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): October 5, 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 Plaza, Suite 2024, Chicago, Illinois 60654
(Address of Principal Executive Offices) (Zip Code)
Registrant’s Telephone Number, Including Area Code: (312) 506-1200
(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 October 2009, which is incorporated herein by reference.
The information contained in, or incorporated into, this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference to such filing. 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. |
| Exhibit No. |
||
| Exhibit 99.1 | Investor Presentation dated October 2009 |
SIGNATURE
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 hereunto duly authorized.
| ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS, INC. | ||||
| Date: October 5, 2009 | By: | /s/ William J. Davis | ||
| William J. Davis | ||||
| Chief Financial Officer | ||||
EXHIBIT INDEX
| Exhibit No. |
||
| Exhibit 99.1 | Investor Presentation dated October 2009 |
Exhibit 99.1
Exhibit 99.1
Connect to Health™
Allscripts Investor Presentation – October 2009
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; the implementation and speed of acceptance of the electronic record provisions of the American Recovery and Reinvestment Act of 2009; 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 most recent 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.
2
About Allscripts
Vision
To bring Health to Healthcare
Clear Mission
To be the clear leader in providing innovative software, connectivity and information solutions that empower physicians and other healthcare providers to improve the health of both their patients and their bottom line
Financially Strong
Revenue run rate of ~ $660mm (Recurring Revenue ~ $400M)
Publicly-traded (Nasdaq: MDRX)
Experienced Team
2,400 employees (8/31/09)
3
The Time is Now…
U.S HEALTHCARE – REPORT CARD
| Uncontrollable Spend |
$2.2 Trillion (~1/5 of GDP) | |
| Significant Waste |
$700 Billion (~1/3 of Total Spend) | |
| Unacceptable Quality |
98,000 Deaths and 1.5 Million Injuries from Medical Errors, 7,000 Deaths from Medication Errors |
4
Practice Automation is Critical to the Fix…
Increases the Quality of Care
Takes Costs Out
Increases Reimbursement
Improves Patient Safety
Increases Patient Satisfaction
5
The Opportunity
$19 billion Stimulus package
$44,000 per Physician
Funding is front-loaded
Must demonstrate meaningful use
“Meaningful Use” criteria updated by ONCHIT on 10/01/10
Funding is time-stamped
The CBO projects 90% EHR adoption by 2019
6
The Time is Now
Funding is Front Loaded
$30,000 (close to 70% of the funding) comes in the first two years
Must 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
7
Wealth of Federal Incentives Available
The incentive per physician . . .
| EHR |
||||||
| ePrescribe |
PQRI | |||||
| Stimulus |
+ |
+ |
||||
| Incentive |
Incentive | |||||
| Funding |
| $44,000 |
$3,000- |
$3,000 - | ||
| (or $64,000) |
estimate | |||
| estimate |
||||
| over 5 yrs. |
PQRI = Physician Quality Reporting Initiative
8
Addressable Market
| TRUE NORTH |
Impact on |
Adoption |
|||||
| EHR |
| ||||||
| Practice Size |
Total |
# of |
(FY08/09 |
) | |||
| 1-3 Physicians |
163,000 |
~10 |
% | ||||
| 4-9 Physician |
27,000 |
~20 |
% | ||||
| 10-25 Physicians |
8,000 |
~25 |
% | ||||
| 26+ Physicians |
2,000 |
~40 |
% | ||||
| Total |
200,000 |
~12 |
% | ||||
Source: SK&A = SK&A Information Services which sells databases for sales and marketing success in healthcare industry
9
True North:
Current Market Landscape / Projections
70% of funding gone by 2013,
%
100 so the rush is on
90 80
Steeper 70 curve in 90% overall
60 Physician adoption large segment 50 by 2019, per CBO
40 26+ Providers
30 10-25 Providers
4-9 Providers
20
1-3 Providers
10 0
FY08/09
FY09/10
FY/10/11
FY11/12
FY12/13
FY13/14
FY14/15
FY15/16
FY16/17
FY17/18
FY18/19
FY19/20
70% of funding will be gone by 2013
The key is driving market penetration (not just share) in the next 2-3 years
EHR adoption w/ Stimulus is estimated by CBO to be 90% by 2019 (compared to 65% without Stimulus)
10
The Opportunity is Significant
| The Electronic |
Revenue Cycle |
|||||
| Health Record |
+ |
Management |
= |
Significant Upside
< 20% Physician Penetration
< 10% in Smaller Groups
~10% to 20% of PM Systems Replaced/Yr.
Allscripts 3rd Largest Claims Processing Clearinghouse
| Lower IT | ||
| Penetration | ||
| Any Sector | ||
| Economy |
All Results in a $10+ Billion Market Opportunity
11
A Great Place to Start … Our Client Base
160,000 MDs
800+ Hospitals
8,000 Post-Acute Facilities & Organizations
90,000 MDs without an EHR
~ $1B Cross-Sell Opportunity
12
Why Allscripts Wins
Significant Footprint: 160,000 MDs, 800 Hospitals, 8,000 Post Acute Facilities and 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
Robust Offerings: Above and Beyond Meaningful Use
Real Utilization: Not Just Implementation
Strong ROI: The Solution That Pays You Back
Delivering the Next Step: Connect to HealthTM
13
A Comprehensive Portfolio
Includes: For physicians not yet
• ePrescribe
• Connect ready for an EHR
• Payerpath
• Document Management
Includes Connected Physician, plus: For physicians ready Enterprise and/or Professional EHR/ PM with connections to become “Operable” to commercial labs and imaging centers
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
Stimulus Ready
Allscripts Distribution Network: from 220 salespeople to 1,600
15
The Allscripts Equation
Market Growth/Expansion Opportunity
+ Market Leadership
+ Innovation
+ Financial Stability
= Strongest Player in an Expanding Market
16
Financial Overview
17
2009 Operating Results
| Fiscal |
Fiscal |
|||||||
| Bookings |
$ |
317.6 |
|
$ |
334.7 |
| ||
| SaaS % |
|
8 |
% |
|
30 |
% | ||
| Revenue, as reported |
$ |
383.8 |
|
$ |
548.4 |
| ||
| AHS revenue pre-merger |
|
285.4 |
|
|
124.3 |
| ||
| Elimination of prepackaged medications |
|
(41.9 |
) |
|
(29.6 |
) | ||
| Deferred revenue adjustment |
|
- |
|
|
7.8 |
| ||
| Non-GAAP Revenue |
$ |
627.3 |
|
$ |
650.9 |
| ||
| Net Income, as reported |
$ |
25.4 |
|
$ |
26.0 |
| ||
| AHS net income pre-merger |
|
11.7 |
|
|
6.7 |
| ||
| Elimination of prepackaged medications |
|
(2.1 |
) |
|
(1.4 |
) | ||
| Deferred revenue adjustment |
|
- |
|
|
4.7 |
| ||
| Stock-based compensation expense |
|
5.4 |
|
|
4.9 |
| ||
| Acquisition-related amortization expense |
|
13.9 |
|
|
12.0 |
| ||
| Transaction-related expense |
|
7.9 |
|
|
23.8 |
| ||
| Tax adjustment to align fiscal 2008 |
|
(2.9 |
) |
|
- |
| ||
| Non-GAAP Net Income |
$ |
59.3 |
|
$ |
76.7 |
| ||
| Non-GAAP Net Income per Share (1) |
$ |
0.71 |
|
$ |
0.60 |
| ||
| Fully Diluted Shares Outstanding |
|
82.9 |
|
|
127.6 |
| ||
(1) GAAP Net income per share was $0.31 for Fiscal 2008 and $0.21 for Fiscal 2009.
YTD 2010 Operating Results
| Fiscal Q1 |
Fiscal Q1 |
|||||||
| Bookings |
$ |
66.4 |
|
$ |
97.5 |
| ||
|
|
21 |
% |
|
26 |
% | |||
| Revenue, as reported |
$ |
92.8 |
|
$ |
164.9 |
| ||
| AHS revenue pre-merger |
|
81.8 |
|
|
- |
| ||
| Deferred revenue adjustment |
|
- |
|
|
2.6 |
| ||
| Elimination of prepackaged medications |
|
(9.9 |
) |
|
- |
| ||
| Non-GAAP Revenue |
$ |
164.7 |
|
$ |
167.5 |
| ||
| Net Income, as reported |
$ |
5.4 |
|
$ |
12.9 |
| ||
| AHS net income pre-merger |
|
1.8 |
|
|
- |
| ||
| Elimination of prepackaged medications |
|
(0.5 |
) |
|
- |
| ||
| Deferred revenue adjustment |
|
- |
|
|
1.5 |
| ||
| Stock-based compensation expense |
|
1.5 |
|
|
2.0 |
| ||
| Acquisition-related amortization expense |
|
2.4 |
|
|
3.5 |
| ||
| Transaction-related expense |
|
4.2 |
|
|
2.4 |
| ||
| Tax adjustment for the fiscal year 2010 period to 39% |
|
- |
|
|
(0.1 |
) | ||
| Non-GAAP Net Income |
$ |
14.8 |
|
$ |
22.2 |
| ||
| Non-GAAP Net Income per Share (1) |
$ |
0.18 |
|
$ |
0.15 |
| ||
| Fully Diluted Shares Outstanding |
|
82.9 |
|
|
148.0 |
| ||
Q1 Highlights:
› 47% increase in bookings year/year
› Bookings growth acceleration vs. 26% in Q4 2009
› 50% increase in Non- GAAP net income
› $21.3 million in cash flow from operations
(1) GAAP Net income per share was $0.06 for FQ1 2009 and $0.09 for FQ1 2010.
2010 Outlook
| Fiscal |
Fiscal | ||||||
| Bookings |
$ |
334.7 |
|
|
N/A | ||
| SaaS % |
|
30 |
% |
||||
| Revenue |
$ |
650.9 |
|
$ |
680.0 | ||
Non GAAP Net Income
$76.7
$88.0 to $92.0
Non GAAP Net Income per Share
$0.52
$0.59 to $0.61
| Proforma Share Count(1) |
148.2 |
150.0 | ||
| (1) Q4 FY 2009 share count has been used for the Fiscal |
2009 |
denominator |
20
US GAAP Net Income to Non-GAAP Net Income Reconciliation
| Fiscal |
Fiscal |
|||||||
| Earnings Before Taxes, as Reported |
$ |
44.4 |
|
$ |
101.2 |
| ||
| Taxes (41% in ‘09 and 40% in ‘10) |
|
(18.4 |
) |
|
(40.5 to |
| ||
| Net Income |
$ |
26.0 |
|
$ |
60.7 |
| ||
| Adjustments |
||||||||
| (Tax adjusted 41% in ‘09 and 39% in ‘10) |
||||||||
| Allscripts Pre Merger Period |
$ |
6.7 |
|
|
- |
| ||
| Deferred Revenue Adjustment |
|
4.6 |
|
|
2.9 |
| ||
| Prepackaged Medications |
|
(1.4 |
) |
|
- |
| ||
| Stock-Based Compensation |
|
4.8 |
|
|
10.9 |
| ||
| Acquisition-related Amortization Expense |
|
12.1 |
|
|
13.5 |
| ||
| Transaction-related Expense |
|
23.7 |
|
|
- |
| ||
| Non-GAAP Net Income |
$ |
76.7 |
|
$ |
88.0 |
| ||
21
Illustrative Revenue Sensitivity Analysis
| 110,000 |
MDs | |
| 20% |
Assumed | |
| 88,000 |
Addressable |
| Four |
Cumulative |
Penetration |
Rates |
|||||||||||||||||
|
|
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
Projected Cost Synergies
$25 – $30m
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
Increased operating leverage expected to result in mid teens EPS growth
$20m+
First Year
Run Rate
23
Summary
| Products |
a |
| |
| Target |
for |
|
Client Base
a footprint of 1 of 3 MDs in the U.S.
24
