Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. | d552732d8k.htm |
| EX-99.2 - EX-99.2 - ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. | d552732dex992.htm |
| EX-10.1 - EX-10.1 - ALLSCRIPTS HEALTHCARE SOLUTIONS, INC. | d552732dex101.htm |
    Allscripts
Investor Presentation
June 2013
Exhibit 99.1 |
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1
Copyright © 2013 Allscripts Healthcare Solutions, Inc. Forward-Looking
Statements This presentation contains forward-looking statements within the
meaning of the federal securities laws. Statements regarding future events or
developments, our future performance, as well as management’s expectations, beliefs,
intentions, plans, estimates or projections relating to the future are
forward-looking statements with the meaning of these laws. These forward-looking statements are subject to a number of risks and
uncertainties, some of which are outlined below. As a result, no assurances can be given
that any of the events anticipated by the forward- looking statements will
transpire or occur, or if any of them do so, what impact they will have on our results of operations or financial condition.
Such risks, uncertainties and other factors include, among other things: the possibility
that our current initiatives focused on product delivery, client experience,
streamlining our cost structure, and financial performance may not be successful, which could result in declining demand for
our products and services, including attrition among our existing customer base; the
impact of the realignment of our sales and services organization; potential
difficulties or delays in achieving platform and product integration and the connection and movement of data among
hospitals, physicians, patients and others; the risk that we will not achieve the
strategic benefits of the merger (the “Eclipsys Merger”) with Eclipsys
Corporation (Eclipsys), or other companies that we have purchased or that the Allscripts products will not be integrated successfully
with these other companies products; competition within the industries in which we
operate, including the risk that existing clients will switch to products of
competitors; failure to maintain interoperability certification pursuant to the Health Information Technology for Economic and
Clinical Health Act (HITECH), with resulting increases in development and other costs for
us and possibly putting us at a competitive disadvantage in the marketplace; the
volume and timing of systems sales and installations, the length of sales cycles and the installation
process and the possibility that our products will not achieve or sustain market
acceptance; the timing, cost and success or failure of new product and service
introductions, development and product upgrade releases; any costs or customer losses we may incur relating to the
standardization of our small office electronic health record and practice management
systems that could adversely affect our results of operations; competitive
pressures including product offerings, pricing and promotional activities; our ability to establish and maintain strategic
relationships; errors or similar problems in our software products or other product
quality issues; the outcome of any legal proceeding that has been or may be
instituted against us and others; compliance obligations under new and existing laws, regulations and industry initiatives,
including new regulations relating to HIPAA/HITECH, increasing enforcement activity in
respect of anti-bribery, fraud and abuse, privacy, and similar laws, and future
changes in laws or regulations in the healthcare industry, including possible regulation of our software by the U.S.
Food and Drug Administration; the possibility of product-related liabilities; our
ability to attract and retain qualified personnel; the continued implementation and
ongoing acceptance of the electronic record provisions of the American Recovery and Reinvestment Act of 2009, as well
as elements of the Patient Protection and Affordable Care Act (aka health reform) which
pertain to healthcare IT adoption, including uncertainly related to changes in
reimbursement methodology and the shift to pay-for-outcomes; maintaining our intellectual property rights
and litigation involving intellectual property rights; legislative, regulatory and
economic developments; risks related to third-party suppliers and our ability
to obtain, use or successfully integrate third-party licensed technology; and breach of data security by third parties and
unauthorized access to patient health information by third parties resulting in
enforcement actions, fines and other litigation. See our Annual Report on Form
10-K/10K-A for 2012 and other public filings with the Securities and Exchange Commission (the “SEC”) for a further discussion
of these and other risks and uncertainties applicable to our business. The statements
herein speak only as of their date and we undertake no duty to update any
forward-looking statement whether as a result of new information, future events or changes in expectations.
|
 2
Explanation of Non-GAAP Financial Measures
Non-GAAP revenue consists of GAAP revenue as reported and adds back the provision for
revenue deferral as well as acquisition-related deferred revenue adjustment
booked for GAAP purposes. Non-GAAP net income consists of GAAP net income as
reported, excludes acquisition-related amortization, stock-based compensation expense and
non-recurring expenses and transaction-related costs, and adds back the provision
for revenue deferral as well as acquisition-related deferred revenue
adjustments, in each case net of any related tax effects. Non-GAAP net income also includes a tax rate alignment adjustment.
Adjusted EBITDA is a non-GAAP measure and consists of GAAP net income (loss) as
reported and adjusts for: the provision for revenue deferral; provision/(benefit)
for income taxes; net interest expense and interest income and other income/(expense); stock-based compensation expense;
depreciation and amortization; deferred revenue adjustment; non-recurring and
transaction-related costs; and non-cash asset impairment charges. A
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Allscripts reports its
financial results in accordance with generally accepted accounting principles, or GAAP. To supplement this information,
Allscripts presents in this release non-GAAP revenue, and net income, including
non-GAAP net income on a per share basis, and Adjusted EBITDA, which are
non-GAAP financial measures under Section 101 of Regulation G under the Securities Exchange Act of 1934, as amended. |
 3
An Open, Connected Community
of Health
™
Our Vision
We provide clinical, financial,
connectivity and information
SOLUTIONS and related professional
services to physicians, health systems,
hospitals and post-acute organizations.
We deliver insights that healthcare
providers require to generate world-class
outcomes and transform healthcare by
improving the quality and efficiency of
patient care.
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Who We Are and What We Do
1
Total research and development costs before software capitalization.
OUR Solutions
•
Electronic Health
Record Technology
•
Revenue Cycle
Management
•
Professional Services
•
Clinical & Financial
Transaction
Management
•
Hosting
•
Connectivity
•
Population Health
Management
•
IT Outsourcing
OUR CLIENTS
•
180,000 Physicians
•
50,000 Physician
Practices
•
1,500 Hospitals
•
10,000 Post-acute
Facilities
•
27,000 Individual
Post-acute Providers
OUR COMPANY
•
~$1.45BB 2012
Revenue
•
~7,100 Employees
•
Grow 2013 R&D
1
double-digits
•
Breadth and depth
of solutions across
the continuum of
care |
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Investment Highlights
MARKET LEADER
Diverse, industry-leading client base
Brand name recognition
OPEN systems
COMPLETE PRODUCT
PORTFOLIO
Depth and breadth
Maximizes opportunities to expand market and wallet share
Significant investment in technology platform and mobile platforms
DYNAMIC GROWTH
MARKET
Clinical innovation & regulatory requirements drive incremental client demand
Replacement opportunity with fragmented, legacy vendors
Connectivity, care coordination, analytics solutions for population health
management
Select global opportunities
OPERATING LEVERAGE
Scalable platform for sales growth
$40-50MM SG&A cost savings in 2014
Making key investments today
SOUND FINANCIAL
MODEL
~$2.7BB revenue backlog (March 31, 2013)
~74% recurring revenue (March 31, 2013)
~$223MM 2012 operating cash flow
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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MARKET
DIFFERENTIATION
GROWTH
Agenda
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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A Large, Dynamic Market
U.S. Acute/Ambulatory EHR Opportunity ~$43BB
Source: McKinsey & Company
$45
$40
$35
$30
$25
$20
$15
$10
$5
$0
Ambulatory
Stand-Alone
Opportunity
Acute
Stand-Alone
Opportunity
Integrated/Complete
Solution Across Hospitals
and Physician Practices
$16B
$10B
$17B
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Meaningful Use
ICD-10
HIPAA
Population
Health
Management
•
~$20BB
federal
program
to
drive
“meaningful”
adoption
of
electronic
health
records
–
Technology and regulatory bar increases over time
–
Yields opportunity for market share gains and competitor replacement/additions
•
Overhaul of healthcare coding system for procedures, diagnosis and billing
•
Opportunities to upgrade revenue cycle management systems
•
Professional and related services opportunity
•
Shift away from volume to value
•
Requires infrastructure above and beyond the electronic health record
•
Connect, analyze and coordinate care across a community
•
Patient and consumer engagement
•
The PHM technology market could grow to exceed $60BB by 2025¹
•
Recent updates to HIPAA Rules drive additional HIPAA compliance requirements
•
Technology platform enables and facilitates sharing of information
–
Critical criteria for success in next generation technology systems
1
Source: Equity research reports
Industry Demand Drivers
Allscripts well positioned to capitalize on evolving market
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Unsustainable Trend
Requiring Change 9
VOLUME
VALUE
Source: HFMA “Value in Healthcare: Current State & Future Directions, June
2011 •
Fragmented providers
and payments
•
No uniform quality
•
Fees for volume
•
Demand increasing
•
Collaboration,
connectivity
•
Clinical, financial
data, analysis
•
Optimize outcomes
•
Accountable care |
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Unsustainable Trend Requiring Change…Will Drive Future
Growth
Opportunities
“Above”
the
EHR
Care
Coordination
Population
Health
Patient
Engagement
Enterprise
Analytics
Software
Development Kit
Health Info
Exchange
Physician EHRs
Hospital EHRs
Alternate Site EHRs
Government Entities
Patient-centered Platform
Single health record
Allscripts provides connectivity, analytics and services across the community, regardless of
underlying system –
a key differentiator for the future
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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MARKET
GROWTH
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. DIFFERENTIATION
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Leading Footprint Across the Market
1 of 3
MDs
1 of 3
Hospitals
10,000
Post-acute
Care Providers
Used By:
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Leading Market Share in Ambulatory
2012 Share by Practice Size
Source: Capsite, 2012 US Ambulatory EHR & PM Study, August 2012
Allscripts Market
Position
#1
#1
#1
#2
#2
#2
22%
13%
16%
15%
14%
15%
42%
54%
63%
68%
77%
59%
36%
33%
21%
17%
9%
26%
Top 15 Vendors
(ex Allscripts)
Rest of Market
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Source: Analysis of HIMSS Analytics, CDR, 2011-2012.
1. For illustrative purposes, two acute vendors with ~22% and ~9% of the hospital IT
market. Total 2012 Market Share
Potential
replacement
opportunity
31%
Positioned for Growth in Acute
1
Allscripts
4.0%
Other
65.0
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. To Succeed in Value Based
Care: Interoperability, Open Platform
Traditional World
(Monolithic/Closed
Mainframe)
New World
(Modern/Open Platform)
Connect Inside
Connect Inside and
Outside |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Our Solutions: OPEN + Depth
& Breadth |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Complete Core Solution
Set Homecare
Care Management
Electronic Health Records
Practice Management
Payerpath
Clinical and Financial Management
Care Management
Emergency Department
•
Enterprise EHR and Practice Management
•
Professional EHR and Practice Management
•
Pathway Solutions
•
Sunrise Clinical Manager
•
Sunrise Financial Manager
•
Sunrise Ambulatory
•
Allscripts Care Management
•
Provides business, clinical and scheduling
functionality for multiple lines of business –
home, health, hospital & private duty
•
Referral Management allows home health
agencies, hospice agencies, and post-acute
facilities to track all patient referrals
Physician
Hospital & Health System
At Home/Alternate Site
Deploy as software, SaaS & hosted solutions |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. SOLUTIONS for the
“Virtual Layer” Beyond the EHR:
Patient Engagement, Connectivity, Analytics and Care
Coordination
Physician
Hospital & Health System
At Home/Alternate Site
Health
Information
Exchange:
dbMotion
Patient Engagement: Follow My
Health™ Clinical Analytics
& Financial Analytics: CQS; dB Motion; EPSi Care Coordination Applications:
e.g. Care Director, Care Management Technology platform a source of
competitive advantage for the future |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. •
Stage
1:
EHR/Application
•
Stage
2:
Connection
•
Stage
3:
Information
•
Stage
4:
Analytics
and
Insights
•
Stage
5:
Outcomes
LEVEL OF
IMPACT
(Quality,
Cost of Care)
TIME
Well-positioned for Next Generation of Healthcare
•
Significant drivers post Meaningful Use: Accountable Care Organization functionality,
care coordination and predictive analytics (i.e. Population Health
Management) •
Interoperability, connectivity, clinical decision support to drive better outcomes
Today |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Allscripts Leadership
Stabilized and experienced team comprised of HCIT and technology
veterans
Name
Title
Years
Relevant
Experience
Experience
Paul Black
CEO and President
25+
Cerner, IBM
Rick Poulton
Chief Financial Officer
25+
AAR, United Airlines, Arthur Andersen
Cliff Meltzer
EVP, Solutions Development
30+
CA Technologies, Apple, Cisco, IBM
Steve Shute
EVP, Sales & Services
18
IBM
Joe Carey
Client Experience Officer
23
Enterprise Systems, HBOC
Brian Farley
SVP, General Counsel
20+
Motorola, Level 3, Rythyms NetConnections
Dennis Olis
SVP, Operations
25+
Motorola
Deborah Snow
SVP, Culture & Talent
18
Cisco, Bank of America
Diane Bradley
Chief Quality and Outcomes Officer
16
Motorola, University Health System |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. MARKET
DIFFERENTIATION
GROWTH |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Strategic Imperatives for
2013 Client Commitments
Position for Growth
Enhance Financial Consistency
Operational Effectiveness
•
Deliver timely, high-quality upgrades, ensuring client
success with upcoming regulatory compliance requirements
•
Invest in improving client satisfaction
•
“Centers of Excellence”
R&D/support strategy
•
$500MM R&D and M&A commitment in 2013
•
Acquired leading connectivity provider dbMotion and
patient engagement platform “Follow My Health”
•
Delivered integrated acute revenue cycle management
solution
•
Increase deployment of hosted and mobile solutions
•
Launched Population Health Management applications
including “Care Director”
•
Package offerings
•
Longer term client commitments
•
Increased subscription/SaaS revenue
•
Expand share of wallet through incremental IT budget
•
Site consolidation plan
•
Rationalize small physician office offering
•
Streamline reporting structures and management layers
•
Discipline in procurement and sourcing
•
Invest $45-$50MM in 2013 to drive in excess of $50MM
in annualized savings beginning in 2014 |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Growth: Long-Term
Focus ¹
Annual revenue for Allscripts illustrated above is based on a GAAP presentation and is
calenderized based on reported quarterly results. Please note Allscripts changed its fiscal year-end
to
May between the period of September 2008 and May 2010. Revenue includes the impact
of acquisitions and divestitures, including revenue from Eclipsys beginning in 3Q 2010.
ALLSCRIPTS REVENUE
1
2007 -
2012
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2007
2008
2009
2010
2011
2012
$934MM
$1.444BB
$1.446BB
$282MM
$364MM
$661MM |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Strong Cash Flow
Generation ¹
Annual
cash
flow
from
operations
for
Allscripts
illustrated
above
is
calenderized
based
on
annual
results.
Please
note
Allscripts
changed
its
fiscal
year-end
to
May
between
the
period of September 2008 and May 2010. Cash flows from operations also include the
impact of acquisitions and divestitures CASH
FLOW
FROM
OPERATIONS
1
2007
-
2012
$0
$50
$100
$150
$200
$250
$300
$350
$400
2007
2008
2009
2010
2011
2012
$134MM
$269MM
$223MM
$31MM
$24MM
$97MM |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. 1Q’13 Results
($MM except per share)
Q1’13
Q4’12
Q1’12
Y/Y % change
Bookings
$177.7
$180.7
$194.6
(8.7%)
Non–GAAP Revenue
$348.0
$368.0
$365.5
(4.8%)
Adj. EBITDA
margin
$49.8
(2)
14%
$53.6
15%
$58.3
16.0%
(14.6%)
(1.7%)
Non-GAAP EPS
$0.09
(2)
$0.16
$0.12
(25%)
Please see the Non-GAAP reconciliation and related footnotes in the appendix to this
presentation Adjusted EBITDA and non-GAAP EPS for the three months ended March
31, 2013 include a pre-tax gain of approximately $8.0 million.investor.allscripts.com
1
1
1
1.
2.
Source: Company filings and publications.
|
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. Recent Results and
Corporate Update •
Q1: signed a new Sunrise community agreement (Resolute Health) and large client
renewal (Phoenix Children’s Hospital)
•
Investing in clients /solutions
•
Focused on meeting commitments
•
Results not indicative of long-term potential
•
Increased Q1 2013 gross R&D expenditures 19% year-over-year
•
Recent acquisitions (March 2013) position Allscripts for future growth
•
dbMotion
•
Follow My Health
•
Non-GAAP revenue and non-GAAP operating income for the second quarter of
2013 are expected to be materially consistent with the first quarter of 2013
Source: Company filings and publications. investor.allscripts.com |
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Key Balance Sheet Metrics
($MM)
2010
2011
2012
Q1’13
Cash and Cash Equivalents
$129.4
$157.8
$104.0
$92.3
Accounts Receivable
317.2
362.8
337.0
351.8
Total Assets
2,418.6
2,503.6
2,384.5
2,622.8
Accounts Payable
46.6
41.2
45.9
73.0
Accrued Liabilities
125.1
121.5
137.2
140.7
Total Deferred Revenue
228.6
288.9
290.7
327.9
Debt
490.5
368.1
442.0
544.3
Total Liabilities
1,034.8
1,026.9
1,100.1
1,288.5
Stockholders’
Equity
1,383.8
1,476.7
1,284.3
1,334.3
Source: Company filings
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. |
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Copyright © 2013 Allscripts Healthcare Solutions, Inc. In Summary….
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Non-GAAP Reconciliations: Revenue and earnings first
quarter 2013 and 2012 and fourth quarter 2012
Source: Company filings
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Copyright © 2013 Allscripts Healthcare Solutions, Inc.
3/31/13
12/31/12
3/31/12
Total revenue, as reported
$347.1
$350.9
$364.7
Provision for revenue deferral (a)
0.0
16.8
0.0
Acquisition-related deferred revenue adjustment
0.9
0.3
0.8
Total non-GAAP revenue
$348.0
$368.0
$365.5
Net income/(loss), as reported
($11.6)
($24.3)
$5.8
Provision for revenue deferral
0.0
17.3
0.0
Acquisition-related deferred revenue adjustment
0.7
0.3
0.5
Acquisition-related amortization
12.4
15.9
10.4
Stock-based compensation expense
6.1
13.0
4.9
Non-recurring expenses and transaction-related costs
16.0
12.5
1.9
Tax rate alignment
(7.4)
(6.7)
0.0
Non-GAAP net income
$16.2
$28.1
$23.5
Tax Rate
23%
-3%
37%
Weighted
shares
outstanding
-
diluted
173.7
173.5
192.9
Earnings
per
share
-
diluted,
as
reported
($0.07)
($0.14)
$0.03
Non-GAAP
earnings
per
share
-
diluted
$0.09
$0.16
$0.12
Three Months
Ended
Allscripts Healthcare Solutions, Inc.
Condensed Non-GAAP Financial Information
(In millions, except per-share amounts)
(Unaudited)
(a)
Provision
for
revenue
deferral
for
the
three
months
and
year
ended
December
31,
2012
reflects
a
non-recurring
revenue
deferral related to clients who have long-aged accounts receivable
balances. Three Months
Ended
Three Months
Ended |
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Non-GAAP Reconciliations: Adjusted EBITDA first quarter
2013 and 2012 and fourth quarter 2012
Source: Company filings
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Copyright © 2013 Allscripts Healthcare Solutions, Inc.
3/31/13
12/31/12
3/31/12
Total revenue, as reported
$347.1
$350.9
$364.7
Provision for revenue deferral (a)
0.0
16.8
0.0
Acquisition related deferred revenue adjustment
0.9
0.3
0.8
Total non-GAAP revenue
$348.0
$368.0
$365.5
Net income/(loss), as reported
($11.6)
($24.3)
$5.8
Tax provision/(benefit)
(13.2)
(5.8)
3.7
Interest expense (income) and other (income) expense (b)
3.2
2.2
2.0
Stock-based compensation expense
8.0
12.7
7.7
Depreciation and amortization
40.8
39.6
35.2
Acquisition-related deferred revenue adjustments
0.9
0.3
0.8
Provision for revenue deferral
0.0
16.8
0.0
Acquisition-related amortization
1.2
0.0
0.0
Non-recurring expenses and transaction-related costs (c)
20.4
12.2
3.0
Non-GAAP adjusted EBITDA
$49.8
$53.6
$58.3
Non-GAAP adjusted EBITDA margin
14%
15%
16%
Three Months
Ended
Allscripts Healthcare Solutions, Inc.
Non-GAAP Financial Information -
Adjusted EBITDA
(In millions)
Three Months
Ended
Three Months
Ended
(Unaudited)
(a) Provision for revenue deferral for the three months and year ended
December 31, 2012 reflects a non-recurring revenue
deferral related to clients who have long-aged accounts receivable
balances. (b) Interest expense (income) and other (income) expense has been
adjusted from the amounts presented in the statements of
operations in order to remove the amortization of deferred debt
issuance costs from interest expense since such amortization is
also included in depreciation and amortization. Additionally, the
amount presented for the three months ended March 31, 2013
excludes gains on investments totaling $8.0 million.
(c) Non-recurring expenses relate to certain severance,
legal, consulting, and other charges incurred in connection with
activities that are considered one-time. Depreciation expense
totaling $0.4 million has been excluded from non-recurring
expenses for the three months ended March 31, 2013 since this amount is
also included in depreciation and amortization. |
    Allscripts
Investor Presentation
June 2013 |