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

Date of Report (Date of earliest event reported):  February 23, 2006

ECLIPSYS CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	000-24539	65-0632092
(State or Other Jurisdiction of Incorporation	(Commission File Number)	(IRS Employer Identification No.)
1750 Clint Moore Road Boca Raton, Florida		33487
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code:  (561) 322-4321

(Former Name or Former Address, if Changed Since Last Report)

          Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.  Results of Operations and Financial Condition

          On February 23, 2006, Eclipsys Corporation announced its financial results for the quarter and year ended December 31, 2005.  The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K. 

          The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits

(d)	Exhibits
	The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:
	99.1	Press Release entitled “Eclipsys Releases Financial Results for the Quarter and Year Ended December 31, 2005,” issued by the company on February 23, 2006.

SIGNATURE

          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.

	ECLIPSYS CORPORATION
Date:  February 23, 2006	By:	/s/ Robert J. Colletti
		Robert J. Colletti
		Senior Vice President and
		Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release entitled “Eclipsys Releases Financial Results for the Quarter and Year Ended December 31, 2005,” issued by the company on February 23, 2006.

EX-99.1

Exhibit 99.1

Eclipsys Releases Financial Results for Quarter and Year Ended December 31, 2005

— Company Experiences Second Consecutive Profitable Quarter, Ends Year with Positive EPS —

Boca Raton, FL — February 23, 2006 — Eclipsys Corporation^® (NASDAQ: ECLP), The Outcomes Company^®, today released results for the quarter and year ended December 31, 2005.

The following table summarizes selected financial data:

	In thousands, except per share data
	Three months ended December 31,										Three months ended September 30,
	2005		2004			$ Change		% Change			2005		$ Change			% Change
Revenues	$	105,120	$	87,233		$	17,887		20.5	%	$	97,852	$	7,268			7.4	%
Basic earnings (loss) per share	$	0.10	$	(0.06	)	$	0.16		N/A		$	0.11	$	(0.01	)		-9.1	%
Diluted earnings (loss) per share	$	0.10	$	(0.06	)	$	0.16		N/A		$	0.10	$	0.00			N/A
	Year ended December 31,
	2005		2004			$ Change		% Change
Revenues	$	383,271	$	309,075		$	74,196		24.0	%
Basic earnings (loss) per share	$	0.01	$	(0.70	)	$	0.71		N/A
Diluted earnings (loss) per share	$	0.01	$	(0.70	)	$	0.71		N/A

Fourth-Quarter and Year-End Results

Fourth-quarter 2005 revenues were $105.1 million, compared to revenues of $87.2 million in Q4’04, an increase of $17.9 million or 20.5 percent. Net income for the quarter was $5.0 million, compared to a net loss of $(2.9) million in Q4’04. This represents a $7.9 million improvement. Basic and diluted earnings per share were $0.10, compared to basic and diluted loss per share of $(0.06) in Q4’04.

For the year, revenues were $383.3 million compared to revenues of $309.1 million in 2004, an increase of 24.0 percent. Net income for the year was $485,000, compared to a loss of $(32.6) million in 2004; this represents a $33.1 million improvement over last year. Basic and diluted earnings per share was $0.01, compared to a loss of $(0.70) in 2004, a $0.71 per share improvement over 2004.

Operating cash flows were $14.4 million for the year, compared to $(3.2) million in 2004; this represents a $17.6 million improvement compared to 2004.  Cash, cash equivalents and marketable securities were $114.1 million as of December 31, 2005. Days sales outstanding (DSOs) were 69 days, an increase of two days from the prior year. Deferred revenue (including current and long-term) was $124.7 million as of December 31, 2005, compared to $122.7 million as of December 31, 2004.

“Fourth-quarter 2005 was a solid quarter for Eclipsys,” stated Robert J. Colletti, Eclipsys senior vice president and chief financial officer. “We exceeded $100 million in revenues, experienced a significant sequential improvement in sales, and achieved positive EPS for the second consecutive quarter. Having ended the quarter and the year with positive EPS, as we previously guided, we are optimistic that we have passed an inflection point in our business model that positions us well for profitable growth in the future.”

R. Andrew Eckert, Eclipsys president and chief executive officer, said that, “The restructuring initiative we implemented and accounted for in January 2006 was designed to increase the resources focused on client service and support and also contribute to improved financial performance. Our realignment of resources allows us to focus on improving customer satisfaction and enhancing the capacity of our professional services group. We are encouraged by the very positive feedback we have received from our client base regarding these initiatives and the most recent release of our enterprise clinical solution, Sunrise ™ 4.5 XA™.”

1750 Clint Moore Road, Boca Raton, FL 33487 • phone 561.322.4321 • fax 561.322.4320 • info@eclipsys.com

Eclipsys Releases Financial Results for the Quarter and Year-Ended December 31, 2005
February 23, 2006
Page 2 of 2

Investor Teleconference February 23

Eclipsys senior executives will discuss the results during an investor community teleconference scheduled for 8:30 a.m. Eastern time on Thursday, February 23. Persons interested in participating in the teleconference should call (800) 230-1074 approximately 15 minutes before the conference is slated to begin. For listen-only mode, participants should go to www.eclipsys.com prior to the conference call to register and download the necessary audio software. An audio replay will be available at www.eclipsys.com for approximately 48 hours beginning at 12 noon Eastern on February 23.

About Eclipsys

Eclipsys is a leading provider of advanced clinical, financial and management information software and service solutions to more than 1,500 healthcare facilities. Eclipsys empowers healthcare organizations to improve patient safety, revenue cycle management and operational efficiency through innovative information solutions. For more information, see www.eclipsys.com or email info@eclipsys.com.

Statements in this news release or the investor call referenced herein concerning the company’s future financial performance and the benefits provided by Eclipsys software and services are forward-looking statements and actual results may differ from those projected due to a variety of risks and uncertainties.   Future performance expectations are predicated upon achievement of various sales and performance targets that may be difficult to meet.  The market is highly competitive.  Eclipsys has recently released new software that has not yet been widely implemented.   Implementation and customization of Eclipsys software is complex and time-consuming. Results depend upon a variety of factors and can vary by client. Each client’s circumstances are unique and may include unforeseen issues that make it more difficult than anticipated to implement or derive benefit from software, implementation or consulting services. The success and timeliness of the company’s services will depend at least in part upon client involvement, which can be difficult to control. Eclipsys is required to meet specified performance standards, and the contract can be terminated or its scope reduced under certain circumstances. More information about company risks is available in recent Form 10-K and other filings made by Eclipsys from time to time with the Securities and Exchange Commission. Special attention is directed to the portions of those documents entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Eclipsys Corporation and The Outcomes Company are registered trademarks of Eclipsys Corporation. Other product and company names in this news release are trademarks and/or registered trademarks of their respective companies

Eclipsys
Michael E. Donner	Robert J. Colletti
Chief Marketing Officer (media)	Chief Financial Officer (investors)
(561) 322-4485	(561) 322-4655
michael.donner@eclipsys.com	investor.relations@eclipsys.com

Eclipsys Corporation and subsidiaries
Consolidated Statements of Operations - Unaudited
(000’s Omitted)

	Year Ended December 31,
							Change $			Change %
	2005			2004
Revenues:
Systems and services	$	370,309		$	282,124		$	88,185			31.3	%
Hardware		12,962			26,951			(13,989	)		-51.9	%
Total revenues		383,271			309,075			74,196			24.0	%
Costs and expenses:
Cost of systems and services revenues		225,080			168,393			56,687			33.7	%
Cost of hardware revenues		11,055			22,949			(11,894	)		-51.8	%
Sales and marketing		64,140			65,024			(884	)		-1.4	%
Research and development		51,789			58,095			(6,306	)		-10.9	%
General and administrative		19,191			15,524			3,667			23.6	%
Depreciation and amortization		14,659			13,284			1,375			10.4	%
Total costs and expenses		385,914			343,269			42,645			12.4	%
Loss from operations		(2,643	)		(34,194	)		31,551			92.3	%
Interest income, net		3,128			1,629			1,499			92.0	%
Income (Loss) before taxes		485			(32,565	)		33,050			101.5	%
Provision for income taxes		—			—			—
Net income (loss)	$	485		$	(32,565	)	$	33,050			101.5	%
Earnings (loss) per share:
Basic (loss) per share	$	0.01		$	(0.70	)	$	0.71			N/A
Diluted (loss) per share	$	0.01		$	(0.70	)	$	0.71			N/A
Weighted average shares outstanding:
Basic		47,947			46,587
Diluted		50,644			46,587

Eclipsys Corporation and subsidiaries
Consolidated Statements of Operations - Unaudited
(000’s Omitted)

	Three Months Ended											Three Months Ended September 30,
	December  31, 2005		December 31, 2004			Change $			Change %			2005		Change $			Change %
Revenues:
Systems and services	$	100,818	$	80,368		$	20,450			25.4	%	$	94,806	$	6,012			6.3	%
Hardware		4,302		6,865			(2,563	)		-37.3	%		3,046		1,256			41.2	%
Total revenues		105,120		87,233			17,887			20.5	%		97,852		7,268			7.4	%
Costs and expenses:
Cost of systems and services revenues		59,477		44,371			15,106			34.0	%		56,776		2,701			4.8	%
Cost of hardware revenues		3,823		5,667			(1,844	)		-32.5	%		2,575		1,248			48.5	%
Sales and marketing		17,004		18,784			(1,780	)		-9.5	%		14,076		2,928			20.8	%
Research and development		12,512		13,617			(1,105	)		-8.1	%		12,726		(214	)		-1.7	%
General and administrative		4,484		4,668			(184	)		-3.9	%		3,840		644			16.8	%
Depreciation and amortization		3,769		3,553			216			6.1	%		3,625		144			4.0	%
Total costs and expenses		101,069		90,660			10,409			11.5	%		93,618		7,451			8.0	%
Income (loss) from operations		4,051		(3,427	)		7,478			218.2	%		4,234		(183	)		-4.3	%
Interest income, net		982		536			446			83.2	%		865		117			13.5	%
Income (loss) before income taxes		5,033		(2,891	)		7,924			274.1	%		5,099		(66	)		-1.3	%
Provision for income taxes		—		—			—						—		—
Net income (loss)	$	5,033	$	(2,891	)	$	7,924			274.1	%	$	5,099	$	(66	)		-1.3	%
Earnings (loss) per share:
Basic earnings (loss) per share	$	0.10	$	(0.06	)	$	0.16			N/A		$	0.11	$	(0.01	)		-9.1	%
Diluted earnings (loss) per share	$	0.10	$	(0.06	)	$	0.16			N/A		$	0.10	$	0.00			0.0	%
Weighted average shares outstanding:
Basic		48,604		46,937									48,304
Diluted		51,408		46,937									51,316

Eclipsys Corporation and subsidiaries
Consolidated Balance Sheets - Unaudited
(000’s Omitted)

	December 31,
	2005		2004
Assets
Current assets:
Cash and cash equivalents	$	76,693	$	122,031
Marketable securities		37,455		—
Accounts receivable, net		80,833		64,862
Inventory		2,289		1,644
Prepaid expenses		17,909		14,495
Other current assets		2,184		1,091
Total current assets		217,363		204,123
Property and equipment, net		40,500		35,002
Capitalized software development costs, net		35,690		29,819
Acquired technology, net		584		886
Intangible assets, net		2,940		3,804
Goodwill, net		6,624		2,863
Other assets		20,964		14,923
Total assets	$	324,665	$	291,420
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue	$	107,960	$	106,804
Accounts payable		26,103		21,945
Accrued compensation costs		15,974		12,738
Other current liabilities		10,413		10,642
Total current liabilities		160,450		152,129
Deferred revenue		16,772		15,892
Other long-term liabilities		1,252		122
Stockholders’ equity:		146,191		123,277
Total liabilities and stockholders’ equity	$	324,665	$	291,420

Eclipsys Corporation and subsidiaries
Consolidated Statements of Cash Flows - Unaudited
(000’s omitted)

	Twelve Months Ended December 31,
	2005			2004
Operating Activities:
Net income (loss)	$	485		$	(32,565	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation and Amortization		32,472			27,410
Loss from Sale of Marketable securities		—			131
Bad debt provision		3,011			1,800
Stock Compensation Expense		2,353			477
Changes in operating assets and liabilities
Accounts receivable		(18,982	)		(11,520	)
Inventory		(645	)		(1,079	)
Other current assets		(1,092	)		(28	)
Prepaid Expenses		(3,415	)		(506	)
Other assets		(9,283	)		(2,724	)
Deferred revenue		2,036			21,403
Accrued compensation		2,441			(4,486	)
Account Payables		6,493			3,637
Other current liabilities		(2,563	)		(4,635	)
Other liabilities		1,130			(562	)
Total adjustments		13,956			29,318
Net cash provided by (used in) operating activities		14,441			(3,247	)
Investing Activities:
Purchase of fixed assets		(19,288	)		(15,333	)
Purchase of marketable securities		(501,717	)		(164,074	)
Proceeds from sale of marketable securities		464,262			163,943
Capitalized software development costs		(20,144	)		(15,194	)
Acquisitions, net of cash		(312	)		(5,458	)
Net cash used in investing activities		(77,199	)		(36,116	)
Financing Activities:
Proceeds from stock options exercised		16,853			7,892
Proceeds from issuance of common stock in stock purchase plan		195			1,664
Net cash provided by financing activities		17,048			9,556
Effect of exchange rate changes on cash and cash equivalents		372			155
Net decrease in cash and cash equivalents	$	(45,338	)	$	(29,652	)
Cash and cash equivalents, beginning of period		122,031			151,683
Cash and cash equivalents, end of period		76,693			122,031
Marketable securities		37,455			—
Total Cash	$	114,148		$	122,031