ATLANTA--(BUSINESS WIRE)-- Eclipsys Corporation® (NASDAQ: ECLP), The Outcomes Company®, today announced results for the fourth quarter and year ended December 31, 2009.
Revenues for the quarter ended December 31, 2009 were $133.7 million, compared to revenues of $126.8 million for the quarter ended December 31, 2008. Revenues for the year ended December 31, 2009 were $519.2 million, compared to $515.8 million for the year ended December 31, 2008.
Non-GAAP revenues for the fourth quarter 2009 were $135.7 million and for the year ended 2009 were $527.2 million.
A reconciliation of GAAP to non-GAAP revenues is included in the attached tables.
GAAP operating income for the year ended December 31, 2009 was $9.4 million, or 1.8 percent of revenues, compared to $9.4 million, or 1.8 percent in the prior year.
On a GAAP basis, net income for the fourth quarter 2009 was $3.8 million, or $0.07 per diluted common share, compared to net income of $3.3 million, or $0.06 per diluted common share in the fourth quarter 2008.
GAAP net income for the year ended December 31, 2009 was $2.7 million, or $0.05 per diluted common share, compared to $99.5 million, or $1.79 per diluted common share in 2008.
GAAP net income for 2008 included an income tax benefit of $85.5 million, or $1.54 per diluted common share, associated with the reversal of the company's deferred tax valuation allowance in the third quarter 2008.
Non-GAAP operating income for the year ended December 31, 2009 was $56.7 million, or 10.8 percent of non-GAAP revenues, compared to $39.0 million, or 7.6 percent in the prior year.
Non-GAAP net income for the fourth quarter 2009 was $9.8 million, or $0.17 per diluted common share, compared to non-GAAP net income for the fourth quarter 2008 of $4.1 million, or $0.07 per diluted common share.
Non-GAAP net income for the year ended December 31, 2009 was $36.5 million, or $0.64 per diluted common share, compared to $41.7 million, or $0.75 per diluted common share in 2008.
A reconciliation of GAAP to non-GAAP results is included in the attached tables.
"We ended 2009 with very strong fourth quarter results," said Philip M. Pead, Eclipsys president and chief executive officer. "For the year, we exceeded our earnings guidance and generated significant cash flows."
Balance Sheet Update
In the fourth quarter 2009, Eclipsys repaid $31.0 million of debt on its credit facility, reducing the company's long-term debt to $29.0 million. These payments were funded through available cash and operating cash flows, and Eclipsys ended the quarter with $123.2 million of cash and $86.0 million in long-term investments.
For the year ended December 31, 2009, Eclipsys generated $55.7 million in free cash flows, compared to $30.1 million for the year ended 2008. The company defines free cash flow as operating cash flows less capitalized software development costs and capital expenditures.
Eclipsys current expectations for full-year 2010 results are as follows:
- Non-GAAP diluted earnings per share to range from $0.70 to $0.75.
- New business bookings growth of 20 percent to 30 percent. The company defines new business bookings as the total amount of all new contracts signed in a particular period, excluding renewals.
- Revenue growth of 6 percent to 8 percent.
- Non-GAAP operating income margin to range from 12 percent to 13 percent.
Eclipsys 2010 projected non-GAAP results exclude stock-based compensation expense and acquisition related amortization. Eclipsys non-GAAP results may also exclude other items that the company does not consider indicative of its underlying business performance.
Today's Conference Call
Eclipsys executives will discuss the final results for the fourth quarter and year ended December 31, 2009 on a teleconference scheduled for 4:30 p.m. Eastern time on February 18, 2010. Persons interested in participating in the teleconference should call 800-230-1059 (in the U.S.) or 612-332-0819 (international) approximately 15 minutes before the conference call is slated to begin. For listen-only mode, participants can go to www.eclipsys.com prior to the conference call to register and download the necessary audio software.
About two hours after its completion, an audio replay of the conference call will be available on www.eclipsys.com for approximately 48 hours.
Eclipsys is a leading provider of advanced integrated clinical, revenue cycle and performance management software, clinical content and professional services that help healthcare organizations improve clinical, financial and operational outcomes. For more information, see www.eclipsys.com or email [email protected].
The company has provided revenue financial measures on a non-GAAP basis for the three months and year ended December 31, 2009, which include deferred revenue adjustments net of deferred costs adjustments related to the company's December 2008 acquisition of Premise Corporation. The company has also provided net income and earnings per share financial measures on a non-GAAP basis for the three months and year ended December 31, 2009 and December 31, 2008, which exclude non-cash stock-based compensation expense, amortization expense associated with acquisitions, and certain additional items that the company does not consider to be indicative of its underlying business performance, as listed on the attached GAAP to non-GAAP reconciliation tables. Because of the significance of the GAAP components excluded, these non-GAAP financial measures should not be considered a substitute for, or superior to, any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. When considered in conjunction with comparable GAAP financial measures, management believes that the non-GAAP financial measures provide useful supplemental information to management and investors to facilitate the understanding and evaluation of the company's underlying operating performance and future prospects, as well as comparisons of the company's results with its prior period results that did not include these gains and/or charges, and with results of other companies on a more consistent basis. Internally, management also uses non-GAAP net income and earnings for forecasting and to help make management decisions, as an indicator of business performance, and to evaluate management's effectiveness and help determine bonuses for management and others.
The company adds back the Premise deferred revenue adjustment for non-GAAP revenue because the inclusion of this amount directly correlates to the underlying business performance of Eclipsys' operations and facilitates comparisons of the legacy Premise business to that of the company's post-merger results. The company omits non-cash stock-based compensation because such expense can vary significantly between periods as a result of the timing (which determines various input assumptions that impacts the compensation expense amount) and number of new equity-based incentive awards in any one period, including grants in connection with acquisitions. The company omits non-cash acquisition-related amortization expense arising from the acquisition of intangible assets in presenting non-GAAP earnings because such expense in any one period may not directly correlate to its underlying business performance and because such expense can vary significantly between periods as a result of new acquisitions and full amortization of previously acquired intangible assets. This adjustment also provides management and investors with consistent measures of performance both before and after including such non-cash acquisition-related amortization charges. The economic substance of omitting the other items incurred that the company does not consider to be indicative of its underlying business performance derives from the fact that such episodic gains and/or charges make it more difficult to compare operating results of different periods, not all of which include such gains and/or charges. However, the omission of non-cash stock-based compensation expense may mask an economic cost incurred by the company in connection with stock-based compensation, and the omission of the charges related to the company's other non-GAAP adjustments may mask actual and expected future costs associated with such matters. Management compensates for these limitations by using both the GAAP and non-GAAP measures. Although the company has provided 2010 guidance for non-GAAP diluted earnings per share and non-GAAP operating income margin, a quantitative reconciliation to the equivalent GAAP guidance financial measures is not available given the number of variables that affect the reconciliation.
The company has provided reconciling tables attached to this release.
Caution Regarding Forward-Looking Statements
Certain statements in this news release or the investor call referenced herein, including those concerning the company's operational initiatives, future performance expectations, and effects of economic conditions are forward-looking statements and actual results may differ materially from those projected or implied by the forward-looking statements due to a variety of risks and uncertainties. Future performance expectations are predicated upon achievement of various sales and performance targets that may be difficult to meet. Economic conditions are unstable and may cause hospitals and other healthcare providers to curtail HIT system spending. Eclipsys' cost reduction and other initiatives in response to the challenging economic environment, including initiatives designed to improve operational efficiencies, may not be effective, and it is difficult to predict what the company may be able to achieve. Eclipsys sales may fall below expectations due to market conditions, competition, and other factors, including client demands for pricing and financing concessions. Costs may be greater than anticipated due to the potential need to increase spending to ensure performance in accordance with commitments to clients, regulatory requirements, and other factors. Software development may take longer and cost more than expected, and incorporation of anticipated features and functionality (including as required to comply with ARRA and related regulations, as well as other certification standards) may be delayed, due to various factors including programming and integration challenges and resource constraints. The market is highly competitive. Implementation and customization of Eclipsys software is complex and time-consuming. Results depend upon a variety of factors and can vary by client. Each client's circumstances are unique and may include unforeseen issues that make it more difficult than anticipated to implement or derive benefit from software, implementation or consulting services. The success and timeliness of the company's services will depend at least in part upon client involvement, which can be difficult to control. Eclipsys is required to meet specified performance standards and regulatory requirements, and clients can terminate contracts, assess penalties or reduce contract scope under certain circumstances. More information about company risks is available in recent Form 10-K and other filings made by Eclipsys from time to time with the Securities and Exchange Commission. Special attention is directed to the portions of those documents entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."