Cerner Corporation Caps Successful Year; Reports Record Fourth Quarter; Raises Revenue & EPS Guidance for 2001.Business & Health Editors, Medical Writers KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BW HealthWire)--Jan. 31, 2001 Cerner Cerner Corporation (NYSE: CERN) is an international IT corporation in the healthcare industry with more than 7,700 employees. As of June 2006, approximately 1,900 associates in the United States and 300 associates in India were involved full-time in the software development Corporation (Nasdaq:CERN CERN or European Organization for Nuclear Research, nuclear and particle physics research center straddling the French-Swiss border W of Geneva, Switzerland. ) today announced record results for the fourth quarter and year ended December December: see month. 30, 2000. The fourth-quarter diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of were $.21, excluding the impact of non-recurring items. The First Call consensus analyst earnings per share estimate for the 2000 fourth quarter had been $.19. This marks the fifth consecutive quarter in which the company has exceeded consensus estimates. Cerner also said that it is raising its guidance for earnings per share in 2001 and is now comfortable with analyst estimates in the range of $0.80 to $0.85, up from the previous range of $0.75 to $0.80 and that it is comfortable with analysts' revenue estimates for the 2001 year in the range of $480 to $490 million, up from previous analyst estimates of $450 to $460 million. Revenues for the fourth quarter were a record $119.6 million, an increase of 33% over the $89.7 million for the fourth quarter of 1999. Net earnings before non-recurring charges were $7.7 million, compared with $3.1 million for the fourth quarter of 1999. Diluted earnings per share before non-recurring charges were $0.21 per share, compared with $0.09 per share in the year ago quarter. Highlights for the fourth quarter include the following: -- Record new business bookings revenue of $113.4 million vs. $85 million in the year ago quarter -- 58 major system contracts signed during the quarter, 25% higher than any previous quarter -- Operating margin of 11.4% vs. 6.8% in the year ago quarter, excluding non-recurring charges -- Record cash collections of $106.2 million -- Days Sales Outstanding of 139 days, down 15% from 164 days in the year ago quarter. For the year ended December 30, 2000, revenues increased 19% to $404.5 million from $340.2 million from the 1999 year. Net earnings before non-recurring and extraordinary items increased 197% to $20.4 million, compared with $6.9 million in the prior year. Diluted earnings per share before non-recurring and extraordinary items were $0.57 per share, compared with $0.20 per share for the 1999 year. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: percentage, excluding non-recurring items for the year, was 9.2%, more than double the prior year's 4.3%. "Cerner's record results in the fourth quarter reflect strong internal and external trends increasing our consistency Consistency can refer to:
Robert Wilson Patterson, 1850–1910, b. Chicago, grad. Williams, 1871, became (1871) a reporter on the Chicago Times and after 1873 was attached to the Chicago Tribune. , Chairman and Chief Executive Officer. "In addition to our impressive financial performance, Cerner had success in a number of key areas. The Company added over 430 new client relationships during the year, representing a significant future cross-sell opportunity for our technology. Our hosting services, where we provide the technical infrastructure and services for Cerner solutions in our world class data center, became the delivery platform of choice for over $50 million of new bookings in its first year. Many of these clients are community hospitals and represent a significantly expanded market for our products. These increased opportunities are being addressed by a sales force that has more than doubled in the past 18 months." Patterson continued: "We made important progress in installing HNA HNA Hereditary Neuralgic Amyotrophy HNA Hawaii Nurses Association HNA High North Alliance HNA Morioka, Japan - Hanamaki (Airport Code) HNA Hospice Nurses Association (now Hospice and Palliative Nurses Association) Millennium millennium [Lat.,=1,000 years], the period of 1,000 years in which, according to some schools of Christian eschatology, Christ will reign again gloriously on earth. Belief in the millennium, based on Rev. 20, has recurred in Christianity since the earliest times. (R) applications. We now have over 800 applications live on our HNA Millennium product set in over 125 client organizations worldwide. PowerChart Office(TM), Cerner's physician clinical practice solution, is having a significant impact on the way many of our clients practice medicine. In the fourth quarter, the number of clients committing to purchasing this solution was more than double that of the first three quarters combined, with one placement representing the first Cerner footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. in one of the largest healthcare providers in the southeast Southeast or south east is the ordinal direction halfway between south and east. It the opposite of northwest. Southeast or South East can refer to: "We continue to see demand for HNA Millennium across the size spectrum of provider organizations," Patterson added. "We separately announced today that, in the fourth quarter of 2000, the prestigious UPMC See Ultra-Mobile PC. Health System, a 17 hospital network with 23 affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: hospitals serving the entire western Pennsylvania Western Pennsylvania consists of the western third of the state of Pennsylvania in the United States. Pittsburgh is the largest city in the region, with a metropolitan area of about 2.4 million people, and is the cultural center for Western Pennsylvania. area, has selected Cerner as their strategic partner for their clinical and administrative healthcare technology solutions. In Winona, Minnesota Winona is the county seat of Winona County6. Located in picturesque bluff country on the Mississippi River, its most noticeable physical landmark is Sugar Loaf. Winona is named after the legend of Princess Winona, a possible relative of Chief Wapasha (Wabasha) III. , we were selected by Winona Winona (wĭnō`nə, wī–), city (1990 pop. 25,399), seat of Winona co., SE Minn., on the Mississippi River; inc. 1857. Automotive products, flour, metal, and heavy road equipment are made there. Community Hospital to provide a broad set of Cerner clinical solutions due to the success of the project in which Cerner is networking the entire community. These agreements highlight the power and value of HNA Millennium and the breadth Breadth The percentage of assets or stocks advancing relative to those unchanged or declining. Also the number of independent forecasts available per year. A stock picker forecasting returns to 100 stocks every quarter exhibits a breadth of 400, assuming each forecast is of Cerner's services for providers who are seeking to link themselves tightly with the consumers and communities they serve. "As we look forward to 2001, Cerner has strengthened its leadership position. Our successful HNA Millennium architecture and applications are now industrial strength. In addition we are offering the technology to our market with expanded delivery options and business arrangements. For example, the Cerner hosted delivery model is allowing Cerner to provide state of the art applications that cover the entire marketplace of healthcare providers. We believe that over the next three years healthcare providers will need to replace many of their legacy clinical and financial systems in order to improve efficiency of their operations and meet the continuing governmental compliance requirements Compliance requirements are a series of directives established by United States Federal government agencies that summarize hundreds of Federal laws and regulations applicable to Federal assistance (also known as Federal aid or Federal funds). on privacy, safety and billing. Cerner is the clear leader ready today to meet those challenges." Patterson concluded: "We believe that several key elements in our business will continue our momentum, growing our revenues, expanding our operating margins and providing for higher levels of revenue visibility. We expect continued success in the marketplace with major systems contracts driving our top line growth. In addition, our Cerner Consulting practice for system implementation and support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services are expected to continue to deliver improved operating margins as a result of HNA Millennium conversions and the completion of the conversion to a fee for service implementation model. We believe that these improvements, combined with internal operating efficiencies and Cerner's increasing competitiveness, should again produce substantial earnings growth in 2001." Cerner announced on December 29, 2000, that it recorded two non-recurring items in the 2000 fourth quarter. The first item relates to the sale of 4.27 million shares of WebMD WebMD is a medical and wellness information service, primarily known for its public internet site, which provides health information, a symptom checklist, pharmacy information, a place to store personal medical information, and an online community with over 140 moderated expert-led (Nasdaq:HLTH HLTH Health HLTH WebMD Corporation (stock abbreviation, AMEX) ) for $25.6 million during December 2000. The shares were principally acquired in a license transaction in December 1998, at which time they were valued at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.30 per share. In the third quarter of 2000, Cerner recognized a non-recurring $120.4 million gain (net of tax) on 17.1 million shares of WebMD stock as a result of the exchange of CareInsite shares for WebMD shares based on the $15 per share stock price on the date of the merger of CareInsite and WebMD. As a result of the sale of 4.27 million shares at a price less than $15 per share, Cerner recognized a non-recurring investment loss of $24.5 million (net of tax) in the fourth quarter. The second non-recurring item relates to the acquisition of ADAC ADAC Allgemeiner Deutscher Automobil Club (German automobile club) ADAC Aboriginal Drug and Alcohol Council ADAC Art Directors and Artists Club (Sacramento, California) ADAC Alcohol and Drug Abuse Council Healthcare Information Systems during the fourth quarter of 2000. As a result of the acquisition, the Company recorded a non-recurring charge of $1.0 million (net of tax) due to the write off of purchased in-process research and development in the fourth quarter. Cerner will host an analyst conference call at 3:30 p.m. CDT CDT abbr. Central Daylight Time CDT Central Daylight Time CDT n abbr (US) (= Central Daylight Time) → hora de verano del centro; (BRIT on Wednesday Wednesday: see week. , January January: see month. 31, 2001. The call will be web cast and will be available both live and archived on Cerner's web site at www.cerner.com. Please access the site fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be made available shortly after the call and will run for two weeks. Cerner Corporation (Nasdaq:CERN) (www.cerner.com) is the leading supplier of clinical and management information and knowledge systems to more than 1,400 healthcare organizations worldwide. Cerner's mission is to connect the appropriate persons, knowledge, and resources at the appropriate time and location to achieve the optimal health outcome. The company's vision is to improve the health of communities through innovation and investments in information technology. Cerner strives to transform the healthcare delivery system by increasing the quality of care, improving efficiencies, eliminating medical error and connecting the individual to the system with innovative information solutions. HNA Millennium is Cerner's comprehensive suite of solutions that promote personal and community health management by connecting consumers, clinicians and healthcare organizations into a streamlined, unified single care process. HNA Millennium applications work on a cohesive cohesive, n the capability to cohere or stick together to form a mass. platform that is open, intelligent and scalable, allowing vital health information to be accessed and shared throughout the healthcare system. Cerner ... we make healthcare smarter. The following are registered trademarks of Cerner: Cerner, Cerner's logo, PowerChart Office and HNA Millennium. This release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve a number of risks and uncertainties. It is important to note that any such performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "trend," "future," "is becoming," "believe," "are expected" and "should" and similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: variations in the Company's quarterly operating results, volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of the Company's stock price, market risk of investments, changes in the healthcare industry, length of the sales and implementation cycles, changes in technology, significant competition, the Company's proprietary technology may be subjected to infringement The encroachment, breach, or violation of a right, law, regulation, or contract. The term is most frequently used in reference to the invasion of rights secured by Copyright, patent, or trademark. claims or may be infringed upon, regulation of the Company's software by the U.S. Food and Drug Administration or other government regulation, the possibility of product-related liabilities, risks and uncertainties related to the Year 2000, possible failures or defects in the performance of the Company's software and the possibility that the Company's anti-takeover defenses Noun 1. anti-takeover defense - resistance to or defense against a hostile takeover opposition, resistance - the action of opposing something that you disapprove or disagree with; "he encountered a general feeling of resistance from many citizens"; "despite could delay or prevent an acquisition of the Company. Additional discussion of these and other factors affecting the company's business and prospects is contained in the company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time.
Pro-Forma
Cerner Corporation
Consolidated Statements of Earnings
Note Note Note Note
(a)(b) (a)(b)(c)(d) (e) (e)(f)
Three Months Three Months
Ended YTD Ended YTD
December 30, 2000 2000 January 1, 2000 1999
------------- ---------- ------------- --------
(In thousands,
except per share data)
Revenue
System sales $ 81,499 263,109 57,487 224,510
Support and
maintenance 31,274 114,898 25,275 94,198
Other 6,797 26,497 6,981 21,489
-------- ------- ------- -------
Total revenue 119,570 404,504 89,743 340,197
Margin
System sales 59,068 196,370 40,856 161,276
Support and
maintenance 25,667 92,523 19,772 73,442
Other 6,481 25,493 6,925 19,889
------- ------- ------- -------
Total margin 91,216 314,386 67,553 254,607
------- ------- ------- -------
Operating expenses
Sales and client
service 47,241 169,289 36,160 139,876
Software development 21,775 78,425 18,407 72,663
General and
administrative 8,584 29,483 6,927 27,563
------- ------- ------- -------
Total operating
expenses 77,600 277,197 61,494 240,102
------- ------- ------- -------
Operating earnings 13,616 37,189 6,059 14,505
Interest income 861 3,645 756 2,582
Interest expense (1,810) (7,316) (1,823) (5,978)
-------- ------- ------- -------
Interest expense,
net (949) (3,671) (1,067) (3,396)
Earnings before
income taxes 12,667 33,518 4,992 11,109
Income taxes (4,941) (13,152) (1,892) (4,252)
------- ------- ------- -------
Net Earnings $ 7,726 20,366 3,100 6,857
======= ======= ======= =======
Basic earnings
per share:
Basic earnings
per share $ 0.22 0.60 0.09 0.20
======= ======= ======= =======
Basic weighted average
shares outstanding 34,695 34,123 33,698 33,623
Diluted earnings
per share:
Diluted earnings
per share $ 0.21 0.57 0.09 0.20
======= ======= ======= =======
Diluted weighted
average shares
outstanding 36,888 35,603 33,952 33,916
Note (a): Excludes a realized loss on the sale of stock. The impact of
this charge is a $24.5 million decrease in net earnings and
a reduction to EPS of $.67 for Q4-2000 and $.69 for the
year.
Note (b): Excludes a non-recurring charge related to the acquisition
of HCIS. The impact of this charge is a $1.0 million
decrease in net earnings and a $.03 reduction in EPS for
Q4-2000 and the year.
Note (c): Excludes a Q3-2000 unrealized gain on exchange of stock of
$120.4 million (net of tax). The impact of this gain is a
$3.38 increase to EPS for the year. Excludes a Q3-2000
non-recurring charge of $3.2 million related to the
acquisition of Citation. The impact of this charge is a $.09
reduction to EPS for the year.
Note (d): Excludes a Q2-2000 non-recurring charge of $6.7 million,
related to a write-down of intangible assets associated with
the HNV purchase. The impact of this charge is a $.19
reduction to EPS for the year.
Note (e): Excludes a non-recurring charge of $5.8 million, net of $3.6
million tax benefit related to costs of completing fixed fee
implementation contracts. The impact of this charge is a
$.17 reduction for Q4-1999 and the year. Excludes a
non-recurring charge of $.9 million, net of $.5 million tax
benefit related to the accrual of branch restructuring
costs. The impact of this charge is $.03 reduction to EPS
for Q4-1999 and the year.
Note (f): Excludes a Q2-1999 extraordinary item of $1.4 million (net
of tax), related to the early extinguishment of debt. The
impact of this charge is a $.05 reduction to EPS for the
year.
Cerner Corporation
Consolidated Statements of Earnings
(including non-recurring and extraordinary items)
Three Months Three Months
Ended YTD Ended YTD
December 30, 2000 2000 January 1, 2000 1999
------------- ---------- ------------- --------
(In thousands,
except per share data)
Revenue
System sales $ 81,499 263,109 57,487 224,510
Support and
maintenance 31,274 114,898 25,275 94,198
Other 6,797 26,497 6,981 21,489
------- ------- ------- -------
Total revenue 119,570 404,504 89,743 340,197
Margin
System sales 59,068 196,370 40,856 161,276
Support and
maintenance 25,667 92,523 19,772 73,442
Other 6,481 25,493 6,925 19,889
Write-off of fixed-fee
implementation
contracts - - (9,448) (9,448)
------- ------- ------- -------
Total margin 91,216 314,386 58,105 245,159
------- ------- ------- -------
Operating expenses
Sales and client
service 47,241 169,289 36,160 139,876
Software development 21,775 78,425 18,407 72,663
General and
administrative 8,584 29,483 6,928 27,564
Write-off of in
process research
and development 1,700 4,900 - -
Write-down of
intangible assets - 6,687 - -
Branch restructuring
charge - - 1,358 1,358
------- ------- ------- -------
Total operating
expenses 79,300 288,784 62,853 241,461
------- ------- ------- -------
Operating earnings 11,916 25,602 (4,748) 3,698
Interest income 861 3,645 756 2,582
Interest expense (1,810) (7,316) (1,823) (5,978)
Loss on Sale of
Shares (38,462) (38,462) - -
Unrealized gain on
exchange of stock - 188,654 - -
------- ------- ------- -------
Interest expense,
net (39,411) 146,521 (1,067) (3,396)
Earnings before income
taxes and extrordinary
item (27,495) 172,123 (5,815) 302
Income taxes 9,645 (66,858) 2,242 (118)
------- ------- ------- -------
Earnings before
extraordinary
item $ (17,850) 105,265 (3,573) 184
------- ------- ------- -------
Extraordinary loss on
early extinguisment of
debt, net of taxes
of $865 - - - (1,395)
------- ------- ------- -------
Net Earnings $ (17,850) 105,265 (3,573) (1,211)
======= ======= ======= =======
Basic earnings
per share:
Basic earnings per share
before extraordinary
item $ (0.51) 3.08 (0.11) 0.01
======= ======= ======= =======
Basic earnings
per share $ (0.51) 3.08 (0.11) (0.04)
======= ======= ======= =======
Basic weighted average
shares outstanding 34,695 34,123 33,698 33,623
Diluted earnings
per share:
Diluted earnings per share
before extraordinary
item $ (0.51) 2.96 (0.11) 0.01
======= ======== ======== =======
Diluted earnings
per share $ (0.51) 2.96 (0.11) (0.04)
======= ======== ======== =======
Diluted weighted average
shares outstanding 34,695 35,603 33,698 33,623
Cerner Corporation
Consolidated Balance Sheets
(In thousands)
December 30, January 1,
2000 2000
-------------- --------------
Assets
Cash and cash equivalents $ 90,893 75,677
Receivables 188,036 161,174
Inventory 2,174 1,262
Prepaid expenses and other 7,393 4,316
-------------- --------------
Total current assets 288,496 242,429
Property and equipment, net 82,234 77,938
Software development costs, net 83,276 71,007
Intangible assets, net 22,227 7,511
Investments, net 130,626 252,123
Other assets 9,552 9,883
-------------- --------------
Total assets $ 616,411 660,891
============== ==============
Liabilities
Accounts payable $ 20,532 20,261
Current installments of long-term debt 72 -
Deferred revenue 40,212 21,245
Income taxes 9,718 10,987
Accrued payroll and tax withholdings 27,338 17,241
Other accrued expenses 4,443 2,642
-------------- --------------
Total current liabilities 102,315 72,376
-------------- --------------
Long-term debt, net 102,299 100,000
Deferred income taxes 57,430 93,578
Deferred revenue 10,650 16,000
-------------- --------------
Total liabilities 272,694 281,954
-------------- --------------
Stockholders' Equity
Common stock 360 349
Additional paid-in capital 192,715 166,735
Retained earnings 230,916 125,651
Treasury stock, at cost (1,201,625 shares in
2000 and 1,201,518 shares in 1999) (20,799) (20,796)
Accumulated other comprehensive income:
Foreign currency translation adjustment (743) 23
Unrealized gain on available-for-sale
equity security (net of deferred tax
benefit of $33,036 in 2000 and deferred
tax liability $59,806 in 1999) (58,732) 106,975
-------------- --------------
Total stockholders' equity 343,717 378,937
-------------- --------------
Total liabilities and equity $ 616,411 660,891
============== ==============
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