Exhibit 99.1
Per-Se Technologies Reports Second Quarter 2004 Results
ALPHARETTA, Ga.--(BUSINESS WIRE)--Aug. 4, 2004--Per-Se
Technologies, Inc. (Nasdaq: PSTI), the leader in Connective Healthcare
solutions that help physicians and hospitals realize their financial
goals, today released its results for the second quarter ended June
30, 2004.
On a GAAP basis, the Company reported revenue of $88.1 million,
operating income of $6.3 million, or 7.1% of revenue, and a loss from
continuing operations of $1.4 million, or $.04 per share during the
second quarter. During the second quarter, the Company incurred
expenses of approximately $2.5 million related to the additional
procedures requested by the Company's external auditors in connection
with allegations of improprieties made in 2003 and 2004, which are
classified as other expenses. Also during the second quarter, the
Company incurred expenses of $5.9 million associated with the issuance
of its 3.25% convertible debentures and the concurrent retirement of
its Term Loan B debt.
On a non-GAAP basis, excluding the expenses related to the
additional procedures and the convertible debentures transaction, the
Company had operating income of $8.8 million, or 10.0% of revenue, and
income from continuing operations of $7.0 million, or $.21 per share
on a fully diluted basis, for the second quarter.
For comparison purposes, in the second quarter of 2003, the
Company reported revenue of $85.5 million and operating income of $9.5
million, or 11.1% of revenue. Income from continuing operations in the
second quarter of 2003 was $5.0 million, or $.16 per share on a fully
diluted basis.
"We had good operational performance during the second quarter,"
stated Philip M. Pead, Per-Se's chairman, president and chief
executive officer. "Excluding the costs associated with the additional
procedures and the debt refinancing, our income from continuing
operations increased more than 40% over the prior year quarter."
Year-To-Date Results
On a GAAP basis, the Company reported revenue of $172.7 million,
operating income of $10.2 million, or 5.9% of revenue, and income from
continuing operations of $0.2 million, or $.00 per share on a fully
diluted basis for the six months ended June 30, 2004. Excluding the
year-to-date additional procedures expenses of $6.5 million, the
convertible debentures transaction expenses of $5.9 million, and
restructuring expenses of $47,000 (on a non-GAAP basis), the Company
had operating income of $16.7 million, or 9.6% of revenue and income
from continuing operations of $12.6 million, or $.37 per share on a
fully diluted basis, for the six months ended June 30, 2004.
For comparison purposes, in the prior year period, the Company had
revenue of $167.5 million, operating income of $17.5 million, or 10.5%
of revenue, and income from continuing operations, excluding debt
retirement expenses of $0.2 million, of $8.4 million, or $.27 per
share on a fully diluted basis.
Cash flow from continuing operations for the six months ended June
30, 2004, was $10.4 million compared to $10.2 million for the six
months ended June 30, 2003. Cash flow from continuing operations for
2004 includes an approximately $6.0 million use of cash related to the
additional procedures.
"Both our profitability and our cash flow improved significantly
year-over-year excluding the impact of the additional procedures,"
stated Pead. "Our recurring revenue business model delivers good
operating cash flow."
Segment Performance
The Physician Services division reported revenue and operating
income of $66.1 million and $7.1 million, respectively, for the second
quarter of 2004, compared to revenue and operating income of $64.1
million and $7.8 million, respectively, for the second quarter of
2003.
The division had operating margins of 10.8% in the second quarter
of 2004 compared to 12.1% in the prior year period. As expected,
margins were negatively impacted in the current year quarter by costs
associated with the implementation of the record level of net new
business sold during the first quarter of 2004, which included one
large contract with higher than normal transition costs.
The division had net new business sold in the second quarter of $2
million, compared to $3 million in the second quarter of 2003. On a
year-to-date basis, the division had net new business sold of $15
million, compared to $6 million in the first six months of 2003. "Some
of our new sales opportunities were negatively impacted during the
quarter by the distraction of the additional procedures and the delay
in the filing of our 2003 Form 10-K," stated Pead. "However, with
those distractions behind us, I expect our new sales momentum to
continue throughout the second half of the year. Client satisfaction
in the quarter was high with client retention rates that were in line
with our expectations." The Company defines net new business sold as
the annualized revenue value of new contracts signed in a period, less
the annualized revenue value of terminated business in that same
period.
The division had a net backlog of approximately $3 million as of
June 30, 2004. Net backlog represents the annualized revenue related
to new contracts signed with the business still to be implemented,
less the annualized revenue related to existing contracts where
discontinuance notification has been received.
The Hospital Services division reported revenue and operating
income of $25.4 million and $6.4 million, or 25.0% of revenue,
respectively, for the second quarter of 2004 compared to revenue and
operating income of $24.8 million and $5.9 million, or 23.9% of
revenue, respectively, for the second quarter of 2003. As discussed
during the first quarter, revenue in the second quarter was positively
impacted by previously unbilled maintenance for certain software
customers that is being recognized upon receipt of payment.
New business sold in the Hospital Services division during the
second quarter of 2004 was approximately $15 million, compared to new
business sold of approximately $7 million during the second quarter of
2003.
Contributing to the growth in new business sold during the second
quarter was a five-year contract the division signed to provide print
and mail services for a new customer. As part of the transaction, the
Company acquired production assets from the customer. Medical-related
transaction volume increased approximately 9% in the second quarter
compared to the prior year period.
"We continue to see increased demand for our resource management
products in the market," stated Pead. "Although our transaction volume
grew, the industry's ongoing efforts to comply with HIPAA continue to
dampen demand for some of our revenue cycle management products."
Convertible Debentures Transaction
On June 30, 2004, the Company issued $125 million principal amount
of 3.25% subordinated convertible debentures due 2024 to qualified
institutional buyers pursuant to Rule 144A of the Securities Act of
1933, as amended. The Company used the proceeds of the offering
together with cash on hand to retire its $118.8 million outstanding
Term Loan B and to fund a $25 million common share repurchase
completed concurrently with the transaction. The Company repurchased
approximately 2.0 million shares as part of this transaction. While
the method of accounting for convertible debt transactions is
currently being evaluated by the Financial Accounting Standards Board,
the transaction will be slightly accretive even if the "if converted"
method of accounting is required in future periods.
During the second quarter, the Company incurred approximately $5.9
million in expenses related to the convertible debentures transaction,
including the write-off of unamortized debt issuance costs associated
with the Term Loan B's original issuance, the call premium, and other
costs.
Lloyd's of London Settlement
As previously reported, the Company reached a settlement in May
2004 with Lloyd's of London (Lloyd's). The Company was in litigation
with Lloyd's following Lloyd's attempt in May 2002 to rescind certain
Errors & Omissions Liability Policies and Directors and Officers
Liability Policies issued by Lloyd's to the Company for the period
December 31, 1998, to June 30, 2002.
During the second quarter, as a result of negotiations with
Lloyd's and a party to a prior settlement, the originally agreed to
cash settlement amount of $20 million was adjusted to $16.2 million
and the Company's corresponding receivable from Lloyd's was reduced by
$3.8 million. This adjustment had no impact on the net proceeds of
approximately $15 million that the Company received during early July.
The Company will recognize a gain on settlement of $1.5 million during
the third quarter.
During the second quarter, the Company incurred approximately $0.9
million, or $.03 per share on a fully diluted basis, in litigation
expenses related to the Company's dispute with Lloyd's. By comparison,
in the second quarter of 2003, the Company incurred approximately $0.9
million, or $.03 per share on a fully diluted basis, in increased
insurance premiums and litigation expenses related to the Lloyd's
matter. On a year-to-date basis, expenses related to the Lloyd's
matter were $1.5 million, or $.04 per share on a fully diluted basis,
compared to $2.2 million, or $.07 per share on a fully diluted basis
in the prior year period.
Cash flow for the first six months of 2004 was negatively impacted
by approximately $5.4 million related to the dispute with Lloyd's
compared to $3.9 million in the first six months of 2003.
Patient1 Sale Finalized
As reported last quarter, the Company finalized the closing
balance sheet related to the July 2003 sale of its Patient1 clinical
product line. The Company received $4.3 million in cash during the
second quarter resulting from a positive working capital adjustment.
The Company recognized an additional net gain on sale of $3.8 million
during the quarter. Patient1 is classified as discontinued operations
for all periods presented.
New Corporate Office Lease
On July 30, 2004, the Company relocated its corporate offices to
Alpharetta, GA, a northern suburb of Atlanta. The move will result in
cash flow savings for the Company of more than $5 million over the
life of the ten-year lease, compared to the current office lease. As
part of the new lease arrangement, the new landlord is funding the
remaining 7-month lease obligation on the previous corporate facility.
While this arrangement is neutral in the current year from a cash flow
standpoint, the Company will record a one-time non-cash expense of
approximately $1.0 million during the third quarter upon its exit of
the facility.
Outlook
The Company continues to expect consolidated revenue growth in
2004 of 7% to 9% over the prior year and the Company expects fully
diluted earnings per share from continuing operations of $.88 to $.95.
The earnings per share from continuing operations guidance excludes
the additional procedures expenses, the debt retirement expenses, the
non-cash lease expense, restructuring expenses, and the Lloyd's
settlement gain. The earnings per share guidance also assumes the
accounting for the convertible debentures is on the "if converted"
method.
The Company's expectations of fully diluted earnings per share
from continuing operations by quarter are outlined in the following
table:
Third Fourth Full
2004 Quarter Quarter Year
- ----------------------------------------------------------------------
Earnings per share from
continuing operations $.24 - $.28 $.27 - $.30 $.88 - $.95
- ----------------------------------------------------------------------
By segment, the Company expects revenue growth for the Physician
Services division to be on the low end of its previous guidance range
of 6% to 8% year-over-year growth. Operating margins for the division
are expected to be in the range of 11% to 12%. Operating margins are
being negatively impacted by revenue growth targeted at the lower end
of the range and, as discussed previously, by the implementation of
the significant new business sold during the first quarter, which
included one large contract with higher than normal transition costs.
For the Hospital Services division, the Company expects revenue
growth of 9% to 11%, an increase from previous guidance of 8% to 10%,
and operating margins of 22% to 23%.
The Company continues to expect cash flow from continuing
operations for the full year 2004 to be between $48 million and $51
million. The Company expects capital expenditures and capitalized
software development costs to be between $15 million and $16 million.
Cash flow guidance includes the costs of the additional procedures and
the positive net cash flow impact of the Lloyd's settlement.
"With a good first half of 2004 behind us, I am confident in our
ability to continue to deliver profitable revenue growth for the
remainder of 2004," stated Pead.
Conference Call
Per-Se will host a conference call for institutional investors and
security analysts at 10:00 a.m. Eastern time today. All interested
investors are invited to access a live audio broadcast of the call via
Webcast. The Webcast can be accessed at www.per-se.com in the
Investors section by selecting the Webcast link. Listeners should go
to the website at least 15 minutes before the scheduled start time of
the conference call to download and install any necessary audio
software. For those unable to listen to the live broadcast of the
call, a replay will be available shortly after completion of the call
and will be archived on Per-Se's website for approximately 60 days.
About Per-Se Technologies
Per-Se Technologies (Nasdaq: PSTI) is the leader in Connective
Healthcare. Connective Healthcare solutions from Per-Se enable
physicians and hospitals to achieve their income potential by creating
an environment that streamlines and simplifies the complex
administrative burden of providing healthcare.
Per-Se's Connective Healthcare solutions help reduce
administrative expenses, increase revenue and accelerate the movement
of funds to benefit providers, payers and patients. More information
is available at www.per-se.com.
Safe Harbor Statement
This Press Release contains statements that constitute
forward-looking statements within the meaning of the Securities Act of
1933 and the Securities Exchange Act of 1934, as amended by the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements contained in this Press Release include the intent, belief
or current expectations of the Company and members of its management
team with respect to the Company's future business operations as well
as the assumptions upon which such statements are based.
Forward-looking statements include specifically, but are not limited
to, revenue projections, operating income projections, operating
margin projections, earnings per share from continuing operations
projections, cash flow projections, capital expenditure and
capitalized software projections, the one-time, non-cash lease
expense, and the Lloyd's gain. Prospective investors are cautioned
that any such forward-looking statements are not guarantees of future
performance, and involve risks and uncertainties, and that actual
results may differ materially from those contemplated by such
forward-looking statements. Important factors currently known to
management that could cause actual results to differ materially from
those contemplated by the forward-looking statements in this Press
Release include, but are not limited to, failure to realize
improvements in performance, efficiency and profitability, failure to
complete anticipated sales under negotiations, failure to successfully
implement sales backlog, lack of revenue growth, client losses, the
projected operating margins of a significant contract in the Physician
Services division, the Financial Accounting Standard Board's decision
not to change the method of accounting for contingent convertible
debentures, and adverse developments with respect to the operation or
performance of the Company's business units or the market price of its
common stock. Additional factors that would cause actual results to
differ materially from those contemplated within this Press Release
can also be found in the Company's Safe Harbor Compliance Statement
and Factors That May Affect Future Results of Operations, Financial
Condition or Business included in the Company's Form 10-Q for the
quarter ended March 31, 2004, and Form 10-K for the year ended
December 31, 2003. The Company disclaims any responsibility to update
any forward-looking statements.
The Company believes that operating income and operating margins
excluding additional procedures expenses, and debt retirement
expenses, and income from continuing operations and earnings per share
from continuing operations excluding additional procedures expenses
and debt retirement expenses as well as guidance for income from
continuing operations that also excludes the gain on the Lloyd's
settlement and the one-time, non-cash lease expense, and Corporate
operating income excluding additional procedures expenses are
additional meaningful measures of operating performance. However, this
information will necessarily be different from comparable information
provided by other companies and should not be used as an alternative
to our operating and other financial information as determined under
U.S. generally accepted accounting principles.
CONSOLIDATED STATEMENTS OF OPERATIONS - SEGMENT REPORTING
(unaudited, in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---------------- ------------------
2004 2003 2004 2003
------- ------- -------- --------
Revenue
Physician Services $66,075 $64,083 $129,258 $126,152
Hospital Services (1) 25,446 24,750 50,217 47,916
Eliminations (3,380) (3,377) (6,733) (6,614)
------- ------- -------- --------
Consolidated $88,141 $85,456 $172,742 $167,454
======= ======= ======== ========
Operating Income
Physician Services $ 7,117 $ 7,763 $ 13,070 $ 15,098
Hospital Services (1) (2) 6,368 5,903 12,217 10,473
Corporate (3) (4,651) (4,156) (8,631) (8,061)
------- ------- -------- --------
$ 8,834 $ 9,510 $ 16,656 $ 17,510
Other Expenses (2,538) --- (6,499) ---
------- ------- -------- --------
Consolidated $ 6,296 $ 9,510 $ 10,157 $ 17,510
======= ======= ======== ========
(1) The Patient1 and Business1 product lines have been classified
as discontinued operations for all periods presented and, therefore,
are not included in the Hospital Services division segment.
(2) Hospital Services excludes restructuring expenses of $47,000
for the six months ended June 30, 2004, which are classified as other
expenses in the income statement.
(3) Corporate excludes $2,538,000 and $6,452,000, respectively,
for the three and six months ended June 30, 2004, related to the
additional procedures. These expenses are classified as other expenses
in the income statement.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
June 30, December 31,
2004 2003
------------ ------------
Assets
Cash and cash equivalents $ 9,698 $ 25,271
Restricted cash 63 66
Accounts receivable, net 52,779 47,948
Lloyd's receivable 14,650 17,405
Other current assets 5,604 6,183
Property and equipment 15,448 16,434
Goodwill 32,549 32,549
Other intangible assets 20,543 19,787
Other 5,415 5,881
Net assets of discontinued operations (4) --- 129
------------ ------------
$ 156,749 $ 171,653
============ ============
Liabilities and Stockholders' Deficit
Current liabilities $ 39,585 $ 43,726
Deferred revenue 22,093 20,334
Current portion of long-term debt --- 12,500
Long-term debt 125,000 109,375
Other long-term obligations 3,993 2,908
Net liabilities of discontinued operations
(4) --- 422
Stockholders' deficit (5) (33,922) (17,612)
------------ ------------
$ 156,749 $ 171,653
============ ============
(4) Net assets and net liabilities of discontinued operations at
December 31, 2003, included Business1.
(5) Stockholders' deficit at June 30, 2004, includes $24,999,000
of treasury stock repurchased by the Company on June 30, 2004.
PER-SE TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -------------------
2004 2003 2004 2003
-------- --------- --------- ---------
Revenue $88,141 $85,456 $172,742 $167,454
-------- --------- --------- ---------
Salaries and wages 51,515 48,622 101,199 96,235
Other operating expenses 23,949 23,126 47,150 45,220
Depreciation 1,989 2,367 4,090 4,865
Amortization 1,854 1,831 3,647 3,624
Other expenses 2,538 -- 6,499 --
-------- --------- --------- ---------
Operating income 6,296 9,510 10,157 17,510
Interest expense 1,999 4,179 4,073 8,661
Interest income (192) (58) (244) (166)
Loss on extinguishment of debt 5,896 -- 5,896 221
-------- --------- --------- ---------
(Loss) income before income
taxes (1,407) 5,389 432 8,794
Income tax (benefit) expense (20) 376 212 660
-------- --------- --------- ---------
(Loss) income from
continuing operations (1,387) 5,013 220 8,134
-------- --------- --------- ---------
Discontinued operations
Loss from discontinued
operations, net of tax -
Patient1 -- (599) (18) (1,108)
Gain on sale of Patient1,
net of tax 3,821 -- 3,755 --
Loss from discontinued
operations, net of tax -
Business1 -- (1,110) (303) (1,874)
Loss on sale of Business1,
net of tax -- -- (130) --
Loss from discontinued
operations, net of tax -
Other (30) (223) (93) (234)
-------- --------- --------- ---------
3,791 (1,932) 3,211 (3,216)
-------- --------- --------- ---------
Net income $2,404 $3,081 $3,431 $4,918
======== ========= ========= =========
Diluted net income (loss) per
common share:
Income from continuing
operations excluding other
expenses, and loss on
extinguishment of debt $ 0.21 $0.16 $ 0.37 $ 0.27
Other expenses (0.07) --- (0.19) --
Loss on extinguishment
of debt (0.18) --- (0.18) (0.01)
-------- --------- --------- ---------
(Loss) Income from
continuing
operations (0.04) 0.16 --- 0.26
-------- --------- --------- ---------
Income from discontinued
operations, net of tax -
Patient1 --- (0.02) --- (0.04)
Gain on sale of Patient1 0.11 --- 0.11 --
Loss from discontinued
operations, net of tax -
Business1 --- (0.04) (0.01) (0.06)
Loss on sale of Business1, net
of tax --- --- --- ---
Loss from discontinued
operations, net of tax -
Other --- --- --- ---
-------- --------- --------- ---------
Net income $0.07 $0.10 $0.10 $0.16
======== ========= ========= =========
Weighted average shares used in
computing diluted earnings
per share (6) 33,462 31,866 33,831 31,452
(6) As the Company had a loss from continuing operations for the
three months ended June 30, 2004, diluted earnings per share
calculated on a GAAP basis would be the same as basic earnings per
share. The weighted average shares calculation would exclude
approximately 1.9 million shares related to dilutive options and
warrants that are included above. The Company has provided fully
diluted earnings per share from continuing operations to facilitate
comparisons to previously issued guidance.
PER-SE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
Six Months Ended
June 30,
---------------------
2004 2003
--------- ---------
Cash Flows From Operating Activities:
Net income $ 3,431 $ 4,918
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 7,737 8,489
Loss on extinguishment of debt 5,896 221
Gain on sale of Patient1 (3,755) --
Loss from discontinued operations 544 3,216
Amortization of deferred financing costs 665 645
Changes in assets and liabilities,
excluding effects of acquisitions
and divestitures (4,160) (7,253)
--------- ---------
Net cash provided by continuing operations 10,358 10,236
Net cash used for discontinued operations (512) (5,593)
--------- ---------
Net cash provided by operating activities 9,846 4,643
--------- ---------
Cash Flows From Investing Activities:
Purchases of property and equipment (3,000) (3,385)
Software development costs (2,529) (1,697)
Net proceeds from sale of Patient1 and Business1 3,625 --
Acquisition, net of cash acquired (1,141) --
Other (35) (37)
--------- ---------
Net cash used for continuing operations (3,080) (5,119)
Net cash used for discontinued operations --- (1,865)
--------- ---------
Net cash used for investing activities (3,080) (6,984)
--------- ---------
Cash Flows From Financing Activities:
Proceeds from the exercise of stock options 5,258 1,139
Proceeds from borrowings 125,000 --
Treasury stock purchase (24,999) --
Debt issuance costs (5,723) --
Repayments of debt (121,875) (15,020)
--------- ---------
Net cash used for financing activities (22,339) (13,881)
--------- ---------
Cash and Cash Equivalents:
Net change in cash (15,573) (16,222)
Balance at beginning of period 25,271 46,748
--------- ---------
Balance at end of period $ 9,698 $ 30,256
========= =========
RECONCILIATION OF CONSOLIDATED OPERATING INCOME AND MARGIN,
AND INCOME FROM CONTINUING OPERATIONS AND EPS
(unaudited, in thousands)
For the period ended June 30, 2004
----------------------------------------
QTD YTD
-------- --------
% of % of
Revenue Revenue
----------
Operating income excluding
additional procedures and
restructuring expenses $ 8,834 10.0% $16,656 9.6%
Additional procedures
expenses (2,538) (6,452)
Restructuring expenses -- (47)
---------------------- -------------
Consolidated operating income $ 6,296 7.1% $10,157 5.9%
======= ============== ======= ======
Increase
(decr)vs.
QTD prior year EPS YTD EPS
----------------------------------------
Income from continuing
operations excluding
additional procedures,
extinguishment of debt and
restructuring expenses $ 7,047 40.6%$ .21 $12,615 $ .37
Additional procedures
expenses (2,538) ($.07) (6,452) ($.19)
Loss on extinguishment of
debt (5,896) ($.18) (5,896) ($.18)
Restructuring expenses -- -- (47) --
------- ------ ------- ------
(Loss) Income from continuing
operations $(1,387) (127.7%) ($.04)$ 220 --
======= ====== ======= ======
Six Months Ended
June 30, 2003
------------------
EPS
----------
Income from continuing
operations excluding
extinguishment of debt
expenses $ 8,355 $ .27
Loss on extinguishment of
debt (221) (.01)
------- --------
Income from continuing
operations $ 8,134 $ .26
======= ========
NOTE: Additional procedures expenses and restructuring expenses
are classified as other expenses in the consolidated income statement.
Operating income and income from continuing operations, excluding
additional procedures and restructuring expenses and loss on
extinguishment of debt
The Company believes operating income, excluding additional
procedures and restructuring expenses, and income from continuing
operations and related earnings per share from continuing operations,
excluding additional procedures expenses and restructuring expenses,
are additional meaningful measures of operating performance to
facilitate comparisons to previously issued guidance that excluded
these items. These measures represent the earnings generated from the
"base business" excluding (1) the costs associated with the additional
procedures requested by the Company's external auditors associated
with allegations of improprieties, and (2) the costs associated with
reorganization of the Company's operating structure following the
Patient1 divestiture. These expenses are special in nature.
Internally, the Company uses these measures to evaluate its
operational performance. While the Company believes these measures are
meaningful and useful to the readers of the financial statements,
these measures will be different from comparable information provided
by other companies and should not be used as an alternative to our
operating and other financial information as determined under U.S.
generally accepted accounting principles.
Income from continuing operations, excluding loss on
extinguishment of debt
The Company believes income from continuing operations, excluding
loss on extinguishment of debt and related earnings per share is an
additional meaningful measure of operating performance to facilitate
comparisons to previously issued guidance that excluded these items.
These measures represent the earnings generated from the "base
business" excluding the costs associated with the refinancing and
retirement of the Company's debt. These expenses are special in
nature. Internally, the Company uses this measure to evaluate the
operational performance of the Company. While the Company believes
this measure is meaningful and useful to the readers of the financial
statements, this measure will be different from comparable information
provided by other companies and should not be used as an alternative
to our operating and other financial information as determined under
U.S. generally accepted accounting principles.
RECONCILIATION OF GUIDANCE
(unaudited, in thousands)
Year Ended
December 31,
2004 EPS Guidance 2004
---------------
EPS from continuing operations excluding special items $.88 - $.95
Additional procedures expenses (.19)
Loss on extinguishment of debt (.18)
Non-cash lease abandonment expenses (.03)
Restructuring expenses --
Gain on Lloyd's settlement .04
---------------
EPS from continuing operations $.52 - $.59
===============
EPS from continuing operations, excluding special items - guidance
The Company believes earnings per share from continuing
operations, excluding special items, is an additional meaningful
measure of operating performance as it represents the earnings
generated from the "base business" excluding (1) the costs associated
with additional procedures requested by the Company's external
auditors associated with allegations of improprieties, (2) the costs
associated with the refinancing and retirement of the Company's debt,
(3) the non-cash costs associated with the Company's corporate office
move, (4) the costs associated with the reorganization of the
Company's operating structure following the divestiture of the
Patient1 product line, as well as (5) the gain on the settlement of
the Company's litigation with Lloyd's. These expenses are special in
nature. Internally, the Company uses this measure to evaluate the
operational performance of the Company. While this measure is
meaningful and useful, it will be different from comparable
information provided by other companies and should not be used as an
alternative to our operating and other financial information as
determined under U.S. generally accepted accounting principles.
CONTACT: Per-Se Technologies, Alpharetta
Michele Howard, 770-237-7827
michele.howard@per-se.com