EX-99.2 3 dex992.htm INVESTOR PRESENTATION Investor Presentation
1
Exhibit 99.2


Copyright ©
2008 AllscriptsMisys Healthcare Solutions, Inc.
The Right Place at the Right Time
Allscripts Investor Presentation


3
Forward Looking Statements
This
communication
contains
forward-looking
statements
within
the
meaning
of
the
federal
securities
laws.
Statements
regarding
future
events,
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,
some
of
which
are
outlined
below.
As
a
result,
actual
results
may
vary
materially
from
those
anticipated
by
the
forward-looking
statements.
Among
the
important
factors
that
could
cause
actual
results
to
differ
materially
from
those
indicated
by
such
forward-looking
statements
are:
the
volume
and
timing
of
systems
sales
and
installations;
length
of
sales
cycles
and
the
installation
process;
the
possibility
that
products
will
not
achieve
or
sustain
market
acceptance;
the
timing,
cost
and
success
or
failure
of
new
product
and
service
introductions,
development
and
product
upgrade
releases;
competitive
pressures
including
product
offerings,
pricing
and
promotional
activities;
our
ability
to
establish
and
maintain
strategic
relationships;
undetected
errors
or
similar
problems
in
our
software
products;
compliance
with
existing
laws,
regulations
and
industry
initiatives
and
future
changes
in
laws
or
regulations
in
the
healthcare
industry;
possible
regulation
of
the
Company’s
software
by
the
U.S.
Food
and
Drug
Administration;
the
possibility
of
product-related
liabilities;
our
ability
to
attract
and
retain
qualified
personnel;
our
ability
to
identify
and
complete
acquisitions,
manage
our
growth
and
integrate
acquisitions;
the
ability
to
recognize
the
benefits
of
the
merger
with
Misys
Healthcare
Systems,
LLC
(“MHS”);
the
integration
of
MHS
with
the
Company
and
the
possible
disruption
of
current
plans
and
operations
as
a
result
thereof;
maintaining
our
intellectual
property
rights
and
litigation
involving
intellectual
property
rights;
risks
related
to
third-party
suppliers;
our
ability
to
obtain,
use
or
successfully
integrate
third-party
licensed
technology;
breach
of
our
security
by
third
parties;
and
the
risk
factors
detailed
from
time
to
time
in
our
reports
filed
with
the
Securities
and
Exchange
Commission,
including
our
2007
Annual
Report
on
Form
10-K
available
through
the
Web
site
maintained
by
the
Securities
and
Exchange
Commission
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.


4
Large & Troubled . . .
Our U.S. Healthcare Scorecard
$2.2 Trillion
Spent in Healthcare
$700 Billion
in Waste
98,000 Deaths
from Medical Errors
1.5 Million
Injuries 
7,000 Deaths
from Medication Errors


5
Key Trends Driving Change
Rising Cost and the Parties Responsible for Payment
New Competitors for Physician Groups
Patients Are Not Patient Anymore
New Payment Structures and Metrics


6
The Role of Technology
Increase the Quality of Care
Take Costs Out
Improve Patient Safety
Increase Patient Satisfaction
Technology is the Enabler
The End Game is Information


7
The Healthcare Market Is Ripe for Change
Less Than 20% Physician Penetration
Less Than 10% in Smaller Groups
Lower IT Investment than Any Other Sector
<20
%
<10
%


8
The Opportunity for AllscriptsMisys
Two market leaders come together
Perfectly positioned to win in a vibrant, growing market
-
Electronic Health Record
-
Revenue Cycle Management
$1B cross-sell opportunity within our base
Stability from $400M+ in recurring revenue


9
Our DNA –
Blending Two Into One
Clear Goal:
Ready to Deliver on Day 1
Sales Force Integration
Product Strategy
Leadership Team
Brand
Integration Organized Around 13 Workstreams


10
In the Last Three Weeks…


11
Clear Mission
-
To be the clear leader in providing innovative software, connectivity and
information solutions that empower physicians and other healthcare
providers
to
improve
the
health
of
both
their
patients
and
their
bottom
line
Financially Strong
-
Revenue of ~ $700mm (Recurring Revenue ~ $400mm)
-
Publicly-Traded (Nasdaq: MDRX)
Experienced Team
-
2,500+ Employees
About the new
Allscripts


12
12
Waves of Healthcare IT Adoption
Practice
Management
Market
Enhance the
effectiveness of the
practice
Misys Leadership in Building
Practice Management / Claims
Management Client Base
Wave
1
Electronic          
Health Record
Market
Enhance the efficiency and
quality of the visit
Allscripts Leadership in EHR
Product and Blue Chip
Client Base
Wave
2
AllscriptsMisys Leadership in
New Solutions and Services
Connectivity
and
Information
Market
Enhance the health of the
patient and the practices
bottom line
Wave
3


13
It’s Time to Connect to Health™
NOTE:
INSERT CONNECT TO HEALTH VIDEO


14
Why We Win
Significant Footprint:
150,000 MDs, 700 Hospitals,
6,000 Post Acute Facilities, 600 Homecare Agencies
All Sizes and Settings:
Ambulatory and Acute,
Primary Care and Specialty, Small to Large
Diversified Portfolio:
Clinical and Business Solutions,
Acute and Ambulatory
All World-Class:
Top Rated Consistently
Significant Breakthroughs:
Innovation Comes Standard
Real Utilization:
Not Just Implementation
Strong ROI:
The Solution That Pays You Back
Delivering the Next Step:
Connect to Health


15
Connect Solutions
Connect Portal
Connect Messaging Services
Community Care
……
……
Clinical Solutions
Professional EHR
Enterprise EHR
MyWay
ePrescribe
Document Management
Medication Services
Clinical Trials
Patient Access Solutions
Business Solutions
PM/ Revenue Cycle Services
Payerpath / EDI
Ambulatory
Practices
Emergency Department
Care Management
Utilization Management
Discharge Planning
Documentation Integrity
Quality Management
Stark Offerings
EHR Solutions
ePrescribe
Acute
Care
Homecare
Home Health & Private Duty
Hospice
Referral Management
Referral Management Plus
Mobile
Core System Integration
Post-Acute
Care
Our Portfolio –
We Will Connect the Market


16
Bloomberg of Healthcare


17
Our Client Base
150,000 MDs and 700+ Hospitals Across the U.S.


18
18
Professional EHR + PM
EDI
~40% penetration
1.3k practices
65k physicians
Enterprise EHR + PM
EDI
~10% penetration
170k practices
241k physicians
Professional EHR + PM
ASP-Based EHR
EDI
Segment
Allscripts Offering
Penetration/Size
~20% penetration
33k practices
227k physicians
Independent
Practices
1-3 physicians
Leadership Across the Ambulatory Market
Small to Mid-Sized
Physician Practices
4-25 Physicians
Large Physician
Practices
26-200+ Physicians


19
Market Opportunity
~ 500,000 U.S. Practicing Physicians
x          80% EHR Market Opportunity
x  ~$12,000 Initial Investment/Physician
= ~$5 Billion Opportunity
Electronic Health Record (EHR) Market = ~ $5 Billion
Practice Management (PM) Market = ~ $1 Billion/Yr.
~10% to 20% of PM Systems Replaced/Yr.
Software Maintenance Agreement (SMA) = ~ $1 Billion/Yr.
Clinical and EDI Transaction Fees = ~ $1 to 3 Billion/Yr.
American Presidential candidates see technology as the answer to
a
better healthcare delivery system


20
Summary
a complete portfolio
of solutions…
for practices in all sizes/areas…
a footprint of 1 of 3 MDs
in the U.S.
Products
Target
Client Base


21
Financial Overview
*
*
*
*
*


22
Q3 2008 Preliminary Overview
Q3 Results will be finalized and filed with the SEC on 11/10/2008
Updated Estimates for Q3
-
Bookings
-
$44.6m for the quarter and $152.5m YTD
-
$41.8m clinical bookings for the quarter and $143.1m YTD
-
Revenue
-
$85.7m for the quarter and $239.3m YTD
-
$71.8m
software
and
related
services
for
the
quarter
and
$198.6m
YTD
-
Gross Margins
-
48.8% for the quarter and 49.7% YTD
-
Adjusted Earnings
-
$8.4m
or
$0.15
per
share
for
the
quarter
and
$20.7m
or
$0.36
per
share
YTD
-
Net Income
-
$4.0m or $0.07 per share for the quarter and $6.5m or $0.11 per share YTD
-
$5.3m
or
$0.09
per
share
for
the
quarter
and
$11.2m
or
$0.19
per
share
YTD; excluding transaction cost and Physicians Interactive gain
Note: Adjusted earnings is a non-GAAP financial measure. See
reconciliation to comparable GAAP measure in Appendix A.


23
2009 Outlook
($ in millions - unaudited pro forma)
Previous
Guidance
Fiscal
Fiscal
Calendar
Guidance
2008
2008
2009
Bookings
$317.7
N/A
N/A
Revenue
$684.2
$700.0
$700.0 to $715.0
Less: PI
(15.0)
(15.0)
0.0
Adjusted Revenue
$669.2
$685.0
$700.0 to $715.0
Adjusted Earnings
$62.6
$85.0 to $90.0
$76.0 to $82.0
Less: Physicians Interactive
(1.1)
(1.0)
0.0
Less: Synergies Timing
0.0
(5.0)
0.0
Less: Amortization Timing
0.0
(4.0)
0.0
Revised Adjusted Earnings
$61.5
$75.0 to $80.0
$76.0 to $82.0
Adjusted Earnings Per Share
$0.43
$0.48 to $0.52
$0.49 to $0.53
Pro Forma Share Count
148.0
155.0
155.0
Note: Fiscal 2008 reflects actual results for Misys Healthcare (under U.S GAAP) for the year ended May 31, 2008
    and the trailing 12-months for Allscripts for the period ended June 30, 2008.
Note 2: Adjusted earnings is a non-GAAP financial measure. See reconciliation to
comparable GAAP measure on page 24.


24
Adjusted Earnings Potential
($ in millions -
unaudited pro forma)
Fiscal
Fiscal
2008
2009
Earnings Before Taxes, as reported
$57.5
$83.5 to $93.0
Taxes (Assumed @ 39%)
(22.4)
$32.5 to $36.0
Net Income
$35.1
$51.0 to $57.0
Adjustments:(tax adjusted @ 39%)
Stock-Based Compensation
$5.4
$7.0
Deal-Related Amortization
14.0
18.0
One-Time Costs / Transaction Related Expenses
8.1
-
Physicians Interactive
(1.1)
-
Total Adjustments
$26.4
$25.0
Adjusted Earnings
$61.5
$76.0 to $82.0
Adjusted Earnings Growth
42%
24% to 33%


25
Significant and Realizable Synergy Opportunity
Cost synergies of $20m+, pre-tax,
expected in first year following
transaction close
-
Up to $25m to $30m, pre-tax, in annual
cost savings within the next few years
-
Main drivers of cost synergies include:
R&D, Marketing, Sales, Administrative
Functions
Revenue synergies from cross-selling
into respective client bases is expected
to be ~$7m+ in FY 2009
Increased operating leverage expected
to result in mid teens EPS growth
Projected Cost Synergies
$20m+
$25 -
$30m
First Year
Run Rate


26
Illustrative Revenue Sensitivity Analysis
Four Year Cumulative Penetration Rates
110,000
MDs
20%
Assumed EHR Penetration
88,000
Addressable EHR Market
20%
30%
40%
50%
60%
License/Service Fees
$165m
$248m
$330m
$410m
$495m
Annual Maintenance
$20m
$30m
$40m
$50m
$60m


27
We Are Prepared to Execute
Vern Davenport, President
Professional Solutions
Clients:
21,000+ clients
Small to mid-sized practices
Employees:
~1,700 employees
160 sales reps (30 inside)
Laurie McGraw, President
Enterprise Solutions
Clients:
5,000 clients
Large Physicians Practices,
IDNs, and Hospitals
Employees:
~350 employees
35 sales reps (9 inside)
Jeff Surges, President
Health Systems Group
Clients:
700 hospitals
6,000 post-acute providers
600+ homecare and hospice
agencies
Employees:
~300 employees
35 sales reps (5 inside)


28
Fiscal Year 2009 Liquidity
($ in millions - unaudited pro forma)
Estimated Cash & Marketable Securities Net of
Transaction Expenses
$45.0
to
$50.0
Summary of Debt:
Drawn Portion of Revolving Credit Facility
$50.0
Convertible Notes Outstanding
27.9
 
Mortgage (will be paid off with proceeds from sale)
3.5
   
Capital Leases
1.6
   
Total Debt
$83.0
Net Debt
($33.0)
to
($38.0)
Undrawn Revolver Availability
$25.0
Proforma Cash Flow:
FY 2009 Adjusted Earnings
$76.0
to
$82.0
Less: Incremental Capitalized Software
(13.5)
         Incremental Capital Expenditures
(3.0)
         Change in Working Capital
(4.5)
         One-time Costs, Net of Sale of Facility Proceeds
(3.0)
(24.0)
Estimated Cash Flow
$52.0
to
$58.0
Note:  Assumes taxes are paid in cash.


29
Capital Structure
(shares in millions)
Ownership %
Allscripts Outstanding Shares
63.0
41.4%
Allscripts Shares Issued to Misys plc
82.9
54.5%
Shares Underlying Remaining Debentures
3.5
2.3%
"In the Money" Options
2.4
1.5%
Unvested Restricted Stock Units
0.4
0.2%
Outstanding Equity as of Closing
152.1
100.0%
Estimated Number of RSU Grants in FY 2009
4.0 to 4.5
Note: Debenture holders will have an opportunity to put their debentures to the company for
        
principal plus accrued but unpaid interest through date of 'put'.


30
Reporting Considerations
U.S. GAAP vs. IFRS
Allscripts accounting acquiree -
valuation in process
Deferred revenue adjustment (non-cash)
Effective tax rate
Convertible debt potential ‘put’
Change in auditors
Booking (aka Order Intake) Definition


31
The new
Allscripts Is Positioned for Profitable Growth
Two market leaders come together
Perfectly positioned to win in a vibrant, growing market
-
Electronic Health Record
-
Revenue Cycle Management
$10B market opportunity and $1B cross-sell opportunity
within our base
Stability via $400M+ in recurring revenue



33
Appendix A –
GAAP Reconciliation
Three Months Ended
Nine Months Ended
2008
2007
2008
2007
Net Income
$4.0
$4.1
$6.5
$14.6
Stock-based compensation expense (tax effected at 39% for
2008 and 40% for 2007)
1.0
0.9
3.2
1.7
Acquisition-related amortization (tax effected at 39% for
2008 and 40% for 2007)
2.1
1.7
6.3
4.7
Transaction-related expenses (tax effected at 39% for 2008)
3.3
-
6.8
-
Gain on sale of Physicians Interactive business (tax effected
at 39% for 2008)
(2.0)
-
(2.0)
-
Non-GAAP Adjusted Earnings
$8.4
$6.7
$20.7
$21.0
Weighted average shares of common stock outstanding
used in computing diluted non-GAAP adjusted earnings per
share
58.2
65.2
57.8
64.5
Non-GAAP Adjusted Earnings Per Share -
diluted
$0.15
$0.11
$0.36
$0.35
Allscripts
Healthcare
Solutions,
Inc.
September 30,
September 30,
Reconciliation of Non-GAAP Adjusted Earnings and Non-GAAP Adjusted Earnings Per Share
(amounts in millions, except per-share amounts)
(Unaudited)