EX-99.1 2 a4685303ex99.txt EXHIBIT 99.1 PRESS RELEASE Exhibit 99.1 Cerner Delivers Record Second Quarter New Business Bookings; Cash Flow and Margin Expansion also Very Strong KANSAS CITY, Mo.--(BUSINESS WIRE)--July 21, 2004--Cerner Corporation (NASDAQ:CERN) today announced results for the 2004 second quarter ended July 3, 2004. Diluted earnings per share were $0.38, compared to $0.25 in the second quarter of 2003. Analysts' consensus estimates for second quarter earnings per share were $0.37. Second quarter revenues increased 10 percent to $228.4 million compared to $207.7 million in the year-ago quarter. Net earnings in the quarter were $14.3 million, compared to $8.9 million in the second quarter of 2003. New business bookings in the second quarter were $240.4 million, an increase of 19 percent compared to $201.2 million in the second quarter of 2003. These bookings were a record for second quarter and the second highest level of bookings for any quarter. The Company generated strong operating cash flow of $36.7 million in the second quarter driven by strong cash collections and a significant number of Cerner Millennium(TM) implementations. Other Second Quarter Highlights: -- Operating margin of 11.3 percent, an increase of 340 basis points compared to the second quarter of 2003. -- Strong cash collections of $235.3 million. -- Days Sales Outstanding (DSOs) of 103 days, which is 9 days lower than a year ago and down 5 days sequentially. -- Total revenue backlog of $1.4 billion, up 29 percent over the year-ago quarter. This is comprised of $1.1 billion of contract backlog and $324 million of support and maintenance backlog. -- 245 Cerner Millennium solutions were implemented during the quarter. Cerner has now turned on more than 3,000 Cerner Millennium solutions at over 600 client facilities worldwide. -- Computerized Physician Order Entry was brought live at 64 locations, bringing the total to more than 300. "We are extremely pleased with our second quarter results," said Neal Patterson, Cerner's co-founder, Chairman and Chief Executive Officer. "Our sales and operational execution was as good as I have ever seen it, and we intend to build on this momentum." "Our record bookings performance reflects our continued leadership position in the healthcare information technology industry, and we believe the outlook for the industry is good," added Patterson. "Healthcare providers, the Federal Government, policy makers, employers, public and private payers, and consumers are collectively driving changes that will lead to investments in technology to enable higher quality, more efficient, and safer healthcare." Future Period Guidance Cerner expects earnings per share in the third quarter of 2004 to be between $0.43 and $0.44. The Company expects revenue in the third quarter to be approximately $230 million to $235 million. Cerner expects bookings revenue in the third quarter to be between $205 million and $225 million. For 2004, the Company expects earnings per share between $1.66 and $1.69 (not including the $0.05 gain from the sale of Zynx Health in the first quarter of 2004), which is up from previous guidance of $1.63 to $1.67. Cerner still expects revenue for 2004 to be at the upper end of its existing guidance range of $920 million to $940 million. The Company also reiterated its cash flow guidance for 2004, indicating that it expects to generate between $120 million and $140 million of operating cash flow. Based on these estimates, the Company still expects to generate positive free cash flow, defined as operating cash flow less capital expenditures and capitalized software, in 2004. Earnings Conference Call Cerner will host an earnings conference call to provide additional detail at 3:30 p.m. CT on July 21, 2004. The dial-in number for the call is (617) 786-2964 and the replay number is (617) 801-6888 (Pass code: 14872710). The call will also be Web cast and available both live and archived on Cerner's Web site at www.cerner.com in the Investors' section under News and Events. Please access the site fifteen minutes early to register and to download and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be made available shortly after the call and will run for two weeks. A copy of the script used during the call will also be available at www.cerner.com in the Investors' section under News and Events. Cerner Corp. is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 1,500 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium, and Cerner's logo. (Nasdaq:CERN), www.cerner.com. This release may contain forward-looking statements that involve a number of risks and uncertainties. It is important to note that the Company's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "intend", "believe", "will lead", "expects", "guidance", "estimates", or variations thereof or similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: quarterly operating results may vary, stock price may be volatile, market risk of investments, potential impairment of goodwill, changes in the healthcare industry, significant competition, the Company's proprietary technology may be subjected to infringement claims or may be infringed upon, regulation of the Company's software by the U.S. Food and Drug Administration or other government regulation, the possibility of product-related liabilities, possible system errors or failures or defects in the performance of the Company's software, risks associated with the Company's global operation and the recruitment and retention of key personnel. Additional discussion of these and other factors affecting the Company's business is contained in the Company's periodic filings with the Securities and Exchange Commission. The Company 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. CERNER CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS Three Three Months Months Ended YTD Ended YTD (In thousands, except per July 3, July 3, June 28, June 28, share data) 2004 2004(1) 2003 2003 --------- --------- --------- --------- Revenue System sales $ 84,853 169,365 82,742 161,336 Support, maintenance and services 133,949 261,018 116,240 229,172 Reimbursed travel 9,588 16,734 8,713 15,378 --------- --------- --------- --------- Total revenue 228,390 447,117 207,695 405,886 Margin System sales 56,009 113,788 51,188 101,577 Support, maintenance and services 121,817 236,092 103,411 202,961 --------- --------- --------- --------- Total margin 177,826 349,880 154,599 304,538 --------- --------- --------- --------- Operating expenses Sales and client service 94,232 187,074 86,646 174,737 Software development 42,769 85,323 38,457 75,915 General and administrative 14,919 29,064 13,149 26,291 --------- --------- --------- --------- Total operating expenses 151,920 301,461 138,252 276,943 --------- --------- --------- --------- Operating earnings 25,906 48,419 16,347 27,595 Interest income 438 880 191 600 Interest expense (2,230) (4,787) (1,794) (4,049) Other income (174) 2,840 127 143 --------- --------- --------- --------- Non-operating expense, net (1,966) (1,067) (1,476) (3,306) Earnings before income taxes 23,940 47,352 14,871 24,289 Income taxes (9,626) (18,909) (5,928) (9,753) --------- --------- --------- --------- Net earnings $ 14,314 28,443 8,943 14,536 ========= ========= ========= ========= Basic earnings per share $ 0.40 0.79 0.25 0.41 ========= ========= ========= ========= Basic weighted average shares outstanding 36,044 35,799 35,395 35,476 Diluted earnings per share $ 0.38 0.76 0.25 0.40 ========= ========= ========= ========= Diluted weighted average shares outstanding 37,510 37,306 35,731 36,215 Note 1: Includes a gain on the sale of Zynx Health Incorporated. The impact of this gain is a $1.8 million increase, net of $1.2 million tax expense, in net earnings and an increase to diluted earnings per share of $.05 for 2004. CERNER CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands) July 3, January 3, 2004 2004 ----------- ------------ Assets Cash and cash equivalents $ 137,224 121,839 Receivables 258,744 256,574 Inventory 10,473 12,434 Prepaid expenses and other 35,212 38,132 ----------- ------------ Total current assets 441,653 428,979 Property and equipment, net 217,655 204,953 Software development costs, net 150,242 141,090 Goodwill, net 52,831 51,573 Intangible assets, net 22,189 24,036 Investments, net 410 692 Other assets 6,662 8,017 ----------- ------------ Total assets $ 891,642 859,340 =========== ============ Liabilities Accounts payable $ 20,198 20,753 Current installments of long-term debt 24,715 21,162 Deferred revenue 62,614 64,879 Deferred income taxes 15,521 15,586 Accrued payroll and tax withholdings 45,811 45,004 Other accrued expenses 12,281 10,095 ----------- ------------ Total current liabilities 181,140 177,479 ----------- ------------ Long-term debt, net 111,095 124,570 Deferred income taxes 62,852 59,500 Deferred revenue 1,551 1,945 ----------- ------------ Total liabilities 356,638 363,494 ----------- ------------ Minority owners' equity interest in subsidiary 1,166 1,166 Stockholders' Equity Common stock 376 371 Additional paid-in capital 248,387 236,969 Retained earnings 307,806 279,363 Treasury stock, at cost (1,502,999 shares in 2004 and 2003) (26,793) (26,793) Foreign currency translation adjustment 4,062 4,770 ----------- ------------ Total stockholders' equity 533,838 494,680 Total liabilities and equity $ 891,642 859,340 =========== ============ CONTACT: Cerner Corporation Investors: Allan Kells, 816-201-2445 akells@cerner.com or Media: Justin Scott, 816-201-6438 jscott@cerner.com http://www.cerner.com