BURLINGTON, Vt., Oct. 27 /PRNewswire-FirstCall/ -- IDX Systems Corporation (Nasdaq:
IDXC -
News) reported results today for the third quarter ended September 30, 2004.
Revenues for the third quarter 2004 increased 34 percent to $136.1 million compared with $101.4 million in the third quarter of 2003. For the first nine months of 2004, revenues increased 26 percent to $369.0 million compared with revenues of $292.2 million for the same period in 2003.
Operating income for the third quarter 2004 was $14.6 million, reflecting operating margin of 10.8 percent, compared with $8.1 million, or operating margin of 8.0 percent, in the third quarter 2003. Operating income year-to- date 2004 was $28.8 million compared with $21.1 million during the same period last year. Operating margin for the first nine months was 7.8 percent, reflecting an improvement of 60 basis points over the same period last year, despite significant start-up costs associated with the company's operations in the United Kingdom.
Net income for the third quarter 2004 was $9.8 million, or $0.31 per fully diluted share, compared with net income of $10.3 million, or $0.34 per fully diluted share, in the same period last year, which included certain tax benefit adjustments, primarily the write-up of deferred tax assets, of approximately $0.15 per fully diluted share. For the first nine months of 2004, IDX reported net income from continuing operations of $19.4 million, or $0.62 per fully diluted share, compared with net income of $19.4 million, or $0.66 per fully diluted share, in the same period last year, including the $0.15 tax benefit adjustment.
"We are extremely pleased with our results so far this year," said James H. Crook, Jr., Chief Executive Officer of IDX. "We continue to execute well across the business, and we are well positioned to realize our mission to make a difference in healthcare, bringing value to the industry as well as to our shareholders."
IDX signed the following noteworthy contracts during the third quarter:
-- The Diagnostic Division of HealthSouth plans to deploy the IDX
Flowcast(TM) Financial Suite, IDX Imagecast(TM) Radiology Information
System (RIS), and Imagecast Picture Archiving and Communications
System (PACS) in a pilot project of seven imaging centers in Alabama.
The Diagnostic Division manages 106 imaging centers nationwide. Upon
successful completion of the pilot project in early 2005, HealthSouth
will consider contracting with IDX for a nationwide roll-out to its
remaining imaging centers.
-- A long-time IDXtend(R) customer, University of Minnesota Physicians
(UMPhysicians) agreed to implement the full Flowcast solution, which
includes the access management, patient financials and business
intelligence suites. UMPhysicians is a multi-specialty group
practice of more than 650 physicians affiliated with the University
of Minnesota Medical School, a major research institution.
-- Conemaugh Health Initiatives, a 105-physician managed service
organization that currently serves more than half a million patients
per year at 55 locations across Pennsylvania, signed an agreement to
implement the core IDX Groupcast(TM) solution plus IDX's eCommerce
EDI services with Task Management, statement mailing services and
relational reporting. Conemaugh expects to achieve significant
increases in financial efficiency with Groupcast, including the
ability to easily view expected reimbursement levels versus actual
payments.
-- Middletown Regional Hospital (MRH) of Middletown, Ohio is a new
Imagecast RIS/PACS customer. Serving Southwest Ohio, MRH is a 310-
bed hospital that performs approximately 120,000 exams per year.
-- Thomas Jefferson University Hospital, Philadelphia, PA, agreed to
upgrade to IDX Carecast(TM) to further enhance its use of
computerized physician order entry (CPOE), facility-wide nursing
documentation and emergency department workflow automation. With 800
beds, Jefferson University Hospital is one of Philadelphia's largest
medical centers, a prestigious teaching facility and an IDX
LastWord(R) customer since 1999. The hospital is currently 90
percent live on CPOE, and the organization looks forward to
continuing its successful rollout of CPOE with Carecast. More than
900 Thomas Jefferson physicians, including attendings, fellows and
residents, have received CPOE training to date.
IDX management remains comfortable with projected 2004 revenue guidance of $500 - $525 million and earnings per share guidance of $0.95 - $0.99. The company projects 2005 revenues of $610 - $630 million and earnings per share guidance of $1.25 - $1.31.
A conference call with investors will be held on October 27, 2004 at 11:00 am EDT to discuss these results. An audio Webcast of the call is available at our Internet site: http://www.idx.com , Investor Relations, Multimedia.
About IDX
Founded in 1969, IDX Systems Corporation provides information technology solutions to maximize value in the delivery of healthcare, improve the quality of patient service, enhance medical outcomes, and reduce the costs of care. IDX supports these objectives with a broad range of complementary and functionally rich products installed at 3,300 customer sites. Customers include 138,000 physicians who utilize practice management systems to improve patient care and other workflow processes. IDX software solutions are installed at:
-- 380 integrated delivery networks (IDNs) representing more than 500
hospitals
-- 175 large group practices with more than 200 physicians
-- 665 mid-size group practices with less than 200 physicians
IDX also provides its enterprise clinical software as a subcontractor to BT and Fujitsu Services, Local Service Providers for the United Kingdom National Health Service's National Programme for Information Technology, an initiative to establish electronic patient records for 50 million patients.
The IDX web strategy includes browser technology, e-commerce and web-based tools -- built using Internet architecture -- that facilitates access for patients, physicians and care providers to vital health information and data managed by the IDX clinical, administrative, financial, and managed care products. IDX has approximately 2,100 full-time employees.
IDX, Flowcast, Groupcast, Carecast, Imagecast, LastWord and IDXtend are registered trademarks or trademarks of IDX Investment Corporation. All other product names are registered trademarks or trademarks of their respective companies.
This press release contains forward-looking statements about IDX Systems Corporation that involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are uncertainties or difficulties in developing and delivering products and services, difficulties in implementing systems, possible deferral, delay or cancellation by customers of computer system or service purchase decisions, possible delay of system installations and service implementations, including implementations related to the UK Department of Health's National Programme for Information Technology, development by competitors of new or superior technologies, changing economic, political and regulatory influences on the healthcare industry, possible disruptions in the national economy caused by terrorist activities and foreign conflicts, changes in product pricing policies, governmental regulation of IDX's software and operations, the possibility of product-related liabilities, and factors detailed from time to time in IDX's periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. IDX 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.
Contacts:
Margo Happer
Vice President
Investor Relations and
Corporate Communications
802-859-6169
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IDX SYSTEMS CORPORATION
Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2004 2003
(unaudited) (audited)
ASSETS
Cash and cash equivalents $ 53,996 $ 25,536
Marketable securities 99,162 79,068
Accounts receivable, net 118,846 93,709
Deferred contract costs 21,609 3,961
Refundable income taxes 3,081 8,564
Prepaid and other current assets 11,555 7,485
Deferred tax asset - 5,899
Total current assets 308,249 224,222
Property and equipment, net 89,811 86,216
Capitalized software costs, net 5,041 3,806
Goodwill, net 2,508 2,508
Deferred contract costs, less
current portion 19,460 --
Other assets 10,518 10,357
Deferred tax asset 10,937 11,404
Total assets $ 446,524 $ 338,513
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $ 58,951 $ 54,843
Deferred revenue 62,653 23,016
Deferred tax liability 6,389 --
Total current liabilities 127,993 77,859
Deferred revenue 6,702 --
Total liabilities 134,695 77,859
Stockholders' equity 311,829 260,654
Total liabilities and
stockholders' equity $ 446,524 $ 338,513
IDX SYSTEMS CORPORATION
Consolidated Statements of Operations
(in thousands, except for per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues
Systems sales $ 36,334 $ 35,338 $ 112,557 $ 102,873
Maintenance and service
fees 99,747 66,093 256,459 189,278
Total revenues 136,081 101,431 369,016 292,151
Operating expenses
Cost of systems sales 15,047 15,394 44,741 41,977
Cost of maintenance and
services 62,909 42,612 167,608 124,680
Selling, general and
administrative 27,940 21,334 82,831 62,846
Software development costs 15,542 13,971 44,688 41,549
Restructuring charge -- -- 387 --
Total operating expenses 121,438 93,311 340,255 271,052
Operating income 14,643 8,120 28,761 21,099
Other income
Other income 832 252 1,283 338
Gain on sale of investment 248 -- 1,257 --
Total other income 1,080 252 2,540 338
Income before income taxes 15,723 8,372 31,301 21,437
Income tax (provision)
benefit (5,949) 1,929 (11,869) (1,990)
Income from continuing
operations 9,774 10,301 19,432 19,447
Discontinued operations
Gain on sale of
discontinued operations,
net of income and income
taxes -- -- -- 26,826
Net income $ 9,774 $ 10,301 $ 19,432 $ 46,273
Basic earnings per share
Income from continuing
operations $ 0.32 $ 0.35 $ 0.64 $ 0.66
Income from discontinued
operations $ -- $ -- $ -- $ 0.92
Basic earnings per share $ 0.32 $ 0.35 $ 0.64 $ 1.58
Basic weighted average
shares outstanding 30,396 29,446 30,152 29,271
Diluted earnings per share
Income from continuing
operations $ 0.31 $ 0.34 $ 0.62 $ 0.66
Income from discontinued
operations $ -- $ -- $ -- $ 0.90
Diluted earnings
per share $ 0.31 $ 0.34 $ 0.62 $ 1.56
Diluted weighted average
shares outstanding 31,684 30,224 31,563 29,699
Earnings per share numbers may not foot due to rounding.
Certain revenue and cost of sale components (including ecommerce revenues and royalties) have been reclassified.
The above financial statement includes the following special items:
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Restructuring charge $ -- $ -- $ 387 $ --
Gain on sale of investment (248) -- (1,257) --
Tax effect of included special
items 94 -- 330 --
Tax adjustments -- (4,440) -- (4,440)
Total net effect of included
special items $(154) $(4,440) $ (540) $ (4,440)
IDX SYSTEMS CORPORATION
Consolidated Statements of Operations
(in thousands, except for per share data)
*Excluding one-time charges
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Revenues
Systems sales $ 36,334 $ 35,338 $ 112,557 $ 102,873
Maintenance and service
fees 99,747 66,093 256,459 189,278
Total revenues 136,081 101,431 369,016 292,151
Operating expenses
Cost of systems sales 15,047 15,394 44,741 41,977
Cost of maintenance and
services 62,909 42,612 167,608 124,680
Selling, general and
administrative 27,940 21,334 82,831 62,846
Software development costs 15,542 13,971 44,688 41,549
Total operating expenses 121,438 93,311 339,868 271,052
Operating income 14,643 8,120 29,148 21,099
Other income 832 252 1,283 338
Income before income taxes 15,475 8,372 30,431 21,437
Income tax provision (5,855) (2,511) (11,539) (6,430)
Income from continuing
operations 9,620 5,861 18,892 15,007
Discontinued operations
Gain on sale of
discontinued operations,
net of income and income
taxes -- -- -- 26,826
Net income $ 9,620 $ 5,861 $ 18,892 $ 41,833
Basic earnings per share
Income from continuing
operations $ 0.32 $ 0.20 $ 0.63 $ 0.51
Income from discontinued
operations $ -- $ -- $ -- $ 0.92
Basic earnings per share $ 0.32 $ 0.20 $ 0.63 $ 1.43
Basic weighted average
shares outstanding 30,396 29,446 30,152 29,271
Diluted earnings per share
Income from continuing
operations $ 0.30 $ 0.19 $ 0.60 $ 0.51
Income from discontinued
operations $ -- $ -- $ -- $ 0.90
Diluted earnings per share $ 0.30 $ 0.19 $ 0.60 $ 1.41
Diluted weighted average
shares outstanding 31,684 30,224 31,563 29,699
Earnings per share numbers may not foot due to rounding.
Certain revenue and cost of sale components (including ecommerce revenues and royalties) have been reclassified.
The above financial statement excludes the following special items:
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
Restructuring charge $ -- $ -- $ 387 $ --
Gain on sale of investment (248) -- (1,257) --
Tax effect of excluded special
items 94 -- 330 --
Tax adjustments -- (4,440) -- (4,440)
Total net effect of excluded
special items $(154) $(4,440) $ (540) $(4,440)
IDX SYSTEMS CORPORATION
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
September 30,
2004 2003
OPERATING ACTIVITIES
Net income from continuing
operations 9,774 10,301
Less: Loss from discontinued
operations, net of income taxes -- (814)
Gain on disposal of discontinued
operations, net of income -- 814
Net income from continuing
operations 9,774 10,301
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 4,245 3,204
Amortization 770 298
Gain on sale of investment (248) --
Deferred taxes 802 (2,864)
(Decrease)/increase in
allowance for doubtful accounts (796) 294
Tax benefit related to exercise
of non-qualified stock options 604 747
Foreign currency
transaction gain (83) --
Other -- 85
Changes in operating assets
and liabilities:
Accounts receivable 7,312 2,837
Deferred contract costs (17,469) --
Prepaid expenses and
other assets (122) (1,077)
Accounts payable and
accrued expenses (2,900) (1,446)
Federal and state
income taxes 5,789 (1,852)
Deferred revenue 2,166 2,949
Net cash provided
by operating
activities 9,844 13,476
INVESTING ACTIVITIES
Purchase of property and
equipment, net (7,759) (4,445)
Other assets (639) (811)
Net cash used in
investing activities (8,398) (5,256)
FINANCING ACTIVITIES
Proceeds from sale of common stock 1,385 3,300
Payment on capital lease obligation (12) --
Net cash provided by
financing activities 1,373 3,300
Effect of exchange rate fluctuations
on cash and cash equivalents 454 --
Fair value of marketable
securities * 25,307 --
Increase in cash, cash equivalents
and marketable securities 28,580 11,520
Cash, cash equivalents and marketable
securities at beginning of period 124,578 90,681
Cash, cash equivalents and
marketable securities at end of
period $ 153,158 $ 102,201
* The increase in fair value of marketable securities relates to the
change in accounting method from the equity method to the fair value
method of accounting for available for sale securities in accordance
with SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities.
