liabilities and stockholders' equity $ 270,600 $ 284,324 ========= =========== Page 7 of 10 IDX SYSTEMS CORPORATION Statements of Cash Flows (in thousands) Quarter Ended March 31, 1999 1998 ---- ---- OPERATING ACTIVITIES Net Income (loss) $ (6,900) $ 4,402 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,065 2,490 Deferred tax benefit, net of business acquisitions - (517) Increase in allowance for doubtful accounts 356 31 Minority interest 270 741 Loss on investment 1,642 - Write-off of acquired in-process research & development costs - 3,201 Changes in operating assets and liabilities, net of business acquisitions: Accounts receivable 13,409 (4,522) Prepaid expenses and other assets (4,791) 1,688 Accounts payable 4,270 5,410 Accrued expenses (5,888) (9,270) Federal and state taxes payable (5,429) - Deferred revenue (2,308) (2,008) ---------- --------- Net cash provided by (used in) operating (2,304) 1,646 activities INVESTING ACTIVITIES Purchase of property and equipment, net (6,428) (4,156) Purchase of securities available-for-sale (59,179) (36,076) Sale of securities available-for-sale 78,659 33,178 Business acquisitions - (4,000) Other assets (4,200) - ---------- --------- Net cash provided by (used in) investing 8,852 (11,054) activities FINANCING ACTIVITIES Proceeds from sale of common stock 2,327 6,060 Contributions to affiliates, net - 6,000 Principal repayments of debt (9) (6,066) ---------- --------- Net cash provided by financing 2,318 5,994 activities ---------- --------- Increase (decrease) in cash and cash equivalents 8,866 (3,414) Cash and cash equivalents at beginning of period 10,953 14,061 --------- --------- Cash and cash equivalents at end of period 19,819 10,647 Short term investments 94,026 104,721 --------- --------- Cash and short term investments $ 113,845 $ 115,368 ========= ========== Page 8 of 10 EX-99 3 EXHIBIT 99B IDX News Release IDX Systems Corporation Contacts: IDX Systems Corporation 1400 Shelburne Road Nina Fraley, Public Relations P.O. Box 1070 (206) 689-1378 Burlington, VT nina_fraley@idx.com 95402-1070 Debbie Drewniak, Investor Relations www.idx.com (802) 862 - 1022 - ----------- deborah_drewniak@idx.com FOR IMMEDIATE RELEASE IDX Systems Corporation Announces Acquisition of ChannelHealth Physician connectivity tools improving the healthcare delivery process Burlington, VT, April 21, 1999--IDX Systems Corporation (Nasdaq: IDXC) today announced that on April 1, 1999 IDX purchased 80 percent of ChannelHealth of Bedford, Massachusetts. IDX paid $6.5 million in cash for its interest and committed an additional $16 million in cash to fund operations over the next three years. IDX has also agreed to pay an additional $3 million, contingent on achieving certain performance goals. ChannelHealth develops Web-based services designed to provide healthcare consumers with comprehensive drug information, extensive disease, health, and wellness information, and e-commerce for ordering and fulfillment of medical products. ChannelHealth's Web services, expected to be available to consumers by midyear, is designed to enhance the traditional physician-patient and pharmacy-patient relationships by pointcasting custom tailored healthcare information and product offerings to patients and physicians through a secure and confidential private community network. According to IDX Chief Executive Officer Richard E. Tarrant, "Our Internet track record began three years ago with the launch of OutReach, our Web-based product that connects physicians and other healthcare providers to data from IDX systems. We are building on this success to improve healthcare by integrating patient access to the healthcare system through our Web initiative. We believe patients will want to go to their physicians' websites to request a scheduled visit, view lab results, and interact with IDX transaction and clinical systems. And once online, we expect that patients will demand information on medical conditions, drugs and other health products. Through acquisitions such as ChannelHealth, IDX is positioned to push health information and e-commerce anywhere on the value chain. With this capability, IDX expects to continue the lead in transforming healthcare on the Internet." David R. Page, a pharmacist and expert in direct marketing for healthcare products, founded True Channel Communications in 1996. Mr. Page will remain with ChannelHealth. "It is an exciting opportunity to be aligned with a corporate leader in the HCIS industry. This acquisition validates the ChannelHealth solution for physicians, patients and healthcare plans," said Page. "With the IDX and ChannelHealth combination, we expect physicians and pharmacists to extend their capabilities for patient education with online healthcare information in a way that will be easily accessible and meaningful to the patient." Page 9 of 10 - more - IDX/Channel Health...Page 2 The ChannelHealth acquisition is a key component of a comprehensive Web initiative for IDX that includes the use of browser technology on existing IDX products, and the use of the Internet as a connectivity tool for content delivery and e-commerce capabilities. With the ChannelHealth acquisition, IDX is adding a critical building block in the IDX Web strategy. About IDX Founded in 1969, IDX Systems Corporation provides complete healthcare information solutions for integrated delivery networks including group practices, MSOs and hospitals. To connect systems and sites across the enterprise, IDX offers IDXtendR(TM) @ the Site Series. The IDXtendR product line provides comprehensive, integrated products and services to manage costs and contracts, measure utilization, capture clinical data and monitor patient outcomes - while streamlining patient flow and automating business processes. IDX is the company of choice at more than 1,600 customer sites nationwide. *** This press release contains forward-looking statements that involve a number of risks and uncertainties, including statements regarding the expected development of IDX's Web-based strategy and the future benefits IDX expects to derive as a result of that strategy. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the satisfaction of various closing conditions, volume and timing of systems sales and installations, length of sales cycles and installation process, seasonal patterns of sales and customer buying behaviors, procurement, development and implementation of year 2000 ready products for internal use, procurement, development and implementation of year 2000 ready solutions for customers, the potential disruption of customer's purchasing plans due to work on their own year 2000 problems, development by competitors of new or superior technologies, delays in product development, undetected errors or bugs in software, product liability, changing economic, political and regulatory influences on the healthcare industry, changes in product pricing policies, competitive pressures, possible regulation of the Company's software by the U.S. Food and Drug Administration, general economic conditions, and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. 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