Exhibit 99.1
ECLIPSYS RELEASES FINANCIAL RESULTS FOR QUARTER ENDED JUNE 30, 2006
BOCA RATON, Fla., Aug. 3 /PRNewswire-FirstCall/ -- Eclipsys Corporation(R)
(Nasdaq: ECLP), The Outcomes Company(R), today released results for the quarter
ended June 30, 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050209/FLW006LOGO )
Second-quarter Results
Revenues for the quarter ended June 30, 2006, increased $6.5 million to
$102.3 million, compared to revenues of $95.9 million for the quarter ended June
30, 2005. On a GAAP basis, the second-quarter earnings were $1.1 million or
$0.02 per common share on a basic and diluted basis compared to a net loss of
($2.5) million, or ($0.05) per common share on a basic and diluted basis in the
second-quarter of 2005. Second-quarter 2006 earnings included the expense
associated with adopting Statement of Financial Accounting Standards (SFAS) No.
123R, Share-Based Payment, which requires the expensing of stock options. The
adoption of SFAS 123R resulted in second-quarter 2006 expense of $3.3 million,
or $0.06 per common share on a basic and diluted basis.
The restructuring to reduce costs and redirect spending into client related
functions, which we began in the first quarter, was completed in the second
quarter with a charge for the period of $1.3 million, or $0.03 per common share.
For comparative purposes, excluding the expense associated with SFAS 123R
adoption and the restructuring charge, non-GAAP net income for the quarter was
$5.8 million, or $0.11 per diluted common share compared with a net loss of
($1.8) million, or ($0.04) per common share on a basic and diluted basis in the
second-quarter of 2005. 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 June 30, Six months ended June 30,
---------------------------------- -----------------------------------
2006 2005 $ Change 2006 2005 $ Change
--------- --------- --------- --------- --------- ---------
Revenues $ 102,330 $ 95,865 $ 6,465 $ 203,114 $ 180,300 $ 22,814
Net income (loss) 1,146 (2,485) 3,631 (6,901) (9,646) 2,745
Earnings (loss)
per common
share,
basic and diluted $ 0.02 $ (0.05) $ 0.07 $ (0.14) $ (0.20) $ 0.06
Non-GAAP Results* Non-GAAP Results*
Three months ended June 30, Six months ended June 30,
---------------------------------- -----------------------------------
2006 2005 $ Change 2006 2005 $ Change
--------- --------- --------- --------- --------- ---------
Revenues $ 102,330 $ 95,865 $ 6,465 $ 203,114 $ 180,300 $ 22,814
Net income
(loss)* 5,837 (1,751) 7,588 7,867 (8,496) 16,363
Earnings (loss)
per common
share, basic
and diluted* $ 0.11 $ (0.04) $ 0.15 $ 0.15 $ (0.18) $ 0.33
* Excludes the effect of restructuring charge and implementation of SFAS 123R.
A reconciliation of GAAP to non-GAAP results is included in the attached
table.
Operating cash flows improved to $8.6 million for the quarter, compared to
$1.7 million in second-quarter 2005. Cash, cash equivalents and marketable
securities were $121.0 million as of June 30, 2006. Days sales outstanding
(DSOs) were 66 days, a sequential decrease of 7 days. Deferred revenue
(including current and long-term) was $111.6 million as of June 30, 2006,
compared to $112.9 million as of March 31, 2006.
"In the second quarter, we posted a significant increase in earnings while
at the same time making great strides in the transformation of the company" said
R. Andrew Eckert, Eclipsys president and chief executive officer. "We took four
important steps to strengthen our business. First, we have upgraded our sales
and marketing capabilities from top to bottom in order to win both new customers
and expand our product footprint at existing clients. Second, we have increased
our clinical implementation capacity to deliver on our commitment to reduce our
over-reliance on outside resources as well as enhance client delivery. Third,
with the Sysware transaction we have begun to establish an offshore presence,
which should help us increase profitability at a faster rate than revenue
growth. Finally, to better meet the needs of the rapidly growing ambulatory and
broader community healthcare markets, we increased the reach of our ambulatory
care offering by signing an OEM agreement with athenahealth, Inc. While we
didn't meet our software revenue goals in the second quarter, we've been working
hard to position both the organization and product portfolio to accelerate our
second half performance."
Full year Guidance
The company is updating its full year guidance. We anticipate that revenues
will be in the range of $422 million to $432 million and GAAP earnings per
diluted common share in the range of $0.13 to $0.19. Excluding the full year
restructuring charge and FAS123R this range is $0.52 to $0.58 per diluted common
share. Table 3 includes a reconciliation of GAAP EPS to the non-GAAP measure
used above.
Investor Teleconference August 3
Eclipsys senior executives will discuss the results during an investor
community teleconference scheduled for 8:00 a.m. Eastern time on Thursday,
August 3. Persons interested in participating in the teleconference should call
(888) 423-3276 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 in the investor relations section of
www.eclipsys.com for approximately 48 hours beginning at 12 noon Eastern on
August 3.
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 months and six months ended
June 30, 2006 on a non-GAAP 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 restructuring charge and implementation of FAS 123R make
comparison of the Company's results with prior periods more difficult and
investors have indicated that they consider this supplemental non-GAAP
information useful in evaluating our results of operations and future prospects.
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 of our results with our prior period results
that did not include these charges and with results of other companies on a more
consistent basis. Internally, the Company uses this non-GAAP information for
forecasting and to help make management decisions, as an indicator of business
performance, and to evaluate management's effectiveness and help determine
bonuses for management and others. The Company has provided reconciling
information in the attachment to this release.
About Eclipsys
Eclipsys is a leading provider of advanced integrated information software,
clinical content and professional services that help healthcare organizations
improve clinical, financial, operational and customer-satisfaction outcomes. For
more information, see www.eclipsys.com or email info@eclipsys.com.
Statements in this news release or the investor call referenced herein
concerning the company's sales and marketing initiatives, evolving India
operations, 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 clients can terminate contracts,
assess penalties or reduce contract scope under certain circumstances. More
information about company risks is available in recent Form 10-K and other
filings made by Eclipsys from time to time with the Securities and Exchange
Commission. Special attention is directed to the portions of those documents
entitled "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." Eclipsys Corporation 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
----------------------------
June 30, June 30,
2006 2005 Change $ Change %
------------ ------------ ------------ ------------
Revenues:
Systems and services $ 97,754 $ 91,557 $ 6,197 6.8%
Hardware 4,576 4,308 268 6.2%
Total revenues 102,330 95,865 6,465 6.7%
Costs and expenses:
Cost of systems and services
revenues 59,097 55,248 3,849 7.0%
Cost of hardware revenues 3,851 3,557 294 8.3%
Sales and marketing 14,473 16,196 (1,723) -10.6%
Research and development 14,296 13,974 322 2.3%
General and administrative 5,559 6,511 (952) -14.6%
Depreciation and amortization 3,894 3,583 311 8.7%
Restructuring charge 1,349 - 1,349 n/a
Total costs and expenses 102,519 99,069 3,450 3.5%
Loss from operations before
interest and income taxes (189) (3,204) 3,015 94.1%
Interest income, net 1,335 719 616 85.7%
Income (loss) from operations
before income taxes 1,146 (2,485) 3,631 146.1%
Provision for income taxes - - -
Net income (loss) $ 1,146 $ (2,485) $ 3,631 146.1%
Earnings (loss) per common share:
Basic earnings (loss) per
common share $ 0.02 $ (0.05) $ 0.07
Diluted earnings (loss) per
common share $ 0.02 $ (0.05) $ 0.07
Weighted average common
shares outstanding:
Basic 51,598 47,629
Diluted 53,100 47,629
Eclipsys Corporation and Subsidiaries
Consolidated Statements of Operations - Unaudited
(000's Omitted, Except per Share Data)
Six Months Ended
---------------------------
June 30, June 30,
2006 2005 Change $ Change %
------------ ------------ ------------ ------------
Revenues:
Systems and services $ 193,977 $ 174,685 $ 19,292 11.0%
Hardware 9,137 5,615 3,522 62.7%
Total revenues 203,114 180,300 22,814 12.7%
Costs and expenses:
Cost of systems and
services revenues 115,555 107,513 8,042 7.5%
Cost of hardware revenues 7,502 4,658 2,844 61.1%
Sales and marketing 30,742 34,372 (3,630) -10.6%
Research and development 31,258 26,550 4,708 17.7%
General and administrative 11,199 10,867 332 3.1%
Depreciation and
amortization 7,696 7,266 430 5.9%
Restructuring charge 8,547 - 8,547 n/a
Total costs and expenses 212,499 191,226 21,273 11.1%
Loss from operations before
interest and income taxes (9,385) (10,926) 1,541 14.1%
Interest income, net 2,484 1,280 1,204 94.1%
Loss before income taxes (6,901) (9,646) 2,745 28.5%
Provision for income taxes - - -
Net loss $ (6,901) $ (9,646) $ 2,745 28.5%
Loss per common share:
Basic and diluted loss
per common share $ (0.14) $ (0.20) $ 0.06
Weighted average common
shares outstanding:
Basic and diluted 51,109 47,444
Eclipsys Corporation and Subsidiaries
Consolidated Balance Sheets - Unaudited
(000's Omitted)
June 30, December 31,
2006 2005
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 28,588 $ 76,693
Marketable securities 92,375 37,455
Accounts receivable, net 74,556 80,833
Inventory 1,611 2,289
Prepaid expense 23,235 17,909
Other current assets 906 2,184
Total current assets 221,271 217,363
Property and equipment, net 42,390 40,500
Capitalized software development
costs, net 31,303 35,690
Acquired technology, net 432 584
Intangibles assets, net 2,515 2,940
Deferred tax asset 4,812 4,124
Goodwill 6,669 6,624
Other assets 17,985 20,964
Total assets $ 327,377 $ 328,789
Liabilities and Stockholders' Equity
Current liabilities:
Deferred revenue $ 97,562 $ 107,960
Accounts payable 12,636 26,103
Accrued compensation costs 10,017 15,974
Deferred tax liability 4,812 4,124
Other current liabilities 18,970 10,413
Total current liabilities 143,997 164,574
Deferred revenue 14,057 16,772
Other long-term liabilities 156 1,252
Total liabilities 158,210 182,598
Stockholders' equity: 169,167 146,191
Total liabilities and stockholders' equity $ 327,377 $ 328,789
Eclipsys Corporation and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
(000's Omitted)
Six Months Ended June 30,
---------------------------
2006 2005
------------ ------------
Operating activities:
Net loss $ (6,901) $ (9,646)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 18,371 16,106
Provision for bad debts 818 1,050
Stock compensation expense 6,904 1,150
Changes in operating assets and liabilities:
Decrease / (Increase) in accounts
receivable 5,252 (1,135)
Decrease / (Increase) in other
current assets 2,077 (2,337)
Decrease / (Increase) in inventory 678 (28)
Increase in other assets (3,857) (9,920)
Decrease in deferred revenue (12,794) (1,755)
(Decrease) / Increase in accrued
compensation (5,957) 3,763
(Decrease) / Increase in other
current liabilities (4,960) (3,745)
(Decrease) / Increase in other
long-term liabilities (1,095) 1,143
Total adjustments 5,438 4,292
Net cash used in operating
activities (1,463) (5,354)
Investing activities:
Purchases of property and equipment (9,160) (6,316)
Purchase of marketable securities (512,324) (159,866)
Proceeds from sale of marketable
securities 457,403 122,712
Capitalized software development costs (4,626) (9,634)
Deposit and Cash paid for acquisitions (800) (20)
Net cash used in investing
activities (69,507) (53,124)
Financing activities:
Proceeds from stock options exercised 22,227 7,623
Proceeds from issuance of common stock
in stock purchase plan 223 -
Net cash provided by financing
activities 22,450 7,623
Effect of exchange rates on cash and
cash equivalents 415 89
Net decrease in cash and cash equivalents (48,105) (50,766)
Cash and cash equivalents - beginning
of the period 76,693 122,031
Cash and cash equivalents -
end of the period $ 28,588 $ 71,265
Eclipsys Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Results
(000's omitted, except per share data)
Table 1
Three Months Ended
June 30,
-----------------------
2006 2005
---------- ----------
GAAP net income (loss) $ 1,146 $ (2,485)
Add:
Share-based compensation expense 3,342 734
Restructuring charge 1,349 -
Non-GAAP net income (loss) $ 5,837 $ (1,751)
GAAP earnings (loss) per basic share $ 0.02 $ (0.05)
Add:
Share-based compensation expense 0.06 0.01
Restructuring charge 0.03 -
Non-GAAP earnings (loss) per basic
and diluted common share $ 0.11 $ (0.04)
Eclipsys Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Results
(000's omitted, except per share data)
Table 2
Six Months Ended
June 30,
-----------------------
2006 2005
---------- ----------
GAAP net loss $ (6,901) $ (9,646)
Add:
Share-based compensation expense 6,221 1,150
Restructuring charge 8,547 -
Non-GAAP net income (loss) $ 7,867 $ (8,496)
GAAP loss per basic share $ (0.14) $ (0.20)
Add:
Share-based compensation expense 0.12 0.02
Restructuring charge 0.17 -
Non-GAAP earnings (loss) per basic
and diluted common share $ 0.15 $ (0.18)
Eclipsys Corporation and Subsidiaries
Reconciliation of GAAP to Non-GAAP Guidance
(000's omitted, except per share data)
Table 3
2006 Annual Guidance
Revenues $422 to $432 million
EPS, excluding restructure and FAS 123R $0.52 - $0.58
EPS, including restructure $0.35 - $0.41
EPS, including restructure and FAS 123R $0.13 - $0.19
SOURCE Eclipsys Corporation
-0- 08/03/2006
/CONTACT: Media: Jason Cigarran, Director of Media Relations,
+1-561-322-4355, jason.cigarran@eclipsys.com, or Investors: Robert J. Colletti,
Chief Financial Officer, +1-561-322-4655, investor.relations@eclipsys.com/
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