CERN($43-$47)Beats by 2 cents. Raises guidance for the year. Sees substantial earnings growth through quarters three and four.
Wednesday July 18, 4:02 pm Eastern Time
Press Release
SOURCE: Cerner Corporation
Cerner Reports Record Bookings and Revenue, Cites Strong Market Demand; Raises Revenue and EPS Guidance for 2001 and Provides 2002 Guidance
KANSAS CITY, Mo., July 18 /PRNewswire/ -- Cerner Corporation (Nasdaq: CERN - news) today announced record results for the second quarter ended June 30, 2001. The second quarter diluted earnings per share (before non- recurring items) were $0.21. The First Call consensus analyst earnings per share estimate for the 2001 second quarter had been $0.19. This marks the sixth consecutive quarter in which the company has exceeded consensus estimates.
Revenues for the second quarter were a record $130.0 million, an increase of 39 percent over the $93.5 million for the second quarter of 2000. Net earnings (before non-recurring items) were $7.6 million, compared with $4.1 million for the second quarter of 2000. Diluted earnings per share were $0.21 per share compared with $0.12 per share in the year ago quarter.
Highlights for the second quarter include the following:
Record new business bookings revenue of $127.5 million, 37 percent over the $92.9 million in the year ago quarter and 8 percent over last quarter's record bookings
Operating margin of 10.5 percent vs. 8.1 percent in the year ago quarter
Near-record cash collections of $124.3 million, operating cash flow of $21.6 million, and an increase in cash of $8.7 million
Number of requests for proposals increased 62 percent over the year ago quarter
Days Sales Outstanding (DSO's) for the quarter were 135 days, down sequentially from the prior quarter. Total revenue backlog was $710.6 million, up 26 percent over the year ago quarter.
For the six months ended June 30, 2001, revenues increased 39% to $250.9 million from $180.6 million in 2000. Net earnings (before non- recurring items) increased 115% to $13.9 million compared with $6.5 million in the prior year. Diluted earnings per share (before non-recurring items) were $0.38 per share as compared to $0.19 in the prior year.
Cerner also said that it is raising its guidance for earnings per share in 2001 and is now comfortable with analyst earnings per share estimates in the range of $0.86 to $0.91, up from the previous range of $0.83 to $0.88 and that it is comfortable with analyst revenue estimates for the 2001 year in the range of $505 to $515 million, up from a previous range of $490 to $500 million. The Company also indicated it was comfortable with the First Call consensus analyst estimates of $0.23 for the third quarter of 2001. The Company also provided initial guidance for 2002, indicating that it was comfortable with analyst earnings per share estimates in the range of $1.20 to $1.25 and revenue estimates in the range of $590 to $610 million.
``Cerner's record results in the second quarter represent a continuation of the momentum that began building in 2000,'' said Trace Devanny, Cerner's President. ``New business bookings revenue increased more than 37 percent over the year ago quarter, reflecting the strong demand for Cerner's industry- leading Cerner Millennium(TM) solutions. The strength of our backlog and sales pipeline makes us comfortable with increasing earnings and revenue estimates for 2001 and is reflected in our 2002 guidance.''
``We are seeing increased demand in the healthcare technology marketplace,'' continued Devanny. ``Sales activity measures are up significantly over last year and our bookings performance represents seven consecutive quarters of record performance. As a measure of our competitiveness, nearly half of the transactions this quarter were with new clients.''
``Cerner also did very well in new market segments,'' added Devanny. ``We are having significant success in the mid-tier hospital market, supported by the strength of our remote hosting capabilities and our new patient accounting system. We have completed the integration of the image workflow technology acquired from ADAC Laboratories and sold our first Cerner Millennium PACS imaging system this quarter. We have already signed a second PACS deal in the third quarter, reflecting the high market interest in this product.''
``The strong market demand, combined with internal operating efficiencies and Cerner's continued competitiveness, will produce substantial earnings growth in 2001 and 2002,'' concluded Devanny. ``As we've stated before, 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 market place with major systems contracts driving our top line growth. Additionally, we expect Cerner Consulting to continue delivering improved operating margins as a result of Cerner Millennium conversions and the completion of the conversion to a fee-for-service implementation model.''
Cerner announced on June 19, 2001, that it would record two non-recurring items in the second quarter of 2001. The first item is a non-recurring gain of $4.8 million (net of $2.7 million of tax) related to a software license agreement originally entered into by CareInsite, Inc., which was acquired by WebMD in September 2000. Under the agreement, Cerner received 2 million shares of WebMD stock in exchange for approximately $400,000 in cash and the cancellation of various obligations due to Cerner by WebMD. The second item is a non-recurring charge to earnings of approximately $81 million (net of $46.2 million of tax) to adjust the carrying value of the WebMD shares owned by Cerner from $15 per share to the current market value. Including these non-recurring items, the company reported a net loss for the quarter ending June 30, 2001 of $69.0 million. |
