- Fourth quarter bookings of $244 million and $923 million for the full year
- 2014 full-year adjusted EBITDA grows 11 percent and free cash flow improves by over $70 million for the year
- Provides 2015 outlook for revenue, adjusted EBITDA and earnings per share
CHICAGO, Feb. 26, 2015 (GLOBE NEWSWIRE) — Allscripts Healthcare Solutions, Inc. (Nasdaq:MDRX) (Allscripts) announced its financial results for the three months and year ended December 31, 2014.
Fourth Quarter and Full Year Bookings Highlights:
Bookings(1) in the fourth quarter were $244 million compared with $274 million in the fourth quarter of 2013, an 11% decline. Fourth quarter 2014 bookings reflect double-digit growth in ambulatory solutions, managed IT services, and international sales compared with the fourth quarter of 2013. Partially offsetting this growth was a decline in client demand for patient portal solutions, a requirement for meeting Meaningful Use 2 (MU2). This demand positively impacted bookings results during the second half of 2013 as well as the first half of 2014.
On a sequential basis, and consistent with historical seasonal trends, bookings grew 10 percent in the fourth quarter of 2014 compared with $223 million in the third quarter of 2014. Population Health Management(2) bookings grew compared with the third quarter of 2014 and contributed materially to overall bookings results for the fourth quarter and all of 2014. Fourth quarter Software-as-a-Service-based or subscription-based (collectively, SaaS) bookings were 48 percent of total bookings, compared with 44 percent in the fourth quarter of 2013 and 42 percent in the third quarter of 2014.
For the full year, bookings were $923 million, a 2 percent increase over 2013. SaaS bookings constituted 44 percent of total bookings compared with 36 percent in 2013.
Contract revenue backlog as of December 31, 2014 totaled $3.4 billion, which was comparable with the prior-year amount.
Paul M. Black, President and Chief Executive Officer of Allscripts, stated: “Allscripts fourth quarter non-GAAP EPS increased despite a lack of revenue growth in the quarter. The Company also generated strong operating cash flow in the fourth quarter, which drove a significant improvement in free cash flow for 2014 compared with 2013. In addition, the investments we have made to improve our solutions are driving higher client satisfaction and positioning Allscripts for long-term growth.
“We are optimistic about the sustainability of several business trends creating a foundation of stability and a trajectory for growth and continued innovation. We achieved a healthy mix of add-on sales across Allscripts clients in 2014, reflecting the nearly half a billion dollars we have spent on research and development over the last two years. In addition, our improved client execution is driving an increasing interest in and recognition of Allscripts advanced, OPEN technology. As a result, we continue to add new clients globally and across the continuum of care. We also are adding new services offerings and positioning Allscripts as the preferred partner for all healthcare providers to transition, both financially and clinically, to value-based care.”
Fourth Quarter 2014 Highlights
Revenue totaled $343 million and $341 million on a non-GAAP and GAAP basis, respectively, a decline of 3 percent on both a non-GAAP and GAAP basis, compared with $354 million and $351 million, respectively, in the fourth quarter of 2013. Recurring revenue increased $8 million compared with the fourth quarter of 2013. This includes SaaS revenue, which grew 9 percent compared with the fourth quarter of 2013. Non-recurring revenue, consisting of systems sales and professional services revenue, declined $18 million compared with the fourth quarter of 2013.
Fourth quarter 2014 gross margin was 43.9 percent on a non-GAAP basis and 40.0 percent on a GAAP basis, compared with 44.4 percent and 39.4 percent, respectively, in the fourth quarter of 2013.
Total operating expenses declined 9 percent on a non-GAAP basis and 19 percent on a GAAP basis in the fourth quarter of 2014 compared with the fourth quarter of 2013. The decline in operating expenses reflects initiatives to decrease corporate SG&A expenses, streamline business functions, and leverage prior investments in research and development.
Adjusted EBITDA increased 8 percent to $52 million in the fourth quarter of 2014, compared with $49 million in the fourth quarter of 2013.
On a non-GAAP basis, Allscripts effective tax rate was 35 percent in the fourth quarter of 2014, compared with 32 percent in the fourth quarter of 2013. On a GAAP basis, Allscripts recorded an income tax benefit of approximately $4 million in the fourth quarter of 2014, compared with an income tax benefit of $14 million in the fourth quarter of 2013.
Fourth quarter 2014 non-GAAP net income totaled $17 million compared with $14 million in the fourth quarter of 2013. Fourth quarter 2014 GAAP net loss totaled $2 million compared with a net loss of $21 million in the fourth quarter of 2013.
Fourth quarter 2014 non-GAAP earnings per share were $0.09 compared with $0.08 in the fourth quarter of 2013. Fourth quarter 2014 GAAP loss per share was $0.01 compared with a loss per share of $0.12 in the fourth quarter of 2013.
Full Year Financial Highlights:
For the full year 2014, revenue totaled $1.39 billion and $1.38 billion on a non-GAAP and GAAP basis, respectively, compared with$1.38 billion and $1.37 billion, respectively, in 2013. 2014 revenue performance was impacted, in part, by a decline of approximately $28 million of predominantly low-margin, non-recurring revenue in 2014, including lower hardware revenue resulting from Allscripts ongoing transition to a predominantly SaaS-based business model.
For the full year 2014, Allscripts recurring revenue totaled 77 percent of total revenue compared with 74 percent in 2013. This increase was driven in part by a 13 percent increase in SaaS revenue in 2014 compared with 2013.
For 2014, operating expenses declined 5 percent on a non-GAAP basis and 11 percent on a GAAP basis compared with 2013.
For 2014, Adjusted EBITDA increased 11 percent to $199 million, compared with $180 million in 2013.
On a non-GAAP basis, Allscripts effective tax rate was 35 percent in 2014, compared with 28 percent in 2013. On a GAAP basis, Allscripts recorded an income tax benefit of approximately $2 million in 2014, compared with an income tax benefit of $44 millionin 2013.
For the full year 2014, non-GAAP net income totaled $56 million compared with $48 million in 2013. 2014 GAAP net loss totaled$67 million compared with a net loss of $104 million in 2013.
For the full year 2014, non-GAAP earnings per share were $0.31 compared with $0.27 in 2013 and GAAP loss per share was $0.37compared with a loss per share of $0.59 in 2013.
Financial Guidance:
Allscripts is introducing annual guidance that replaces Allscripts prior three-year guidance for revenue and Adjusted EBITDA, which was issued in the first quarter of 2014. Allscripts currently expects to achieve the following financial results in 2015:
- Revenue between $1.43 billion and $1.46 billion.
- Adjusted EBITDA between $230 million and $250 million.
- 2015 non-GAAP earnings per share between $0.42 and $0.50 per diluted share.
A reconciliation of reported net income to adjusted EBITDA, as well as GAAP and non-GAAP earnings per share, is expected to be provided consistent with the reconciling items provided in this earnings release within Tables 4 and 5.
For a complete reconciliation of GAAP and non-GAAP items, see the explanation of non-GAAP financial measures as well as the GAAP and non-GAAP reconciliation financial tables in this release.
Conference Call:
Allscripts will conduct a conference call today, Thursday, February 26, 2015, at 4:30 PM Eastern Standard Time to discuss its earnings release and other information. Participants may access the conference call via webcast at http://investor.allscripts.com.
A replay of the call will be available approximately two hours after the conclusion of the call, for a period of two weeks, on the Allscripts investor relations website or by calling (855) 859-2056 or +1 (404) 537-3406 – Conference ID # 62359194.
Supplemental and non-GAAP financial information also will be available at http://investor.allscripts.com.
Footnotes
(1) Bookings reflect the value of executed contracts for software, hardware, professional services, remote hosting, outsourcing and subscription-based services.
(2) Population health management solutions are comprised of Allscripts Care Management™, Allscripts dbMotion, Allscripts FollowMyHealth™, Allscripts Patient Flow™, and Allscripts Care Director™, as well as Allscripts post-acute, decision support and clinical analytics solutions.
About Allscripts
Allscripts (Nasdaq:MDRX) is a leader in healthcare information technology solutions that advance clinical, financial and operational results. Our innovative solutions connect people, places and data across an Open, Connected Community of Health™. Connectivity empowers caregivers to make better decisions and deliver better care for healthier populations. To learn more, visitwww.allscripts.com, Twitter, YouTube and It Takes A Community: The Allscripts Blog.
© 2015 Allscripts Healthcare, LLC and/or its affiliates. All Rights Reserved.
Allscripts, the Allscripts logo, and other Allscripts marks are trademarks of Allscripts Healthcare, LLC and/or its affiliates. All other products are trademarks of their respective holders, all rights reserved. Reference to these products is not intended to imply affiliation with or sponsorship of Allscripts Healthcare, LLC and/or its affiliates.
Forward-Looking Statements
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current beliefs and expectations of Allscripts management, only speak as of the date that they are made, and are subject to significant risks and uncertainties. Such statements can be identified by the use of words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” and similar terms. Actual results could differ from those set forth in the forward-looking statements, and reported results should not be considered an indication of future performance. Certain factors that could cause Allscripts’ actual results to differ materially from those described in the forward-looking statements include, but are not limited to: Allscripts’ failure to compete successfully; consolidation in Allscripts’ industry; current and future laws, regulations and industry initiatives; increased government involvement in Allscripts’ industry; the failure of markets in which Allscripts operates to develop as quickly as expected; Allscripts’ or its customers’ failure to see the benefits of government programs; changes in interoperability or other regulatory standards; the effects of the realignment of Allscripts’ sales, services, and support organizations; market acceptance of Allscripts’ products and services; the unpredictability of the sales and implementation cycles for Allscripts’ products and services; Allscripts’ ability to manage future growth; Allscripts’ ability to introduce new products and services; Allscripts’ ability to establish and maintain strategic relationships; risks related to the acquisition of new companies or technologies; the performance of Allscripts’ products; Allscripts’ ability to protect its intellectual property rights; the outcome of legal proceedings involving Allscripts; Allscripts’ ability to hire, retain and motivate key personnel; performance by Allscripts’ content and service providers; liability for use of content; security breaches; price reductions; Allscripts’ ability to license and integrate third party technologies; Allscripts’ ability to maintain or expand its business with existing customers; risks related to international operations; changes in tax rates or laws; business disruptions; Allscripts’ ability to maintain proper and effective internal controls; and asset impairment charges. Additional information about these and other risks, uncertainties, and factors affecting Allscripts’ business is contained in Allscripts’ filings with the Securities and Exchange Commission. Allscripts does not undertake to update forward-looking statements to reflect changed assumptions, the impact of circumstances or events that may arise after the date of the forward-looking statements, or other changes in its business, financial condition, or operating results over time.
