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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): January 10, 2012

 

 

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 January 10, 2012, 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.

   

Description

99.1    Investor Presentation dated January 10, 2012

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: January 10, 2012     By:   /s/    WILLIAM J. DAVIS        
        William J. Davis
        Chief Financial Officer

EXHIBIT INDEX

 

Exhibit No.

   

Description

99.1    Investor Presentation dated January 10, 2012
Investor Presentation
1
Allscripts Investor
Presentation
JANUARY 2012
J.P.
Morgan
30
th
Annual
Healthcare
Conference
Exhibit 99.1

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2
Forward Looking Statement
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
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,
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
risk
that
we
will
not
achieve
the
strategic
benefits
of
the
merger
(the
“Eclipsys
Merger”)
with
Eclipsys
Corporation
(“Eclipsys”);
the
possibility
that
the
expected
synergies
and
cost
savings
of
the
Eclipsys
Merger
will
not
be
realized,
or
will
not
be
realized
within
the
expected
time
period;
the
risk
that
our
business
will
not
be
integrated
successfully
with
the
business
of
Eclipsys;
disruption
from
the
Eclipsys
Merger
and
related
transactions
making
it
more
difficult
to
maintain
business
relationships
with
customers,
partners
and
others;
unexpected
requirements
to
achieve
interoperability
certification
pursuant
to
the
Health
Information
Technology
for
Economic
and
Clinical
Health
Act,
with
resulting
increases
in
development
and
other
costs
for
us;
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;
errors
or
similar
problems
in
our
software
products;
the
outcome
of
any
legal
proceeding
that
has
been
or
may
be
instituted
against
us
and
others;
compliance
obligations
under
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,
as
well
as
elements
of
the
Patient
Protection
and
Affordable
Care
Act
(aka
health
reform)
which
pertains
to
health
IT
adoption;
maintaining
our
intellectual
property
rights
and
litigation
involving
intellectual
property
rights;
legislative,
regulatory
and
economic
developments;
risks
related
to
third-party
suppliers
and
our
ability
to
obtain,
use
or
successfully
integrate
third-party
licensed
technology
and
breach
of
our
security
by
third
parties.
See
our
Transition
Report
on
Form
10-KT
for
the
seven
months
ended
December
31,
2010
and
our
subsequent
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.

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Allscripts
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A Connected Community
of Health
™
OUR VISION
Allscripts is the leading provider
of Electronic Health Record (EHR),
practice management and other
clinical, revenue cycle, connectivity
and information solutions for
physicians, hospitals & post-acute
organizations
3

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OUR CLIENTS
•
180,000 Physicians
•
50,000 Physician Practices
•
1,500 Hospitals
•
10,000 Post-acute Facilities
•
27,000 Clinicians In Patients
Homes Every Day
OUR COMPANY
•
~$1.3BB 2010 Non-GAAP
Revenue
•
6,000 Employees
•
$160MM in R&D & Growing
•
Leader in Innovation
•
~$3.5BB Market Capitalization
•
1 Complete Set of Solutions
Allscripts: Who We Are
4
Please see the Non-GAAP reconciliation and related  footnotes in the appendix to this presentation.

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Investment Highlights
MARKET LEADER
•
Diverse, industry leading client base
COMPLETE PRODUCT
PORTFOLIO
•
Flexible, modern and complete solutions
•
Maximizes opportunities to expand market and wallet share
DYNAMIC GROWTH
MARKET
•
$30BB Federal stimulus program drives healthcare IT adoption
•
Low penetration of clinical solutions
•
Shift to value-based care drives strong long-term secular demand trends
SIGNIFICANT
OPERATING LEVERAGE
•
Proven and scalable platform for sales growth
•
Legacy of product innovation
•
Industry-leading brand awareness
HIGH QUALITY
FINANCIAL MODEL
•
Exceptional visibility with $2.7BB revenue backlog
•
~66% recurring revenue
•
Strong free cash flow

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Agenda
6
MARKET
DIFFERENTIATION
GROWTH

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MARKET
DIFFERENTIATION
GROWTH

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A National
Problem
A Market
that is Ready
A Significant
Opportunity
•
Quality Issues
•
Medical Errors /
Safety Concerns
•
Rising Cost
•
Significant Waste
•
$43BB
1
Opportunity
•
$30BB in Stimulus
Funding
•
~35% Penetration
in Physician
Practices
•
Rise in Employed
Physicians
•
Hospitals Driving
Adoption
•
We are at the
beginning
of what
we expect will be
the single fastest
transformation of
any industry in US
history
8
Market: The Time is NOW
1. McKinsey & Company

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Market: Unsustainable Trend Requiring Change
9
VOLUME
•
Fragmented providers
and payments
•
No uniform quality
•
Fees for volume
•
Demand increasing
VALUE
•
Collaboration,
connectivity
•
Clinical, financial data,
analysis
•
Optimize outcomes
•
Accountable care
Source: HFMA “Value in Healthcare: Current State & Future Directions June 2011

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Market:
MDRX
Addresses
the
Entire
Market
Opportunity
10
Acute/Ambulatory EHR Opportunity 2010-2014 = ~$43BB
•
Ambulatory
Stand-Alone
Opportunity
•
Acute
Stand-Alone
Opportunity
STAND-ALONE
MARKET
INTEGRATED
MARKET
•
Integrated/Complete
Solution Across
Hospitals and
Physician Practices

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Market: Significant Ambulatory Potential
PRACTICE SIZE
TOTAL # OF PRACTICES
EHR PENETRATION (July ‘11)
1-3 Physicians
~186,000
~30%
4-9 Physicians
~28,000
~50%
10-25 Physicians
~6,900
~70%
26+ Physicians
~1,750
~85%
Total
226,650
~35%
Source: SK&A Information Services

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HOSPITALS/HEALTH SYSTEMS
Market: Acute Care Growth Drivers
12
Source: HIMSS Analytics EMR Adoption Model, July 2011
LEGACY
REPLACEMENT
CYCLE
UNDER-
UTILIZATION
•
Obsolete mainframe systems
•
Integrate acute/ambulatory
systems
•
Care Coordination
•
Only ~20%* of Hospitals at
HIMSS Stage 4 adoption or higher
•
Only 1%* at HIMSS Stage 7

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MARKET
DIFFERENTIATION
GROWTH

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Differentiation: Leading Footprint Across the Market
14
(48% Rev)
1 of 3
MDs
1 of 3
Hospitals
(43% Rev)
10,000
Post-acute
Care Providers
(9% Rev)
Source: Allscripts Form 10Q Quarterly Report for period ended 9/30/11.  GAAP revenue percentage based on 9 month period.

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Differentiation: Open and Connected Portfolio
15

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Differentiation: The Challenge to Deliver Meaningful Care
16
•
Stage
1:
Application
•
Stage
2:
Connection
•
Stage
3:
Information
•
Stage
4:
Insights
•
Stage
5:
Outcomes
TIME
LEVEL OF
IMPACT
(Quality, Cost)

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Differentiation: The New Architecture of Healthcare
17
Old World
(Monolithic/Closed
Mainframe)
New World
(Modern/Open Platform)
Connect Inside
Connect Inside and Outside

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•
Key stakeholders across
the community (Allscripts
Referral Network,
Allscripts Community)
•
All points of care and
all applications within
their organization
18
Differentiation: Allscripts Approach

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“Clinical outcomes is the name of the game
in ACOs. This is an area where we believe
Allscripts holds a market lead, and needs
to continue to focus on delivering more
integrated outcomes modules for its
client base.”
THE ADVISORY BOARD COMPANY (APRIL 2011, “A PERSPECTIVE ON THE COMPANY”)
Differentiation: Clinical Outcomes Experience and Focus
19

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Differentiation: i20-Insights to Outcomes
Market values information, delivered to physicians leading to Better Results . . .
Better Outcomes . . . Insights to Outcomes
ALLSCRIPTS
OPTIMALLY
POSITIONED
•
Largest client footprint
•
Technology to connect
•
The analytics to deliver
information at the point
of care
THIS SHOWS IN
ALLSCRIPTS CLIENT
RESULTS . . .
•
Most utilization
•
Most innovation
•
Best outcomes

Differentiation: Deliver Solutions in a Value-Based
Care Environment
21
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Differentiation: Innovative Solutions
22
Mobile Platforms
Accelerate Adoption

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MARKET
DIFFERENTIATION
GROWTH

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Growth: Long-Term Focus
24
1. 2011 revenue guidance provided by Allscripts on November 3, 2011. This document does not subsequently update or reaffirm Allscripts financial guidance.
2. Annual revenue for Allscripts illustrated above is based on a
GAAP presentation and is calenderized based on quarterly results. Please note Allscripts changed its fiscal year-end
to May between the period of September, 2008 and May, 2010. GAAP
revenue also includes the impact of acquisitions and divestitures.

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Growth: Historical Performance
25
Note: Please see the Non-GAAP reconciliation and related footnotes in the appendix to this presentation. tp://investor.allscripts.com
•
Non-GAAP
Revenue
CY 2010:
$1,300MM
•
Non-GAAP
Revenue
CY 2009:
$1,188MM

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Growth: Distribution Outpaces the Competition
26

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Growth: Significant Cost Synergies
27
Projected Cost Synergies Over Three Years
•
Duplicative management
structure
•
Duplicative public company
costs
•
Duplicative back-end office
and system integration
•
Marketing
Key Cost
Synergy Drivers

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Growth: Significant Client Sales Opportunity
28
Sell Acute
Solutions to
Ambulatory
Care Base
Sell
Ambulatory 
Solutions to
Acute Care
Base

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Growth: Utilizing Strong Cash Flow to Enhance Value
29
CAPITALIZATION
ACTUAL
9/30/2011
Cash and Marketable Securities
$87
Revolver ($250mm)
0
Term Loan
377
Total Debt
$377
Equity
1,439
Total Capitalization
$1,816
Credit Statistics
LTM EBITDA
(1)
$328
Total Debt / LTM EBITDA
(1)
1.1x
Debt / Capitalization
20.8%
•
Reduced debt by $193MM since
merger closed (8/10); $45.5MM in
Q3 2011
•
Minimum required principal payments
over next 12 months totals $40MM
•
Current borrowing cost <3%
•
$200MM, 3-year share repurchase
program instituted in the second
quarter of 2011
•
Repurchased $50MM of shares to
date
1
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, consistent
with the calculation as defined in the Company’s Senior Credit Facilities agreement. 
Note: Please see the Non-GAAP reconciliation and related  footnotes in the appendix to this presentation.  tp://investor.allscripts.com

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Growth: Non-GAAP Financial Outlook
CY 2010 ACTUAL
CY 2011
2010 TO 2011
CHANGE
NON-GAAP
REVENUE
$1,300
$1,455 -
$1,460
12%
NON-GAAP
OPERATING MARGIN
19%
21%
+200 BPS
NON-GAAP
NET INCOME
$148
$174 -
$179
17 –
21%
NON-GAAP
DILUTED EPS
$0.76
$0.91 -
$0.93
20 –
22%
($ in millions; except per share amounts)
Note:  Guidance provided by the company in a press release on November 3, 2011. This presentation does not subsequently update or reaffirm Allscripts financial
guidance.  Please see the Non-GAAP reconciliation and related  footnotes in the appendix to this presentation. tp://investor.allscripts.com

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MARKET
DIFFERENTIATION
GROWTH
In Summary….

32
Allscripts Investor
Presentation
JANUARY 2012
J.P. Morgan 30
th
Annual Healthcare Conference

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Appendix: Non-GAAP Reconciliations
33

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Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP revenue and net income reconciliation for the twelve months
ended
December 31, 2010.
Three Months
Ended
Twelve Months
Ended
12/31/2010
12/31/2010
Allscripts
Eclipsys
Q1 2010
Allscripts
Eclipsys
Q2 2010
Allscripts
Eclipsys
Additional
Int Exp(a)
Q3 2010
Q4 2010
CY 2010
Total revenue, as reported
$184.4
$128.4
$312.8
$191.4
$134.4
$325.8
$191.2
$51.2
$0.0
$242.4
$316.2
$1,197.2
     Deferred revenue adjustment
0.5
0.0
0.5
0.6
0.0
0.6
0.5
6.7
0.0
7.2
       
20.9
29.2
     Eclipsys results pre-merger period (7/1/10-8/23/10)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
79.5
0.0
79.5
     
0.0
79.5
Total non-GAAP revenue
$184.9
$128.4
$313.3
$192.0
$134.4
$326.4
$191.7
$137.4
$0.0
$329.1
$337.1
$1,305.9
Net income, as reported
$18.6
$5.4
$24.0
$13.1
$1.6
$14.7
$5.4
($4.0)
$0.0
$1.4
($6.2)
$33.9
     Deferred revenue adjustment
0.3
0.0
0.3
0.3
0.0
0.3
0.3
4.0
0.0
4.3
12.7
17.6
     Acquisition-related amortization
3.4
1.9
5.3
3.5
1.8
5.3
3.4
3.0
0.0
6.4
10.6
27.6
     Stock-based compensation expense
2.4
3.4
5.8
1.8
2.9
4.7
4.0
0.0
0.0
4.0
2.3
16.8
     Transaction-related expense
0.1
0.0
0.1
7.7
2.0
9.7
16.0
5.5
(1.9)
19.6
10.9
40.3
     ARS Sales
0.0
0.0
0.0
0.0
0.9
0.9
0.0
0.0
0.0
0.0
0.0
0.9
     Tax rate alignment
0.7
0.0
0.7
(0.2)
0.0
(0.2)
(1.6)
(0.2)
0.0
(1.8)
8.4
7.1
     Eclipsys results pre-merger period (7/1/10-8/23/10)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
2.9
0.0
2.9
0.0
2.9
Non-GAAP net income
$25.5
$10.7
$36.2
$26.2
$9.2
$35.4
$27.5
$11.2
($1.9)
$36.8
$38.7
$147.1
(a) Transaction-related expenses are fees and expenses, including legal, investment banking and accounting fees and other
integration-related expenses, incurred in connection with announced transactions.
3/31/10
6/30/10
9/30/2010
Allscripts Healthcare Solutions, Inc.
Non-GAAP Financial Information - 2010  Financial Information
(In millions, except per-share amounts)
(unaudited)
Three Months Ended
Three Months Ended
Three Months Ended

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Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP revenue reconciliation for the twelve months ended November
30,
2009 (Allscripts) and twelve months ended December 31, 2009 (Eclipsys).
Allscripts
(11/30/2009)
Eclipsys
(12/31/2009)
Non-GAAP
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)
0.0
($9.7)
Total non-GAAP revenue
$661.1
$527.1
$1,188.2
Twelve Months Ended
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)

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Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP operating income reconciliation by quarter and twelve months
ended December 31, 2009 (Eclipsys) and November 30, 2009 (Allscripts).

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Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP operating income reconciliation by quarter and twelve months
ended December 31, 2010.
Three Months
Ended
Twelve Months
Ended
12/31/2010
12/31/2010
Allscripts
Eclipsys
Q1 2010
Allscripts
Eclipsys
Q2 2010
Allscripts
Eclipsys
Additional
Int Exp(a)
Q3 2010
Q4 2010
CY 2010
Operating income, as reported
$32.0
$10.7
$42.7
$20.5
$5.4
$25.9
$6.0
($7.2)
$0.0
($1.2)
$9.5
$76.9
     Deferred revenue adjustment
0.5
0.0
0.5
0.6
0.0
0.6
0.5
6.7
0.0
7.2
       
20.9
29.2
     Acquisition-related amortization
5.6
3.1
8.7
5.6
3.1
8.7
5.6
4.9
0.0
10.5
     
17.4
45.3
     Stock-based compensation expense
3.9
3.7
7.6
2.9
3.7
6.6
6.6
0.0
0.0
6.6
       
3.7
24.5
     Transaction-related expense (a)
0.2
0.0
0.2
12.5
3.5
16.0
26.1
9.1
0.0
35.2
     
17.8
69.2
     Eclipsys results pre-merger period (7/1/10-8/23/10)
0.0
0.0
0.0
0.0
0.0
0.0
0.0
4.7
0.0
4.7
       
0.0
4.7
Total non-GAAP operating income
$42.2
$17.5
$59.7
$42.1
$15.7
$57.8
$44.8
$18.2
$0.0
$63.0
$69.3
$249.8
Allscripts Healthcare Solutions, Inc.
Non-GAAP Financial Information - 2010  Financial Information
(In millions, except per-share amounts)
(unaudited)
Three Months Ended
Three Months Ended
Three Months Ended
(a) Transaction-related expenses are fees and expenses, including legal, investment banking and accounting fees and
other integration-related expenses, incurred in connection with announced transactions.
3/31/10
6/30/10
9/30/2010

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Appendix: Non-GAAP Reconciliation
•
GAAP –
non-GAAP operating income and margin reconciliation for the three and nine
months ended September 30, 2011 and 2010.
9/30/11
9/30/10
9/30/11
9/30/10
Total revenue, as reported
$368.8
$242.4
$1,060.9
$618.2
Deferred revenue adjustment
2.6
7.2
20.1
8.3
Eclipsys results pre-merger period
0.0
79.5
0.0
342.3
Total non-GAAP revenue
$371.4
$329.1
$1,081.0
$968.8
Operating income (loss), as reported
$37.4
($1.2)
$94.0
51.4
Deferred revenue adjustment
2.6
7.2
20.1
8.3
Acquisition-related amortization
16.6
10.5
49.9
27.9
Stock-based compensation expense
9.9
6.6
25.8
20.8
Transaction-related expense (a)
8.8
35.2
32.1
51.4
Eclipsys results pre-merger period
0.0
4.7
0.0
20.7
Total non-GAAP operating income
$75.3
$63.0
$221.9
$180.5
Total non-GAAP operating income as a
percentage of non-GAAP revenue
20.3%
19.1%
20.5%
18.6%
(a) Transaction-related expenses are fees and expenses, including legal, investment
banking and accounting fees and other integration-related expenses, incurred in
connection with announced transactions.
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(Unaudited)
Three Months
Ended
Three Months
Ended
Nine Months
Ended
Nine Months
Ended

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Appendix: Non-GAAP Reconciliation
•
GAAP
–
non-GAAP
EBITDA
reconciliation
for
the
12
months
ended
September
30,
2011
EBITDA Calculation ($ in thousands)
Combined Results for
Allscripts and Eclipsys for the
12 months ended 9/30/11
Net income, as reported
$43.3
Taxes
38.8
Stock-based compensation expense
37.3
Depreciation and Amortization
121.0
Interest expense
23.3
Transaction-related expenses
23.3
Deferred revenue adjustment
41.0
Gain on Sale of Assets
(0.3)
Earnings before interest, taxes, depreciation and amortization
$327.5
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)

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Footnotes Regarding Financial Guidance
Financial guidance was last provided by the company in a press release on November 3, 2011. This presentation does not subsequently
update or reaffirm Allscripts financial guidance.
Allscripts non-GAAP guidance for calendar 2011 assumes the following adjustment
to approximately $1,458.0 million in GAAP
revenue: approximately $21.0 million, pre-tax for an acquisition-related deferred revenue adjustment. Non-GAAP guidance for
calendar 2011 assumes the following adjustments to GAAP operating and net income: approximately $66.5 million of acquisition-
related amortization; approximately $36.0 million in stock-based compensation expense; and approximately $21.0 million in deferred
revenue, all on a pre-tax basis. Allscripts 2011 non-GAAP net income and diluted earnings per share guidance assumes a 37.5-38.0
percent tax rate.

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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
press
release
total
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.
Total
non-GAAP
revenue
consists
of
GAAP
revenue
as
reported
and
Eclipsys
revenue
for
periods
prior
to
the
August
24,
2010
consummation
of
the
2010
merger
with
Eclipsys
(2010
Merger)
and
adds
back
the
acquisition-related
deferred
revenue
adjustment
booked
for
GAAP
purposes.
Total
non-GAAP
gross
profit
consists
of
GAAP
gross
profit
as
reported
and
Eclipsys
gross
profit
for
periods
prior
to
the
consummation
of
the
2010
Merger
and
adds
back
the
acquisition-related
deferred
revenue
adjustment
booked
for
GAAP
purposes.
Total
non-GAAP
operating
income
consists
of
GAAP
operating
income
as
reported
and
Eclipsys
operating
income
for
periods
prior
to
the
consummation
of
the
2010
Merger
and
adds
back
the
acquisition-related
deferred
revenue
adjustment
booked
for
GAAP
purposes
and
excludes
acquisition-related
amortization,
stock-based
compensation
expense
and
transaction-related
expenses.
Non-GAAP
net
income
consists
of
GAAP
net
income
as
reported
and
includes
Eclipsys
net
income
for
periods
prior
to
the
consummation
of
the
2010
Merger,
excludes
acquisition-related
amortization,
stock-based
compensation
expense
and
transaction-related
expenses,
adds
back
the
acquisition-related
deferred
revenue,
in
each
case
net
of
any
related
tax
effects.
Non-GAAP
net
income
also
includes
a
tax
rate
alignment
adjustment.
Management
also
believes
that
non-GAAP
revenue,
gross
profit,
operating
income
and
net
income
and
non-GAAP
net
income
on
a
per
share
basis
provide
useful
supplemental
information
to
management
and
investors
regarding
the
underlying
performance
of
the
Company's
business
operations
and
facilitates
comparisons
of
the
separate
2010
pre-merger
results
of
legacy
Allscripts
and
legacy
Eclipsys
to
that
of
the
Company's
2010
post-
merger
results.
Acquisition
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
revenue,
operating
income
and/or
net
income
to
measure
achievement
under
the
Company's
stock
and
cash
incentive
compensation
plans.
Note,
however,
that
non-GAAP
revenue,
gross
profit,
operating
income
and
net
income
and
non-GAAP
net
income
on
a
per
share
basis
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.