Allscripts Healthcare Solutions Inc (MDRX, Financial) filed Quarterly Report for the period ended 2009-02-28.
ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS INC. formerly Allscripts Healthcare Solutions Inc. is a provider of clinical software connectivity and information solutions that are used by the physicians. The Company?s businesses provide solutions that inform physicians with just in time information and connect physicians to each other and to the entire community of care. The Company operates through three business segments: software and related services information services and prepackaged medications. Allscripts Healthcare Solutions Inc has a market cap of $1.65 billion; its shares were traded at around $11.28 with a P/E ratio of 21.7 and P/S ratio of 5.9.
Consolidated operating income increased 38.8%, from $16,417 during the three months ended February 29, 2008 to $22,787 during the same period in fiscal 2009. The increase in the three month period for fiscal 2009 is primarily due to the legacy Allscripts gross margin contribution which was not present in the comparable fiscal 2008 period, offset by an increase of $20,607 in selling, general, and administrative expenses primarily due to legacy Allscripts, including approximately $3,500 in deal related costs, an increase of $2,692 in amortization of intangibles related to acquired Allscripts intangible assets, and due to an increase of approximately $1,229 in research and development activities relating to new software products.
Consolidated operating income decreased 6.0%, from $23,615 during the nine months ended February 29, 2008 to $22,204 during the same period in fiscal 2009. The decrease in the nine month period for fiscal 2009 is primarily due to the legacy Allscripts gross margin contribution which was not present in the comparable fiscal 2008 period and a benefit relating to a decrease in amortization of intangibles of $6,813, which was offset by an increase of $51,764 in selling, general, and administrative expenses primarily due to legacy Allscripts, including approximately $32,700 in merger, integration, and severance related costs in connection with the Transactions, and due to an increase of approximately $517 in research and development activities.
Unallocated corporate expenses for the three months ended February 28, 2009 increased by $17,386, from $3,697 during the three months ended February 29, 2008 to $21,083 in the comparable period in fiscal 2009. Unallocated corporate expenses for the nine months ended February 28, 2009 increased by $40,844 from $28,746 in the first nine months of fiscal 2008 to $69,590 in the same period in fiscal 2009. Unallocated corporate expenses include amortization of intangible assets with the exception of the amortization of acquired technology which is included in cost of revenue. The increase in unallocated corporate expense for both the three and nine month periods in fiscal 2009 includes merger and integration related costs incurred in connection with the Transactions of approximately $3,500 and $32,700, respectively. Excluding these one-time related costs in fiscal 2009, unallocated corporate expenses would have been approximately $17,583 and $36,890 for the three and nine months ended February 28, 2009, respectively. These increases in both periods in fiscal 2009 are primarily due to corporate costs incurred related to the Transactions and the impairment charge of $14,076 related to the investment in iMedica, partially offset by cost benefits received in fiscal 2009 for cost reduction strategies that were implemented at the end of fiscal 2008.
Amortization of intangibles for the three months ended February 28, 2009 increased $2,692, from $180 during the three months ended February 29, 2008 to $2,872 in the comparable period in fiscal 2009. Amortization of intangibles for the nine months ended February 28, 2009 decreased $6,813 or 61.2%, from $11,128 during the nine months ended February 29, 2008 to $4,315 in the comparable period in fiscal 2009. The quarter over quarter increase is attributable to intangible amortization recorded in conjunction with the Transactions during the quarter ended February 28, 2009 which was absent in the comparable period of fiscal 2008. The intangible amortization related to the Transactions may change in the future once the final valuation is completed. The decrease in the nine month period ended February 28, 2009 is primarily due to the Medic customer relationship intangible asset becoming fully amortized during the beginning of fiscal 2009 versus a full period of amortization in the comparable period in fiscal 2008. The decrease was partially offset by the intangible amortization recorded in conjunction with the Transactions for the period from the closing of the Transactions on October 10, 2008 through February 28, 2009.
On February 10, 2009 Allscripts entered into a Second Amended and Restated Credit Agreement (the Credit Facility) which provides for a total unsecured commitment of $125,000, an increase of $50,000 from the First Amendment to Credit Facility, and matures on August 15, 2012. On November 7, 2008, Allscripts launched an offer to purchase for cash all of the $27,868 of Notes then outstanding at a purchase price equal to 100% of the principal amount of the Notes being repurchased ($1,000 per each $1,000 principal amount outstanding) plus any accrued and unpaid interest, pursuant to the terms of the indenture governing the Notes. The offer to purchase the outstanding Notes expired on December 9, 2008, with $8,164 of the $27,868 outstanding Notes being repurchased for cash during the quarter ended February 28, 2009, which resulted in a decrease in interest expense on the 3.5% Notes.
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ALLSCRIPTS-MISYS HEALTHCARE SOLUTIONS INC. formerly Allscripts Healthcare Solutions Inc. is a provider of clinical software connectivity and information solutions that are used by the physicians. The Company?s businesses provide solutions that inform physicians with just in time information and connect physicians to each other and to the entire community of care. The Company operates through three business segments: software and related services information services and prepackaged medications. Allscripts Healthcare Solutions Inc has a market cap of $1.65 billion; its shares were traded at around $11.28 with a P/E ratio of 21.7 and P/S ratio of 5.9.
Highlight of Business Operations:
Consolidated gross margin for the three months ended February 28, 2009 increased $30,898, or 59.0%, from $52,383 for the three months ended February 29, 2008 to $83,281 in the comparable fiscal 2009 period. Gross margin for the nine months ended February 28, 2009 increased $44,057, or 28.2%, from $155,981 for the nine months ended February 29, 2008 to $200,038 in the comparable fiscal 2009 period. Consolidated gross margin as a percentage of revenue for the three and nine months ended February 28, 2009 were 51.8% and 52.4%, respectively. Consolidated gross margin as a percentage of revenue for the three and nine months ended February 29, 2008 were 53.9% and 54.4%, respectively. The increase in gross margin for both the three and nine month periods in fiscal 2009 is primarily due to the legacy Allscripts gross margin contribution which was not present in the comparable fiscal 2008 period. The decrease in gross margin as a percentage of revenue for both periods in fiscal 2009 compared to the same periods in fiscal 2008 is primarily due to the contribution of gross profit from the legacy Allscripts software and services product line, which historically tends to have lower margins than our traditional legacy MHS overall software and related services product lines.Consolidated operating income increased 38.8%, from $16,417 during the three months ended February 29, 2008 to $22,787 during the same period in fiscal 2009. The increase in the three month period for fiscal 2009 is primarily due to the legacy Allscripts gross margin contribution which was not present in the comparable fiscal 2008 period, offset by an increase of $20,607 in selling, general, and administrative expenses primarily due to legacy Allscripts, including approximately $3,500 in deal related costs, an increase of $2,692 in amortization of intangibles related to acquired Allscripts intangible assets, and due to an increase of approximately $1,229 in research and development activities relating to new software products.
Consolidated operating income decreased 6.0%, from $23,615 during the nine months ended February 29, 2008 to $22,204 during the same period in fiscal 2009. The decrease in the nine month period for fiscal 2009 is primarily due to the legacy Allscripts gross margin contribution which was not present in the comparable fiscal 2008 period and a benefit relating to a decrease in amortization of intangibles of $6,813, which was offset by an increase of $51,764 in selling, general, and administrative expenses primarily due to legacy Allscripts, including approximately $32,700 in merger, integration, and severance related costs in connection with the Transactions, and due to an increase of approximately $517 in research and development activities.
Unallocated corporate expenses for the three months ended February 28, 2009 increased by $17,386, from $3,697 during the three months ended February 29, 2008 to $21,083 in the comparable period in fiscal 2009. Unallocated corporate expenses for the nine months ended February 28, 2009 increased by $40,844 from $28,746 in the first nine months of fiscal 2008 to $69,590 in the same period in fiscal 2009. Unallocated corporate expenses include amortization of intangible assets with the exception of the amortization of acquired technology which is included in cost of revenue. The increase in unallocated corporate expense for both the three and nine month periods in fiscal 2009 includes merger and integration related costs incurred in connection with the Transactions of approximately $3,500 and $32,700, respectively. Excluding these one-time related costs in fiscal 2009, unallocated corporate expenses would have been approximately $17,583 and $36,890 for the three and nine months ended February 28, 2009, respectively. These increases in both periods in fiscal 2009 are primarily due to corporate costs incurred related to the Transactions and the impairment charge of $14,076 related to the investment in iMedica, partially offset by cost benefits received in fiscal 2009 for cost reduction strategies that were implemented at the end of fiscal 2008.
Amortization of intangibles for the three months ended February 28, 2009 increased $2,692, from $180 during the three months ended February 29, 2008 to $2,872 in the comparable period in fiscal 2009. Amortization of intangibles for the nine months ended February 28, 2009 decreased $6,813 or 61.2%, from $11,128 during the nine months ended February 29, 2008 to $4,315 in the comparable period in fiscal 2009. The quarter over quarter increase is attributable to intangible amortization recorded in conjunction with the Transactions during the quarter ended February 28, 2009 which was absent in the comparable period of fiscal 2008. The intangible amortization related to the Transactions may change in the future once the final valuation is completed. The decrease in the nine month period ended February 28, 2009 is primarily due to the Medic customer relationship intangible asset becoming fully amortized during the beginning of fiscal 2009 versus a full period of amortization in the comparable period in fiscal 2008. The decrease was partially offset by the intangible amortization recorded in conjunction with the Transactions for the period from the closing of the Transactions on October 10, 2008 through February 28, 2009.
On February 10, 2009 Allscripts entered into a Second Amended and Restated Credit Agreement (the Credit Facility) which provides for a total unsecured commitment of $125,000, an increase of $50,000 from the First Amendment to Credit Facility, and matures on August 15, 2012. On November 7, 2008, Allscripts launched an offer to purchase for cash all of the $27,868 of Notes then outstanding at a purchase price equal to 100% of the principal amount of the Notes being repurchased ($1,000 per each $1,000 principal amount outstanding) plus any accrued and unpaid interest, pursuant to the terms of the indenture governing the Notes. The offer to purchase the outstanding Notes expired on December 9, 2008, with $8,164 of the $27,868 outstanding Notes being repurchased for cash during the quarter ended February 28, 2009, which resulted in a decrease in interest expense on the 3.5% Notes.
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