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/ /Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050209/FLW006LOGO AP Archive: http://photoarchive.ap.org PRN Photo Desk, photodesk@prnewswire.com/ /Web site: http://www.eclipsys.com /