Exhibit 99.1
Per-Se Technologies Reports First Quarter 2006 Results;
First Quarter Performance Exceeds Guidance;
Adjusted Cash Flow from Continuing Operations of $45 million;
Acquisition Debt Reduced by $50 million through April
ALPHARETTA, Ga.--(BUSINESS WIRE)--May 9, 2006--Per-Se
Technologies, Inc. (Nasdaq: PSTI), the leader in Connective Healthcare
solutions that help physicians, pharmacies, hospitals and healthcare
organizations realize their financial goals, today released its
financial results for the first quarter ended March 31, 2006. The
Company has included the financial results of the NDCHealth businesses
acquired on January 6, 2006, in its consolidated financial statements
for the first quarter of 2006.
The Company reported the following highlights from its first
quarter, which includes non-GAAP measures that are discussed in more
detail later in the press release:
-- On a GAAP basis, revenue was $146.2 million, operating income
was $0.2 million, and a loss from continuing operations was
$8.6 million or $0.22 per share.
-- Revenue increased 59% in the first quarter to $146.2 million
from $92.0 million a year ago.
-- Adjusted cash flow from continuing operations increased 240%
to $44.7 million, compared to cash flow from continuing
operations of $13.2 million in the first quarter last year.
-- Adjusted consolidated operating income increased 71% in the
first quarter to $18.5 million from consolidated operating
income $10.9 million a year ago. Adjusted consolidated
operating margin expanded to 12.7% from a consolidated
operating margin of 11.8% a year ago.
-- First quarter performance exceeded the Company's previous
adjusted diluted earnings per share guidance of $0.17 to
$0.20. On a comparable basis, first quarter adjusted diluted
earnings per share was $0.24.
-- The Company retired $40 million of its outstanding Term Loan B
debt during the first quarter of 2006, and reduced debt by an
additional $10 million in April.
-- As a result of accounting for deferred taxes related to the
NDCHealth transaction, the Company's GAAP tax rate is
approximately 40% beginning in the first quarter of 2006. The
Company's cash-tax paying rate is approximately 5% due to the
utilization of net operating loss carryforwards.
-- The Company reiterated 2006 adjusted EBITDA guidance of $142
million to $147 million and adjusted cash flow from continuing
operations guidance of $100 million to $110 million. Full year
adjusted diluted earnings per share guidance is $0.81 to $0.87
using the GAAP tax rate of 40%. The only change from previous
guidance of $1.30 to $1.40 per share is the increase in the
GAAP tax rate.
During the first quarter of 2006, the Company incurred non-cash
stock-based compensation expense related to the adoption of SFAS
123(R) of approximately $0.9 million. The Company also recorded the
following related to the NDCHealth acquisition: a non-cash expense of
approximately $13.3 million related to the write-off of in-process
research and development; a non-cash tax benefit of $1.5 million
related to the partial release of its deferred tax asset valuation
allowance; and transition and integration costs of $4.1 million.
Cash flow from continuing operations for the quarter ended March
31, 2006, was $23.1 million. During the first quarter, the Company
used $21.6 million in operating cash related to the NDCHealth
acquisition transition and integration. Excluding these transition and
integration costs, adjusted cash flow from continuing operations was
$44.7 million for the first quarter of 2006.
During the first quarter, the Company began recording its income
tax provision at a rate of approximately 40%. Prior to the first
quarter of 2006, the Company's GAAP tax provision rate was consistent
with its cash tax-paying rate, and was the basis for the Company's
2006 diluted earnings per share guidance. This change in the Company's
GAAP tax provision rate was due to the accounting for deferred taxes
related to the acquisition of NDCHealth. The change in the Company's
GAAP tax provision rate has no impact on the Company's cash tax-paying
rate or its cash flow. The Company continues to have federal net
operating loss carryforwards of approximately $375 million as of
December 31, 2005 that it expects to be able to use to offset cash
taxes payable for the foreseeable future.
On a non-GAAP basis, excluding the impact of the higher tax
provision rate and for purposes of comparison to previously issued
guidance, the Company reported first quarter adjusted operating income
of $18.5 million, or 12.7% of revenue, and adjusted income from
continuing operations of $10.2 million, or $0.24 per diluted share.
The non-cash impact of the higher tax provision rate on first quarter
adjusted income from continuing operations was approximately $3.9
million, or $0.09 per diluted share. Including the impact of the
higher tax provision rate, adjusted income from continuing operations
was $6.3 million, or $0.15 per diluted share. These adjusted results
exclude the NDCHealth acquisition-related costs, stock-based
compensation expense, and the non-cash tax benefit related to the
partial release of deferred tax valuation allowance.
For comparison purposes, in the first quarter of 2005 on a GAAP
basis, the Company reported revenue of $92.0 million and operating
income of $10.9 million, or 11.8% of revenue. Income from continuing
operations was $9.4 million, or $0.29 per diluted share, in the first
quarter of 2005.
"Our first quarter results exceeded our expectations for adjusted
earnings and cash flow due to the strength of our operations," said
Philip M. Pead, chairman, president and chief executive officer of
Per-Se Technologies. "The integration of our NDCHealth acquisition is
proceeding very well and we are excited about the future as we begin
to leverage our market-leading solutions and services. In addition, we
continue to expect to achieve cost savings during 2006 towards the
high end of our range of $15 million to $20 million related to the
integration."
Business Segment Performance
The following business segment review references adjusted
operating income for the first quarter of 2006, which excludes
acquisition-related costs and stock-based compensation expense.
Physician Solutions Division
The Physician Solutions division reported revenue of $77.3 million
and adjusted operating income of $10.3 million, or 13.3% of revenue,
for the first quarter of 2006, compared to revenue and operating
income of $67.2 million and $8.6 million, respectively, or 12.8% of
revenue, for the same quarter of 2005.
This division's outsourced receivables management business had net
new business sold in the first quarter of approximately $3 million,
which compares to net new business sold of approximately $5 million in
the same quarter a year ago. 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.
"Our physician outsourcing business exceeded our expectations
during the first quarter with good revenue growth and margins,"
commented Pead. "With a strong new business pipeline, we continue to
expect this division to achieve our full year guidance for net new
business sold of $25 million to $35 million."
The Physician Solutions division had a net backlog of
approximately $11 million as of March 31, 2006, versus a net backlog
of $5 million a year ago. Net backlog represents the expected
annualized revenue related to new contracts signed with the business
still to be implemented, less the expected annualized revenue related
to existing contracts where discontinuance notification has been
received.
Hospital Solutions Division
The Hospital Solutions division reported revenue of $43.5 million
and adjusted operating income of $10.6 million, or 24.3% of revenue,
for the first quarter of 2006. This compares to revenue of $28.4
million and operating income of $6.4 million, or 22.7% of revenue, in
the same quarter of 2005.
New business sold in the Hospital Solutions division was
approximately $7 million in the first quarter, which compares to new
business sold of approximately $6 million in the same quarter a year
ago. The Company expects this division to achieve $20 million to $30
million of new business sold in 2006.
"Both our revenue cycle and resource management operations met our
expectations during the first quarter," stated Pead. "We are
progressing well on our plans to leverage our market-leading revenue
cycle management products across our expanded customer base since the
NDCHealth acquisition."
Pharmacy Solutions Division
The Pharmacy Solutions division reported revenue of $29.4 million
and adjusted operating income of $4.2 million, or 14.3% of revenue,
for the first quarter of 2006.
Pharmacy Solutions' new business sold in the first quarter of 2006
was approximately $6 million. The Company expects this division to
achieve new business sold of $25 million to $35 million in 2006.
"Our Pharmacy operations exceeded our expectations in the first
quarter," stated Pead. "We had strong network volume driven in part by
the implementation of our Medicare Part D eligibility and TrOOP
contracts at the beginning of the year. We also continue to gain
traction in the pharmacy systems market, with a strong sales pipeline
for our new products for chain pharmacies as well as independent and
mail order pharmacy operators."
Financial Guidance for 2006
The Company expects consolidated 2006 revenue to be in the range
of $625 million to $635 million. Excluding acquisition related costs
and stock compensation expenses, consolidated adjusted operating
income for full year 2006 is expected to be in the range of $90
million to $96 million, or 14.5% to 15.0% of revenue. Consolidated
adjusted EBITDA for full year 2006 is expected to be in the range of
$142 million to $147 million.
The Company expects full year 2006 adjusted cash flow from
continuing operations to be in the range of $100 million to $110
million, excluding expected NDCHealth transition and
acquisition-related costs. The Company expects capital expenditures
and capitalized software development costs to be between $40 million
and $42 million.
Including the revised GAAP tax provision rate, the Company's
adjusted diluted earnings per share guidance for 2006 is now in a
range of $0.81 to $0.87. Full year 2006 adjusted diluted earnings per
share guidance was unchanged in a range of $1.30 to $1.40 prior to the
increase in the Company's tax rate for GAAP purposes as discussed
above. Adjusted diluted earnings per share guidance for 2006 excludes
expected transition and integration-related costs related to the
NDCHealth merger, the in-process research and development write-off
expense, the partial release of the Company's deferred tax asset
valuation allowance, and the impact of adopting SFAS 123(R).
On a quarterly basis, the Company revised its expected adjusted
diluted earnings per share from continuing operations for the second
quarter to a range of $0.17 to $0.19. For the third quarter, adjusted
diluted earnings per share from continuing operations are expected to
be in the range of $0.23 to $0.25.
"Our first quarter results provide a strong start to 2006," Pead
stated. "Each of our business segments performed well and we expect to
continue to deliver strong earnings and cash flow growth throughout
2006."
Conference Call
Per-Se will host a conference call for institutional investors and
security analysts at 10:00 a.m. Eastern time today, May 9, 2006. 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 "Investor Relations" section by selecting the webcast link. 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, pharmacies 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: 2006 projections, costs and revenue growth, margin and other
financial projections; full year 2006 new business sold forecasts; the
Company's ability to successfully integrate and capitalize on
synergies associated with the acquisition of NDCHealth; and the impact
of adopting SFAS 123 (R). 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 implement
successfully sales backlog; lack of revenue growth; client losses;
technical issues in processing claims through the Company's
clearinghouses; failure to gain integration synergies from the
NDCHealth acquisition; any benefit from an additional release of the
tax valuation allowance; outcome of pending legal matters; 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 could cause actual results to differ
materially from those contemplated within this Press Release can also
be found in the Company's Risk Factor disclosures in its Form 10-K for
the year ended December 31, 2005. The Company disclaims any
responsibility to update any forward-looking statements.
PER-SE TECHNOLOGIES, INC.
CONDENSED SEGMENT REPORTING
(unaudited, in thousands)
Three Months
Ended
March 31,
-----------------
2006 2005
-------- -------
Revenue
Physician Solutions $ 77,326 $67,190
Hospital Solutions 43,527 28,364
Pharmacy Solutions 29,401 n/a
Eliminations (4,013) (3,524)
-------- -------
Consolidated $146,241 $92,030
======== =======
Adjusted Operating Income
(a non-GAAP measure)(1)
Physician Solutions $ 10,307 $ 8,568
Hospital Solutions 10,594 6,429
Pharmacy Solutions 4,209 n/a
Corporate (6,578) (4,144)
-------- -------
Consolidated $ 18,532 $10,853
======== =======
(1) Operating income for the first quarter of 2006 is adjusted to
exclude NDCHealth integration and transition costs, the write off of
in-process research & development, and stock-based compensation
expense. See the reconciliation of adjusted operating income to GAAP
operating income by business segment provided in this release for
further information.
PER-SE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands)
March December
31, 31,
2006 2005
-------- --------
Assets
Cash and cash equivalents $ 35,908 $ 61,161
Restricted cash 43 20
Accounts receivable, net 92,752 54,397
Other current assets 18,307 6,539
Property and equipment, net 42,168 16,843
Goodwill 382,486 38,199
Other intangible assets 306,888 21,946
Deferred income tax asset, net 33,658 30,294
Other 16,872 10,124
-------- --------
$929,082 $239,523
======== ========
Liabilities and Stockholders' Equity
Current liabilities $ 96,810 $ 38,249
Deferred revenue 37,608 25,821
Current portion of long-term debt 269 135
Long-term debt 520,495 125,490
Other long-term obligations 33,484 5,312
Stockholders' equity 240,416 44,516
-------- --------
$929,082 $239,523
======== ========
PER-SE TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands except per share data)
Three Months
Ended
March 31,
----------------
2006 2005
-------- -------
Revenue $146,241 $92,030
-------- -------
Cost of services 101,605 60,037
Selling, general and administrative 44,460 21,140
-------- -------
Operating income 176 10,853
Interest expense, net 7,881 1,169
-------- -------
Income (loss) before income taxes (7,705) 9,684
Income tax expense (1) 861 253
-------- -------
Income (loss) from continuing operations (8,566) 9,431
Loss from discontinued operations, net of tax (25) --
-------- -------
Net income (loss) $ (8,591)$ 9,431
======== =======
Diluted net income (loss) per common share:
Adjusted income from continuing operations $ 0.15 0.29
Stock-based compensation expense, net of tax (0.01) --
In-process research & development expense (0.31) --
NDCHealth transition and integration costs, net of
tax (0.06) --
Partial release of deferred tax valuation allowance 0.03 --
-------- -------
Income (loss) from continuing operations (2) (0.20) 0.29
Loss from discontinued operations, net of tax -- --
----------------
Net (loss) income - diluted (2) $ (0.20)$ 0.29
======== =======
Net loss - basic (and diluted for GAAP
purposes) (2) $ (0.22)
========
Weighted average shares used in computing diluted
earnings per share (2) 43,317 32,522
======== =======
Weighted average shares used in computing GAAP net
loss per share (2) 38,414
========
(1) The Company had GAAP taxable income as a result of expenses
that were not allowable as tax deductions. The most significant item
in the quarter was the non-cash write off of $13.3 million related to
in-process research & development related to the NDCHealth
acquisition.
(2) As the Company had a loss from continuing operations for the
three months ended March 31, 2006, 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 5.7 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)
Three Months Ended
March 31,
------------------
2006 2005
--------- --------
Cash Flows From Operating Activities:
Net (loss) income $(8,591) $9,431
Adjustments to reconcile net (loss) income to cash
provided by operating activities:
Depreciation and amortization 25,446 3,752
Amortization of debt issuance costs 553 343
Stock-based compensation expense 931 --
Deferred taxes (3,225) --
Changes in assets and liabilities,
excluding effects of acquisitions and
divestitures 8,025 (364)
--------- --------
Net cash provided by operating activities 23,139 13,162
--------- --------
Cash Flows From Investing Activities:
Acquisitions, net of cash acquired (429,866) --
Purchases of property and equipment (3,422) (2,552)
Software development costs (3,901) (2,073)
Other -- (50)
--------- --------
Net cash used for investing activities (437,189) (4,675)
--------- --------
Cash Flows From Financing Activities:
Proceeds from the exercise of stock options 1,501 1,402
Proceeds from borrowings 435,000 --
Treasury stock purchase -- (9,890)
Deferred financing costs (7,662) --
Repayments of debt (40,067) --
Other 25 42
--------- --------
Net cash provided by (used for) financing
activities 388,797 (8,446)
--------- --------
Cash and Cash Equivalents:
Net change in cash (25,253) 41
Balance at beginning of period 61,161 42,422
--------- --------
Balance at end of period $35,908 $42,463
========= ========
PER-SE TECHNOLOGIES, INC.
ITEMS EXCLUDED IN CALCULATION OF NON-GAAP INCOME AND EPS
(unaudited, in thousands except per share data)
First Quarter 2006
-------------------------
Tax-
After- adjusted
Pre-tax tax EPS
-------------------------
Non-cash stock compensation expense $931 $559 $0.01
Non-cash in-process research & development
expense $13,300 $13,300 $0.31
NDCHealth transition and integration
expenses $4,125 $2,475 $0.06
Non-cash tax benefit from partial reversal of
deferred tax asset valuation allowance $(1,515)$(1,515) $(0.03)
Full Year 2006
---------------------------------------------
Tax-adjusted
Pre-tax After-tax EPS
---------------------------------------------
Non-cash stock
compensation expense $8,000 - 9,000 $4,800 - 5,400 $0.11 - 0.12
Non-cash in-process
research & development
expense $13,300 $13,300 $0.31
NDCHealth transition and
integration expenses $10,000 - 12,000 $6,000 - 7,200 $0.14 - 0.17
Non-cash tax benefit from
partial reversal of
deferred tax asset
valuation allowance $(1,515) $(1,515) $(0.03)
PER-SE TECHNOLOGIES, INC.
RECONCILIATION OF ADJUSTED OPERATING INCOME TO
GAAP OPERATING INCOME BY BUSINESS SEGMENT
(unaudited) ($ in thousands)
Quarter ended
March 31, 2006
-----------------
Operating
Margin
---------
Physician Solutions:
Adjusted operating income (a non-GAAP measure) $10,307 13.3%
Non-cash in-process research & development expense (1,900)
Non-cash stock-based compensation expense (177)
NDCHealth transition and integration-related
expenses (83)
-----------------
Operating income $8,147 10.5%
-----------------
Hospital Solutions:
Adjusted operating income (a non-GAAP measure) $10,594 24.3%
Non-cash in-process research & development expense (2,800)
Non-cash stock-based compensation expense (117)
NDCHealth transition and integration-related
expenses (146)
-----------------
Operating income $7,531 17.3%
-----------------
Pharmacy Solutions:
Adjusted operating income (a non-GAAP measure) $4,209 14.3%
Non-cash in-process research & development expense (8,600)
Non-cash stock-based compensation expense (114)
-----------------
Operating loss $(4,505) (15.3)%
-----------------
Corporate:
Adjusted operating loss (a non-GAAP measure) $(6,578)
Non-cash stock-based compensation expense (523)
NDCHealth transition and integration-related
expenses (3,896)
-----------------
Operating loss $(10,997)
-----------------
Consolidated:
Adjusted operating income (a non-GAAP measure) $18,532 12.7%
Non-cash in-process research & development expense (13,300)
Non-cash stock-based compensation expense (931)
NDCHealth transition and integration-related
expenses (4,125)
-----------------
Operating income $176 --
=================
The Company believes adjusted operating income, which excludes
non-cash in-process research & development expense, non-cash
stock-based compensation expense and NDCHealth merger-related expenses
is a meaningful measure of operating performance and facilitates
comparisons to previously issued guidance that excluded these items.
Internally, the Company uses these measures to evaluate its
operational performance. The presentation of such non-GAAP measures
enables investors to focus on expected period-over-period operating
performance, without the impact of these items, and thereby enhances
the user's overall understanding of the Company's current financial
performance and provides a better baseline for modeling future
earnings expectations. The Company believes the inclusion of such
non-GAAP measures provides consistency and comparability in its
financial reporting and is provided in order to enable investors to
evaluate how management views its business and to more thoroughly
evaluate its current performance compared to past performance.
However, this information may be different from comparable information
provided by other companies and should not be used in isolation or as
an alternative to the Company's operating and other financial
information as determined under U.S. generally accepted accounting
principles.
PER-SE TECHNOLOGIES, INC.
RECONCILIATION OF ADJUSTED INCOME AND EPS FROM CONTINUING
OPERATIONS TO GAAP INCOME AND EPS FROM CONTINUING OPERATIONS
(unaudited, in thousands except per share data)
Quarter
ended
March 31,
2006 EPS
-------- -------
Adjusted consolidated operating income (a non-GAAP
measure) $18,532
Interest expense, net (7,881)
Taxes at previous cash-paying provision rate (448)
--------
Adjusted income from continuing operations before
full tax provision rate (a non-GAAP measure) 10,203 $0.24
Non-cash increase in tax provision rate (3,950) (0.09)
-------- -------
Adjusted income from continuing operations after full
tax provision rate (a non-GAAP measure) 6,253 0.15
Non-cash in-process research & development
expense (13,300) (0.31)
Non-cash stock-based compensation expense, net
of tax (559) (0.01)
NDCHealth transition and integration-related
expenses, net of tax (2,475) (0.06)
Tax benefit from partial reversal of deferred
tax asset valuation allowance 1,515 0.03
-------- -------
Loss from continuing operations (adjusted diluted EPS
- a non-GAAP measure) (8,566) (0.20)
Impact of share count (diluted versus basic) -- (0.02)
-------- -------
Loss from continuing operations (basic and diluted
EPS for GAAP purposes) $(8,566) $(0.22)
======== =======
The Company believes income and earnings per share from continuing
operations, which excludes NDCHealth transition and
integration-related expenses, non-cash stock-based compensation
expense and non-cash in-process research & development write off
expense and diluted earnings per share are additional meaningful
measures of operating performance and facilitate comparisons to
previously issued guidance that excluded these items. Internally, the
Company uses these measures to evaluate its operational performance.
The presentation of such non-GAAP measures enables investors to focus
on period-over-period operating performance, without the impact of
these items, and thereby enhances the user's overall understanding of
the Company's financial performance and provides a better baseline for
modeling future earnings expectations. The Company believes the
inclusion of such non-GAAP measures provides consistency and
comparability in its financial reporting and is provided in order to
enable investors to evaluate how management views its business and to
more thoroughly evaluate its current performance compared to past
performance. However, this information may be different from
comparable information provided by other companies and should not be
used in isolation or as an alternative to the Company's operating and
other financial information as determined under U.S. generally
accepted accounting principles.
PER-SE TECHNOLOGIES, INC.
RECONCILIATION OF ADJUSTED CASH FLOW FROM CONTINUING OPERATIONS TO
GAAP CASH FLOW FROM CONTINUING OPERATIONS AND GUIDANCE
(unaudited) ($ in millions)
Q1 2006
2006 Guidance
------ -----------
Adjusted cash flow from continuing operations
(a non-GAAP measure) $44.7 $100 - 110
Cash used for non-recurring merger-related costs (21.6) (37 - 33)
------ -----------
Cash flow from continuing operations $23.1 $63 - 77
====== ===========
The Company believes cash flow from continuing operations, which
excludes NDCHealth merger-related costs is a meaningful measure of
operating cash flow generated from the "base business" and facilitates
comparisons to previously issued guidance that excluded these items.
Internally, the Company uses these measures to evaluate its
operational performance. The presentation of such non-GAAP measures
enables investors to focus on expected period-over-period operating
performance, without the impact of these non-recurring items, and
thereby enhances the user's overall understanding of the Company's
expected financial performance and provides a better baseline for
modeling future cash flow expectations. The Company believes the
inclusion of such non-GAAP measures provides consistency and
comparability in its financial reporting and is provided in order to
enable investors to evaluate how management views its business and to
more thoroughly evaluate its expected performance compared to past
performance. However, this information may be different from
comparable information provided by other companies and should not be
used in isolation or as an alternative to the Company's operating and
other financial information as determined under U.S. generally
accepted accounting principles.
PER-SE TECHNOLOGIES, INC.
RECONCILIATION OF 2006 EBITDA GUIDANCE
(unaudited) ($ in millions)
2006
Guidance
-----------
Adjusted EBITDA (a non-GAAP measure) $142 - 147
Depreciation & amortization expense 52 - 51
-----------
Adjusted operating income (a non-GAAP measure) 90 - 96
Non-cash in-process research & development expense 13 -13
Non-cash stock-based compensation expense 9 - 8
NDCHealth transition and integration-related expenses 12 -10
-----------
Operating income $56 - 65
===========
The Company believes earnings before interest, taxes, depreciation
and amortization expense (EBITDA), which excludes NDCHealth
merger-related expenses, in-process research & development expense,
and stock-based compensation expense is a meaningful measure of
operating performance and facilitates comparisons to previously issued
guidance that excluded these items. Internally, the Company uses these
measures to evaluate its operational performance. The presentation of
such non-GAAP measures enables investors to focus on expected
period-over-period operating performance, without the impact of these
items, and thereby enhances the user's overall understanding of the
Company's expected financial performance and provides a better
baseline for modeling future earnings expectations. The Company
believes the inclusion of such non-GAAP measures provides consistency
and comparability in its financial reporting and is provided in order
to enable investors to more thoroughly evaluate its expected
performance compared to past performance. However, this information
may be different from comparable information provided by other
companies and should not be used in isolation or as an alternative to
the Company's operating and other financial information as determined
under U.S. generally accepted accounting principles.
PER-SE TECHNOLOGIES, INC.
RECONCILIATION OF 2006 ADJUSTED EARNINGS PER SHARE (EPS)
FROM CONTINUING OPERATIONS GUIDANCE TO GAAP EPS
(unaudited)
2006 Guidance
---------------
Adjusted income from continuing operations before
full tax provision rate (a non-GAAP measure) $1.30 - 1.40
Non-cash increase in tax provision rate (0.49) - (0.53)
---------------
Adjusted income from continuing operations after
full tax provision rate (a non-GAAP measure) 0.81 - 0.87
Non-cash in-process research & development expense (0.31) - (0.31)
Non-cash stock-based compensation expense,
net of tax (0.12) - (0.11)
NDCHealth transition and integration-related
expenses, net of tax (0.17) - (0.14)
Tax benefit from partial reversal of deferred tax
asset valuation allowance 0.03 - 0.03
---------------
Income from continuing operations $0.24 - 0.34
===============
The Company believes income (earnings) per share from continuing
operations, excluding NDCHealth transition and integration-related
expenses, stock-based compensation expense, in-process research &
development expense, the tax benefit from the partial release of the
deferred tax asset valuation allowance, and impact of the increase in
the GAAP tax provision rate is a meaningful measure of operating
performance and facilitates comparisons to previously issued guidance
that excluded these items. Internally, the Company uses these measures
to evaluate its operational performance. The presentation of such
non-GAAP measures enables investors to focus on expected
period-over-period operating performance, without the impact of these
items, and thereby enhances the user's overall understanding of the
Company's expected financial performance and provides a better
baseline for modeling future earnings expectations. The Company
believes the inclusion of such non-GAAP measures provides consistency
and comparability in its financial reporting and is provided in order
to enable investors to evaluate how management views its business and
to more thoroughly evaluate its expected performance compared to past
performance. However, this information may be different from
comparable information provided by other companies and should not be
used in isolation or as an alternative to the Company's operating and
other financial information as determined under U.S. generally
accepted accounting principles.
CONTACT: Per-Se Technologies Inc., Alpharetta
Robert Borchert, 770-237-7539
investors@per-se.com