 1
William Blair & Company Growth Stock Conference
Investor Presentation
June 15, 2011
Exhibit 99.1 |
 |
Copyright
©
2011
Allscripts
Healthcare
Solutions,
Inc.
A Connected Community of Health
2
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the
federal securities laws. Statements regarding future events or developments, our
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, no assurances can be given that any
of the events anticipated by the forward-looking statements will transpire or occur,
or if any of them do so, what impact they will have on our results of operations or
financial condition. Such risks, uncertainties and other factors include, among other things: the risk that
we will not achieve the strategic benefits of the merger (the “Eclipsys Merger”) with Eclipsys Corporation
(“Eclipsys”); the possibility
that the expected synergies and cost savings of the Eclipsys Merger will not be realized,
or will not be realized within the expected time period; the risk that our business
will not be integrated successfully with the business of Eclipsys; disruption from the Eclipsys
Merger and related transactions making it more difficult to maintain business
relationships with customers, partners and others; unexpected requirements to
achieve interoperability certification pursuant to the Health Information Technology for Economic and
Clinical Health Act, with resulting increases in development and other costs for us; the
volume and timing of systems sales and installations, the length of sales cycles
and the installation process and the possibility that our 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; errors or similar problems in our
software products; the outcome of any legal proceeding that has been or may be instituted
against us and others; compliance obligations under existing laws, regulations and
industry initiatives and future changes in laws or regulations in the healthcare industry,
including possible regulation of our software by the U.S. Food and Drug Administration;
the possibility of product-related liabilities; our ability to attract and
retain qualified personnel; the implementation and speed of acceptance of the electronic record provisions
of the American Recovery and Reinvestment Act of 2009, as well as elements of the Patient
Protection and Affordable Care Act (aka health reform) which pertains to health IT
adoption; maintaining our intellectual property rights and litigation involving intellectual
property rights; legislative, regulatory and economic developments; risks related to
third-party suppliers and our ability to obtain, use or successfully integrate
third-party licensed technology and breach of our security by third parties. See our Transition Report on Form
10-K for the seven months ended December 31, 2010 and our subsequent filings with the
SEC for a further discussion of these and other risks and uncertainties applicable
to our business. The statements herein speak only as of their date and we undertake no duty to
update any forward-looking statement whether as a result of new information, future
events or changes in expectations. |
 3
|
 4
|
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
5
Allscripts Corporate Snapshot
Allscripts Key Competitive Differentiation: Leading Market Share Across Acute,
Ambulatory and
Post-Acute
Providers,
a
Key
Consideration
for
Accountable
Care
Organizations
(ACOs)
•
180,000 Providers
•
50,000 Physician Practices
•
1,500 Hospitals
•
10,000 Post Acute Facilities
•
27,000 Clinicians In Patients’
Homes Every Day
Our Clients
•
One Complete Set of Solutions
•
5,800 Employees
•
$1.3BB 2010 Non-GAAP Revenue
•
$148MM 2010 Non-GAAP Net
Income
Our Company
Note: Please see the Non-GAAP reconciliation and related footnotes in
the appendix to this presentation. Information also available at http://investor.allscripts.com |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Investment Highlights
6
Leading
healthcare
IT
company
with
the
broadest
set
of
capabilities
across every venue of care including physicians, hospitals, post-acute
and homecare
The
most
utilized
clinical
solutions
enabling
health
care
providers
to
fully capitalize on the $30BB federal stimulus program
Leadership in technology and innovation uniquely positions Allscripts to
aggressively
compete
for
the
$43BB
healthcare
IT
solutions
market
A
highly
attractive
financial
profile
with
high
recurring
revenue,
significant operating leverage and cost synergy opportunities and
strong free cash flow
>
>
>
> |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
The Time is NOW
7
•
Quality Issues
•
Medical Errors / Safety
Concerns
•
Rising Cost
•
Significant Waste
A National
Problem
•
$43BB(1)
Opportunity
•
$30BB in Stimulus
Funding
•
~15% Penetration in
Physician Practices
•
Rise of the Employed
Physicians
•
Hospitals Driving
Adoption
A Market that
is Ready
We are at the
beginning
of
what
we
expect will be the
single fastest
transformation of any
industry in US history
A Significant
Opportunity
>
>
(1)
McKinsey & Company |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Addressing the Entire Market Opportunity
Acute/Ambulatory EHR Opportunity 2010-2014 = ~$43BB
8
Source: McKinsey & Company
$16BB
$10BB
$17BB
A Complete Portfolio Addresses the Entire Care Continuum
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
Ambulatory Stand-Alone
Opportunity
Acute Stand-Alone
Opportunity
Stand-Alone Market
Integrated Market
Integrated/Complete
Solution Across
Hospitals and
Physician Practices |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
9
Ambulatory Market Potential
Practice Size
Total # of Practices
EHR Penetration
(FY09/10)
1-3 Physicians
163,000
~13%
4-9 Physicians
27,000
~22%
10-25 Physicians
8,000
~33%
26+ Physicians
2,000
~50%
Total
200,000
~15%
Source: SK&A = SK&A Information Services which sells databases for sales and
marketing success in healthcare industry |
    | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Incentive Program
Has Begun!
ARRA
Announced
Final Rules
Issued
70% of Funding
Used
Increased Certainty for Widespread
EHR Adoption
10
December
2013
June
2011
Q1
2009
July
2010
Physician
Penetration
(1)
~20%
Source: National Center for Health Statistics
~ 400 Hospitals
Will Replace Clinical
Systems
(2)
TODAY
(1)
~20% estimate based on number of ambulatory physicians; penetration as a percentage of
number of physician practices is ~11%
(2)
Hospitals >200 beds |
 Allscripts: Competitive Differentiation
•
The Largest Network with a
Client Base of 180,000
Physicians, 1,500 Hospitals
and 10,000 Post-Acute Care
Providers
•
The Unique Ability to Truly
Connect a Community
•
One Patient Record Across
an Organization and the
Community –
One Source of
Truth
One
Network.
The largest connected
network in the nation…
and in your community.
One
Platform.
Open, flexible, and
innovative to help you
connect inside and
outside your
organization.
One
Patient.
A complete portfolio
that delivers a single
patient record across
your community.
•
Comprehensive, Integrated
Solutions for all Settings
•
Rapid Implementation Approach
to Attain “Meaningful Use”
•
A Track Record of Innovation
with a ‘Future State’
Clinical/Financial Informatics
Capability
•
Common Microsoft platform and
a shared ‘open architecture’
approach, simplifying the
connection to third-party
applications across every care
setting
A Connected Community of Health
| Copyright ©
2011 Allscripts Healthcare Solutions, Inc. |
 12
Hospitals
Physician Practices
Post-Acute Facilities &
Agencies
•
The ‘Hub’:
Over 1,500 Hospitals including 40%
of “America’s Best Hospitals”
as Clients
•
The ‘Spokes’:
Over 180,000 MDs and 10,000
Post-Acute Care Organizations are Connected
to other Practices, Patients, Pharmacies, Payors,
Clinical Labs and Hospitals
One
Network:
The
Largest
Community
in
the
Nation
A Connected Community of Health
| Copyright ©
2011 Allscripts Healthcare Solutions, Inc. |
 One
Platform: A Complete, Integrated Solutions Portfolio
Clinical
Financial
Administrative
Analytics
Services
Community Exchange
Community Record
Helios
Remote Hosting
Patient Financials
EPSi
Enterprise Registration
Outsourcing
Enterprise Scheduling
Access Management
Consulting
Decision Support
Record Manager
Network/Desktop
Patient Flow
Financial Manager
Clinical Analytics
Pharmacy
Emergency Care
Laboratory
Knowledge-Based
Charting
Knowledge-Based
Medication
Administration
Acute Content
Clinical Manager
Radiology
Enterprise Identifier
Education
13 |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
14
One Patient: Critical Patient Data Flows Freely
Acute Solutions
(Sunrise)
Ambulatory
Solutions
Post-Acute
Solutions
Patient Records
Labs
Prescriptions
X-Rays
Referrals
Results
Orders |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
The New Architecture of Healthcare
Old World
(Monolithic Mainframe)
Hospitals
Owned Physician Practices
Rehab Clinics
New World
(Modern Platform) |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
16
Financial Overview |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
17
1Q 2011 Highlights
Bookings Growth
Reflects Breadth of
Market Solutions
Healthy Platform for
Future Growth
Strong Revenue, Margin
Growth
•
Total bookings of $500MM in the two full quarters, post-merger,
a 22%year-over-year increase
•
Three new Sunrise Enterprise client sales YTD (two in Q1 2011)
•
Strong ambulatory purchasing across all practice sizes
•
Software-as-a-Service( SaaS) bookings 21% of total
•
Non-GAAP revenue grew 10.5% year-over-year to $346.1MM
•
66% recurring revenue in the quarter
•
Professional services grew 34% year-over-year
•
Non-GAAP operating margins expanded to 20.8% from 19.1%
•
$2.7BB revenue backlog
•
Generated
$67MM
in
operating
cash
flow
-
strong
Q1
showing
•
Repaid $122MM in debt in 8 months, post merger
•
Refinanced debt agreement at more favorable terms
•
Announced a $200MM share repurchase program
Revenue, operating margin on a non-GAAP basis |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Historical Consolidated Performance
18
Combined Non-GAAP Operating Income ($millions)
Combined Non-GAAP Operating Income ($millions)
Non-GAAP Revenue
CY 2009: $1,188MM
Non-GAAP Revenue
CY 2009: $1,188MM
Non-GAAP Revenue
CY 2010: $1,300MM
Non-GAAP Revenue
CY 2010: $1,300MM
$0
$50
$100
$150
$200
$250
CY2009
CY2010
3 Months
3/31/10
$212
$251
$60
$72
3 Months
3/31/11
Ambulatory
56%
Acute
44%
Ambulatory
58%
Acute
42%
Note: Ambulatory revenue refers to legacy Allscripts, as reported; Acute
revenue refers to legacy Eclipsys, as reported Note:
Please see the Non-GAAP reconciliation and related footnotes in the appendix to this presentation. Information also
available at http://investor.allscripts.com
|
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Significant Key Cost Synergies
19
Projected Cost Synergies Over Three Years
•
Duplicative management
structure
•
Duplicative public company
costs
•
Duplicative back-end office
and system integration
•
Marketing
Key Cost
Synergy Drivers
CY2011
~$25MM
~$35MM
~$40MM
CY2012
CY2013 &
Beyond |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Revenue Cross-Sell Opportunity of $1.25BB
20
Incremental Revenue Opportunity
$16BB Integrated Market Provides Additional Opportunity
Sunrise Clinical Manager,
Patient Flow, EPSi
Care Management, Emergency
Department, Homecare,
Ambulatory EHR
Sell
Ambulatory
Solutions to
Acute Care
Base
Total
~$430MM
~$820MM
~$1,250MM
=
+
Sell Acute
Solutions to
Ambulatory
Care Base |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Non-GAAP
Revenue
Non-GAAP
Operating
Margin
Non-GAAP
Net Income
Non-GAAP Financial Outlook(1)
($ in millions; except per share amounts)
CY 2010 Actual
Non-GAAP
Diluted EPS
$1,300
19%
$148
$0.76
CY 2011
$1,425 -
$1,450
21%
$167 -
$176
$0.86 -
$0.90
2010 to 2011
Change
10 -
12%
13 -
19%
13 -
18%
--
(1)
Guidance provided by the company in a press release on May 5, 2011. This presentation does not subsequently update or reaffirm Allscripts financial guidance.
Note: Please see the
Non-GAAP reconciliation and related footnotes in the appendix to this presentation. Information also available at
http://investor.allscripts.com |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Strong Free Cash Flow Generation
22
•
Reduced debt by $122MM
since merger closed
•
Required principal payments
in 2011 total $27.8MM
•
Current borrowing cost <3%
•
Completed amendment to
borrowing agreements,
reducing cash borrowing costs
by 75 BPS
Capitalization
Actual
3/31/2011
Cash and Marketable Securities
$147
Revolver ($250mm)
0
Term Loan
448
Total Debt
$448
Equity
1,428
Total Capitalization
$1,876
Credit Statistics
LTM EBITDA
(1)
$314
Total Debt / LTM EBITDA
(1)
1.4x
Debt / Capitalization
23.9%
1
EBITDA is calculated as net income plus income tax expense, interest expense,
stock-based compensation expense, depreciation & amortization, deferred revenue adjustments,
certain one-time and transaction-related expenses, and
non-recurring losses on the sale of investments minus non-recurring gains on the sale of assets, consistent with the calculation
as defined in the Company’s Senior Credit Facilities agreement.
Note: Please see the
Non-GAAP reconciliation and related footnotes in the appendix to this presentation. Information also available at
http://investor.allscripts.com |
 23
|
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
24
·
GAAP
–
non-GAAP
revenue
and
net
income
reconciliation
for
the
twelve
months
ended
December
31,
2010.
Appendix: Non-GAAP Reconciliation
Non-GAAP
Total revenue, as reported
$1,191.5
Deferred revenue adjustment
29.2
Eclipsys results pre-merger period
(7/1/10-8/23/10) 79.5
Total non-GAAP revenue
$1,300.3
Net income, as reported
$36.4
Deferred revenue adjustment
17.7
Acquisition-related amortization
27.7
Stock-based compensation expense
16.9
Transaction-related expense
38.2
ARS Sales
0.9
Tax rate alignment
6.8
Eclipsys results pre-merger period
(7/1/10-8/23/10) 2.9
Non-GAAP net income
$147.5
Allscripts Healthcare Solutions, Inc.
2010 Non-GAAP Financial Information
(In millions)
(unaudited)
2010 Results |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
25
·
GAAP –
non-GAAP revenue growth for the three months ended March 31, 2011.
Appendix: Non-GAAP Reconciliation
3/31/10
3/31/10
Q1 2010
3/31/11
Allscripts
Eclipsys
Total
Total revenue, as reported
$335.3
$184.4
$128.4
$312.8
Deferred revenue adjustment
10.8
0.5
0.0
0.5
Total non-GAAP revenue
$346.1
$184.9
$128.4
$313.3
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)
Three Months
Ended
Three Months Ended |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
26
·
GAAP –
non-GAAP operating income and margin reconciliation for the three months ended March
31, 2011 and 2010.
Appendix: Non-GAAP Reconciliation
3/31/10
3/31/10
Q1 2010
3/31/11
Allscripts
Eclipsys
Total
Total revenue, as reported
$335.3
$184.4
$128.4
$312.8
Deferred revenue adjustment
10.8
0.5
0.0
0.5
Total non-GAAP revenue
$346.1
$184.9
$128.4
$313.3
Operating income, as reported
$24.5
$32.0
$10.7
$42.7
Deferred revenue adjustment
10.8
0.5
0.0
0.5
Acquisition-related amortization
16.7
5.6
3.1
8.7
Stock-based compensation expense
7.0
3.9
3.7
7.6
Transaction-related expense (a)
13.1
0.2
0.0
0.2
Total non-GAAP operating income
$72.1
$42.2
$17.5
$59.7
Total non-GAAP operating income as a percentage of
non-GAAP revenue
20.8%
19.1%
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)
Three Months
Ended
Three Months Ended |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
27
·
GAAP
–
non-GAAP
revenue
reconciliation
for
the
twelve
months
ended
November
30,
2009
(Allscripts)
and
twelve months ended December 31, 2009 (Eclipsys).
Appendix: Non-GAAP Reconciliation
Allscripts
(11/30/2009)
Eclipsys
(12/31/2009)
Non-GAAP
Total revenue, as reported
$661.1
$519.1
$1,180.2
Deferred revenue adjustment
9.7
8.0
$17.7
Elimination of prepackaged medications
(9.7)
0.0
($9.7)
Total non-GAAP revenue
$661.1
$527.1
$1,188.2
Twelve Months Ended
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited) |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
28
•
GAAP –
non-GAAP operating income reconciliation by quarter and twelve months ended December
31, 2009 (Eclipsys) and November 30, 2009 (Allscripts).
Appendix: Non-GAAP Reconciliation
2/28/09
3/31/09
Q1 2009
5/31/09
6/30/09
Q2 2009
8/31/09
9/30/09
Q3 2009
11/30/09
12/31/09
Q4 2009
11/30/09
12/31/09
CY 2009
Allscripts
Eclipsys
Non-
GAAP
Allscripts
Eclipsys
Non-
GAAP
Allscripts
Eclipsys
Non-
GAAP
Allscripts
Eclipsys
Non-
GAAP
Allscripts
Eclipsys
Non-
GAAP
Operating income, as reported
$22.8
($0.1)
$22.7
$23.6
($2.2)
$21.4
$21.6
$4.5
$26.1
$26.7
$7.2
$33.9
$94.7
$9.4
$104.1
Deferred revenue adjustment
3.1
1.5
4.6
2.6
3.1
5.7
2.6
0.5
3.1
1.4
1.8
3.2
9.7
6.9
16.6
Acquisition-related amortization
6.1
3.1
9.2
5.7
3.1
8.8
5.7
3.1
8.8
5.7
3.1
8.8
23.2
12.4
35.6
Stock-based compensation expense
2.1
4.4
6.5
2.6
6.8
9.4
3.3
3.6
6.9
4.4
3.4
7.8
12.4
18.2
30.6
Transaction-related expense
3.5
0.0
3.5
7.2
0.0
7.2
3.9
0.0
3.9
1.3
0.0
1.3
15.9
0.0
15.9
Restructuring
0.0
5.4
5.4
0.0
3.2
3.2
0.0
1.1
1.1
0.0
0.0
0.0
0.0
9.7
9.7
Elimination of prepackaged medications
(1.0)
0.0
(1.0)
(0.1)
0.0
(0.1)
0.0
0.0
0.0
0.0
0.0
0.0
(1.1)
0.0
(1.1)
Total non-GAAP operating income
$36.6
$14.3
$50.9
$41.6
$14.0
$55.6
$37.1
$12.8
$49.9
$39.5
$15.5
$55.0
$154.8
$56.6
$211.5
Allscripts Healthcare Solutions, Inc.
2009 Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)
2009 Actual Results By Quarter
Three Months Ended
Three Months Ended
Three Months Ended
Three Months Ended
Twelve Months Ended |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
29
•
GAAP –
non-GAAP operating income reconciliation by quarter and twelve months ended December
31, 2010.
Appendix: Non-GAAP Reconciliation
2/28/10
3/31/10
Q1 2010
5/31/10
6/30/10
Q2 2010
9/30/10
9/30/10
Q3 2010
12/31/10
Allscripts
Eclipsys
Non-GAAP
Allscripts
Eclipsys
Non-GAAP
Allscripts
Eclipsys
Non-GAAP
Q4 2010
Non-GAAP
Operating income, as reported
$31.9
$10.7
$42.6
$24.5
$5.4
$29.9
$5.5
($7.2)
($1.7)
$9.5
$80.3
Deferred revenue adjustment
0.5
0.0
0.5
0.6
0.0
0.6
0.5
6.7
7.2
20.9
29.2
Acquisition-related amortization
5.6
3.1
8.7
5.7
3.1
8.8
5.6
4.9
10.5
17.4
45.4
Stock-based compensation expense
4.3
3.7
8.0
2.8
3.7
6.5
6.6
0.0
6.6
3.7
24.8
Transaction-related expense
0.0
0.0
0.0
9.1
3.5
12.6
26.6
9.1
35.7
17.8
66.1
Restructuring
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
-
-
0.0
Eclipsys results pre-merger period (7/1/10-8/23/10)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.7
4.7
-
4.7
Total non-GAAP operating income
$42.3
$17.5
$59.8
$42.7
$15.7
$58.4
$44.8
$18.2
$63.0
$69.3
$250.5
Allscripts Healthcare Solutions, Inc.
Non-GAAP Financial Information -
2010 Proforma Financial Information
(In millions)
(unaudited)
2010 Actual Results By Quarter
Three Months Ended
Three Months Ended
Three Months Ended
Three
Months
2010 Full Year
Results |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
30
•
GAAP –
non-GAAP EBITDA reconciliation for the 12 months ended March 31, 2011
Appendix: Non-GAAP Reconciliation
EBITDA Calculation
($ in thousands)
Pro Forma Combined
12 months ended
3/31/2011
Net income
$14.6
Income tax expense
15.1
Stock-based compensation expense
36.5
Depreciation & amortization
108.1
Interest expense
18.1
Transaction related/integration-related expenses
75.7
Deferred revenue adjustment
39.4
Loss on sale of investments/ARS
6.4
EBITDA
$314.0 |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
31
Financial guidance was last provided by the company in a press release on May 5, 2011. This presentation does not subsequently update or reaffirm Allscripts
financial guidance.
Allscripts non-GAAP guidance for calendar 2011 assumes the following adjustments to
approximately $1,418.0 million in GAAP revenue: approximately $21.0 million,
pre-tax in deferred revenue adjustments. Non-GAAP guidance for calendar 2011 assumes the following adjustments to GAAP operating and net
income: approximately $70.0 million of acquisition-related amortization; approximately
$40.0 million in stock-based compensation expense; approximately $21.0 million
in deferred revenue adjustments; all on a pre-tax basis. Allscripts 2011 non-GAAP net income and diluted earnings per share guidance assumes a
38.0%-39.5% tax rate.
Footnotes Regarding Financial Guidance |
 | Copyright ©
2011 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
32
Explanation of Non-GAAP Financial Measures
Allscripts reports its financial results in accordance with generally accepted accounting
principles, or GAAP. To supplement this
information, in this presentation Allscripts provides total non-GAAP revenue, gross
profit, operating income and net income, including non-GAAP net income on a per
share basis, which are non-GAAP financial measures under Section 101 of Regulation
G under the Securities Exchange Act of 1934, as amended. Total non-GAAP revenue consists of GAAP revenue as reported and
Eclipsys revenue for periods prior to the August 24, 2010 consummation of the 2010 merger
with Eclipsys (2010 Merger) and adds back the acquisition-related deferred
revenue adjustment booked for GAAP purposes. Total non-GAAP gross profit
consists of GAAP gross profit as reported and Eclipsys gross profit for periods prior to
the consummation of the 2010 Merger and adds back the acquisition-related
deferred revenue adjustment booked for GAAP purposes. Total non-GAAP operating
income consists of GAAP operating income as reported and Eclipsys operating income for
periods prior to the consummation of the 2010 Merger and adds back the
acquisition-related deferred revenue adjustment booked for GAAP purposes and excludes
acquisition-related amortization, stock-based compensation expense and
transaction-related expenses. Non-GAAP net income consists of GAAP net
income as reported and includes Eclipsys net income for periods prior to the consummation of the 2010
Merger, excludes acquisition-related amortization, stock-based compensation
expense and transaction-related expenses, adds back the acquisition-related
deferred revenue adjustment, in each case net of any related tax effects. Management believes that non-GAAP revenue, gross profit, operating income and
net income and non-GAAP net income on a per share basis provide useful
supplemental information to management and investors regarding the underlying performance of
the company's business operations and facilitates comparisons of the separate 2010
pre-merger results of legacy Allscripts and legacy Eclipsys to that of the
company's 2010 post-merger results. Acquisition accounting adjustments made in accordance with
GAAP can make it difficult to make meaningful comparisons of the underlying operations of
the business without considering the non-GAAP adjustments that we have provided
and discussed herein. Management also uses this information internally for
forecasting and budgeting as it believes that the measure is indicative of the company's
core operating results. In addition, the company uses non-GAAP revenue,
operating income and/or net income to measure achievement under the company's stock and
cash incentive compensation plans. Note, however, that non-GAAP revenue, gross profit, operating income and net income and
non-GAAP net income on a per share basis are performance measures only, and they do
not provide any measure of the company's cash flow or liquidity. Non-GAAP
financial measures are not in accordance with, or an alternative for, measures of
financial performance prepared in accordance with GAAP and may be different from
non-GAAP measures used by other companies. Non-GAAP measures have
limitations in that they do not reflect all of the amounts associated with Allscripts results of
operations as determined in accordance with GAAP.
|