View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 12, 2009
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-32085 | 36-4392754 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
222 Merchandise Mart, Suite 2024
Chicago, IL 60654
Registrant’s telephone number, including area code 1-866-358-6869
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 7.01. | Regulation FD Disclosure. |
Attached as Exhibit 99.1 hereto is an Investor Presentation dated January 2009, which is incorporated herein by reference.
This information is being furnished pursuant to Item 9 of this Report and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section and will not be incorporated by reference into any registration statement filed by Allscripts Healthcare Solutions, Inc. under the Securities Act of 1933, as amended, unless specifically identified as being incorporated therein by reference. This Report will not be deemed an admission as to the materiality of any information in this Report that is being disclosed pursuant to Regulation FD.
Please refer to page 2 of Exhibit 99.1 for a discussion of certain forward-looking statements included therein and the risks and uncertainties related thereto.
| ITEM 9.01. | Financial Statements, Pro Forma Financial Information and Exhibits. |
| (d) | Exhibits: |
| 99.1 | Investor Presentation dated January 2009 | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC. | ||||||||
| Date: January 12, 2009 | By: | /s/ William J. Davis | ||||||
| William J. Davis Chief Financial Officer | ||||||||
3
EXHIBIT INDEX
The following exhibits are filed herewith:
| Exhibit No. |
||
| 99.1 | Investor Presentation dated January 2009. | |
 Connect to Health™ Allscripts Investor Presentation – January 2009 EXHIBIT 99.1 |
 2 Forward Looking Statements This communication contains forward-looking statements within the meaning of the federal securities laws. Statements regarding future events, developments, the Company’s future performance, as well as management’s expectations, beliefs, intentions, plans, estimates or projections relating to the future are forward- looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties, some of which are outlined below. As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: the volume and timing of systems sales and installations; length of sales cycles and the installation process; the possibility that products will not achieve or sustain market acceptance; the timing, cost and success or failure of new product and service introductions, development and product upgrade releases; competitive pressures including product offerings, pricing and promotional activities; our ability to establish and maintain strategic relationships; undetected errors or similar problems in our software products; compliance with existing laws, regulations and industry initiatives and future changes in laws or regulations in the healthcare industry; possible regulation of the Company’s software by the U.S. Food and Drug Administration; the possibility of product-related liabilities; our ability to attract and retain qualified personnel; our ability to identify and complete acquisitions, manage our growth and integrate acquisitions; the ability to recognize the benefits of the merger with Misys Healthcare Systems, LLC (“MHS”); the integration of MHS with the Company and the possible disruption of current plans and operations as a result thereof; maintaining our intellectual property rights and litigation involving intellectual property rights; risks related to third-party suppliers; our ability to obtain, use or successfully integrate third-party licensed technology; breach of our security by third parties; and the risk factors detailed from time to time in our reports filed with the Securities and Exchange Commission, including our 2007 Annual Report on Form 10-K available through the Web site maintained by the Securities and Exchange Commission at www.sec.gov. The Company undertakes no obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. |
 3 The Story… There is Now a Clear Market Leader… - 150,000 Physicians - 700 Hospitals - Top-Rated in All Product Categories … that is Strong and Stable - Revenue ~ $700mm - Electronic Health Records ~ $200mm - Revenue Cycle Management (Practice Management + Claims Processing) ~ $400mm - Health System Solutions ~ $100mm - Recurring Revenue ~ $400mm … in a Growing Market - Market Size ~ $10b - Growth ~ 15-20% in EHR markets 1 2008 Year-End KLAS Report 1 |
 4 Why Allscripts + Misys? › Brought two market leaders together › 110,000 + 40,000 › Perfectly positioned to win in a vibrant, growing market with a $10B market opportunity – Electronic Health Record – Revenue Cycle Management › ~$1B cross-sell opportunity within base › $20+M in cost synergies |
 5 2001: Form Partnership to Bring Allscripts EHR to IDX PM Base Install Base (2001) = 138,000 MDs Primarily in Larger Practices A Proven Approach Install Base (2008) = 110,000 MDs Primarily in Small-Mid Sized Practices 2008: Allscripts and Misys Come Together Bringing EHR to Misys PM Base Practice Management System Electronic Health Record |
 6 The Time is Now… |
 7 Practice Automation is Critical to the Fix… › Increases the Quality of Care › Takes Costs Out › Increase Reimbursement › Improves Patient Safety › Increases Patient Satisfaction |
 8 The Path is Clear… “We're investing in electronic medical records and other technologies that can drive down healthcare costs.” - President-elect Barack Obama “Cost savings from a mandatory requirement that Medicare providers adopt and use HIT as a condition of participating in the Medicare program…savings total $34 billion over 10 years from physicians and hospitals .” - CBO 1 Congressional Budget Office – 12/08 – Budget Options Vol. I – Health Care 1 |
 9 Key Trends Driving Technology Adoption Now › Declining Reimbursement for Physicians › Incentives for Technology Adoption - ePrescribing CMS Incentive ~ $3,000 to $4,000 per MD/year - PQRI Incentive ~ $3,000 to $4,000 per MD/year - Stark Safe Harbor Enables Hospitals to Fund up to 85% of EHR and up to 100% of ePrecribing › EHRs Increasingly Seen as a “Standard of Practice” › Patients Are Not Patient Anymore |
 10 › < 20% Physician Penetration › < 10% in Smaller Groups The Opportunity is Significant The Electronic Health Record Revenue Cycle Management › ~10% to 20% of PM Systems Replaced/Yr. › Allscripts 3 Largest Claims Processing Clearinghouse + Significant Upside › Lower IT Penetration than Any Sector of Economy = All Results in a $10+ Billion Market Opportunity rd |
 11 A Great Place to Start…Our Client Base › 150,000 MDs and 700+ Hospitals Across the U.S. › 90,000 MDs without an EHR › ~ $1B Cross-Sell Opportunity |
 12 12 Professional EHR + PM EDI ~40% penetration 1.3k practices 65k physicians Enterprise EHR + PM EDI ~10% penetration 170k practices 241k physicians Professional EHR + PM ASP-Based EHR EDI Segment Allscripts Offering Penetration/Size ~20% penetration 33k practices 227k physicians Independent Practices 1-3 physicians Leadership Across the Ambulatory Market Small to Mid-Sized Physician Practices 4-25 Physicians Large Physician Practices 26-200+ Physicians |
 13 Connect Solutions • Connect Portal • Connect Messaging Services Community Care …… …… Clinical Solutions • Professional EHR • Enterprise EHR • MyWay • ePrescribe • Document Management • Medication Services • Clinical Trials • Patient Access Solutions Business Solutions • PM/ Revenue Cycle Services • Payerpath / EDI Ambulatory Care Emergency Department Care Management • Utilization Management • Discharge Planning • Documentation Integrity • Quality Management Stark Offerings • EHR Solutions • ePrescribe Acute Care Homecare • Home Health & Private Duty • Hospice Referral Management • Referral Management Plus • Mobile • Core System Integration Post-Acute Care A Diversified Portfolio |
 14 Our Operating Leaders… Vern Davenport President Clients: 21,000+ clients Small to mid-sized practices Employees: ~1,700 employees 160 sales reps (30 inside) Laurie McGraw President Clients: 5,000 clients Large Physicians Practices, IDNs, and Hospitals Employees: ~350 employees 35 sales reps (9 inside) Jeff Surges President Clients: 700 hospitals 6,000 post-acute providers 600+ homecare and hospice agencies Employees: ~300 employees 35 sales reps (5 inside) Professional Solutions Enterprise Solutions Health Systems Group |
 15 15 Waves of Healthcare IT Adoption Electronic Health Record Market Enhance the efficiency and quality of the visit Wave 2 Allscripts Leadership in EHR Product and Blue Chip Client Base Practice Management Market Enhance the effectiveness of the practice Wave 1 Misys Leadership in Building Practice Management / Claims Management Client Base Connectivity and Information Market Enhance the health of the patient and the practices bottom line Wave 3 AllscriptsMisys Leadership in New Solutions and Services |
 16 Bloomberg of Healthcare The Real Power Comes When You Connect |
 17 The Allscripts Equation Market Growth/Expansion Opportunity + Market Leadership + Innovation + Financial Stability = Strongest Player in an Expanding Market |
 18 Financial Overview * * * * * * |
 19 2009 Outlook ($ in millions - unaudited pro forma) Fiscal Fiscal Guidance 2008 2009 Bookings $317.7 N/A Revenue $684.2 $700.0 to $715.0 Less: PI (15.0) 0.0 Adjusted Revenue $669.2 $700.0 to $715.0 Non-GAAP Net Income $62.6 $76.0 to $82.0 Less: Physicians Interactive (1.1) 0.0 Less: Synergies Timing 0.0 0.0 Less: Amortization Timing 0.0 0.0 Non-GAAP Net Income $61.5 $76.0 to $82.0 Non-GAAP Net Income Per Share $0.43 $0.49 to $0.53 Pro Forma Share Count 148.0 154.0 Note: Fiscal 2008 reflects actual results for Misys Healthcare (under U.S GAAP) for the
year ended May 31, 2008 and the trailing 12-months
for Allscripts for the period ended June 30, 2008. Note 2: Adjusted earnings
is a non-GAAP financial measure. See reconciliation to comparable GAAP measure on page 24. |
 20 Non-GAAP Net Income Potential ($ in millions - unaudited pro forma) Fiscal Fiscal 2008 2009 Earnings Before Taxes, as reported $57.5 $96.0 to $106.0 Taxes (Assumed @ 40% in 09 and 39% in 08) (22.4) ($38.0 to $45.0) Net Income $35.1 $58.0 to $64.0 Adjustments: (tax adjusted @ 40% in 09 and 39% in 08) Stock-Based Compensation $5.4 $6.6 Deal-Related Amortization 14.0 11.4 One-Time Costs / Transaction Related Expenses 8.1 - Physicians Interactive (1.1) - Total Adjustments $26.4 $18.0 Non-GAAP Net Income $61.5 $76.0 to $82.0 Non-GAAP Net Income Growth 42% 24% to 33% |
 21 Illustrative Revenue Sensitivity Analysis Four Year Cumulative Penetration Rates 110,000 MDs 20% Assumed EHR Penetration 88,000 Addressable EHR Market 20% 30% 40% 50% 60% License/Service Fees $165m $248m $330m $410m $495m Annual Maintenance $20m $30m $40m $50m $60m |
 22 Significant and Realizable Synergy Opportunity › Cost synergies of $20m+, pre-tax, expected in first year following transaction close - Up to $25m to $30m, pre-tax, in annual cost savings within the next few years - Main drivers of cost synergies include: R&D, Marketing, Sales, Administrative Functions › Revenue synergies from cross-selling into respective client bases is expected to be ~$7m+ in FY 2009 › Increased operating leverage expected to result in mid teens EPS growth Projected Cost Synergies $20m+ $25 - $30m First Year Run Rate |
 23 Capital Structure (shares in millions) Ownership % Allscripts Outstanding Shares 63.0 41.4% Allscripts Shares Issued to Misys plc 82.9 54.5% Shares Underlying Remaining Debentures 2.5 2.3% "In the Money" Options 2.4 1.5% Unvested Restricted Stock Units 0.4 0.2% Outstanding Equity as of Closing 151.1 100.0% Estimated Number of RSU Grants in FY 2009 4.0 to 4.5 |
 24 Summary a complete portfolio of solutions… for practices in all sizes/areas… a footprint of 1 of 3 MDs in the U.S. Products Target Client Base |
 |