Allscripts-Misys Healthcare Solutions, Inc. (MDRX) reported second quarter fiscal 2010 earnings per share of 16 cents, beating the Zacks Consensus Estimate of 13 cents and the year-ago earnings of 14 cents.
Sales
Total revenues in the second quarter increased 31.6% year over year to $169.3 million. Non-GAAP revenues in the reported quarter increased 4.5% year over year to $170.7 million. Non-GAAP revenues in the second quarter of fiscal 2010 included a deferred revenue adjustment. Non-GAAP revenues in the second quarter of fiscal 2009 included the standalone Allscripts’ revenue pre-merger, a deferred revenue adjustment and elimination of prepackaged medications revenue that the company disposed off in Mar 2009.
Growth was registered across all business segments. Maintenance sales increased 31.3% year over year to $61.3 million. Transaction processing and other revenues increased 25.8% year over year to $56.1 million. System sales increased 61.5% year over year to $33.6 million. Professional services revenues increased 55.1% year over year to $18.3 million.
Total bookings for the quarter were $93.8 million, an increase of 16% year over year.
Gross margin in the reported quarter increased 450 basis points (bps) year over year to 56.4%. Non-GAAP gross margin increased 150 bps year over year to 56.8%. Selling, general and administrative (SG&A) expenses as a percentage of sales declined 1,700 bps year over year to 32.8%. Research and development (R&D) expenses as a percentage of sales declined 220 bps year over year to 6.3%.
Higher gross margin coupled with lower SG&A and R&D expenses, the latter two being based on percentage of sales, was responsible for a higher operating margin that increased 2,320 bps year over year to 15.8%.
Balance Sheet & Cash Flow
Allscripts ended the second quarter with cash and cash equivalents of $88.6 million, an increase of 24.4% in the first six months of fiscal 2010. Cash flow from operations was $19.8 million for the quarter.
Outlook
Allscripts has provided guidance for fiscal 2010. For the year, revenues are expected between $680 million and $700 million. GAAP earnings per share should be in the range of 41 cents to 43 cents. Non-GAAP earnings per share should be in the range of 61 cents to 63 cents.
Libertyville, Illinois-based Allscripts Healthcare Solutions Inc. is a leading provider of clinical software and information solutions meant for physicians. In Oct 2008, the company merged with Misys Plc − a global applications software and services company − to form Allscripts-Misys Healthcare Solutions Inc.
Allscripts faces strong competition from Cerner Corporation (CERN), Quality Systems Inc. (QSII) and MedAssets Inc. (MDAS). Presently, we have a ‘Neutral’ rating on Allscripts.
Read the full analyst report on “MDRX”
Read the full analyst report on “CERN”
Read the full analyst report on “QSII”
Read the full analyst report on “MDAS”
Zacks Investment Research
