First Half Year-Over-Year Revenues Increase More Than 24%
BURLINGTON, Vt., July 28 /PRNewswire-FirstCall/ -- IDX Systems Corporation 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
CONTACT: Margo C. Happer, Vice President, Investor Relations and Corporate Communications, +1-802-859-6169
Web site: http://www.idx.com/
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