EX-99.1 2 c14357exv99w1.htm PRESS RELEASE exv99w1
 

Exhibit 99.1
INVESTORS: Allan Kells
(816) 201-2445 allan.kells@cerner.com
MEDIA: Jennifer Bosshardt
(816) 201-0048 jennifer.bosshardt@cerner.com
Cerner’s Internet Home Page: www.cerner.com
Cerner Delivers Strong Revenue and Earnings Growth
KANSAS CITY, Mo. — April 19, 2007—Cerner Corp. (NASDAQ: CERN) today announced results for the 2007 first quarter that ended March 31, 2007, delivering strong levels of new business bookings, revenue and earnings growth. Bookings in the first quarter 2007 were $353.0 million, up 35 percent over the year-ago quarter and a record for the first quarter. First quarter 2007 revenue increased 14 percent to $365.9 million compared to $321.2 million in the year-ago quarter.
On a Generally Accepted Accounting Principles (GAAP) basis, first quarter 2007 net earnings were $27.6 million, and diluted earnings per share were $0.33. First quarter 2006 GAAP net earnings were $20.1 million and diluted earnings per share were $0.25. Adjusted first quarter 2007 net earnings were $29.9 million, which is 30 percent higher than the $23.0 million of adjusted net earnings in the first quarter of 2006. Adjusted diluted earnings per share were $0.36 in the first quarter of 2007 compared to $0.28 in the first quarter of 2006. Analysts’ consensus estimate for first quarter 2007 adjusted diluted earnings per share was $0.35.
Adjusted first quarter 2007 and 2006 net earnings and diluted earnings per share exclude the impact of adopting Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment, which requires the expensing of stock options. The adoption of SFAS 123R reduced first quarter 2007 net earnings and diluted earnings per share by $2.3 million and $0.03, respectively, and reduced first quarter 2006 net earnings and diluted earnings per share by $2.9 million and $0.03, respectively.
     
Other First Quarter Highlights:
  •   Cash collections of $395 million and operating cash flow of $43 million.
 
  •   Days sales outstanding of 89 days compared to 91 days in the year-ago quarter.
 
  •   Total revenue backlog of $2.77 billion, up 27 percent over the year-ago quarter. This is comprised of $2.28 billion of contract backlog and $490 million of support and maintenance backlog.
 
  •   308 Cerner MillenniumÒ solution implementations were completed. Cerner has now turned on more than 6,400 Cerner Millennium solutions at more than 1,100 client facilities worldwide.
“Cerner’s first quarter results reflect continued strong execution across the globe,” said Neal Patterson, Cerner co-founder, chairman and chief executive officer. “This execution is evidenced by our record first quarter bookings, and strong revenue growth, margin expansion and earnings growth.

 

 

“Cerner’s proven execution and ability to deliver predictable results to our clients at a predictable cost continues to distinguish us in the marketplace. We also remain focused on initiatives designed to drive down the total cost of ownership for our clients while increasing the value created. These initiatives should further differentiate Cerner and bolster our leadership position in the healthcare information technology market.”
Future Period Guidance
The company expects revenue in the second quarter of 2007 to be approximately $370 million to $380 million. For the year 2007, Cerner expects revenue between $1.54 billion and $1.57 billion, or 12 to 14 percent over 2006.
Cerner expects adjusted diluted earnings per share before stock options expense in the second quarter to be between $0.40 and $0.41. The company expects SFAS No. 123R share-based compensation expense to reduce diluted earnings per share in the second quarter by approximately $0.04, leading to expected diluted earnings per share between $0.36 and $0.37.
For the full year 2007, Cerner expects adjusted diluted earnings per share before stock options expense to grow in the mid-twenty percent range. This expectation is consistent with EPS before options expense in the range of $1.72, which is 3 cents higher than the $1.69 consensus at the time the Company last provided guidance. The company expects SFAS No. 123R share-based compensation expense to reduce diluted earnings per share for 2007 by approximately $0.15 to $0.16.
Cerner expects new business bookings in the second quarter of 2007 to be between $340 million and $360 million, with the midpoint of this range reflecting 12 percent growth over second quarter of 2006 bookings.
Earnings Conference Call
Cerner will host an earnings conference call to provide additional detail on first quarter results at 3:30 p.m. CT on April 19. The dial-in number for the conference call is (617) 786-2960; the passcode is Cerner. The company recommends accessing the call 15 minutes early for registration. The rebroadcast of the call will be available from 5:30 p.m. CT, April 19 through 11:59 p.m. CT, April 22. The dial-in number for the rebroadcast is (617) 801-6888; the passcode is 78369267.
An audio webcast will be available both live and archived on Cerner’s Web site at www.cerner.com under the About Cerner section (click Investors, then Presentations and Webcasts). A copy of the script used during the call will also be available at the same section of www.cerner.com.
About Cerner
Cerner Corp. is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 6,000 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium and Cerner’s logo. (NASDAQ: CERN), www.cerner.com
This release contains forward-looking statements that involve a number of risks and uncertainties. It is important to note that the Company’s performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The

 

 

words “continues”, “initiatives”, “should”, “guidance”, “expects”, and “continues” or the negative of these words, variations thereof or 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: the possibility of product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities; our proprietary technology may be subjected to infringement claims or may be infringed upon; risks associated with our global operations; recruitment and retention of key personnel; risks related to third party suppliers; risks inherent with business acquisitions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; variations in the our quarterly operating results; and, potential inconsistencies in our sales forecasts compared to actual sales. 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.
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CERNER CORPORATION
CONSOLIDATED STATEMENT OF NET EARNINGS
                   
    Three Months       Three Months  
    Ended       Ended  
(In thousands, except per share data)   March 31, 2007 (1)       April 1, 2006 (2)  
 
                  
Revenue
                  
System sales
   $ 122,870         116,850  
Support, maintenance and services
     233,889         195,585  
Reimbursed travel
     9,093         8,789  
 
              
 
                  
Total revenue
     365,852         321,224  
 
                  
Margin
                  
System sales
     75,870         70,685  
Support, maintenance and services
     217,519         182,521  
 
              
 
                  
Total margin
     293,389         253,206  
 
              
 
                  
Operating expenses
                  
Sales and client service
     157,158         139,524  
Software development
     65,823         59,017  
General and administrative
     26,455         22,671  
 
              
 
                  
Total operating expenses
     249,436         221,212  
 
              
 
                  
Operating earnings
     43,953         31,994  
 
                  
Interest income
     3,129         2,589  
Interest expense
     (3,009 )       (3,282 )
Other income
     (322 )       2,125  
 
              
 
                  
Non-operating income (expense), net
     (202 )       1,432  
 
                  
Earnings before income taxes
     43,751         33,426  
Income taxes
     (16,171 )       (13,282 )
 
              
 
                  
Net earnings
   $ 27,580         20,144  
 
              
 
                  
Basic earnings per share
   $ 0.35         0.26  
 
              
 
                  
Basic weighted average shares outstanding
     78,711         77,156  
 
                  
Diluted earnings per share
   $ 0.33         0.25  
 
              
 
                  
Diluted weighted average shares outstanding
     82,648         81,406  
Note 1
Operating expenses for the three months ended March 31, 2007 include share-based compensation expense. The impact of this expense for the quarter is a $2.3 million decrease, net of $1.5 million tax benefit, in net earnings and a decrease to diluted earnings per share of $.03. The allocation of share-based compensation expense for the quarter is $2.4 million to Sales and client service, $.7 million to Software development and $.7 million to General and administrative.
Note 2
Operating expenses for the three months ended April 1, 2006 include share-based compensation expense. The impact of this expense for the quarter is a $2.9 million decrease, net of $1.8 million tax benefit, in net earnings and a decrease to diluted earnings per share of $.03. The allocation of share-based compensation expense for the quarter is $2.8 million to Sales and client service, $1.1 million to Software development and $.8 million to General and administrative.

 

 

CERNER CORPORATION
CONSOLIDATED BALANCE SHEETS
                 
(In thousands)   March 31,     December 30,  
    2007     2006  
Assets
                
 
                
Cash and cash equivalents
   $ 146,389       162,545  
Short-term investments
     130,387       146,239  
Receivables, net
     358,279       361,424  
Inventory
     12,996       18,084  
Prepaid expenses and other
     60,879       55,272  
Deferred income taxes
     5,626       2,423  
 
            
 
                
Total current assets
     714,556       745,987  
 
                
Property and equipment, net
     397,288       357,942  
Software development costs, net
     190,358       187,788  
Goodwill, net
     142,754       128,819  
Intangible assets, net
     59,949       54,428  
Other assets
     17,640       16,426  
 
            
 
                
Total assets
   $ 1,522,545       1,491,390  
 
            
 
                
Liabilities
                
 
                
Accounts payable
   $ 80,133       79,735  
Current installments of long-term debt
     19,806       20,242  
Deferred revenue
     88,235       93,699  
Accrued payroll and tax withholdings
     77,051       77,914  
Other accrued expenses
     8,063       29,741  
 
            
 
                
Total current liabilities
     273,288       301,331  
 
            
 
                
Long-term debt
     187,976       187,391  
Deferred income taxes
     69,669       68,693  
Deferred revenue
     17,033       14,557  
 
            
 
                
Total liabilities
     547,966       571,972  
 
            
 
                
Minority owners’ equity interest in subsidiary
     1,286       1,286  
 
                
Stockholders’ Equity
                
 
                
Common stock
     791       784  
Additional paid-in capital
     403,777       376,595  
Retained earnings
     567,733       540,153  
Foreign currency translation adjustment
     992       600  
 
            
 
                
Total stockholders’ equity
     973,293       918,132  
 
                
Total liabilities and equity
   $ 1,522,545       1,491,390