Eclipsys 8-K Eclipsys Announces Second-Quarter 2009 Results

Exhibit 99.1

Eclipsys Announces Second-Quarter 2009 Results

ATLANTA--(BUSINESS WIRE)--August 6, 2009--Eclipsys Corporation® (NASDAQ: ECLP), The Outcomes Company®, today announced results for the quarter ended June 30, 2009.

GAAP Results

Revenues for the quarter ended June 30, 2009 were $129.8 million, compared to revenues of $132.1 million for the quarter ended June 30, 2008.

GAAP net loss for the second quarter of 2009 was $4.1 million, or $0.07 per diluted common share, compared to GAAP net income of $8.5 million, or $0.15 per share on a diluted basis for the second quarter of 2008.

Non-GAAP Results

Non-GAAP net income for the second quarter of 2009 was $8.9 million, or $0.16 per diluted common share, compared to second quarter 2008 non-GAAP net income of $13.2 million, or $0.24 per diluted share.

Non-GAAP net income excludes stock-based compensation expense, acquisition related amortization, and certain additional items that the company does not consider to be indicative of its underlying business performance. For second quarter 2008, these additional items were costs associated with the relocation of the corporate headquarters from Boca Raton, FL, to Atlanta, GA; a gain resulting from completion of post-closing milestones associated with the sale of the Clinical Practice Model Resource Center business, which was completed in December 2007; and a reduction in general and administrative expenses associated with insurance recoveries from our previously disclosed derivative litigation that was ultimately settled in September 2008.

For second quarter 2009, these additional items were severance costs primarily associated with the resignation of the company’s former chief executive officer; and exclusion of tax expense related to discrete tax items in the quarter, primarily deferred tax asset adjustments for Canadian research and development credits, and non-GAAP tax adjustments to reflect the non-GAAP annual effective tax rate. Additionally, we excluded the effect of purchase accounting adjustments in connection with the acquisition of Premise Corporation, which was completed in December 2008.

A reconciliation of GAAP to non-GAAP results is included in the attached tables.

"In reviewing our operations and market potential over the last three months, it is clear that we have a significant opportunity to grow revenues while also increasing profitability," said Philip M. Pead, Eclipsys president and chief executive officer. "The American Recovery and Reinvestment Act of 2009 (ARRA) is driving increased activity with both clients and prospects. We expect this activity to accelerate as hospitals and physician practices gain a clearer understanding of what constitutes 'meaningful use.' In addition, we have several initiatives underway that will enable us to be more cost efficient, and we expect the positive effects on margins from these initiatives to become apparent in 2010 and beyond."

Change to Projected Non-GAAP Tax Rate and 2009 Financial Guidance

Eclipsys now anticipates that the full year 2009 non-GAAP income tax rate will be in the range of 37 to 38 percent, compared to the 33 to 35 percent tax rate previously communicated on the company’s first quarter 2009 conference call. This increase is primarily due to lower estimates of available research and development tax credits and revisions in projected income taxes related to foreign earnings.

Due to this anticipated increase in the company’s effective income tax rate for 2009, Eclipsys non-GAAP EPS for 2009 is now expected to range from $0.55 to $0.60.

Conference call

Eclipsys executives will discuss the second-quarter results on a teleconference scheduled for 4:30 p.m. Eastern time on August 6. Persons interested in participating in the teleconference should call (800) 230-1059 approximately 15 minutes before the conference call is slated to begin. For listen-only mode, participants can go to www.eclipsys.com prior to the conference call to register and download the necessary audio software.

Replay

About two hours after its completion, an audio replay of the call will be available on www.eclipsys.com for approximately 48 hours.

About Eclipsys

Eclipsys is a leading provider of advanced integrated clinical, revenue cycle and performance management software, clinical content and professional services that help healthcare organizations improve clinical, financial and operational outcomes. For more information, see www.eclipsys.com or email info@eclipsys.com.

Non-GAAP Measures

The company has provided net income and earnings per share financial measures on a non-GAAP basis for the three months ended June 30, 2009 and June 30, 2008, which exclude non-cash stock-based compensation expenses, amortization expense associated with acquisitions, and certain additional items that the company does not consider to be indicative of its underlying business performance, as listed on the attached GAAP to non-GAAP reconciliation tables. Because of the significance of the GAAP components excluded, these non-GAAP financial measures should not be considered a substitute for, or superior to, any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management believes that the non-GAAP financial measures provided, when considered in conjunction with comparable GAAP financial measures, facilitate the understanding and evaluation of the company’s operating performance and future prospects, as well as comparisons of the company’s results with its prior period results that did not include these gains and/or charges, and with results of other companies on a more consistent basis. Internally, management uses non-GAAP net income and earnings for forecasting and to help make management decisions, as an indicator of business performance, and to evaluate management’s effectiveness and help determine bonuses for management and others.

The economic substance of omitting non-cash stock-based compensation expense in presenting non-GAAP earnings derives from providing investors with consistent measures of performance both before and after including non-cash stock-based compensation charges. The economic substance of omitting the other items incurred that the company does not consider to be indicative of its underlying business performance derives from the fact that such episodic gains and/or charges make it more difficult to compare operating results of different periods, not all of which include such gains and/or charges. However, the omission of non-cash stock-based compensation expense may mask an economic cost incurred by the company in connection with stock-based compensation, and the omission of the charges related to the company’s other non-GAAP adjustments may mask actual and expected future costs associated with such matters. Management compensates for these limitations by using both the GAAP and non-GAAP measures.

The company has provided reconciling tables attached to this release.

Caution Regarding Forward-Looking Statements

Certain statements in this news release or the investor call referenced herein, including those concerning the company’s second quarter 2009 financial results, operational initiatives, future performance expectations, and effects of economic conditions are forward-looking statements and actual results may differ materially from those projected or implied by the forward-looking statements 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. Economic conditions are unstable and may cause hospitals and other healthcare providers to curtail HIT system spending. Eclipsys’ cost reduction and other initiatives in response to the challenging economic environment may not be effective, and it is difficult to predict what the company may be able to achieve. Eclipsys sales may fall below expectations due to market conditions, competition, and other factors, including client demands for pricing and financing concessions. Costs may be greater than anticipated due to the potential need to increase spending to ensure performance in accordance with commitments to clients, regulatory requirements, and other factors. Software development may take longer and cost more than expected, and incorporation of anticipated features and functionality may be delayed, due to various factors including programming and integration challenges and resource constraints. The market is highly competitive. 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 regulatory requirements, and clients can terminate contracts, assess penalties or reduce contract scope 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
Non-GAAP Income Statements
(in thousands, except per share amounts)
			Non-GAAP			Non-GAAP								Non-GAAP			Non-GAAP
			Three Months Ended June 30, 2009			Three Months Ended June 30, 2008			$ Change			% Change		Year-to-date June 30, 2009			Year-to-date June 30, 2008			$ Change			% Change
Revenues:
	Systems and services		$	131,185		$	126,308		$	4,877		3.9	%	$	261,048		$	245,446		$	15,602		6.4	%
	Hardware			2,275			5,834			(3,559	)	-61.0	%		4,317			11,076			(6,759	)	-61.0	%
	Total revenues			133,460			132,142			1,318		1.0	%		265,365			256,522			8,843		3.4	%
Cost and expenses:
	Costs of systems and services			68,334			67,413			921		1.4	%		134,916			133,072			1,844		1.4	%
	Costs of hardware			1,979			3,615			(1,636	)	-45.3	%		3,679			7,951			(4,272	)	-53.7	%
	Sales and marketing			21,016			20,916			100		0.5	%		41,272			40,242			1,030		2.6	%
	Research and development			13,326			15,465			(2,139	)	-13.8	%		26,365			32,158			(5,793	)	-18.0	%
	General and administrative			9,908			7,051			2,857		40.5	%		20,962			14,879			6,083		40.9	%
	Depreciation and amortization			4,993			4,619			374		8.1	%		9,904			8,961			943		10.5	%
	Restructuring			-			-			-					-			-			-
	In-process research and development charge			-			-			-					-			-			-
	Total costs and expenses			119,556			119,079			477		0.4	%		237,098			237,263			(165	)	-0.1	%
Income (loss) from operations				13,904			13,063			841		6.4	%		28,267			19,259			9,008		46.8	%
Gain (loss) on sale of assets				838			-			838		* N/M			1,237			33			1,204		* N/M
Gain (loss) on ARS				691			-			691		* N/M			533			-			533		* N/M
Interest expense				(961	)		(457	)		(504	)	110.3	%		(2,105	)		(720	)		(1,385	)	192.4	%
Interest income				681			1,285			(604	)	-47.0	%		1,528			3,667			(2,139	)	-58.3	%
Income (loss) before income taxes				15,153			13,891			1,262		9.1	%		29,460			22,239			7,221		32.5	%
Provision for income taxes				6,265			737			5,528		* N/M			10,989			971			10,018		* N/M
Net income (loss)			$	8,888		$	13,154		$	(4,266	)	-32.4	%	$	18,471		$	21,268		$	(2,797	)	-13.2	%
	Income allocated to participating securities			147			175			(28	)	-16.0	%		288			253			35		13.8	%
	Net income (loss) available to common stockholders		$	8,741		$	12,979		$	(4,238	)	-32.7	%	$	18,183		$	21,015		$	(2,832	)	-13.5	%
	Diluted income (loss) common per share		$	0.16		$	0.24		$	(0.08	)	-33.3	%	$	0.33		$	0.39		$	(0.06	)	-15.4	%
	Shares used in computing earnings (loss) per common share
		Basic		55,710			53,657			2,053		3.8	%		55,588			53,595			1,993		3.7	%
		Diluted		56,346			54,468			1,878		3.4	%		55,914			54,481			1,433		2.6	%

Eclipsys Corporation
GAAP Income Statements
(in thousands, except per share amounts)
		GAAP			GAAP								GAAP			GAAP
		Three Months Ended June 30, 2009			Three Months Ended June 30, 2008			$ Change			% Change		Year-to-date June 30, 2009			Year-to-date June 30, 2008			$ Change			% Change
Revenues:
	Systems and services	$	127,675		$	126,308		$	1,367		1.1	%	$	255,812		$	245,446		$	10,366		4.2	%
	Hardware		2,173			5,834			(3,661	)	-62.8	%		4,202			11,076			(6,874	)	-62.1	%
	Total revenues		129,848			132,142			(2,294	)	-1.7	%		260,014			256,522			3,492		1.4	%
Cost and expenses:
	Costs of systems and services		68,315			69,316			(1,001	)	-1.4	%		135,189			136,876			(1,687	)	-1.2	%
	Costs of hardware		1,950			3,615			(1,665	)	-46.1	%		3,606			7,951			(4,345	)	-54.6	%
	Sales and marketing		27,394			22,781			4,613		20.2	%		50,144			43,652			6,492		14.9	%
	Research and development		13,872			15,753			(1,881	)	-11.9	%		27,364			32,907			(5,543	)	-16.8	%
	General and administrative		12,429			7,713			4,716		61.1	%		24,451			18,676			5,775		30.9	%
	Depreciation and amortization		8,117			5,740			2,377		41.4	%		16,152			10,506			5,646		53.7	%
	Restructuring		-			-			-					5,434			-			5,434
	In-process research and development charge		-			-			-					-			850			(850	)	-100.0	%
	Total costs and expenses		132,077			124,918			7,159		5.7	%		262,340			251,418			10,922		4.3	%
Income (loss) from operations			(2,229	)		7,224			(9,453	)	-130.9	%		(2,326	)		5,104			(7,430	)	-145.6	%
Gain (loss) on sale of assets			838			1,451			(613	)	-42.2	%		1,237			3,515			(2,278	)	-64.8	%
Gain (loss) on ARS			691			-			691					533			-			533
Interest expense			(961	)		(457	)		(504	)	110.3	%		(2,105	)		(720	)		(1,385	)	192.4	%
Interest income			681			1,285			(604	)	-47.0	%		1,528			3,667			(2,139	)	-58.3	%
Income (loss) before income taxes			(980	)		9,503			(10,483	)	-110.3	%		(1,133	)		11,566			(12,699	)	-109.8	%
Provision for income taxes			3,120			992			2,128		214.5	%		3,834			2,766			1,068		38.6	%
Net income (loss)		$	(4,100	)	$	8,511		$	(12,611	)	-148.2	%	$	(4,967	)	$	8,800		$	(13,767	)	-156.4	%
	Basic EPS:
Net income (loss)		$	(4,100	)	$	8,511			(12,611	)	-148.2	%	$	(4,967	)	$	8,800			(13,767	)	-156.4	%
Less: Income allocated to participating securities			-			115			(115	)	-100.0	%		-			107			(107	)	-100.0	%
Net income (loss) available to common shareholders		$	(4,100	)	$	8,396			(12,496	)	-148.8	%	$	(4,967	)	$	8,693			(13,660	)	-157.1	%
	Basic weighted average common shares outstanding		55,710			53,657			2,053		3.8	%		55,588			53,595			1,993		3.7	%
	Basic net income (loss) per common share	$	(0.07	)	$	0.16		$	(0.23	)	-143.8	%	$	(0.09	)	$	0.16		$	(0.25	)	-156.3	%
	Diluted EPS:
Net income (loss)			(4,100	)		8,511			(12,611	)	-148.2	%		(4,967	)		8,800			(13,767	)	-156.4	%
Less: Income allocated to participating securities			-			113			(113	)	-100.0	%		-			105			(105	)	-100.0	%
Net income (loss) available to common shareholders		$	(4,100	)	$	8,398			(12,498	)	-148.8	%	$	(4,967	)	$	8,695			(13,662	)	-157.1	%
	Basic weighted average common shares outstanding		55,710			53,657			2,053		3.8	%		55,588			53,595			1,993		3.7	%
	Dilutive effect of potential common shares		-			811			(811	)	-100.0	%		-			886			(886	)	-100.0	%
Diluted weighted average shares common outstanding			55,710			54,468			1,242		2.3	%		55,588			54,481			1,107		2.0	%
Diluted earnings (loss) per common share		$	(0.07	)	$	0.15		$	(0.22	)	-146.7	%	$	(0.09	)	$	0.16		$	(0.25	)	-156.3	%

ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
			June 30,			December 31,
				2009			2008
			(Unaudited)
Assets
Current assets:
	Cash		$	120,925		$	108,304
	Marketable securities						154
	Accounts receivable, net of allowance for doubtful accounts of $3,499 and $4,912, respectively			111,258			121,811
	Prepaid expenses			24,197			23,975
	Deferred tax asset			343			2,643
	Other current assets			4,181			5,712
		Total current assets		260,904			262,599
Long-term investments				108,806			107,215
Property and equipment, net				58,436			53,996
Capitalized software development costs, net				44,908			37,718
Acquired technology, net				34,570			39,710
Intangible assets, net				8,834			10,258
Deferred tax asset				88,789			89,063
Goodwill				98,030			96,973
Other assets				14,862			11,343
		Total assets	$	718,139		$	708,875
Liabilities and Stockholders’ Equity
Current liabilities:
	Deferred revenue		$	119,534		$	123,733
	Accounts payable			14,452			20,924
	Accrued compensation costs			25,080			16,457
	Deferred tax liability			2,939
	Other current liabilities			21,159			22,481
		Total current liabilities		183,164			183,595
	Deferred revenue			3,724			5,743
	Long term debt & capital leases			105,917			105,000
	Other long-term liabilities			15,403			16,540
		Total liabilities		308,208			310,878
Stockholders’ equity:
	Common stock, $0.01 par value, 200,000,000 shares authorized; issued and outstanding, 56,512,071 and 56,126,674, respectively			565			561
	Additional paid-in capital			584,317			569,717
	Accumulated deficit			(169,679	)		(164,712	)
	Accumulated other comprehensive income			(5,272	)		(7,569	)
		Total stockholders’ equity		409,931			397,997
		Total liabilities and stockholders’ equity	$	718,139		$	708,875

ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
				For the Six Months Ended June 30,						For the Three Months Ended June 30,
					2009			2008			2009			2008
Operating activities:
	Net income			$	(4,967	)	$	8,800		$	(4,100	)	$	8,511
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			24,833			20,551			12,798			10,363
		Provision for bad debt			1,996			1,400			950			450
		In-process research and development charge			-			850			-			-
		Stock compensation expense			11,169			7,466			6,761			4,119
		Gain on sale of assets			(1,237	)		(3,515	)		(837	)		(1,451	)
		Deferred provision for income taxes			3,674			367			3,222			299
	Changes in operating assets and liabilities, excluding the effect of acquisitions and dispositions:													0
		Accounts receivable			1,948			(18,808	)		(1,747	)		(16,716	)
		Prepaid expenses and other current assets			1,580			(4,086	)		3,034			1,914
		Other assets			(497	)		1,047			(260	)		513
		Deferred revenue			(3,631	)		(8,505	)		(2,824	)		(5,154	)
		Accrued compensation			8,633			(6,707	)		1,168			(2,170	)
		Accounts payable and other current liabilities			(6,888	)		3,898			(292	)		(2,054	)
		Long-term liabilities			1,565			2,938			814			595
		Other reconciling items			(425	)		862			(670	)		434
			Total adjustments		42,720			(2,242	)		22,117			(8,858	)
			Net cash provided by operating activities		37,753			6,558			18,017			(347	)
Investing activities:
		Purchases of property and equipment			(12,555	)		(13,315	)		(5,282	)		(6,375	)
		Purchase of marketable securities						(102,000	)		-			-
		Proceeds from sales of marketable securities			150			153,641			-			18,850
		Capitalized software development costs			(14,651	)		(6,941	)		(7,435	)		(4,018	)
		Proceeds from sale of assets						698			-			-
		Earnout out on disposition			1,241			2,582			399			2,182
		Cash paid for acquisitions, net of cash acquired			(2,819	)		(54,370	)		(56	)		(736	)
			Net cash used in investing activities		(28,634	)		(19,705	)		(12,374	)		9,903
Financing activities:
		Proceeds from stock options exercised			3,306			2,439			3,232			953
		Proceeds from employee stock purchase plan			454			375			212			206
		Cash paid for debt issuance costs						(421	)		-			(421	)
		Repayment of secured financing						(45,000	)		-			(45,000	)
		Proceeds from secured financing						95,000			-			50,000
		Other			(59	)					(59	)
			Net cash provided by financing activities		3,701			52,393			3,385			5,738
Effect of exchange rates on cash and cash equivalents					(199	)		(236	)		15			28
Net increase (decrease) in cash and cash equivalents					12,621			39,010			9,043			15,322
Cash and cash equivalents — beginning of period					108,304			22,510			111,882			46,198
Cash and cash equivalents — end of period				$	120,925		$	61,520		$	120,925		$	61,520

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
				GAAP																	Non-GAAP
				Three Months Ended June 30, 2009 (Unaudited)			Stock-based comp expense (1)			Restructuring (2)			Amortization (3)			Premise (4)		Tax (5)			Three Months Ended June 30, 2009 (Unaudited)
Revenues:
	Systems and services			$	127,675											$	3,510				$	131,185
	Hardware				2,173												102					2,275
	Total revenues				129,848			-			-			-			3,612		-			133,460
Cost and expenses:
	Costs of systems and services				68,315			(506	)								525					68,334
	Costs of hardware				1,950												29					1,979
	Sales and marketing				27,394			(4,237	)		(2,141	)										21,016
	Research and development				13,872			(546	)													13,326
	General and administrative				12,429			(1,470	)		(1,051	)										9,908
	Depreciation and amortization				8,117									(3,124	)							4,993
	Restructuring																					-
	In-process research and development charge																					-
	Total costs and expenses				132,077			(6,759	)		(3,192	)		(3,124	)		554		-			119,556
Income (loss) from operations					(2,229	)		6,759			3,192			3,124			3,058		-			13,904
Gain/(loss) on sale of assets					838																	838
Gain (loss) on ARS					691																	691
Interest expense					(961	)																(961	)
Interest income					681																	681
Income (loss) before income taxes					(980	)		6,759			3,192			3,124			3,058		-			15,153
Provision for income taxes					3,120			2,623			1,549			1,377			1,248		(3,652	)		6,265
Net income (loss)				$	(4,100	)	$	4,136		$	1,643		$	1,747		$	1,810	$	3,652		$	8,888
	Income allocated to participating securities				-			47			19			20			21		41			147
	Net income (loss) available to common stockholders			$	(4,100	)	$	4,089		$	1,624		$	1,727		$	1,789	$	3,611		$	8,741
	Diluted income (loss) common per share			$	(0.07	)	$	0.07		$	0.03		$	0.03		$	0.03	$	0.06		$	0.16
	Shares used in computing earnings (loss) per common share
			Basic		55,710			55,710			55,710			55,710			55,710		55,710			55,710
			Diluted		55,710			56,346			56,346			56,346			56,346		56,346			56,346
	1	Represents stock-based compensation expense.
	2	Represents severance related costs primarily associated with the resignation of our former CEO.
	3	This expense is the amortization of intangible assets associated with 2008 acquisitions.
	4	This represents a deferred revenue adjustment of $3.6 million net of deferred costs adjustment of $0.6 million related to our December 2008 acquisition of Premise Corporation. The amounts represent the reduction of deferred revenue and related deferred costs acquired from Premise as a result of purchase accounting adjustments.
	5	This amount represents a combination of discrete tax items in the quarter, primarily deferred tax asset adjustments for Canadian research and development credits, and non-GAAP tax adjustments to reflect the non-GAAP annual effective tax rate.

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
				GAAP																	Non-GAAP
				Year-to-date June 30, 2009 (Unaudited)			Stock-based comp expense (1)			Restructuring (2)			Amortization (3)			Premise (4)		Tax (5)			Year-to-date June 30, 2009 (Unaudited)
Revenues:
	Systems and services			$	255,812											$	5,236				$	261,048
	Hardware				4,202												115					4,317
	Total revenues				260,014			-			-			-			5,351		-			265,365
Cost and expenses:
	Costs of systems and services				135,189			(999	)								726					134,916
	Costs of hardware				3,606												73					3,679
	Sales and marketing				50,144			(6,731	)		(2,141	)										41,272
	Research and development				27,364			(999	)													26,365
	General and administrative				24,451			(2,438	)		(1,051	)										20,962
	Depreciation and amortization				16,152									(6,248	)							9,904
	Restructuring				5,434						(5,434	)										-
	In-process research and development charge																					-
	Total costs and expenses				262,340			(11,167	)		(8,626	)		(6,248	)		799		-			237,098
Income (loss) from operations					(2,326	)		11,167			8,626			6,248			4,552		-			28,267
Gain/(loss) on sale of assets					1,237																	1,237
Gain (loss) on ARS					533																	533
Interest expense					(2,105	)																(2,105	)
Interest income					1,528																	1,528
Income (loss) before income taxes					(1,133	)		11,167			8,626			6,248			4,552		-			29,460
Provision for income taxes					3,834			3,502			3,244			2,350			1,711		(3,652	)		10,989
Net income (loss)				$	(4,967	)	$	7,665		$	5,382		$	3,898		$	2,841	$	3,652		$	18,471
	Income allocated to participating securities				-			94			66			48			35		45			288
	Net income (loss) available to common stockholders			$	(4,967	)	$	7,571		$	5,316		$	3,850		$	2,806	$	3,607		$	18,183
	Diluted income (loss) common per share			$	(0.09	)	$	0.14		$	0.10		$	0.07		$	0.05	$	0.06		$	0.33
	Shares used in computing earnings (loss) per common share
			Basic		55,588			55,588			55,588			55,588			55,588		55,588			55,588
			Diluted		55,588			55,914			55,914			55,914			55,914		55,914			55,914
	1	Represents stock-based compensation expense.
	2	This amount represents costs associated with the previously announced reduction in our professional services organization and other headcount and severance costs incurred primarily in the first quarter and severance costs primarily associated with the resignation of our former CEO in the second quarter.
	3	This expense is the amortization of intangible assets associated with 2008 acquisitions.
	4	This represents a deferred revenue adjustment of $5.4 million net of deferred costs adjustment of $0.8 million related to our December 2008 acquisition of Premise Corporation. The amounts represent the reduction of deferred revenue and related deferred costs acquired from Premise as a result of purchase accounting adjustments.
	5	This amount represents a combination of discrete tax items in the quarter, primarily deferred tax asset adjustments for Canadian research and development credits, and non-GAAP tax adjustments to reflect the non-GAAP annual effective tax rate.

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
				GAAP																		Non-GAAP
				Three Months Ended June 30, 2008 (Unaudited)			Stock-based comp expense (1)			Derivative Litigation (2)			EPSI (3)			Gain on sale of assets (4)			Headquarter Relocation (5)			Three Months Ended June 30, 2008
Revenues:
	Systems and services			$	126,308																	$	126,308
	Hardware				5,834																		5,834
	Total revenues				132,142			-			-			-			-			-			132,142
Cost and expenses:
	Costs of systems and services				69,316			(1,777	)											(126	)		67,413
	Costs of hardware				3,615																		3,615
	Sales and marketing				22,781			(1,488	)											(377	)		20,916
	Research and development				15,753			(288	)														15,465
	General and administrative				7,713			(566	)		658									(754	)		7,051
	Depreciation and amortization				5,740									(1,121	)								4,619
	Restructuring
	In-process research and development charge				-																		-
	Total costs and expenses				124,918			(4,119	)		658			(1,121	)		-			(1,257	)		119,079
Income (loss) from operations					7,224			4,119			(658	)		1,121						1,257			13,063
Gain/(loss) on sale of assets					1,451												(1,451	)					-
Gain (loss) on ARS					-																		-
Interest expense					(457	)																	(457	)
Interest income					1,285																		1,285
Income (loss) before income taxes					9,503			4,119			(658	)		1,121			(1,451	)		1,257			13,891
Provision for income taxes					992			-			-			-			(255	)					737
Net income (loss)				$	8,511		$	4,119		$	(658	)	$	1,121		$	(1,196	)	$	1,257		$	13,154
	Income allocated to participating securities				113			55			(9	)		15			(16	)		17			175
	Net income (loss) available to common stockholders			$	8,398		$	4,064		$	(649	)	$	1,106		$	(1,180	)	$	1,240		$	12,979
	Diluted income (loss) common per share			$	0.15		$	0.07		$	(0.01	)	$	0.02		$	(0.02	)	$	0.02		$	0.24
	Shares used in computing earnings (loss) per common share
			Basic		53,657			53,657			53,657			53,657			53,657			53,657			53,657
			Diluted		54,468			54,468			54,468			54,468			54,468			54,468			54,468
	1	Represents stock-based compensation expense.
	2	This reduction in general and administrative expenses is associated with insurance recoveries related to the previously disclosed derivative litigation, the settlement of which is pending final court approval.
	3	This expense is the amortization of intangible assets associated with the February 2008 acquisition of EPSi.
	4	This gain resulted from the achievement of certain post-closing milestones associated with the December 2007 sale of the Clinical Practice Model Resource Center business.
	5	This cost was related primarily to amounts incurred to relocate the corporate headquarters from Boca Raton to Atlanta. These include salaries and benefits associated with termination of employees not relocating and other administrative costs associated with the move.

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
				GAAP																					Non-GAAP
				Year-to-date June 30, 2008 (Unaudited)			Stock-based comp expense (1)			Derivative Litigation (2)			EPSI (3)			Gain on sale of assets (4)			Headquarter Relocation (5)			Tax Provision (6)			Year-to-date June 30, 2008
Revenues:
	Systems and services			$	245,446																				$	245,446
	Hardware				11,076																					11,076
	Total revenues				256,522			-			-			-			-			-			-			256,522
Cost and expenses:
	Costs of systems and services				136,876			(3,385	)											(419	)					133,072
	Costs of hardware				7,951			-																		7,951
	Sales and marketing				43,652			(2,585	)											(825	)					40,242
	Research and development				32,907			(590	)											(159	)					32,158
	General and administrative				18,676			(907	)		(1,353	)								(1,537	)					14,879
	Depreciation and amortization				10,506									(1,545	)											8,961
	In-process research and development charge				850									(850	)											-
	Total costs and expenses				251,418			(7,467	)		(1,353	)		(2,395	)		-			(2,940	)		-			237,263
Income (loss) from operations					5,104			7,467			1,353			2,395						2,940						19,259
Gain/(loss) on sale of assets					3,515												(3,482	)								33
Gain (loss) on ARS					-																					-
Interest expense					(720	)																				(720	)
Interest income					3,667																					3,667
Income (loss) before income taxes					11,566			7,467			1,353			2,395			(3,482	)		2,940			-			22,239
Provision for income taxes					2,766			-			-			-			(255	)					(1,540	)		971
Net income (loss)				$	8,800		$	7,467		$	1,353		$	2,395		$	(3,227	)	$	2,940		$	1,540		$	21,268
	Income allocated to participating securities				105			89			16			29			(38	)		35			18			253
	Net income (loss) available to common stockholders			$	8,695		$	7,378		$	1,337		$	2,366		$	(3,189	)	$	2,905		$	1,522		$	21,015
	Diluted income (loss) common per share			$	0.16		$	0.14		$	0.02		$	0.04		$	(0.06	)	$	0.05		$	0.03		$	0.39
	Shares used in computing earnings (loss) per common share
			Basic		53,595			53,595			53,595			53,595			53,595			53,595			53,595			53,595
			Diluted		54,481			54,481			54,481			54,481			54,481			54,481			54,481			54,481
	1	Represents stock-based compensation expense.
	2	These charges were incurred as a result of the voluntary stock option review completed in the second quarter 2007 and are related primarily to legal fees associated with the subsequent derivative litigation. These costs are net of insurance recoveries in the second quarter 2008.
	3	These amounts relate to a charge of $850 for a write off of in-process research and development and amortization of intangible assets recorded as part of the purchase price allocation of the February 2008 acquisition of EPSi.
	4	This gain was recorded in conjunction with contingent consideration earned related to the December 2007 sale of the Clinical Practice Model Resource Center business to Elsevier Inc.
	5	This cost was related primarily to amounts incurred to relocate the corporate headquarters from Boca Raton to Atlanta. These include salaries and benefits associated with termination of employees not relocating and other administrative costs associated with the move.
	6	FASB Interpretation 48 "Accounting for Uncertainty in Income Taxes" clarifies the criteria for recognizing income tax benefits. This charge was recorded as a result of the review of uncertain state tax positions.

CONTACT:
Eclipsys
Jason Cigarran, 404-847-5965
Vice President, Investor Relations
jason.cigarran@eclipsys.com