Cerner Corporation (Nasdaq: CERN) today announced results for the 2014 second quarter that ended June 28, 2014, delivering strong levels of bookings, revenue, earnings, and cash flow.
Bookings in the second quarter of 2014 were $1.08 billion, an all-time high for a second quarter and an increase of 15 percent compared to second quarter 2013 bookings of $935.0 million.
Second quarter revenue was $851.8 million, an increase of 20 percent compared to $707.6 million in the year-ago period.
On a U.S. Generally Accepted Accounting Principles (GAAP) basis, second quarter 2014 net earnings were $129.0 million and diluted earnings per share were $0.37. Second quarter 2013 GAAP net earnings were $112.9 million and diluted earnings per share were $0.32.
Adjusted (non-GAAP) Net Earnings
Adjusted net earnings for second quarter 2014 were $138.9 million, compared to $119.6 million of adjusted net earnings in the second quarter of 2013. Adjusted diluted earnings per share were $0.40 in the second quarter of 2014, an increase of 18 percent compared to $0.34 of adjusted diluted earnings per share in the year-ago quarter. Analysts’ consensus estimate for second quarter 2014 adjusted diluted earnings per share was $0.40.
Adjusted net earnings is not a recognized term under GAAP and should not be substituted for net earnings as a measure of Cerner’s performance but instead should be utilized as a supplemental measure of financial performance in evaluating our business. Following is a description of adjustments made to net earnings. For more detail, please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results. (.xls)”
Second quarter 2014 adjusted net earnings and diluted earnings per share exclude share-based compensation expense, which reduced second quarter 2014 net earnings and diluted earnings per share by $9.9 million and $0.03, respectively. Second quarter 2013 adjusted net earnings and diluted earnings per share exclude share-based compensation expense, which reduced net earnings and diluted earnings per share by $6.7 million and $0.02, respectively.
Other 2014 Second Quarter Highlights:
- Second quarter cash collections of $843.8 million and operating cash flow of $248.3 million.
- Second quarter free cash flow of $143.8 million. Free cash flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. For more detail, please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results. (.xls)”
- Second quarter days sales outstanding of 66 days, which is down from 68 days in the year-ago quarter.
- Total backlog of $9.69 billion, up 21 percent over the year-ago quarter. This was comprised of $8.88 billion of contract backlog and $806.6 million of support and maintenance backlog.
“Our outstanding second quarter results reflect Cerner’s strong position in a growing industry,” said Neal Patterson, Cerner chairman, CEO and co-founder. “Health care providers face a growing list of measures and mandates that are putting pressure on them to lower costs while also improving quality. We believe information technology is the biggest lever to help them address these challenges, and we are continuing to invest heavily in R&D to not only help providers navigate the current environment, but also prepare them for the future.”
Future Period Guidance
Cerner currently expects:
- Third quarter 2014 revenue between $840 million and $870 million.
- Full year 2014 revenue between $3.3 billion and $3.4 billion, which is up from a prior range of $3.25 billion to $3.4 billion.
- Third quarter 2014 adjusted diluted earnings per share before share based compensation expense between $0.41 and $0.42.
- Full year 2014 adjusted diluted earnings per share before share based compensation expense between $1.64 and $1.67, which is up from a prior range of $1.63 to $1.67.
- Third quarter 2014 new business bookings between $1 billion and $1.1 billion.
- Share based compensation expense to reduce diluted earnings per share by approximately $0.03 in the third quarter of 2014 and between $0.11 and $0.12 for the year.
Earnings Conference Call
Cerner will host an earnings conference call to provide additional detail on these results at 3:30 p.m. CT on July 24. The dial-in number for the conference call is (617)-614-4909; the passcode is Cerner. Cerner recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 6:30 p.m. CT, July 24 through 11:59 p.m. CT, July 27. The dial-in number for the re-broadcast is (617)-801-6888; the passcode is 98537092.
An audio webcast will be available live and archived on Cerner’s website at www.cerner.com under the About Cerner section (click Investor Relations, then Presentations and Webcasts).
About Cerner
Cerner’s health information technologies connect people, information, and systems, at approximately 14,000 facilities worldwide. Recognized for innovation, Cerner solutions assist clinicians in making care decisions and enable organizations to manage the health of populations. The company provides clients with a wide range of in-house services, as well as an integrated clinical and financial system to help organizations manage revenue. Cerner’s mission is to contribute to the systemic improvement of health care delivery and the health of communities. Nasdaq: CERN. For more information about Cerner, please visit www.cerner.com, check out our blog at www.cerner.com/blog and connect with us on Twitter at http://www.twitter.com/cerner and on Facebook at www.facebook.com/cerner.
Investor Contact: Allan Kells, (816) 201-2445, akells@cerner.com
Media Contact: Kate O’Neill Rauber, (816) 888-2880, c_oneillrauber.kate@cerner.com
Cerner’s Internet Home Page: www.cerner.com
