Cerner Reports Third Quarter 2007 Results.Strong Earnings Growth and Margin Expansion 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. -- Cerner Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : 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 results for the 2007 third quarter that ended Sept. 29, delivering strong margin expansion and earnings growth. Bookings in the third quarter 2007 were $356.7 million, which is up 1 percent from the third quarter of 2006. Year-to-date 2007 bookings were $1.10 billion, up 19 percent compared to $926.1 million of bookings in the same period of 2006. Year-to-date 2007 bookings exclude a $97.8 million booking in the second quarter of 2007 related to Cerner's participation in the National Health Service (NHS NHS abbr. National Health Service NHS (in Britain) National Health Service ) initiative to automate clinical processes and digitize To convert an image or signal into digital code by scanning, tracing on a graphics tablet or using an analog to digital conversion device. 3D objects can be digitized by a device with a mechanical arm that is moved onto all the corners. medical records in England. Third quarter revenue increased 8 percent over the year-ago period to $372.9 million. Year-to-date 2007 revenue increased 13 percent to $1.13 billion. On a Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) basis, third quarter 2007 net earnings were $35.8 million, and 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 $0.43. Third quarter 2006 GAAP net earnings were $26.7 million, and diluted earnings per share were $0.33. Adjusted (non-GAAP) Earnings Adjusted third quarter 2007 net earnings were $38.4 million, which is 30 percent higher than the $29.6 million of adjusted net earnings in the third quarter of 2006. Adjusted diluted earnings per share were $0.46 in the third quarter of 2007 compared to $0.36 in the third quarter of 2006. Analysts' consensus estimate for third quarter 2007 adjusted diluted earnings per share was $0.45. Adjusted net earnings and diluted earnings per share exclude the impact of adopting Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 123R, Share-Based Payment, which requires the expensing of stock options. The Company provides earnings with and without stock options expense because earnings excluding this expense are used by management along with GAAP results to analyze our business, make strategic decisions, and for management compensation purposes. Adjusted Net Earnings is not a recognized term under GAAP and should not be substituted for net earnings as a measure of the Company's performance but instead should be utilized as a supplemental measure of financial performance in evaluating our business. Please see the accompanying schedule, titled "Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings Per Share to GAAP Net Earnings and Diluted Earnings Per Share." Other Third Quarter Highlights: * Cash collections of $402 million and operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. of $80 million. * Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). of 89 days compared to 93 days in the year-ago quarter. * Total revenue backlog of $3.12 billion, up 31 percent over the year-ago quarter. This is comprised of $2.59 billion of contract backlog and $528.9 million of support and maintenance backlog. * 458 Cerner Millennium([R]) solution implementations were completed. Cerner has now turned on more than 7,200 Cerner Millennium solutions at more than 1,200 client facilities worldwide. "We are pleased with our solid results in the third quarter," said Neal Patterson Neal L. Patterson is CEO of Cerner Corporation, a Kansas City-based medical software corporation. Cerner was founded in 1979 by Patterson with Paul Gorup and Cliff Illig. Patterson was featured in a USA Today , Cerner co-founder, chairman and chief executive officer. "Our focus on margin expansion is reflected in the very strong earnings growth we achieved this quarter. "Our position as a leader in the global healthcare information technology industry was validated by record attendance of more than 6,700 people from 10 countries at Cerner's Health Conference. Not only is this the largest client gathering in our company's history, the event also included more than 100 exhibiting companies, making it a major industry conference as well. "With an unmatched depth and breadth of solutions and services and a strategic footprint across acute care, ambulatory care ambulatory care n. Medical care provided to outpatients. ambulatory care, n the health services provided on an outpatient basis to those who can visit a health care facility and return home the same day. , retail pharmacy, laboratory, pharmaceutical companies, and employers, Cerner is uniquely positioned to have a meaningful impact on the worldwide health economy," Patterson said. Future Period Guidance The company expects revenue in the fourth quarter of 2007 to be approximately $405 million to $415 million. For the year 2007, Cerner expects revenue between $1.53 billion and $1.54 billion, or 11 to 12 percent over 2006. Cerner expects adjusted diluted earnings per share before stock options expense in the fourth quarter to be between $0.50 and $0.51. This brings expectations for adjusted EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. before stock options expense for the full year 2007, to $1.73 to $1.74. The company expects SFAS No. 123R share-based compensation expense to reduce diluted earnings per share in the fourth quarter and full year by approximately $0.04 and $0.13, respectively, leading to expected diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. GAAP earnings per share between $0.46 and $0.47 for the fourth quarter and between $1.60 to $1.61 for the full year. Cerner expects new business bookings in the fourth quarter of 2007 to be between $380 million and $400 million. Earnings Conference Call Cerner will host an earnings conference call to provide additional detail on third quarter results 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 Oct. 18. The dial-in number for the conference call is 617-597-5396; the passcode is Cerner. The company recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 5:30 p.m. CDT, Oct. 18 through 11:59 p.m. CDT, Oct 21. The dial-in number for the re-broadcast is 617-801-6888; the passcode is 74182820. An audio webcast will be available both live and archived on Cerner's Web site at www.cerner.com under the About Cerner section (click Investors, then Presentations and Webcasts). A copy of the script used during the call will also be available at the same section of www.cerner.com. About Cerner Cerner Corp. is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 6,000 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium and Cerner's logo. (NASDAQ: CERN), www.cerner.com This release contains 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 the Company's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "positioned," "guidance" and "expects" or variations thereof or 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: the possibility of product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities; our proprietary technology may be subjected to infringement claims or may be infringed upon; risks associated with our global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. ; our potential failure to effectively hedge against foreign currency exchange rate fluctuations; risks associated with the recruitment and retention of key personnel; risks related to third party suppliers; risks inherent with business acquisitions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; variations in our quarterly operating results; and, potential inconsistencies in our sales forecasts Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. compared to actual sales. Additional discussion of these and other factors affecting the Company's business is contained in the Company's periodic filings with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial condition or business over time. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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