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Form 8-K

 

 

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) April 24, 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 April 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 April 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: April 24, 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 April 2009.
Investor Presentation dated April 2009
Connect to Health™
Allscripts
Investor
Presentation
–
April
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
1
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

4
The Time is Now…

5
Practice Automation is Critical to the Fix…
›
Increases the Quality of Care
›
Takes Costs Out
›
Increases Reimbursement
›
Improves Patient Safety
›
Increases Patient Satisfaction

6
1
The Path is Clear…
“We're investing in electronic medical records
and other technologies that can drive down
healthcare costs.”
-
President 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 

7
$19 Billion New Reasons To Adopt NOW
$17 billion
+ $2 billion
= $19 billion
Physician Incentives
Incentive Bonuses from Medicare/Medicaid
HHS Discretionary Funds
Potential Areas Include: Standards Development,
Grants (AHRQ, HRSA, CMS), HIE Infrastructure,
Loans to the States for EHR, Regional HIT
Resource Centers, Telemedicine, Efficacy Studies
HHS = Health and Human Services
AHRQ = Agency for Healthcare Research and Quality
HRSA = Health Resources and Services Administration
CMS = Centers for Medicare and Medicaid Services

8
8
The Time is Now
›
Funding is Front Loaded
–
$30,000 (close to 70% of the funding) comes in the first two years
›
You Need to Demonstrate Meaningful Utilization
–
Purchase
and
Implementation
are
not
enough
-
you
must
use
it
›
Funding is Time Stamped
–
Incentives start in 2011, decrease over time and penalties begin
in 2015

9
EHR
Stimulus
Funding
$44,000
over 5 yrs.
+
PQRI
Incentive
$3,000 -
$5,000/yr.
estimate
+
ePrescribe
Incentive
$3,000-5,000/yr.
estimate
PQRI = Physician Quality Reporting Initiative
Wealth of Federal Incentives Available
If you start now . . .

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
›
150,000 MDs
and
700+ Hospitals
Across the U.S.
›
90,000 MDs
without
an EHR
›
~ $1B
Cross-Sell
Opportunity
A Great Place to Start …
Our Client Base

12
Why Allscripts Wins
›
Significant Footprint:
150,000 MDs, 700 Hospitals,
6,000 Post Acute Facilities, 600 Homecare Agencies
›
All Sizes and Settings:
Ambulatory and Acute,
Primary Care and Specialty, Small to Large
›
Diversified Portfolio:
Clinical and Business Solutions
›
All World-Class:
Top Rated Consistently
›
Significant Breakthroughs:
Innovation Comes Standard
›
Real Utilization:
Not Just Implementation
›
Strong ROI:
The Solution That Pays You Back
›
Delivering the Next Step:
Connect to Health 
TM

13
A Comprehensive Portfolio
Includes:
•
ePrescribe
•
Connect
•
Payerpath
•
Document Management
For physicians not yet
ready for an EHR
Includes Connected Physician, plus:
Enterprise and/or Professional EHR/ PM with connections
to commercial labs and imaging centers
For physicians ready
to become “Operable”
Includes Connected EHR, plus:
Connections to other physicians, hospital ED Systems, CM systems, HIS systems, Clinical trial
systems, CMS reporting, State reporting programs and RHIO’s
For Physicians Ready to “Connect to Health”

14
14
The Time is Now
›
Funding is Front Loaded
–
$30,000 (close to 70% of the funding) comes in the first two years
›
You Need to Demonstrate Meaningful Utilization
–
Purchase
and
Implementation
are
not
enough
-
you
must
use
it
›
Funding is Time Stamped
–
Incentives start in 2011, decrease over time and penalties begin
in 2015

15
A Simple Approach
Get it
Certified
Get it
Connected
Get it
Cool
Get it
Sold
Get it
Used

16
16
New Innovations Overview

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
$675.0 to $680.0
Less: Prepackaged Meds
(1)
(41.9)
(40.0)
Clinical Software Revenue
$642.3
$635.0 to $640.0
Adjusted Earnings
$61.5
$76.0 to $82.0
Less: Prepackaged Meds
(3.3)
(3.2)
Clinical Software Adjusted Earnings
$58.2
$72.8 to $78.8
Adjusted Earnings Per Share
$0.39
$0.48 to $0.52
Share Count
(2)
151.0
151.0
(1)
Prepackaged
Meds
revenue
is
for
12
months
as
contemplated
in
original
guidance.
Proforma
Prepackaged
Medications
Revenue
for
the
9
months
ended
February
2009
was
$28.5m.
(2)
Consistent share count presented for comparability purposes.

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
$5.4
Deal-Related Amortization
14.0
12.6
One-Time Costs / Transaction Related Expenses
(1)
8.1
-
Prepackaged Meds
(3.3)
(3.2)
Physicians Interactive
(1.1)
-
Total Adjustments
$23.1
$14.8
Non GAAP Net Income
$58.2
$72.8 to $78.8
Non GAAP Net Income Growth
42%
25% to 35%
(1)
Note Fiscal Year 2009 guidance does not contemplate transaction related costs. Tax affected Transaction Related
Expenses for the 9 months to February 2009 were $19.6m.

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
41.7%
Allscripts
Shares Issued to Misys PLC
82.9
54.9%
Shares Underlying Remaining Debentures
2.5
1.7%
"In the Money" Options
2.4
1.6%
Unvested Restricted Stock Units
0.3
0.2%
Outstanding Equity as of Closing
151.1
100.0%
Estimated Number of RSU Grants in FY 2009

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