Exhibit 99.1
ECLIPSYS RELEASES FINANCIAL RESULTS FOR THE QUARTER ENDED MARCH 31, 2006
Boca Raton, FL -- May 2, 2006 -- Eclipsys Corporation(R) (NASDAQ: ECLP), The
Outcomes Company(R), today released results for the quarter ended March 31,
2006.
FIRST-QUARTER RESULTS
Revenues for the quarter ended March 31, 2006, increased 19.4 percent to $100.8
million, compared with revenues of $84.4 million for the quarter ended March 31,
2005. On a GAAP basis, the first-quarter net loss was ($8.0) million or ($0.16)
per common share on a basic and diluted basis in 2006 compared to a net loss of
($7.2) million, or ($0.15) per common share on a basic and diluted basis in the
first-quarter of 2005. First-quarter 2006 net loss included the expense
associated with adopting Statement of Financial Accounting Standards (SFAS) No.
123R, Share-Based Payment, which requires the expensing of stock options.
Adoption of SFAS 123R reduced first-quarter 2006 earnings by $2.9 million, or
$0.06 per common share on a basic and diluted basis.
First-quarter 2006 earnings also included a restructuring charge of $7.2
million, or $0.14 per common share, associated with certain headcount reductions
to reduce costs and redirect spending into client related functions including
customer support and professional services. Management expects to incur
additional charges of $0.04 per common share on a basic and diluted basis in the
second-quarter in connection with this restructuring. For comparative purposes,
excluding the expense associated with SFAS 123R adoption and the restructuring
charge, pro forma net income for the quarter was $2.0 million, or $0.04 per
diluted share compared with a net loss of ($7.2) million, or ($0.15) per common
share on a basic and diluted basis in the first-quarter of 2005, an improvement
of $9.2 million or $0.19 per diluted common share. For year-over-year
comparisons, it should be noted that SFAS 123R was first implemented for the
quarter ended March 31, 2006, and prior periods do not include its effect.
The following table summarizes selected financial data:
In thousands, except per share data
Three months ended March 31,
------------------------------------------------------------
2006 2005 $ Change % Change
------------ ------------ ------------ ------------
Revenues $ 100,784 $ 84,435 $ 16,349 19.4%
Net loss (8,047) (7,161) (886) -12.4%
Earnings (loss) per share, basic and $ (0.16) $ (0.15) $ (0.01) N/A
diluted
Non-GAAP Pro Forma Results*
Three months ended March 31,
------------------------------------------------------------
2006 2005 $ Change % Change
------------ ------------ ------------ ------------
Revenues $ 100,784 $ 84,435 $ 16,349 19.4%
Pro forma net income (loss)* 2,031 (7,161) 9,192 128.4%
Pro forma earnings (loss) per share, $ 0.04 $ (0.15) $ 0.19 N/A
basic and diluted*
*Excludes the effect of restructuring charge and implementation of SFAS 123R. A
reconciliation of GAAP to non-GAAP pro forma results is included in the attached
table.
1750 Clint Moore Road, Boca Raton, FL 33487 o phone 561.322.4321
o fax 561.322.4320 o info@eclipsys.com
Eclipsys Releases Financial Results for the Quarter Ended March 31, 2006
May 2, 2006
Page 2 of 3
Operating cash flows were ($10.1) million for the quarter, compared to ($7.1)
million in first-quarter 2005. Cash, cash equivalents and marketable securities
were $118.2 million as of March 31, 2006. Days sales outstanding (DSOs) were 73
days, a sequential increase of four days. Deferred revenue (including current
and long-term) was $112.9 million as of March 31, 2006, compared to $124.7
million as of December 31, 2005.
"We are pleased with the company's progress in Q1 2006 as we exceeded $100
million in revenues for the second consecutive quarter," said R. Andrew Eckert,
Eclipsys president and chief executive officer. "The realignment of Eclipsys
resources around our customers' requirements is paying significant dividends. We
are seeing an increasing number of successful activations, as well as increased
adoption of our advanced solutions by our customers. The release of Sunrise(TM)
4.5 XA(TM) gives us a technology platform and integrated solutions portfolio
that makes us extremely competitive in more and more deals. Our pipeline is
quite robust and the organization is responding well to the many meaningful
changes we completed in the first quarter. With these recent developments, we
are well-positioned to execute on new sales opportunities while achieving our
goal to become the recognized leader in healthcare information technology client
satisfaction."
INVESTOR TELECONFERENCE MAY 2
Eclipsys senior executives will discuss the results during an investor community
teleconference scheduled for 8:30 a.m. Eastern time on Tuesday, May 2. Persons
interested in participating in the teleconference should call (888) 428-4480
approximately 15 minutes before the conference is slated to begin. For
listen-only mode, participants should go to WWW.ECLIPSYS.COM prior to the
conference call to register and download the necessary audio software. An audio
replay will be available at WWW.ECLIPSYS.COM for approximately 48 hours
beginning at 12 noon Eastern on May 2.
NON-GAAP MEASURES
The financial results reported in this press release have been prepared in
accordance with accounting principles generally accepted in the United States
("GAAP"). In addition to the GAAP results, the Company has provided net income
and earnings per share information for the three month period ending March 31,
2006 on a non-GAAP pro forma basis to exclude the effect of the restructuring
charge and implementation of SFAS 123R. These non-GAAP financial measures should
not be considered a substitute for, or superior to, any measure derived in
accordance with GAAP. These non-GAAP financial measures may also be inconsistent
with the manner in which similar measures are derived or used by other
companies. The Company believes that the non-GAAP financial measures provided,
when considered in conjunction with comparable GAAP financial measures,
facilitate understanding and evaluation of the Company's operating performance
and future prospects, as well as comparisons with prior period results that did
not include these charges. Internally, the Company uses this non-GAAP
information as an indicator of business performance, and evaluates management's
effectiveness with specific reference to these indicators. The Company has
provided reconciling information in the attachment to this release.
ABOUT ECLIPSYS
Eclipsys is a leading provider of advanced clinical, financial and management
information software and service solutions to more than 1,500 healthcare
facilities. Eclipsys empowers healthcare organizations to improve patient
safety, revenue cycle management and operational efficiency through innovative
information solutions. For more information, see www.eclipsys.com or email
info@eclipsys.com.
Eclipsys Releases Financial Results for the Quarter Ended March 31, 2006
May 2, 2006
Page 3 of 3
Statements in this news release or the investor call referenced herein
concerning the company's future financial results, operating performance,
development efforts, and the benefits provided by Eclipsys software and services
are forward-looking statements and actual results may differ from those
projected due to a variety of risks and uncertainties. Future performance
expectations are predicated upon achievement of various sales and performance
targets that may be difficult to meet. Sales may be slower than expected due to
market conditions, competition, and other factors. Costs may be greater than
anticipated due to the potential need to increase spending to ensure performance
in accordance with commitments to clients and other factors. Software
development may take longer and cost more than expected, and incorporation of
anticipated features and functionality may be delayed, due to various factors
including programming and integration challenges and resource constraints. The
market is highly competitive. Eclipsys has recently released new software that
has not yet been widely implemented. Implementation and customization of
Eclipsys software is complex and time-consuming. Results depend upon a variety
of factors and can vary by client. Each client's circumstances are unique and
may include unforeseen issues that make it more difficult than anticipated to
implement or derive benefit from software, implementation or consulting
services. The success and timeliness of the company's services will depend at
least in part upon client involvement, which can be difficult to control.
Eclipsys is required to meet specified performance standards, and contracts can
be terminated or scope reduced under certain circumstances. More information
about company risks is available in recent Form 10-K and other filings made by
Eclipsys from time to time with the Securities and Exchange Commission. Special
attention is directed to the portions of those documents entitled "Risk Factors"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations." Eclipsys Corporation and The Outcomes Company are registered
trademarks of Eclipsys Corporation. Sunrise and XA are trademarks of Eclipsys
Corporation. Other product and company names in this news release are trademarks
and/or registered trademarks of their respective companies.
ECLIPSYS
Jason Cigarran Robert J. Colletti
Director of Media Relations (media) Chief Financial Officer (investors)
(561) 322-4355 (561) 322-4655
jason.cigarran@eclipsys.com investor.relations@eclipsys.com
ECLIPSYS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(000's omitted, except per share data)
THREE MONTHS ENDED
----------------------------
MARCH 31, MARCH 31,
2006 2005 CHANGE $ CHANGE %
------------ ------------ ------------ ------------
REVENUES:
Systems and services $ 96,223 $ 83,128 $ 13,095 15.8%
Hardware 4,561 1,307 3,254 249.0%
------------ ------------ ------------
Total revenues 100,784 84,435 16,349 19.4%
------------ ------------ ------------
COSTS AND EXPENSES:
Costs of systems and services revenues 56,458 52,712 3,746 7.1%
Costs of hardware revenues 3,651 1,101 2,550 231.6%
Sales and marketing 16,269 17,729 (1,460) -8.2%
Research and development 16,962 12,576 4,386 34.9%
General and administrative 5,640 4,356 1,284 29.5%
Depreciation and amortization 3,802 3,683 119 3.2%
Restructuring charge 7,198 - 7,198
------------ ------------ ------------
Total costs and expenses 109,980 92,157 17,823 19.3%
------------ ------------ ------------
Income (loss) from operations (9,196) (7,722) (1,474) -19.1%
Interest income, net 1,149 561 588 104.8%
------------ ------------ ------------
Income (loss) before income taxes (8,047) (7,161) (886) -12.4%
Provision for income taxes - - -
------------ ------------ ------------
Net income (loss) $ (8,047) $ (7,161) $ (886) -12.4%
============ ============ ============
EARNINGS (LOSS) PER SHARE:
Basic earnings (loss) per share $ (0.16) $ (0.15) $ (0.01) N/A
============ ============ ============
Diluted earnings (loss) per share $ (0.16) $ (0.15) $ (0.01) N/A
============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 50,581 47,323
============ ============
Diluted 50,581 47,323
============ ============
ECLIPSYS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - UNAUDITED
(000's omitted)
MARCH 31, DECEMBER 31,
2006 2005
------------ ------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 36,214 $ 76,693
Marketable securities 81,979 37,455
Accounts receivable, net 81,512 80,833
Inventory 2,157 2,289
Prepaid expenses 21,263 17,909
Other current assets 1,204 2,184
------------ ------------
Total current assets 224,329 217,363
Property and equipment, net 42,562 40,500
Capitalized software development costs,
net 32,765 35,690
Acquired technology, net 508 584
Intangible assets, net 2,727 2,940
Deferred tax asset 4,083 4,124
Goodwill, net 6,669 6,624
Other assets 19,479 20,964
------------ ------------
Total assets $ 333,122 $ 328,789
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Deferred revenue $ 98,040 $ 107,960
Accounts payable 22,490 26,103
Accrued compensation costs 15,772 15,974
Deferred tax liability 4,083 4,124
Other current liabilities 14,749 10,413
------------ ------------
Total current liabilities 155,134 164,574
Deferred revenue 14,827 16,772
Other long-term liabilities 169 1,252
Stockholders' equity: 162,992 146,191
------------ ------------
Total liabilities and
stockholders' equity $ 333,122 $ 328,789
============ ============
ECLIPSYS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(000's omitted)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2006 2005
------------ ------------
OPERATING ACTIVITIES:
Net loss $ (8,047) $ (7,161)
Adjustments to reconcile net loss to net cash
used in operating activities
Depreciation and amortization 9,217 7,806
Bad debt provision 518 450
Stock compensation expense 3,774 416
CHANGES IN OPERATING ASSETS AND LIABILITIES
Accounts receivable (1,197) 5,348
Inventory 132 80
Other current assets (2,634) (3,444)
Other assets 647 (8,825)
Deferred revenue (11,864) 2,279
Accrued compensation (203) 1,265
Other current liabilities 636 (5,683)
Other liabilities (1,083) 416
------------ ------------
Total adjustments (2,057) 108
------------ ------------
Net cash used in operating activities (10,104) (7,053)
INVESTING ACTIVITIES:
Purchases of property and equipment (5,651) (4,125)
Purchases of marketable securities (245,563) (138,018)
Proceeds from sale of marketable securities 201,038 101,158
Capitalized software development costs (1,576) (6,427)
------------ ------------
Net cash used in investing activities (51,752) (47,412)
FINANCING ACTIVITIES:
Proceeds from stock options exercised 21,042 1,697
------------ ------------
Net cash provided by financing activities 21,042 1,697
Effect of exchange rate changes on cash and
cash equivalents 335 81
------------ ------------
Net decrease in cash and cash equivalents (40,479) (52,687)
Cash and cash equivalents, beginning of period 76,693 122,031
------------ ------------
Cash and cash equivalents, end of period 36,214 69,344
Marketable securities 81,979 36,860
------------ ------------
Total Cash $ 118,193 $ 106,204
============ ============
ECLIPSYS CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP PRO FORMA RESULTS
(000's omitted, except per share data)
THREE MONTHS ENDED
MARCH 31,
---------------------------
2006 2005
------------ ------------
GAAP net loss $ (8,047) $ (7,161)
Deduct:
Share-based compensation expense(1) 2,880 -
Restructuring charge(2) 7,198 -
------------ ------------
Non-GAAP net income (loss)(3) $ 2,031 $ (7,161)
============ ============
GAAP loss per share $ (0.16) $ (0.15)
Deduct:
Share-based compensation expense(1) 0.06 -
Restructuring charge(2) 0.14 -
------------ ------------
Non-GAAP earnings (loss) per share(3) $ 0.04 $ (0.15)
============ ============
(1) On January 1, 2006, we adopted SFAS 123R and applied the modified
prospective transition method. Under this method, we did not restate any prior
periods. During the first-quarter of 2006, we recorded share-based compensation
expense of $2.9 million as a result of adopting SFAS 123R. The impact of SFAS
123R was recorded in costs and expenses as follows:
Three Months
Ended
March 31,
2006
------------
Costs of systems & services revenues $ 811
Sales and marketing 553
Research and development 239
General and administrative 1,277
------------
Total share-based compensation expense $ 2,880
------------
(2) This charge is associated with certain headcount reductions made in the
first quarter to reduce costs and redirect spending into client related
functions including customer support and professional services.
(3) These non-GAAP measures exclude the effect of first quarter restructuring
charges and implementation of SFAS 123R, and are provided to facilitate
evaluation of the company's operating performance and comparisons with prior
period results that did not include these charges. Management uses this
information to review results excluding items that are not necessarily
indicative of our ongoing results.