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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 13, 2010
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 January 2010, 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 January 2010 | |
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: January 13, 2010 | By: | /S/ WILLIAM J. DAVIS | ||
| William J. Davis | ||||
| Chief Financial Officer | ||||
EXHIBIT INDEX
| Exhibit No. |
||
| Exhibit 99.1 |
Investor Presentation dated January 2010 | |
 Allscripts Investor Presentation – January, 2010 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; the impact of the securities class action and other pending or threatened litigation 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.
|
 3 Agenda › Market Opportunity is Now › Meaningful Use Update › Why Allscripts? › Financial Update |
 We
are at the beginning of the single fastest transformation of any industry in US history |
 5 2010: The Year of the EHR <20 % Approx. 20% EHR Penetration -Early Adopters ~ $48B ~$48 Billion in Federal Funding 70 % 70% of funding will be spent in first 3 years Lower IT Investment in Healthcare Than Any Other Sector of Economy
|
 6 Market Potential Practice Size Total # of Practices EHR Penetration (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 6 |
 7 Once in a Lifetime Opportunity… |
 8 Meaningful Use Update: The Time is Now Health care reform will not impact ARRA ~$40B for EHRs › Medicare - $44,000; Medicaid - $63,750 › Rules issued December 30, 2009 › Notice of Proposed Rule Making (NPRM) - how physicians earn incentives - 60 day comment period ends March 15 › Interim Final Rule (IFRM) - how products get certification - no surprises › Penalties for not participating |
 9 Meaningful Use Update: Key Components › The EHR must be certified & include e-prescribing › The EHR must be connected › The EHR must include reporting capabilities on clinical quality metrics › The EHR must be used in a meaningful way |
 10 Why Allscripts? › Leadership - 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 › A Safe Choice - Financially Strong - Revenue of ~ $700mm - R&D 2010 ~$70 million › People & Experience |
 11 Our Footprint… 160,000 Physicians 8,000 Post-Acute Providers 800 Hospitals and 80 million Rx… |
 12 Comprehensive Portfolio… Across the Continuum of Care |
 13 |
 14 Connect |
 15 Powerful Engine to Drive Sales 1. Hospital/Community Distribution Partners 2. Henry Schein; Cardinal Health 3. Allscripts Distribution Network 4. Direct Marketing 5. ~250 Direct Sales Professionals |
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 17 |
 18 |
 19 |
 20 Summary › Unparalled Market Opportunity › Rapid Transformation › “Rules of the Road” for Capturing Stimulus in Place › Allscripts - “Built to Last” |
 21 Financial Overview |
 22 Allscripts – Financial Highlights › $191.3 million in H1 bookings – 30% growth › $680.0 million run rate revenue › Visibility – 67% Recurring Revenue › mix of SaaS Bookings › Improving Gross Margins › Significant Operating Leverage › Substantial R&D Expenditures ~ $70.0 million or ~10% of Revenue in Fiscal 2010 › Strong Financial Position |
 23 Fiscal 2010 2Q & YTD Bookings Results Quarter Ended 11/30/08 11/30/09 % Change Bookings $80.7 $93.8 16% % SaaS 26% 24% Six Months Ended 11/30/08 11/30/09 % Change Bookings $147.1 $191.3 30% % SaaS 24% 25% Strong 2Q and YTD bookings across all of our product offerings
|
 24 Fiscal 2010 2Q Revenue and Net Income Q2 ‘09 Q2 ‘10 % Change Revenue $128.6 $169.3 32% Non-GAAP Revenue(a) $163.4 $170.7 4% % Recurring Revenue 63% 67% Net Income ($6.0) $15.8 N/M Non-GAAP Net Income(a) $16.6 $24.0 45% (a) Please see reconciliation and footnotes in appendix to this presentation regarding
non-GAAP revenue and net income for the three months ended November 30,
2009 and 2008. Information also available at http://investor.allscripts.com |
 25 Gross Profit Margin Improvements 54.0% 56.4% 54.7% 56.8% 40.0% 45.0% 50.0% 55.0% 60.0% Q2 Q1 Q1 Q2 Non-GAAP(a) GAAP (a) Please see reconciliation and footnotes in appendix to this presentation regarding
non-GAAP gross profit margin for the three months ended August 31, 2009
and November 30, 2009. Information also available at http://investor.allscripts.com |
 26 Operating Income Growth - Fiscal 2010 $21.6 $26.7 $37.2 $39.7 $15.0 $25.0 $35.0 $45.0 Q2 Q1 Q1 Q2 Non-GAAP(a) GAAP (a) Please see reconciliation and footnotes in appendix to this presentation regarding
non-GAAP operating profit for the three months ended November 30, 2009.
Additional information also available at http://investor.allscripts.com |
 27 Fiscal 2010 Outlook 2010E Revenue (2009 non-GAAP) $680.0 - $700.0 Net income $64.5 - $66.0 Non-GAAP net income(a) $93.5 - $95.0 Diluted EPS $0.41 - $0.43 Non-GAAP diluted EPS(a) $0.61 - $0.63 WASO 150.5 (a) Please see reconciliation and footnotes in appendix to this presentation regarding
non-GAAP revenue, net income and EPS for the year ended May 31, 2009 and
2010. Information also available at http://investor.allscripts.com
› ~10% Top Line Growth › Mid 50’s Gross Margin % › Significant Operating Leverage › Non-GAAP Net Income Growth 22-24% › Strong Operating Cash Flow |
 |
 29 Appendix: Non-GAAP Reconciliation › GAAP – non-GAAP revenue reconciliation for the three months ended November 30, 2008 and
2009. Q2 Q2 2009 2010 Nov-08 Nov-09 Revenue Revenue, as reported $128.6 $169.3 Allscripts pre-merger 37.4 - Deferred revenue adjustment 2.1 1.4 Elimination of prepackaged medications (4.7) - Revenue, non-GAAP $163.4 $170.7 |
 30 Appendix: Non-GAAP Reconciliation › GAAP – non-GAAP net income reconciliation for the three months ended November 30, 2008 and 2009. Q2 Q2 2009 2010 Nov-08 Nov-09 Net income Net income, as reported $ (6.0) $ 15.8 Allscripts pre-merger 7.9 - Elimination of prepackaged medications (0.3) - Deferred revenue adjustment 2.0 1.5 Stock based compensation 1.0 4.4 Acquisition-related amortization expense 4.6 5.7 Transaction-related expense 22.0 1.3 Tax effect of non-GAAP adjustments (at 39%) (14.6) (5.0) Tax adjustment to bring as-reported to 39% - 0.3 Net income, non-GAAP $16.6 $24.0 |
 31 Appendix: Non-GAAP Reconciliation › GAAP – non-GAAP gross profit margin reconciliation for the three months ended August 31,
2009 and November 30, 2009. Q1 Q2 2010 2010 Aug-09 Nov-09 Gross margin Gross margins, as reported $89.1 $95.5 % of revenue 54.0% 56.4% Deferred revenue adjustment 2.6 1.4 Gross margins, non-GAAP $91.7 $96.9 % of non-GAAP revenue 54.7% 56.8% |
 32 Appendix: Non-GAAP Reconciliation › GAAP – non-GAAP operating income reconciliation for the three months ended August 31, 2009
and November 30, 2009 Q1 Q2 2010 2010 Aug-09 Nov-09 Operating income Operating income as reported $21.6 $26.7 Deferred revenue adjustment 2.6 1.5 Stock based compensation 3.3 4.4 Amortization of intangibles 5.7 5.7 Transaction-related expense 3.9 1.3 Operating income, non-GAAP $37.1 $39.6 |
 33 Appendix: Non-GAAP Reconciliation › GAAP – non-GAAP Net Income and EPS reconciliation for the year ended May 31, 2009 and
2010 Fiscal 2009 Fiscal 2010 Guidance Guidance Range Net income $26.0 $65.3 $64.5 to $66.0 GAAP EPS $0.21 $0.43 $0.41 to $0.43 Adjustments* Allscripts pre-merger 11.4 - Elimination of prepackaged medications (2.4) - Deferred revenue adjustment 7.8 4.9 Stock based compensation 8.3 15.2 Acquisition-related amortization expense 20.5 22.6 Transaction-related expense 40.3 5.2 Tax effect of non-GAAP adjustments (41% in 2009 and 39% in 2010) (35.2) (18.6) Non-GAAP Net income $76.7 $94.6 $93.5 to $95.0 Share count 149.9 150.5 Non-GAAP EPS $0.51 $0.63 $.61 to $.63 |
 34 Appendix: Non-GAAP Reconciliation Fiscal 2009 Revenue Revenue, as reported $548.4 Allscripts pre-merger 124.3 Deferred revenue adjustment 7.8 Elimination of prepackaged medications (29.6) Revenue, non-GAAP $650.9 › GAAP – non-GAAP revenue reconciliation for the year ended May 31, 2009. |
 35 Basis of Presentation Basis of Presentation The Company's GAAP results for the three and six months ended November 30, 2009 include results of
Allscripts for each such period. The Company's GAAP results for the three and six
months ended November 30, 2008 include the results of Misys Healthcare (Misys) for each period and the results of Allscripts subsequent to a merger effected on October 10, 2008, at which time the Company's legal name was
changed to Allscripts-Misys Healthcare Solutions, Inc. Footnotes 1. Non-GAAP revenue for the three months ended November 30, 2009 and 2008, respectively, are comprised
of revenue from Allscripts and Misys for the full three month period of each respective
year, giving effect to the add-back of a deferred revenue adjustment of $1.4 million recorded for GAAP purposes in the three month period ended November 30, 2009 and $2.1 million for the same period last year. In addition,
non-GAAP revenue for the three months ended November 30, 2008 excludes $4.7 million
in prepackaged medications revenue that were recorded for GAAP purposes. Allscripts disposed of its prepackaged medications business on March 16, 2009. Non-GAAP revenue for the six months ended
November 30, 2009 and 2008, respectively, are comprised of revenue from Allscripts and
Misys for the full six month period of each respective year, giving effect to the add-back of a deferred revenue adjustment of $4.0 million recorded for GAAP purposes in the six month period ended November 30, 2009 and
$2.1 million for the same period last year. In addition, non-GAAP revenue for
the six months ended November 30, 2008 excludes $4.7 million in prepackaged medications revenue that were recorded for GAAP purposes. 2. Non-GAAP gross margin for the three months ended November 30, 2009 and 2008, respectively, are
comprised of gross profit from Allscripts and Misys for the full three month period of
each respective year, giving effect to the add-back of a deferred revenue adjustment of $1.4 million recorded for GAAP purposes in the three month period ended November 30, 2009 and $2.1 million for the same period last year. In
addition, non-GAAP gross margin for the three months ended November 30, 2008 excludes
$0.8 million in prepackaged medications gross profit that were recorded for GAAP purposes. Non-GAAP gross margin for the six months ended November 30, 2009 and 2008, respectively, are comprised of gross profit from
Allscripts and Misys for the full six month period of each respective year, giving effect
to the add-back of a deferred revenue adjustment of $4.0 million recorded for GAAP purposes in the six month period ended November 30, 2009 and $2.1 million for the same period last year. In addition, non-GAAP
gross margin for six months ended November 30, 2008 excludes $0.8 million in prepackaged
medications gross profit that were recorded for GAAP purposes. 3. Non-GAAP net income
for the three months ended November 30, 2009 and 2008, respectively, are comprised of net income from Allscripts and Misys for the full three month period of each respective year, giving effect to the add-back of acquisition-related
amortization of $3.5 million and $2.8 million, respectively, net of tax; stock-based
compensation expense of $2.7 million and $0.6 million, respectively, net of tax; transaction-related expenses of $0.8 million and $13.4 million, respectively, net of tax; and a deferred revenue adjustment of $0.9 million and $1.2 million,
respectively, net of tax. Non-GAAP net income also eliminates prepackaged
medications net income of $0.2 million, net of tax, for the three months ended November 30, 2008 and adds-back a tax adjustment of $0.3 million for the three months ended November 30, 2009. Non-GAAP net income for the six
months ended November 30, 2009 and 2008, respectively, are comprised of net income from
Allscripts and Misys for the full six month period of each respective year, giving effect to the add-back of acquisition-related amortization of $6.9 million and $5.2 million, respectively, net of tax; stock-based compensation
expense of $4.7 million and $2.1 million, respectively, net of tax;
transaction-related expenses of $3.2 million and $17.6 million, respectively, net of tax; and a deferred revenue adjustment of $2.5 million and $1.2 million, respectively, net of tax. Non-GAAP net income also eliminates prepackaged medications
net income of $0.7 million, net of tax, for the six months ended November 30, 2008 and
adds-back a tax adjustment of $0.1 million for the six months ended November 30, 2009. 4.Non-GAAP adjustments are effected for tax at the actual as-reported effective tax rate for all
fiscal 2009 periods presented. Non-GAAP adjustments are effected for tax at the
anticipated full-year effective tax rate for all fiscal 2010 periods presented. 5. Please
see next page for a further discussion of non-GAAP measures. Supplemental and non-GAAP financial information is also available at http://investor.allscripts.com.
|
 36 Explanation of Non-GAAP Financial Measures Explanation of Non-GAAP Financial Measures Allscripts reports its financial results in accordance with generally
accepted accounting principles, or GAAP. To supplement this information, Allscripts presents in this presentation non-GAAP revenue, gross profit operating income and net
income, including non-GAAP net income on a per share basis, which are non-GAAP financial measures under Section 101 of Regulation G under the Securities Exchange Act of 1934,
as amended. Non-GAAP revenue consists of GAAP revenue and legacy Allscripts revenue for periods prior to the consummation date of the Misys merger and adds back the
deferred revenue adjustment booked for GAAP purposes and excludes revenue from prepackaged medications. Non-GAAP gross profit consists of GAAP gross profit
and legacy Allscripts gross profit for periods prior to the consummation date of the Misys Healthcare merger and adds back the deferred revenue adjustment booked for GAAP purposes and
excludes revenue from prepackaged medications. Non-GAAP net income consists of GAAP net income and includes legacy Allscripts net income for periods prior to the
consummation date of the Misys merger, excludes acquisition-related amortization, stock-based compensation expense and transaction-related expenses, adds back the
deferred revenue adjustment and excludes net income from prepackaged medications, in each case net of any related tax benefit. Acquisition-Related Amortization. Acquisition-related amortization
expense is a non-cash expense arising from the acquisition of intangible assets in connection with acquisitions or investments. Allscripts excludes acquisition-related amortization
expense from non-GAAP net income because it believes (i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Allscripts
business operations and (ii) such expenses can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets.
Management believes that this adjustment facilitates comparisons of the separate pre-merger results of legacy Misys and legacy Allscripts to that of the Company's post-merger
results. Investors should note that the use of these intangible assets contributed to revenue in the periods presented and will contribute to future revenue generation and should also
note that such expense will recur in future periods. Stock-Based Compensation Expense. Stock-based compensation
expense is a non-cash expense arising from the grant of stock awards to employees. Allscripts excludes stock- based compensation expense from non-GAAP net income because it believes
(i) the amount of such expenses in any specific period may not directly correlate to the underlying performance of Allscripts business operations and (ii) such expenses can
vary significantly between periods as a result of the timing of grants of new stock-based awards, including grants in connection with acquisitions. Investors should note that
stock-based compensation is a key incentive offered to employees whose efforts contributed to the operating results in the periods presented and are expected to contribute to
operating results in future periods and should also note that such expense will recur in future periods. Deferred Revenue Adjustment. Deferred revenue adjustment reflects the fair
value adjustment to deferred revenues acquired in connection with the Misys merger transaction consummated on October 10, 2008. The fair value of deferred revenue
represents an amount equivalent to the estimated cost plus an appropriate profit margin, to perform services related to legacy Allscripts software and product support, which assumes a
legal obligation to do so, based on the deferred revenue balances as of October 10, 2008. Allscripts adds back this deferred revenue adjustment for non-GAAP revenue and
non-GAAP net income because it believes the inclusion of this amount directly correlates to the underlying performance of Allscripts operations and facilitates comparisons of the
separate pre-merger results of legacy Misys and legacy Allscripts to that of the Company's post-merger results. Management also believes that non-GAAP revenue, gross profit and net
income provide useful supplemental information to management and investors regarding the underlying performance of the Company's business operations and facilitates comparisons
of the separate pre-merger results of legacy Misys and legacy Allscripts to that of the Company's post-merger results. Purchase accounting adjustments made in
accordance with GAAP can make it difficult to make meaningful comparisons of the underlying operations of the business without considering the non-GAAP adjustments that we have
provided and discussed herein. Management also uses this information internally for forecasting and budgeting as it believes that the measure is indicative of the Company's
core operating results. In addition, the Company uses Non-GAAP net income to measure achievement under the Company's cash incentive compensation plans. Note, however,
that non-GAAP revenue, gross profit and net income are performance measures only, and they do not provide any measure of the Company's cash flow or liquidity. Non-GAAP
financial measures are not in accordance with, or an alternative for, measures of financial performance prepared in accordance with GAAP and may be different from non-GAAP
measures used by other companies. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Allscripts' results of operations as
determined in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures with GAAP financial
measures contained within the attached condensed consolidated financial statements. |