Idx Systems (NASDAQ:IDXC)
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IDX Systems Corporation Reports 2005 Second Quarter Results
First Half Year-Over-Year Revenues Increase More Than 24%
BURLINGTON, Vt., July 28 /PRNewswire-FirstCall/ -- IDX Systems Corporation
(NASDAQ:IDXC) reported results today for the second quarter ended June 30,
2005.
Revenues for the second quarter 2005 increased to $146.7 million compared with
$130.4 million in the second quarter of 2004. Revenues for the six-month
period ended June 30, 2005 increased to $289.8 million compared with revenues
of $232.9 million for the same period in 2004.
IDX reported second quarter 2005 net income of $5.1 million, or $0.16 per
diluted share, compared to 2004 net income of $8.1 million, or $0.26 per
diluted share. For the six-month period ended June 30, 2005, IDX reported net
income of $13.7 million, or $0.42 per diluted share, compared with net income
of $9.7 million, or $0.31 per diluted share, in the same period last year.
On June 1, 2005 IDX announced the termination of a contract with Fujitsu
Services Limited and an anticipated resulting pretax charge for the loss on the
contract of between $2.0 million and $4.0 million in the second quarter. The
above actual results include a pretax charge for the contract termination loss
of approximately $3.5 million, or $0.07 net of income taxes per diluted share.
The company anticipates an additional pretax charge during the third quarter of
2005 relating to employee severance arrangements and other costs of between
$0.5 million and $1.0 million.
IDX notes the following financial highlights as of June 30, 2005:
* Cash and marketable securities of $224.2 million.
* Days Sales Outstanding (DSOs) of 92 days, up substantially due to a
delayed customer payment, which has since been received. Without the
delay, DSOs would have been within the historical range and projected
target of 80 - 85 days. IDX expects DSOs to return to these levels in
the third quarter.
* New business bookings of $108.2 million, at the upper end of the normal
quarterly range.
* Gain on sale of securities of $2.9 million.
"While second quarter results reflect higher-than-planned costs in the UK
business, we believe recent efforts to refocus that aspect of the business will
yield greater profitability in the future. We are seeing increased momentum
across the domestic business, and our balance sheet is exceptionally strong,
with no debt and record levels of cash and securities. We look forward to
continued growth in the second half of 2005," said James H. Crook, Jr., Chief
Executive Officer of IDX.
IDX management reaffirmed 2005 revenue guidance of $610 - $630 million and
earnings per share guidance of $1.25 - $1.31, excluding the charges associated
with the contract termination loss, and 2006 guidance of $670 - $690 million in
revenue and earnings per share of $1.50 - $1.60.
A conference call with investors will be held on July 28, 2005 at 11:00 am EDT
to discuss these results. An audio Webcast of the call will be 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. Our
systems are deployed to serve approximately 150,000 physicians and are installed
at over 3,400 customer sites, including more than 850 group practices and
approximately 370 integrated delivery networks servicing more than 500
hospitals.
IDX also provides its enterprise clinical software as a subcontractor to BT,
Local Service Provider 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 2,400 full-time employees.
Contact:
Margo C. Happer
Vice President
Investor Relations and
Corporate Communications
802-859-6169
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 new services and system difficulties in completing
and integrating acquisitions, 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, 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, changes in our relationships with our partners,
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.
IDX SYSTEMS CORPORATION
Consolidated Balance Sheets
(in thousands)
June 30, December 31,
2005 2004
(unaudited) (audited)
ASSETS
Cash and cash equivalents $46,574 $67,346
Marketable securities 177,658 94,283
Accounts receivable, net 154,688 122,481
Deferred contract costs 26,837 24,209
Refundable income taxes 7,625 7,514
Prepaid and other current assets 11,917 8,199
Total current assets 425,299 324,032
Property and equipment, net 100,236 94,291
Deferred contract costs, less current
portion 54,158 42,295
Capitalized software costs, net 6,626 5,596
Goodwill, net 7,065 7,163
Other intangible assets 2,514 2,514
Other assets 10,789 10,063
Deferred tax asset 8,070 10,961
Total assets $614,757 $496,915
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities $83,449 $84,388
Deferred revenue 59,610 62,278
Deferred tax liability 43,281 6,579
Total current liabilities 186,340 153,245
Deferred revenue 15,479 11,365
Total liabilities 201,819 164,610
Stockholders' equity 412,938 332,305
Total liabilities and
stockholders' equity $614,757 $496,915
IDX SYSTEMS CORPORATION
Consolidated Statements of Income
(in thousands, except for per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Revenues
Systems sales $39,055 $42,664 $77,509 $76,223
Maintenance and
service fees 107,645 87,721 212,250 156,712
Total revenues 146,700 130,385 289,759 232,935
Operating expenses
Cost of systems sales 15,718 17,725 29,688 29,694
Cost of maintenance
and services 74,409 58,860 146,748 104,699
Cost of sales
- contract termination
loss, net 3,545 - 3,545 -
Selling, general and
administrative 31,581 26,464 62,260 54,891
Software development
costs 15,466 15,259 29,160 29,146
Restructuring charge - 387 - 387
Total operating
expenses 140,719 118,695 271,401 218,817
Operating income 5,981 11,690 18,358 14,118
Other income (expense)
Other income (expense),
net (862) 335 (45) 451
Gain on investment 2,917 1,009 3,417 1,009
Total other income 2,055 1,344 3,372 1,460
Income before income
taxes 8,036 13,034 21,730 15,578
Income tax provision (2,957) (4,953) (8,040) (5,920)
Net income $5,079 $8,081 $13,690 $9,658
Basic earnings per
share $ 0.16 $ 0.27 $ 0.44 $ 0.32
Basic weighted average
shares outstanding 31,060 30,181 30,999 30,031
Diluted earnings
per share $ 0.16 $ 0.26 $ 0.42 $ 0.31
Diluted weighted
average shares
outstanding 32,197 31,572 32,225 31,503
Earnings per share numbers may not foot due to rounding.
The above financial statement includes the following special items:
Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Contract termination
loss, net 3,545 - 3,545 -
Tax effect of included
special items (1,312) - (1,312) -
Total net effect of
included special
items $2,233 $- $2,233 $-
IDX SYSTEMS CORPORATION
Statement of Cash Flows
(in thousands)
(unaudited)
Three Months Ended
June 30,
2005 2004
OPERATING ACTIVITIES
Net income $5,079 $8,081
Adjustments to reconcile net income
to net cash(used in) provided by
operating activities:
Depreciation 4,666 4,143
Amortization 241 1,126
Gain on investments (2,917) (1,009)
Deferred taxes 3,552 4,171
Increase in allowance for
doubtful accounts 114 294
Tax benefit related to exercise
of non-qualified stock options 441 1,190
Foreign currency transaction
loss (gain), net 1,395 (207)
Contract termination loss, net 3,545
Loss on disposition of equipment - -
Restructuring costs - 387
Reduction in fair value of investment 389 -
Other 98 102
Changes in operating assets
and liabilities:
Accounts and uynbilled
receivables (24,684) (8,980)
Deferred contract costs (12,053) (8,297)
Prepaid expenses and
other assets (1,646) (4,655)
Accounts payable and
accrued expenses 2,778 1,879
Federal and state income
taxes (2,316) (1,243)
Deferred revenue 986 22,282
Net cash (used in)
provided by operating
activities (20,332) 19,264
INVESTING ACTIVITIES
Purchase of property and equipment,
net (7,368) (4,464)
Purchase of marketable securities (7,100) (2,000)
Proceeds from sale of marketable
securities and other investments 34,686 10,714
Other assets (2,099) (856)
Net cash provided by
investing activities 18,119 3,394
FINANCING ACTIVITIES
Proceeds from sale of common stock 3,044 4,772
Other financing activities (3) -
Net cash provided by
financing activities 3,041 4,772
Effect of exchange rate fluctuations on
cash and cash equivalents 781 (406)
Net increase in cash and cash equivalents 1,609 27,024
Cash and cash equivalents at beginning
of period 44,965 18,820
Cash and cash equivalents at end of period $46,574 $45,844
DATASOURCE: IDX Systems Corporation
CONTACT: Margo C. Happer, Vice President, Investor Relations and
Corporate Communications, +1-802-859-6169
Web site: http://www.idx.com/