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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): September 27, 2010

 

 

ALLSCRIPTS 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 September 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 September 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 HEALTHCARE SOLUTIONS, INC.
Date: September 27, 2010     By:   /s/    WILLIAM J. DAVIS        
        William J. Davis
        Chief Financial Officer

EXHIBIT INDEX

 

Exhibit No.

     
Exhibit 99.1    Investor Presentation dated September 2010
Investor Presentation
1
Investor Presentation
September 2010
Exhibit 99.1

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|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Forward Looking Statements
This
presentation
contains
forward-looking
statements
within
the
meaning
of
the
federal
securities
laws.
Statements
regarding
future
events
or
developments,
our
future
performance,
as
well
as
management's
expectations,
beliefs,
intentions,
plans,
estimates
or
projections
relating
to
the
future
are
forward-looking
statements
with
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,
no
assurances
can
be
given
that
any
of
the
events
anticipated
by
the
forward-looking
statements
will
transpire
or
occur,
or
if
any
of
them
do
so,
what
impact
they
will
have
on
our
results
of
operations
or
financial
condition.
Such
risks,
uncertainties
and
other
factors
include,
among
other
things:
the
possibility
that
the
expected
synergies,
efficiencies
and
cost
savings
of
the
merger
with
Eclipsys
Corporation
("Eclipsys")
will
not
be
realized,
or
will
not
be
realized
within
the
expected
time
period;
potential
difficulties
or
delays
in
achieving
platform
and
product
integration
and
the
connection
and
movement
of
data
among
hospitals,
physicians,
patients
and
others;
the
risk
that
the
Allscripts
and
Eclipsys
businesses
will
not
be
integrated
successfully;
competition
within
the
industries
in
which
we
operate;
failure
to
achieve
certification
under
the
Health
Information
Technology
for
Economic
and
Clinical
Health
Act
could
result
in
increased
development
costs,
a
breach
of
some
customer
obligations
and
could
put
us
at
a
competitive
disadvantage
in
the
marketplace;
the
volume
and
timing
of
systems
sales
and
installations,
the
length
of
sales
cycles
and
the
installation
process
and
the
possibility
that
our
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;
the
outcome
of
any
legal
proceeding
that
has
been
or
may
be
instituted
against
us;
compliance
with
existing
laws,
regulations
and
industry
initiatives
and
future
changes
in
laws
or
regulations
in
the
healthcare
industry,
including
possible
regulation
of
our
software
by
the
U.S.
Food
and
Drug
Administration;
the
possibility
of
product-related
liabilities;
our
ability
to
attract
and
retain
qualified
personnel;
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
and
our
ability
to
obtain,
use
or
successfully
integrate
third-party
licensed
technology;
and
breach
of
ours
security
by
third
parties.
See
our
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
May
31,
2010
and
other
public
filings
with
the
SEC
for
a
further
discussion
of
these
and
other
risks
and
uncertainties
applicable
to
our
business.
The
statements
herein
speak
only
as
of
their
date
and
we
undertake
no
duty
to
update
any
forward-looking
statement
whether
as
a
result
of
new
information,
future
events
or
changes
in
expectations.

3

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|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Allscripts Corporate Snapshot
Our Clients
>
•
180,000 Providers
•
150,000 Physician Practices
•
1,500 Hospitals
•
10,000 Post Acute Facilities
•
27,000 Clinicians In Patients’
Homes Every Day
Our Company
•
5,500 Employees
•
$1.2BB LTM Pro Forma Revenue
•
Facilities in 24 States,
Canada, India, the Middle East
and The Philippines
•
1 Complete Set of Solutions
>

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Investment Highlights
Leading healthcare IT company with the broadest set of capabilities across every
venue of care including physicians, hospitals, post-acute and homecare
The most utilized clinical solutions enabling health care providers to fully capitalize
on the $30BB federal stimulus program
Leadership in technology and innovation uniquely positions Allscripts to
aggressively compete for the $43BB healthcare IT solutions market
A
highly
attractive
financial
profile
with
high
recurring
revenue,
significant
operating leverage and cost synergy opportunities and strong free cash flow
Proven
and
experienced
“industrial
strength”
management
team
>
>
>
>
>

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
The Time is NOW
•
Quality Issues
•
Medical Errors / Safety
Concerns
•
Rising Cost
•
Significant Waste
A National
Problem
•
$43BB Opportunity
•
$30BB in Stimulus
Funding
•
~15% Penetration in
Physician Practices
•
Rise of the Employed
Physicians
•
Hospitals Driving
Adoption
A Market that
is Ready
We are at the
beginning
of
what
we
expect
will
be
the
single
fastest
transformation of any
industry in US history
A Significant
Opportunity
>
>

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Addressing the Entire Market Opportunity
Acute/Ambulatory EHR Opportunity 2010-2014 = ~$43BB
Source: McKinsey & Company
Pre-Merger Allscripts Opportunity
(Ambulatory Stand-Alone)
Pre-Merger Eclipsys Opportunity
(Acute Stand-Alone)
Legacy
Addressable
Market:
Stand-Alone
New
Addressable
Market:
Integrated
Market Segment Seeking
an Integrated/Complete
Solution Across Hospitals
and Physician Practices
$16BB
$10BB
$17BB
>
>
Well positioned to aggressively compete in the $16BB (~35%) integrated market
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Ambulatory Market Potential
Practice Size
Total # of Practices
EHR Penetration
(FY09/10)
1-3 Physicians
163,000
~13%
4-9 Physician
27,000
~22%
10-25 Physicians
8,000
~33%
26+ Physicians
2,000
~50%
Total
200,000
~15%
Source: SK&A = SK&A Information Services which sells databases for sales and marketing success in healthcare industry

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
December
2013
Incentive
Program Begins
January
2011
ARRA
Announced
Q1
2009
Final Rules
Issued
July
2010
Increased Certainty for Widespread
EHR Adoption
Physician
Penetration
(1)
~20%
(1)
~20%
estimate
based
on
number
of
ambulatory
physicians;
penetration
as
a
percentage
of
number
of
physician
practices
is
~11%
(2)
Hospitals >200 beds
70% of Funding Used
Source: National Center for Health Statistics
400 -
600 Hospitals
Will Replace Clinical
Systems
(2)
TODAY

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Allscripts: Competitive Differentiation
•
The Largest Network with a
Client Base of 180,000
Physicians, 1,500 Hospitals
and 10,000 Post Acute Care
Providers
•
The Unique Ability to Truly
Connect a Community
•
One Patient Record Across
an Organization and the
Community –
One Source of
Truth
One
Network.
The largest connected
network in the nation…
and in your community.
One
Platform.
Open, flexible, and
innovative to help you
connect inside and
outside your
organization.
One
Patient.
A complete portfolio
that delivers a single
patient
record across
your community.
•
Comprehensive, Integrated
Solutions for all Settings
•
Rapid Implementation Approach
to Attain “Meaningful Use”
•
A Track Record of Innovation
with a ‘Future State’
Clinical/Financial Informatics
Capability
•
Common Microsoft platform and
a shared ‘open architecture’
approach, simplifying the
connection to third-party
applications across every care
setting

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Hospitals
Physician Practices
Post Acute Facilities &
Agencies
•
The ‘Hub’:
Over 1,500 Hospitals including 40%
of “America’s Best Hospitals”
as Clients
•
The ‘Spokes’:
Over 180,000 MDs and 10,000
Post Acute Care Organizations are Connected
to other Practices, Patients, Pharmacies, Payors,
Clinical Labs and Hospitals
One
Network:
The
Largest
Community
in
the
Nation

One Platform:
A Complete, Integrated Solutions Portfolio
Clinical
Financial
Administrative
Analytics
Services
Community Exchange
Community Record
Helios
Electronic Health Record
ePrescribe
Payerpath
CQS
Management Consulting
Academy Education
Analytics
Practice Management
Homecare / Hospice
Referral Management
Ready
Care Management
Remote Hosting
Patient Financials
EPSi
Outsourcing
Access Management
Consulting
Record Manager
Network & Desktop
Patient Flow
Financial Manager
Clinical Analytics
Pharmacy
Emergency Care
Laboratory
Knowledge-Based
Charting
Knowledge-Based
Medication
Administration
Acute Content
Clinical Manager
Radiology
Enterprise Identifier
Education
Acute Care
Implementation
Identity & Eligibility

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
One Patient: Critical Patient Data Flows Freely
Acute Solutions
(Sunrise)
Ambulatory
Solutions
Post Acute
Solutions
Patient Records
Labs
Prescriptions
X-Rays
Referrals
Results
Orders

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Proven Management Team
20+ Yrs
Chief Client Officer
Laurie McGraw
20+ Yrs
President, Sales
Jeff Surges
30+ Yrs
Chairman
Phil Pead
25+ Yrs
President, Product Strategy &
Development
John Gomez
20+ Yrs
EVP, Culture and Talent
Diane Adams
25+ Yrs
COO
Eileen McPartland
19+ Yrs
CFO
Bill Davis
Executive
Position
Experience
Glen Tullman
CEO
30+ Yrs
Lee Shapiro
President
30+ Yrs
Kent Alexander
General Counsel
25+ Yrs
Management team with a track record of operational execution, strong financial performance, integrating
acquisitions and driving shareholder value

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Financial Highlights
Significant Growth
Operating Leverage
Revenue Visibility
•
High recurring revenue model
•
Investments (e.g., READY, Upgrade Enablement Center, Sunrise 5.5, Helios)
accelerate implementations
•
Large, diverse client base
•
Allscripts LTM bookings of $415MM, up 24% year-over-year
•
Eclipsys YTD 2010 bookings of $259MM illustrates market momentum
•
Allscripts FY2010 non-GAAP net income of $98MM, up 28%
•
Eclipsys 1H’10 non-GAAP net income of $20MM, up 8% year-over-year
•
ARRA stimulus program creates long-tailed demand curve
•
Total R&D investments of ~$70MM and ~$84MM by Allscripts & Eclipsys,
respectively
•
Significant benefits from Project DRIVE initiatives
•
Allscripts Distribution Network
•
Strong free cash flow
Note: Please see reconciliation and footnotes in appendix to this presentation regarding non-GAAP financial measures.  Information also available at http://investor.allscripts.com

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
$0
$30
$60
$90
$120
$150
CY2008
CY2009
1H’09
1H’10
Pro Forma Performance
Combined Non-GAAP Net Income ($millions)
Combined Non-GAAP Net Income ($millions)
Combined Non-GAAP Revenue
CY 2009
(1)
Non-GAAP Revenue: $1,188MM
Combined Non-GAAP Revenue
CY 2009
(1)
Non-GAAP Revenue: $1,188MM
1H 2010 Non-GAAP Revenue: $634MM
1H 2010 Non-GAAP Revenue: $634MM
Allscripts
56%
Eclipsys
44%
Allscripts
59%
Eclipsys
41%
$106
$128
$64
$72
Note: Please see reconciliation and footnotes in appendix to this presentation regarding non-GAAP financial
measures.  Information also available at http://investor.allscripts.com
(1)
Allscripts calendar year assumes a November year end.

17
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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Significant Key Cost Synergies
Projected Cost Synergies Over Three Years
•
Duplicate management
structure
•
Duplicate public company
costs
•
Duplicate backend office
and system integration
•
Marketing
Key Cost
Synergy Drivers
CY2011
~$25MM
~$35MM
~$40MM
CY2012
CY2013 &
Beyond

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Revenue Synergy Opportunity of $1.25BB
Incremental Revenue Opportunity
$16BB Integrated Market Provides Additional Opportunity
Sunrise Clinical Manager,
Patient Flow, EPSi
Sell Eclipsys
Solutions to Allscripts
Acute Care Base
ECLIPSYS
Care Management, Emergency
Department, Homecare,
Ambulatory Solutions
Sell Allscripts
Solutions to Eclipsys
Acute Care Base
ALLSCRIPTS
Total
~$430MM
~$820MM
~$1,250MM
=
+

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Revenue
Growth
Comments
Non-GAAP
Operating
Margin
Non-GAAP
EPS Growth
•
Similar to Allscripts standalone revenue
growth outlook
•
Eclipsys margins historically lower than
Allscripts margins
•
Cost synergies improve combined margins back
towards near Allscripts historical margins
•
Reflects new capital structure
•
Reflects only cost synergies
2-3 Year Pro Forma Financial Outlook
8-10% +
20% +
15-18% +
Note:
Please
see
reconciliation
and
footnotes
in
appendix
to
this
presentation
regarding
non-GAAP
financial
measures.
Information
also
available
at
http://investor.allscripts.com

20
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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Strong Pro Forma Free Cash Flow Generation
Pro Forma Capitalization 5/31/10
1
Allscripts balance sheet and EBITDA for the year ended 5/31/10.
2
Eclipsys balance sheet and EBITDA for the period ended and last twelve months ending 6/30/10, respectively.  Cash and marketable
securities excludes restricted cash and
includes $35MM of proceeds from the sale of Auction Rate Securities in August 2010.
3
Cash adjustment includes a) $55MM of one-time banking, legal, and other professional fees and expenses related to the merger with Eclipsys, b) $100MM payment associated
with Misys‘
put option, c) $9MM of $119MM premiums paid to Misys out of combined cash. Cash adjustments exclude future retention and non-recurring compensation
expenses and synergy realization costs expected to be incurred over the first 2 years post-closing.
4
Pro forma equity adjusted for a) $33MM of upfront fees & expenses and one-time costs, b) $460MM share repurchase, c) merger with Eclipsys reflecting 59.6MM Eclipsys
shares
at a $20.22 implied offer price based on closing prices on 8/6/10 and a 1.2 exchange ratio, d) Misys’s $100MM put and $2MM additional premium.
5
EBITDA is calculated as net income plus income tax expense, interest expense, stock-based compensation expense, depreciation & amortization, deferred revenue adjustments,
certain one-time and transaction-related expenses, and non-recurring losses on the sale of investments minus non-recurring gains on the sale of assets.
Note:
Please
see
reconciliation
and
footnotes
in
appendix
to
this
presentation
regarding
non-GAAP
financial
measures.
Information
also
available
at
http://investor.allscripts.com
Capitalization
Allscripts
(1)
Eclipsys
(2)
Adj.
(3)
Pro forma
Cash & Marketable Securities
$143
$178
($173)
$148
New Revolver ($250mm)
–
–
100
100
New Term Loan
–
–
470
470
Total Debt
–
–
$570
$570
Equity
(4)
807
458
35
1,300
Total Capitalization
$807
$458
$605
$1,870
Credit Statistics
LTM EBITDA
(1)(2)(5)
$176
$96
$272
Total Debt / LTM EBITDA
(1)(2)(5)
–
–
2.1x
Debt / Capitalization
–
–
30.5%

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP net income reconciliation for the twelve months ended May 31, 2010.
Allscripts
Twelve Months Ended
May 31, 2010
Net income, as reported
62.9
                              
Deferred revenue adjustment
5.1
                                
Acquisition-related amortization
22.7
                              
Stock-based compensation expense
14.8
                              
Transaction-related expense
14.4
                              
Non-GAAP adjustments tax effected at 39%
(22.1)
                             
Tax rate alignment
0.4
                                
Total non-GAAP net income
98.2
                              

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP
–
non-GAAP
net
income
reconciliation
for
the
six
months
ended
June
30,
2010.
Eclipsys
Six  Months Ended
June 30, 2010
Net income, as reported
7.0
                                 
Acquisition-related amortization
3.7
                                 
Stock-based compensation expense
6.3
                                 
Transaction-related expense
2.0
                                 
ARS sales
0.9
                                 
Total non-GAAP net income
19.9
                               
Appendix: Non-GAAP Reconciliation

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP
–
non-GAAP
revenue
reconciliation
for
the
twelve
months
ended
November
30,
2009
(Allscripts)
and
twelve months ended December 31, 2009 (Eclipsys).
Appendix: Non-GAAP Reconciliation
Allscripts
Eclipsys
Non-GAAP
Combined
Twelve Months Ended
November 30, 2009
December 31, 2009
Total revenue, as reported
661.1
                        
519.1
                             
1,180.2
         
Deferred revenue adjustment
9.7
                            
8.0
                                 
17.7
              
Elimination of prepackaged medications
(9.7)
                           
(9.7)
               
Total non-GAAP revenue
661.1
                        
527.1
                             
1,188.2
         

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP –
non-GAAP revenue and net income reconciliation for the six months ended May 31, 2010 (Allscripts)
and six months ended June 30, 2010 (Eclipsys).
Allscripts
Eclipsys
Non-GAAP
Combined
Six Months Ended
May 31, 2010
June 30, 2010
Total revenue, as reported
370.2
                        
262.8
                             
633.0
            
Deferred revenue adjustment
1.1
                            
-
                                 
1.1
                
Total non-GAAP revenue
371.3
                        
262.8
                             
634.1
            
Net income, as reported
34.2
                          
7.0
                                 
41.2
              
Deferred revenue adjustment
0.7
                            
-
                                 
0.7
                
Acquisition-related amortization
7.0
                            
3.7
                                 
10.8
              
Stock-based compensation expense
4.3
                            
6.3
                                 
10.6
              
Transaction-related expense
5.7
                            
2.0
                                 
7.7
                
ARS sales
-
                            
0.9
                                 
0.9
                
Tax rate alignment
0.2
                            
-
                                 
0.2
                
Total non-GAAP net income
52.1
                          
19.9
                               
72.1
              
Appendix: Non-GAAP Reconciliation

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2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP –
non-GAAP net income reconciliation for the six months ended May 31, 2009 (Allscripts) and six
months ended June 30, 2009 (Eclipsys).
Allscripts
Eclipsys
Non-GAAP
Combined
Six Months Ended
May 31, 2009
June 30, 2009
Net income, as reported
26.7
                          
(5.0)
                                
21.7
              
Deferred revenue adjustment
3.4
                            
2.8
                                 
6.2
                
Acquisition-related amortization
6.9
                            
3.9
                                 
10.8
              
Stock-based compensation expense
2.7
                            
7.6
                                 
10.3
              
Transaction-related expense
6.2
                            
-
                                 
6.2
                
Restructuring
-
                            
5.3
                                 
5.3
                
Elimination of prepackaged medications
(0.7)
                           
-
                                 
(0.7)
               
Tax related items
-
                            
3.7
                                 
3.7
                
Total non-GAAP net income
45.2
                          
18.3
                               
64.0
              
Appendix: Non-GAAP Reconciliation

27
|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP –
non-GAAP net income reconciliation for the twelve months ended November 30, 2008 (Allscripts)
and twelve months ended December 31, 2008 (Eclipsys).
Allscripts
Eclipsys
Non-GAAP
Combined
Twelve Months Ended
November 30, 2008
December 31, 2008
Net income, as reported
20.3
                          
99.5
                               
119.8
            
Deferred revenue adjustment
1.2
                            
-
                                 
1.2
                
Acquisition-related amortization
9.4
                            
4.8
                                 
14.2
              
Stock-based compensation expense
4.8
                            
17.3
                               
22.1
              
Transaction-related expense
22.7
                          
-
                                 
22.7
              
AHS net income pre-Misys Healthcare merger
8.7
                            
-
                                 
8.7
                
Professional services reorganization
-
                            
1.4
                                 
1.4
                
Elimination of prepackaged medications
(1.9)
                           
-
                                 
(1.9)
               
Non-recurring items
-
                            
0.8
                                 
0.8
                
Valuation allowance
-
                            
(80.0)
                              
(80.0)
             
Headquarters Relocation
-
                            
3.0
                                 
3.0
                
Derivative Litigation
-
                            
1.3
                                 
1.3
                
Gain on sale of assets
-
                            
(3.2)
                                
(3.2)
               
In-process R&D charge
-
                            
0.9
                                 
0.9
                
Tax related items
(0.9)
                           
(4.0)
                                
(4.9)
               
Total non-GAAP net income
64.3
                          
41.6
                               
105.9
            
Appendix: Non-GAAP Reconciliation

28
|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP –
non-GAAP net income reconciliation for the twelve months ended November 30, 2009 (Allscripts)
and twelve months ended December 31, 2009 (Eclipsys).
Allscripts
Eclipsys
Non-GAAP
Combined
Twelve Months Ended
November 30, 2009
December 31, 2009
Net income, as reported
55.4
                          
2.7
                                 
58.1
              
Deferred revenue adjustment
5.8
                            
4.2
                                 
10.0
              
Acquisition-related amortization
13.9
                          
7.7
                                 
21.6
              
Stock-based compensation expense
7.4
                            
12.4
                               
19.8
              
Transaction-related expense
9.4
                            
-
                                 
9.4
                
Restructuring
-
                            
6.0
                                 
6.0
                
ARS sales
-
                            
0.7
                                 
0.7
                
Elimination of prepackaged medications
(0.7)
                           
-
                                 
(0.7)
               
Tax related items
-
                            
2.0
                                 
2.0
                
Tax rate alignment
0.3
                            
0.7
                                 
1.0
                
Total non-GAAP net income
91.5
                          
36.4
                               
127.9
            
Appendix: Non-GAAP Reconciliation

29
|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
•
GAAP –
non-GAAP EBITDA reconciliation for the twelve months ended May 31, 2010 (Allscripts) and twelve
months ended June 30, 2010 (Eclipsys).
Appendix: Non-GAAP Reconciliation
Allscripts
Eclipsys
Twelve Months Ended
May 31, 2010
June 30, 2010
Net income, as reported
62.9
                          
14.7
                               
Taxes
40.7
                          
11.4
                               
Stock-based compensation expense
14.8
                          
14.4
                               
Depreciation and Amortization
36.0
                          
51.8
                               
Interest expense
2.0
                            
1.9
                                 
Transaction-related expenses
14.4
                          
-
                                 
Gain on Sale of Assets
5.1
                            
2.3
                                 
Loss on Sale of Investments
-
                            
(2.6)
                                
Deferred revenue adjustment
-
                            
2.5
                                 
Earnings before interest, taxes, depreciation and amortization
175.9
                        
96.0
                               

30
|   Copyright ©
2010 Allscripts Healthcare Solutions, Inc.
A Connected Community of Health
Allscripts hereby furnishes certain summary financial information regarding Allscripts and Eclipsys for the quarterly, annual and semi-annual periods set forth in this presentation.
This summary financial information is not required by, or presented in accordance with, U.S. generally accepted accounting principles ("GAAP"), but supplements Allscripts' and
Eclipsys' GAAP financial information by including adjustments that reflect the impact of divested or acquired operations, acquisition related deferred revenue and cost adjustments,
transaction related expenses, stock-based compensation under SFAS No.
123R and other non-recurring income or expenses. The following non-GAAP performance measures are
presented, together with a reconciliation to the corresponding summary GAAP financial information:
•
Non-GAAP revenue. Non-GAAP revenue consists of GAAP revenue, excluding revenue related
to certain divested operations and acquisition related deferred
revenue adjustments,
plus revenue related to acquired operations.
•
Non-GAAP
operating
income.
Non-GAAP
operating
income
consists
of
GAAP
operating
income,
excluding
operating
income
related
to
certain
divested
operations,
acquisition
related deferred revenue and cost adjustments, acquisition-related amortization, stock-based compensation expense under SFAS No. 123R, transaction-related expenses and other
non-recurring income or expenses, plus operating income related to acquired operations.
Non-GAAP operating margin
consists of non-GAAP operating income divided by non-GAAP
revenue.
•
Non-GAAP net income. Non-GAAP net income consists of GAAP net income, excluding net income related to certain divested operations, acquisition-related amortization, stock-
based compensation expense under SFAS No.
123R, transaction-related expenses and other non-recurring income or expenses, plus income related to acquired operations, in each
case net of any related tax benefit.  The GAAP performance measures regarding Allscripts and Eclipsys were derived from their respective unaudited consolidated financial
statements.
Non-GAAP
EPS
(earnings
per
share)
consists
of
non-GAAP
net
income
divided
by
weighted-average
shares
outstanding
used
in
computing
diluted
net
income
per
share. 
Allscripts has a fiscal year end as of May
31, and Eclipsys has a fiscal year end as of December
31.The non-GAAP summary quarterly information regarding Allscripts is presented for
each of the quarters included in Allscripts' fiscal years ended May
31, 2010 and 2009, and six months ended May
31, 2008. The non-GAAP summary quarterly information regarding
Eclipsys is presented for each of the quarters included in Eclipsys' six months ended June 30, 2010, year ended December
31, 2009 and year ended December
31, 2008.
The Non-GAAP summary quarterly information is also presented on a combined basis, which represents the combination of the quarterly information for Allscripts with the quarterly
information for the nearest applicable fiscal quarter for Eclipsys. In reviewing this combined financial information, investors and potential investors should be aware that:
•
no adjustment has been made to account for the fact that Eclipsys' fiscal quarters do not fully correspond to Allscripts' fiscal
quarters;
•
no adjustment has been made to account for any synergies or cost
savings that may or are expected to occur as a result of the Merger;
•
no adjustment has been made to account for any non-cash charges that Allscripts may incur in connection with the Merger;
•
the non-GAAP financial information is provided for informational purposes only and does not purport to represent what the combined company's actual performance would have
been had the Merger occurred prior to the periods indicated, and
does not purport to indicate results of operations for any future period;
•
the non-GAAP financial information does not include any pro forma assumptions or adjustments and should not be used as a substitute for financial statements prepared in
accordance with U.S. GAAP. Allscripts' management believes that these summary non-GAAP performance measures provide useful supplemental information to management and
investors regarding the underlying performance of Allscripts' and Eclipsys' business operations and facilitates comparisons to their historical operating results. Note however, that the
summary non-GAAP combined quarterly information and summary non-GAAP financial measures are performance measures only, and do not provide any measure of each company's
cash flow or liquidity. The summary 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' and Eclipsys' results of operations as determined in
accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of summary non-
GAAP financial measures with summary GAAP financial measures furnished herewith.
Explanation of Non-GAAP Financial Measures