1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
COMMISSION FILE NUMBER: 000-24539
ECLIPSYS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 65-0632092
(State of Incorporation) (IRS Employer Identification
Number)
777 East Atlantic Avenue
Suite 200
Delray Beach, Florida
33483
(Address of principal executive offices)
(561)-243-1440
(Telephone number of registrant)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing for the
past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Class Shares outstanding as of October 31, 1998
----- -----------------------------------------
Common Stock, $.01 par value 19,443,986
Non-voting Common Stock, $.01 par value 896,431
2
ECLIPSYS CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
INDEX
PART I. Financial Information
Item 1. Condensed Consolidated Balance Sheets - September 30, 1998 (unaudited) and
December 31, 1997
Condensed Consolidated Statements of Operations - For the Three and Nine Months
ended September 30, 1998 and 1997 (unaudited)
Condensed Consolidated Statements of Cash Flows - For the Nine Months ended
September 30, 1998 and 1997 (unaudited)
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
PART II. Other Information
Item 2. Changes in Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
3
ECLISPSYS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(IN THOUSANDS)
(UNAUDITED)
ASSETS SEPTEMBER 30, 1998 DECEMBER 31, 1997
------------------ -----------------
Current assets:
Cash and cash equivalents $ 12,309 $ 4,786
Accounts receivable, net 40,443 30,969
Inventory 539 866
Other current assets 9,757 1,114
------------------ -----------------
TOTAL CURRENT ASSETS 63,048 37,735
Fixed assets, net 10,530 9,517
Capitalized software development costs 4,277 1,591
Acquired technology, net 18,798 25,802
Intangible assets, net 15,559 28,288
Other assets 9,479 3,832
TOTAL ASSETS $ 121,691 $ 106,765
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Deferred revenue $ 39,211 $ 25,295
Current portion of long-term debt - 12,794
Other current liabilities 32,411 31,150
------------------ -----------------
TOTAL CURRENT LIABILITIES 71,622 69,239
Deferred revenue 7,789 6,966
Long-term debt - 3,794
Other long-term liabilities 3,713 9,480
Mandatorily redeemable preferred stock - 35,607
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock - 95
Common stock 202 42
Unearned stock compensation (196) (250)
Additional paid-in capital 189,341 115,777
Accumulated other comprehensive income 61 28
Accumulated deficit (150,841) (134,013)
------------------ -----------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) 38,567 (18,321)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 121,691 $ 106,765
================== =================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
4
ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ -------------------------------
REVENUES 1998 1997 1998 1997
---- ---- ---- ----
Systems and services $ 32,452 $ 23,924 $ 88,541 $ 64,470
Hardware 3,708 1,643 9,202 3,009
------------- ------------- -------------- -------------
TOTAL REVENUES 36,160 25,567 97,743 67,479
============= ============= ============== =============
COSTS AND EXPENSES
Cost of systems and services revenues 18,792 19,334 53,196 56,168
Cost of hardware revenues 3,130 1,062 7,825 2,055
Marketing and sales 5,041 3,549 13,945 9,881
Research and development 6,844 3,964 19,267 11,991
General and administrative 1,689 1,946 4,580 4,143
Depreciation and amortization 2,546 2,584 7,937 7,292
Nonrecurring charges - - 7,193 99,189
------------- ------------- -------------- -------------
TOTAL COSTS AND EXPENSES 38,042 32,439 113,943 190,719
------------- ------------- -------------- -------------
------------- ------------- -------------- -------------
LOSS FROM OPERATIONS (1,882) (6,872) (16,200) (123,240)
------------- ------------- -------------- -------------
Interest expense, net 124 394 628 727
------------- ------------- -------------- -------------
NET LOSS (2,006) (7,266) (16,828) (123,967)
============= ============= ============== =============
DIVIDENDS AND ACCRETION ON MANDATORILY
REDEEMABLE PREFERRED STOCK (8,415) (1,611) (10,928) (4,199)
PREFERRED STOCK CONVERSION - - - (3,105)
------------- ------------- -------------- -------------
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (10,421) $ (8,877) $ (27,756) $ (131,271)
============= ============= ============== =============
BASIC AND DILUTED NET LOSS PER COMMON SHARE $ (0.70) $ (2.35) $ (3.41) $ (38.28)
============= ============= ============== =============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 14,934,619 3,771,050 8,133,275 3,429,385
============= ============= ============== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
5
ECLIPSYS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(IN THOUSANDS)
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------
1998 1997
-------------- ---------------
OPERATING ACTIVITIES
Net Loss $ (16,828) $ (123,967)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortization 20,155 23,156
Provision for bad debts 750 450
Loss on disposal of fixed assets 8 570
Write off of in-process research and development and other
non-recurring charges 7,193 99,189
Stock compensation expense 54 151
Changes in operating assets and liabilities, net of acquisitions
Accounts receivable (5,295) (505)
Inventory 327 137
Other current assets 1,025 (475)
Other assets (81) 681
Deferred revenue 9,689 (1,772)
Other current liabilities (1,756) 3,986
Other liabilities (65) 1,691
-------------- ---------------
Total adjustments to reconcile net loss to net
cash provided by operating activities 32,004 127,259
-------------- ---------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,176 3,292
============== ===============
INVESTING ACTIVITIES
Purchase of fixed assets, net (3,573) (2,097)
Capitalized software development costs (2,686) (698)
Acquisitions, net of cash acquired - (108,983)
Changes in other assets (21,565) -
-------------- ---------------
NET CASH USED IN INVESTING ACTIVITIES (27,824) (111,778)
============== ===============
FINANCING ACTIVITIES
Borrowings 18,500 10,000
Payments on borrowings (35,088) -
Exercise of stock options 453 -
Sale of common stock 66,044
Sale of preferred stock 9,000 73,764
(Redemption)/sale of mandatorily redeemable preferred stock (38,771) 30,000
-------------- ---------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 20,138 113,764
============== ===============
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 33 21
============== ===============
NET INCREASE IN CASH AND CASH EQUIVALENTS 7,523 5,299
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,786 4,589
-------------- ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 12,309 $ 9,888
============== ===============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART TO THESE UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
6
ECLIPSYS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1998
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include all adjustments
that, in the opinion of management, are necessary for a fair presentation
of the results for the periods indicated. All such adjustments are
considered of normal recurring nature. Quarterly results of operations
are not necessarily indicative of annual results.
Certain financial information and footnote disclosures normally included
in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
Company's Registration Statement on Form S-1 as amended dated August 6,
1998.
2. ACQUISITION
Effective January 30, 1998, Eclipsys Corporation ("the Company") acquired
the net assets of the North American operations of Emtek Healthcare
Systems ("Emtek"), a division of Motorola, Inc. ("Motorola") for an
aggregate purchase price of $11.7 million, including 1,000,000 shares of
common stock valued at $9.1 million and liabilities assumed of
approximately $12.3 million. In addition, Motorola agreed to pay the
Company $9.6 million in cash due within one year for working capital
purposes.
Unaudited pro forma results of operations as if the aforementioned
acquisition had occurred on January 1, 1998 is as follows (in thousands
except per share data):
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, 1997 SEPTEMBER 30, 1998
----------------- ------------------
Revenues $ 116,815 $ 98,723
Net loss (153,789) (18,518)
Basic and diluted loss per share $(35.97) $(3.57)
3. SIMIONE INVESTMENT
In April 1998, the Company made a strategic investment in Simione Central
Holidngs, Inc. ("Simione") a publicly traded company, purchasing 420,000
shares of restricted common stock from certain stockholders of Simione
for $5.6 million. At the time of the transaction, the common stock
represented 4.9% of Simione's outstanding common stock. The Company
accounts for its investment in these shares using the cost method. Since
the date of the investment, the market price of Simione's common stock
has declined. Currently, Management is evaluating whether there has been
a permanent impairment of this investment in light of market conditions
and other factors.
Concurrent with the investment, the Company and Simione entered into a
remarketing agreement pursuant to which the Company has certain rights to
distribute Simione software products.
7
4. INITIAL PUBLIC OFFERING
Effective August 6, 1998, the Company completed an initial public
offering. Net proceeds from the offering were $66.0 million, including
proceeds from the exercise of the underwriters' over-allotment option.
The Company used the net proceeds from the offering to redeem the
outstanding shares of the Company's mandatorily redeemable preferred
stock, repay the principal balance and accrued interest on acquisition
related debt and to repay amounts outstanding under the Company's
revolving credit facility.
Concurrent with the initial public offering, all classes of preferred
stock were converted to common stock.
5. SUBSEQUENT EVENT
On October 29, 1998, the Company entered into a merger agreement to
acquire Transition Systems, Inc. ("TSI") for approximately $270.0 million
in stock. Under the terms of the agreement, each share of TSI stock will
be converted using a fixed exchange rate of .525 shares of the Company's
stock, with no collar. The transaction, which is subject to regulatory as
well as stockholder approval, will be accounted for as a pooling of
interests and is anticipated to close by the end of January 1999.
8
PART I.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains forward-looking statements. For this purpose, any
statements contained herein that are not statements of historical fact
may be deemed to be forward-looking statements. Without limiting the
forgoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements.
The important factors discussed under the caption "Certain Factors that
May Affect Future Operating Results/Risk Factors," presented from time to
time in the Company's filings with the Securities and Exchange
Commission, among others, could cause actual results to differ materially
from those indicated by forward-looking statements made herein. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
OVERVIEW
Eclipsys is a healthcare information technology company delivering
solutions that enable healthcare providers to achieve improved clinical,
financial and administrative outcomes. The Company offers an integrated
suite of core products in four critical areas - clinical management,
access management, patient financial management and enterprise data
warehouse and analysis. These products can be purchased in combination to
provide an enterprise-wide solution or individually to address specific
needs. These solutions take many forms and can include a combination of
software, hardware, maintenance, consulting services, remote processing
services, network services and information technology outsourcing.
The Company was formed in December 1995, but had no significant
operations until January 1997, when it acquired ALLTEL Healthcare
Information Services, Inc. ("Alltel"). The Company has grown primarily
through three strategic acquisitions. The Company acquired Alltel
effective January 24, 1997, SDK Healthcare Information Systems ("SDK")
effective June 26, 1997 and Emtek effective January 30, 1998,
(collectively the "Acquisitions"). The Acquisitions were accounted for as
purchases; accordingly, the Company's consolidated financial statements
reflect the results of operations of these businesses from the respective
dates acquired.
RESULTS OF OPERATIONS
SUMMARY
Total revenues for the quarter ended September 30, 1998 increased 41% to
$36.2 million compared with $25.6 million for the third quarter 1997. For
the nine months ended September 30, 1998, total revenues increased 45% to
$97.7 million versus $67.5 million in the same period last year.
Total costs and expenses for the quarter ended September 30, 1998
increased 17% compared to the same period in 1997. For the nine months
ended September 30, 1998, total costs and expenses decreased 40% compared
to the same period in 1997.
These changes in revenue and expense combined to decrease net loss for
the quarter and the nine months ended September 30, 1998 by 72% to ($2.0)
million and 86% to ($16.8) million, respectively, compared to the same
periods in 1997.
Included in the reported quarterly net losses were acquisition related
amortization of intangible
9
assets recorded in connection with the Acquisitions of $4.9 million in
the third quarter 1998 and $7.0 million in the third quarter 1997.
Included in the reported year-to-date net losses were acquisition related
in-process research and development write-offs, amortization of
intangible assets recorded in connection with the Acquisitions and
certain non-recurring charges of $22.3 million in the nine months ended
September 30, 1998 and $117.2 million in the same period in 1997.
REVENUES
System and services revenues increased 36% to $32.5 million for the third
quarter of 1998 and 37% to $88.5 million for the nine months ended
September 30, 1998, compared to the same periods in 1997. Contributing to
this increase was the inclusion of the results of operations of the
Acquisitions throughout the 1998 periods, as well as new contracted
business during 1998. The increase in new contracted business was a
result of an increase in marketing efforts related to the regional
realignment of the Company's operations completed in 1997 and the
successful integration of the Acquisitions completed in 1997 and 1998.
Hardware revenues increased 126% to $3.7 million for the third quarter of
1998 and 206% to $9.2 million for the nine months ended September 30,
1998, compared to the same periods in 1997. The increase is primarily due
to increased volume as a result of the Acquisitions and new contracted
business.
EXPENSES
Total cost of revenues increased 7% for the third quarter of 1998 and
increased 5% for the nine months ended September 30, 1998, compared to
the same periods in 1997. Increased costs of hardware associated with the
growth in hardware sales were offset by a reduction of certain expenses
and realization of cost savings during 1998 as a result of the
integration of the Acquisitions.
Marketing and sales expenses increased 42% for the third quarter of 1998
and 41% for the nine months ended September 30, 1998, compared to the
same periods in 1997. The increase was primarily due to the addition of
marketing and direct sales personnel following the Acquisitions and the
regional realignment of the Company's sales force.
Total expenditures for research and development, including both
capitalized and non-capitalized expense increased 73% to $7.7 million for
the third quarter 1998 and increased 73% to $22.0 million for the nine
months ended September 30, 1998, compared to the same periods in 1997.
The increase was due primarily to the inclusion in 1998 of the
Acquisitions and the continued development of an enterprise-wide, client
server platform solution. Research and development expenses capitalized
for the third quarter of 1998 and the nine months ended September 30,
1998 increased $366,000 and $2.0 million, respectively, compared to the
same periods in 1997. Increased capitalization is primarily the result of
projects related to the development of an enterprise-wide, client server
platform solution.
General and administrative expenses decreased 13% for the third quarter
of 1998 and increased 11% for the nine months ended September 30, 1998,
compared to the same periods in 1997. The quarter decrease is primarily
the result of certain integration expenses related to the SDK acquisition
incurred during 1997 that did not occur during 1998. The nine months
increase is primarily due to the addition of administrative and finance
personnel following the Acquisitions.
Depreciation and amortization decreased 1% for the third quarter of 1998
and increased 9% for the nine months ended September 30, 1998, compared
to the same periods in 1997. The decrease for the quarter is primarily
the result of a reduction in Alltel related goodwill amortization as a
result of a write-down of goodwill due to a renegotiation with the former
owner of Alltel of certain obligations under a management and services
agreement (the "Alltel Renegotiation")
10
during 1998. The increase in the nine months depreciation and
amortization is primarily the result of the timing of the Acquisitions
and increased depreciation on capital expenditures. This increase is
partially offset by a reduction in Alltel related goodwill amortization
as a result of the Alltel Renegotiation.
ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT
In connection with the Alltel and SDK acquisitions, the Company wrote off
acquired in-process research and development totaling $92.2 million and
$7.0 million, respectively. These amounts were expensed as non-recurring
charges on the respective acquisition dates. The Company continues to
believe that the acquired in-process research and development will be
successfully developed, but there can be no assurance that commercial
viability of these products will be achieved.
The value of the acquired in-process research and development was
determined by estimating the projected net cash flows related to such
products, including costs to complete the development of the technology
and the future revenues to be earned upon commercialization of the
products. These cash flows were discounted back to their net present
value. The resulting projected net cash flows from such projects were
based on Management's estimates of revenues and operating profits related
to such projects.
Through September 30, 1998, revenues and operating profit attributable to
acquired in-process research and development have not materially differed
from the projections used in determining its value, except for, as
previously reported, the timing of one outsourcing contract. Management
continues to believe the projections used reasonably estimate the future
benefits attributable to the acquired in-process research and
development. However, no assurance can be given that deviations from
these projections will not occur.
YEAR 2000 ISSUES
The Company believes that all of its internal management information
systems are currently Year 2000 compliant and, accordingly, does not
anticipate any significant expenditures to remediate or replace existing
internal-use systems. Although all of the products currently offered by
the Company are Year 2000 compliant, some of the products previously sold
by Alltel and Emtek and installed in the Company's customer base are not
Year 2000 compliant. The Company has developed and tested solutions for
these non-compliant installed products. The Company currently estimates
that the total cost of bringing these installed products into Year 2000
compliance, in those cases in which the Company is required to do so at
its own expense, will be approximately $900,000, all of which is expected
to be incurred by mid-1999. In addition, because the Company's products
are often interfaced with a customer's existing third-party applications,
the Company's products may experience difficulties interfacing with
third-party non-compliant applications. Any unexpected difficulties in
implementing Year 2000 solutions for the installed Alltel or Emtek
products or difficulties in interfacing with third-party products could
have a material adverse effect on the Company's business, financial
condition and results of operations.
As a result of apprehension in the marketplace over Year 2000 compliance
issues, businesses, including the Company's customers, may elect to defer
significant capital investments in information technology programs and
software, either because they decide to focus their capital budgets on
the expenditures necessary to bring their own existing systems into
compliance or because they wish to purchase only software with a proven
ability to process data after 1999. As a result, the Company may not
achieve expected sales revenues and its business, financial condition and
results of operations could be materially adversely affected.
11
BALANCE SHEET
INITIAL PUBLIC OFFERING
Effective August 6, 1998, Eclipsys completed an initial public offering.
Net proceeds from the offering were $66.0 million, including proceeds
from the exercise of the underwriters' over-allotment option. The Company
used the net proceeds from the offering to redeem the outstanding shares
of the Company's mandatorily redeemable preferred stock, repay the
principal balance and accrued interest on acquisition related debt and to
repay amounts outstanding under the Company's revolving credit facility.
Concurrent with the initial public offering, all classes of preferred
stock were converted to common stock.
OTHER CURRENT ASSETS
Other current assets increased during the nine months ended September 30,
1998 primarily related to prepaid royalty fees, software maintenance and
a receivable from Motorola of $9.6 million (as of acquisition date) that
is due within one year for working capital purposes.
INTANGIBLE ASSETS
Intangible assets decreased during the nine months ended September 30,
1998 primarily due to the Alltel Renegotiation and amortization during
the period. In connection with the Alltel Renegotiation, the Company
recorded a reduction of $9.2 million to goodwill. As a result of this
transaction, the Company recorded a nonrecurring charge of $7.2 million.
OTHER ASSETS
Other assets increased during the nine months ended September 30, 1998
primarily due to a strategic minority investment in Simione, purchasing
approximately 4.9% of Simione's outstanding common stock from certain
stockholders of Simione for $5.6 million.
RECENT DEVELOPMENTS
On October 29, 1998, the Company entered into a merger agreement to
acquire Transition Systems, Inc. ("TSI") for approximately $270.0 million
in stock. Under the terms of the agreement, each share of TSI stock will
be converted using a fixed exchange rate of .525 shares of the Company's
stock, with no collar. The transaction, which is subject to regulatory as
well as stockholder approval, will be accounted for as a pooling of
interests and is anticipated to close by the end of January 1999.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 1998, the Company generated
$15.2 million in cash flow from operations. The Company used $27.8
million in investing activities, which was primarily the result of the
payment related to the Alltel Renegotiation and the investment in
Simione. Financing activities provided an additional $20.1 million,
primarily due to the initial public offering partially offset by the
redemption of the mandatorily redeemable preferred stock, the repayment
of the acquisition related debt and the repayment of the amounts
outstanding under the Company's revolving credit facility.
As of September 30, 1998, the Company had no outstanding borrowings under
its $50.0 million revolving credit facility.
As of September 30, 1998, the Company had $12.3 million in cash and
short-term investments.
Management believes that its available cash and short-term investments,
anticipated cash generated from its future operations and amounts
available under the existing revolving credit
12
facility will be sufficient to meet the Company's operating requirements
for at least the next twelve months.
13
PART II.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Company is furnishing the following information with respect to the
use of proceeds from its initial public offering of common stock, $.01
par value per share, which closed in August 1998.
1. The effective date of the Registration Statement on Form S-1 for the
offering was August 6, 1998, and the commission file number of the
Registration Statement is 333-50781.
2. The offering commenced on August 6, 1998.
3. Not applicable
4. (i.) The offering terminated on August 17, 1998, the date of the
exercise of the underwriters' over-allotment option. All of the
shares of common stock registered for the account of the Company
were sold prior to the termination of the offering.
(ii.) The managing underwriters for the offering were Morgan
Stanley Dean Witter, Bancamerica Robertson Stephens,
Lehman Brothers and Salomon Smith Barney.
(iii.) The Company registered shares of its common stock, $.01
par value per share, in the offering.
(iv.) The Company registered 4,830,000 shares. The aggregate
offering price of the shares registered and sold by the
Company was $72,450,000
(v.) The actual expenses incurred for the account of the
Company in connection with the offering were as follows
(amounts represent estimates except for Underwriters
discount):
Underwriting discount $ 5,071,500
SEC registration fee 40,000
NASD filing fee 10,000
NASDAQ National Market listing fee 105,000
Transfer Agent and Registrar fees 10,000
Accounting fees and expenses 400,000
Legal fees and expenses 450,000
Printing and mailing expenses 415,000
Other 270,000
-----------
$ 6,771,500
Payment of expenses were to persons other than
directors, officers, general partners of the Company
or their associates, persons owning 10% or more of
the equity securities of the Company or affiliates
of the Company.
(vi.) The net offering proceeds to the Company after expenses
were approximately $66.0 million.
(vii.) The Company used the proceeds as follows:
Redemption of mandatorily redeemable preferred stock $38,771,443
Repayment of acquisition related debt 3,926,405
Repayment of amounts outstanding under revolving
credit facility 18,500,000
Purchase of short-term investments, net of working
capital requirements 4,846,152
-------------
-----
$66,044,000
(viii.) Not applicable
14
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the quarter ended September 30, 1998, the Company submitted to a
vote of its stockholders through the solicitation of written consents
under Section 128 of the General Corporation Law of the State of Delaware
the proposal to remove Jeffrey Fox from the Board of Directors. Written
consents dated August 5, 1998 were received from stockholders. A total of
13,426,243 votes (out of 17,497,368 shares eligible to vote on the
matter) were cast in favor of the proposal to remove Mr. Fox from the
Board of Directors. The share numbers do not reflect the two-for-three
stock split that occurred subsequent to the stockholder vote.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: See Index to exhibits.
(b) Reports on Form 8-K: Filed with the Securities and Exchange
Commission on October 30, 1998
15
SIGNATURES
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 thereunto duly authorized.
ECLIPSYS CORPORATION
Date: November 16, 1998
----------------------------
Robert J. Vanaria
Chief Financial Officer
16
ECLIPSYS CORPORATION
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
------- -----------
2 Agreement and Plan of Merger
27 Financial Data Schedule (for SEC use only).