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Table of Contents

Table of Contents

Table of Contents

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Cerner Corporation is furnishing herewith as Exhibit 99.1, the Press Release issued by the Company on October 15, 2003, which announces the Company’s financial results for the three months and nine months ended September 27, 2003. This Press Release is being furnished under this Item 9 in accordance with SEC Release No. 33-8216 dated March 27, 2003.

To supplement our consolidated financial statements presented in accordance with GAAP, the Company uses non-GAAP measures of operating results, net income and earnings per share, which are adjusted from results based on GAAP to exclude certain expense items. The Company also discloses certain non-GAAP financial measures, such as booking revenue and revenue backlog. These non-GAAP measures are provided to enhance the user’s overall understanding of our financial performance. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.

The information in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, unless the registrant expressly states otherwise.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

CERNER REPORTS STRONG RESULTS FOR THIRD QUARTER OF 2003
Record New Business Bookings and Strong Cash Flow Performance

KANSAS CITY, Mo. — October 15, 2003 — Cerner Corporation (NASDAQ:CERN) today announced results for the third quarter ended September 27, 2003. Diluted earnings per share were $0.33, compared to $0.37 in the year-ago quarter. Analysts’ consensus estimates for third quarter earnings per share were $0.32.

Third quarter revenues increased 5 percent to $206.3 million compared to $197.0 million in the year-ago quarter. Net earnings in the quarter were $12.0 million, compared to $13.8 million in the third quarter of 2002. The Company generated operating cash flow of $33.3 million in the third quarter driven by strong cash collections and a significant number of Cerner Millennium™ implementations.

The Company also reported that SchlumbergerSema, with Cerner as its key partner, was awarded the Electronic Booking Service contract, which is the first contract awarded in the very large health care information technology procurement being conducted by the National Health Service in the United Kingdom. While this is the smallest of the contracts they plan to award, the Company considers it very strategic because Electronic Bookings will become part of the national architecture that will link health care providers and more than 50 million citizens in England.

•

New business bookings revenue of $203.9 million, up 11 percent compared to $183.2 million in the year-ago quarter. This is an all-time record for new business bookings.

•

Cash collections of $214.0 million, driving strong operating cash flow of $33.3 million.

•

Operating margins of 10.5 percent, an increase of 260 basis points compared to the second quarter of 2003.

•

Days Sales Outstanding (DSOs) in the third quarter were 112 days, which is 10 days lower than a year ago.

•

Total revenue backlog of $1.14 billion, up 19 percent over the year-ago quarter. This is comprised of $843.0 million of contract backlog and $294.3 million of support and maintenance backlog.

•

206 Cerner Millennium applications were implemented during the quarter. There are now over 2,400 Cerner Millennium applications live at over 500 client sites worldwide.

“We are very pleased with our accomplishments in the third quarter,” said Neal Patterson, Cerner’s co-founder, Chairman and Chief Executive Officer. “Specifically, we are pleased with our strong level of new business bookings and our continued strong operational execution, which led to a significant number of Cerner Millennium implementations and strong cash flow performance.”

“The competitive environment remains challenging,” added Patterson. “However, we believe the health care information technology market remains strong, and that Cerner’s proven ability to deliver value to our clients combined with our unmatched suite of solutions positions Cerner to continue having great success in the marketplace.”

Future Period Guidance
Cerner expects earnings per share in the fourth quarter of 2003 to be between $0.41 and $0.43. The Company expects revenue in the fourth quarter to be approximately $225 million to $230 million. Cerner expects bookings revenue in the fourth quarter to be more than $200 million.

For 2004, the Company believes that analysts’ earnings per share estimates between $1.55 and $1.60 are reasonable. Cerner expects revenue in 2004 to be between $910 million and $930 million.

Earnings Conference Call
Cerner will host an earnings conference call to provide additional detail at 3:30 p.m. CT on October 15, 2003. The dial-in number for the call is 617-786-2960 and the replay number is 617-801-6888 (Pass code: 96974889). The call will also be Web cast and available both live and archived on Cerner’s Web site at www.cerner.com in the Investors’ section under News and Events. Please access the site fifteen minutes early to register and to download and install any necessary audio software. For those who cannot listen to the live broadcast, replays will be made available shortly after the call and will run for two weeks. A copy of the script used during the call will also be available at www.cerner.com in the Investors’ section under News and Events.

Cerner Corporation is taking the paper chart out of health care, eliminating error, variance and unnecessary waste in the care process. With more than 1500 clients worldwide, Cerner is the leading supplier of health care information technology. The following are trademarks of Cerner: Cerner, Cerner’s logo and Cerner Millennium. Nasdaq: CERN, www.cerner.com

This release may contain forward-looking statements that involve a number of risks and uncertainties. It is important to note that the Company’s performance, financial condition or business could differ materially from those expressed in such forward-looking statements. The words “believe”, “continue”, “guidance”, “expects”, “estimates” and similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: quarterly operating results may vary, stock price may be volatile, market risk of investments, potential impairment of goodwill, changes in the health care industry, significant competition, the Company’s proprietary technology may be subjected to infringement claims or may be infringed upon, regulation of the Company’s software by the U.S. Food and Drug Administration or other government regulation, the possibility of product-related liabilities, possible system errors or failures or defects in the performance of the Company’s software, and risks associated with the Company’s global operations. Additional discussion of these and other factors affecting the Company’s business is contained in the Company’s periodic filings with the Securities and Exchange Commission. The Company 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.


			Three Months						Three Months
			Ended			YTD			Ended			YTD
(In thousands, except per share data)			September 27, 2003			September 27, 2003			September 28, 2002			September 28, 2002

Revenue
	System sales		$	80,193			241,529			84,866			239,401
	Support, maintenance and services			118,774			347,946			105,465			306,783
	Reimbursed travel (Note 1)			7,325			22,703			6,658			19,051

		Total revenue		206,292			612,178			196,989			565,235
Margin
	System sales			54,144			155,721			60,299			159,799
	Support, maintenance and services			106,713			309,674			92,861			269,776

		Total margin		160,857			465,395			153,160			429,575

Operating expenses
	Sales and client service			84,794			259,531			82,166			233,421
	Software development			39,255			115,170			33,850			95,112
	General and administrative			15,083			41,374			13,216			37,558

		Total operating expenses		139,132			416,075			129,232			366,091

		Operating earnings		21,725			49,320			23,928			63,484
	Interest income			294			894			372			965
	Interest expense			(1,997	)		(6,046	)		(1,617	)		(5,106	)
	Other income			24			167			33			64
	Gain on sale of investment			—			—			—			4,308

		Non-operating income (expense), net		(1,679	)		(4,985	)		(1,212	)		231
Earnings before income taxes and cumulative effect of a change in accounting principle				20,046			44,335			22,716			63,715
Income taxes				(7,999	)		(17,752	)		(8,948	)		(24,851	)

Earnings before cumulative effect of a change in accounting principle				12,047			26,583			13,768			38,864
Cumulative effect of a change in accounting for goodwill, net of $486 income tax benefit				—			—			—			786

Net earnings			$	12,047			26,583			13,768			38,078

Basic earnings per share:
Earnings before cumulative effect of a change in accounting principle			$	0.34			0.75			0.39			1.10
Cumulative effect of a change in accounting for goodwill				—			—			—			(0.02	)

Net earnings			$	0.34			0.75			0.39			1.08

Basic weighted average shares outstanding				35,359			35,437			35,496			35,438
Diluted earnings per share
Earnings before cumulative effect of a change in accounting principle			$	0.33			0.73			0.37			1.05
Cumulative effect of a change in accounting for goodwill				—			—			—			(0.02	)

Net earnings			$	0.33			0.73			0.37			1.03

Diluted weighted average shares outstanding				36,365			36,259			36,913			37,189

Note (1): The Company incurs out-of-pocket expenses in connection with its client service activities, which are reimbursed by its clients. In accordance with EITF 01-14, these amounts have been reclassified from other income to revenue with a corresponding amount in cost of goods sold. This has no impact on the dollar amount of gross margin, operating margin, or net earnings, but does slightly change the percent of revenue each of these items represents.


			Three Months						Three Months
			Ended			YTD			Ended			YTD
(In thousands, except per share data)			September 27, 2003			September 27, 2003			September 28, 2002			September 28, 2002

Revenue
	System sales		$	80,193			241,529			84,866			239,401
	Support, maintenance and services			118,774			347,946			105,465			306,783
	Reimbursed travel			7,325			22,703			6,658			19,051

		Total revenue		206,292			612,178			196,989			565,235
Margin
	System sales			54,144			155,721			60,299			159,799
	Support, maintenance and services			106,713			309,674			92,861			269,776

		Total margin		160,857			465,395			153,160			429,575

Operating expenses
	Sales and client service			84,794			259,531			82,166			233,421
	Software development			39,255			115,170			33,850			95,112
	General and administrative			15,083			41,374			13,216			37,558

		Total operating expenses		139,132			416,075			129,232			366,091

		Operating earnings		21,725			49,320			23,928			63,484
	Interest income			294			894			372			965
	Interest expense			(1,997	)		(6,046	)		(1,617	)		(5,106	)
	Other income			24			167			33			64

		Non-operating expense, net		(1,679	)		(4,985	)		(1,212	)		(4,077	)
Earnings before income taxes				20,046			44,335			22,716			59,407
Income taxes				(7,999	)		(17,752	)		(8,948	)		(23,279	)

Net earnings			$	12,047			26,583			13,768			36,128

Basic earnings per share			$	0.34			0.75			0.39			1.02

Basic weighted average shares outstanding				35,359			35,437			35,496			35,438
Diluted earnings per share			$	0.33			0.73			0.37			0.97

Diluted weighted average shares outstanding				36,365			36,259			36,913			37,189

Note (1): The non-GAAP statements exclude a special gain on the sale of shares of WebMD common stock and a charge for the impairment of goodwill in the year to date September 28, 2002 amounts.


	Three Months				Three Months
	Ended		YTD		Ended		YTD
(In thousands, except per share data)	September 27, 2003		September 27, 2003		September 28, 2002		September 28, 2002

Non-GAAP net income	$	12,047		26,583		13,768		36,128
Gain on sale of WebMD		—		—		—		4,308
Charge on the impairment of goodwill		—		—		—		(1,272	)
Income tax effect		—		—		—		(1,086	)

GAAP net income	$	12,047		26,583		13,768		38,078

Basic earnings per share	$	0.34		0.75		0.39		1.08

Basic weighted average shares outstanding		35,359		35,437		35,496		35,438
Diluted earnings per share	$	0.33		0.73		0.37		1.03

Diluted weighted average shares outstanding		36,365		36,259		36,913		37,189


			September 27,			December 28,
(In thousands)			2003			2002

Assets
Cash and cash equivalents			$	119,805			142,543
Receivables				252,296			272,668
Inventory				10,435			9,041
Prepaid expenses and other				24,680			23,434

		Total current assets		407,216			447,686
Property and equipment, net				173,154			134,283
Software development costs, net				134,820			117,327
Goodwill, net				47,222			45,938
Intangible assets, net				20,850			23,155
Investments, net				1,156			964
Other assets				7,344			9,926

Total assets			$	791,762			779,279

Liabilities
Accounts payable			$	29,255			46,822
Current installments of long-term debt				12,235			12,202
Deferred revenue				53,805			45,055
Income taxes				12,919			4,691
Accrued payroll and tax withholdings				38,952			47,262
Other accrued expenses				10,832			9,519

		Total current liabilities		157,998			165,551

Long-term debt, net				124,386			136,636
Deferred income taxes				39,906			35,848

		Total liabilities		322,290			338,035

Minority owners’ equity interest in subsidiary				1,166			—
Stockholders’ Equity
Common stock				369			367
Additional paid-in capital				230,399			226,912
Retained earnings				263,155			236,572
Treasury stock, at cost (1,502,999 and 1,202,999 shares in 2003 and 2002, respectively)				(26,793	)		(20,863	)
Accumulated other comprehensive income:
	Foreign currency translation adjustment			1,099			(1,668	)
	Unrealized gain (loss) on available-for-sale equity security (net of deferred tax liability of $43 in 2003 and deferred tax asset of $23 in 2002)			77			(76	)

		Total stockholders’ equity		468,306			441,244
Total liabilities and equity			$	791,762			779,279


0-15386				43-1196944

(Commission File Number)				(I.R.S. Employer Identification No.)

2800 Rockcreek Parkway, North Kansas City, Missouri				64117

(Address of principal executive offices)				(Zip Code)


	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
	Item 9. Regulation FD Disclosure
EXHIBIT INDEX
EX-99.1 Press Release


			CERNER CORPORATION


Date: October 15, 2003	By:	/s/	Marc G. Naughton

			Marc G. Naughton, Senior Vice President, Treasurer and Chief Financial Officer

Exhibit

Number

Description

Press Release issued October 15, 2003, furnished pursuant to Item 9 of this Form 8-K.


Date of report (Date of earliest event reported)		October 15, 2003