Eclipsys Announces Third-Quarter 2009 Results
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ATLANTA--(BUSINESS WIRE)-- Eclipsys Corporation(R) (NASDAQ: ECLP), The Outcomes Company(R), today announced results for the quarter ended September 30, 2009.
Revenues for the quarter ended September 30, 2009 were $125.5 million, compared to revenues of $132.4 million for the quarter ended September 30, 2008.
GAAP net income for the third quarter of 2009 was $3.9 million, or $0.07 per diluted common share, compared to GAAP net income of $87.4 million, or $1.58 per share on a diluted basis for the third quarter of 2008. GAAP net income in the third quarter of 2008 included a one-time income tax benefit of $80.0 million associated with the reversal of the company's deferred tax valuation allowance.
Non-GAAP Results
Non-GAAP net income for the third quarter of 2009 was $8.2 million, or $0.14 per diluted common share, compared to third quarter 2008 non-GAAP net income of $16.3 million, or $0.30 per diluted share. A detailed reconciliation of GAAP to non-GAAP results is included in the attached tables.
"Our third-quarter performance was in-line with our expectations," said Philip M. Pead, Eclipsys president and chief executive officer. "I was very pleased with our bookings in the third quarter, particularly the amount of new enterprise business we signed."
The non-GAAP earnings per share guidance range remains $0.55 to $0.60 for 2009, and the company will provide 2010 financial guidance in its fourth quarter earnings release.
Balance Sheet Update
In the quarter, Eclipsys repaid $45 million of debt on its credit facility. These payments were funded through available cash, operating cash flows and $23.6 million in proceeds from the sale of auction rate securities. Eclipsys ended the quarter with $122.1 million of cash and $86.0 million in long-term investments.
Through the third quarter of 2009, Eclipsys has generated $29.9 million in free cash flows, compared to $8.7 million through the third quarter of 2008. The company defines free cash flow as operating cash flows less capitalized software development costs and capital expenditures.
Conference Call
Eclipsys executives will discuss the third-quarter results on a teleconference at 4:30 p.m. Eastern time on November 5. Persons interested in participating in the teleconference should call (800) 288-8968 approximately 15 minutes before the conference call is slated to begin. For listen-only mode, participants can go to www.eclipsys.com prior to the conference call to register and download the necessary audio software.
Replay
About two hours after its completion, an audio replay of the call will be available on www.eclipsys.com for approximately 48 hours.
About Eclipsys
Eclipsys is a leading provider of advanced integrated clinical, revenue cycle and performance management software, clinical content and professional services that help healthcare organizations improve clinical, financial and operational outcomes. For more information, see www.eclipsys.com or email info@eclipsys.com.
Non-GAAP Measures
The company has provided net income and earnings per share financial measures on a non-GAAP basis for the three months ended September 30, 2009 and September 30, 2008, which exclude non-cash stock-based compensation expenses, amortization expense associated with acquisitions, and certain additional items that the company does not consider to be indicative of its underlying business performance, as listed on the attached GAAP to non-GAAP reconciliation tables. Because of the significance of the GAAP components excluded, these non-GAAP financial measures should not be considered a substitute for, or superior to, any measure derived in accordance with GAAP. These non-GAAP financial measures may also be inconsistent with the manner in which similar measures are derived or used by other companies. Management believes that the non-GAAP financial measures provided, when considered in conjunction with comparable GAAP financial measures, facilitate the understanding and evaluation of the company's operating performance and future prospects, as well as comparisons of the company's results with its prior period results that did not include these gains and/or charges, and with results of other companies on a more consistent basis. Internally, management uses non-GAAP net income and earnings for forecasting and to help make management decisions, as an indicator of business performance, and to evaluate management's effectiveness and help determine bonuses for management and others.
The economic substance of omitting non-cash stock-based compensation expense in presenting non-GAAP earnings derives from providing investors with consistent measures of performance both before and after including non-cash stock-based compensation charges. The economic substance of omitting the other items incurred that the company does not consider to be indicative of its underlying business performance derives from the fact that such episodic gains and/or charges make it more difficult to compare operating results of different periods, not all of which include such gains and/or charges. However, the omission of non-cash stock-based compensation expense may mask an economic cost incurred by the company in connection with stock-based compensation, and the omission of the charges related to the company's other non-GAAP adjustments may mask actual and expected future costs associated with such matters. Management compensates for these limitations by using both the GAAP and non-GAAP measures.
The company has provided reconciling tables attached to this release.
Caution Regarding Forward-Looking Statements
Certain statements in this news release or the investor call referenced herein, including those concerning the company's operational initiatives, future performance expectations, and effects of economic conditions are forward-looking statements and actual results may differ materially from those projected or implied by the forward-looking statements due to a variety of risks and uncertainties. Future performance expectations are predicated upon achievement of various sales and performance targets that may be difficult to meet. Economic conditions are unstable and may cause hospitals and other healthcare providers to curtail HIT system spending. Eclipsys' cost reduction and other initiatives in response to the challenging economic environment, including initiatives designed to improve operational efficiencies, may not be effective, and it is difficult to predict what the company may be able to achieve. Eclipsys sales may fall below expectations due to market conditions, competition, and other factors, including client demands for pricing and financing concessions. Costs may be greater than anticipated due to the potential need to increase spending to ensure performance in accordance with commitments to clients, regulatory requirements, and other factors. Software development may take longer and cost more than expected, and incorporation of anticipated features and functionality (including as required to comply with ARRA and related regulations, as well as other certification standards) may be delayed, due to various factors including programming and integration challenges and resource constraints. The market is highly competitive. Implementation and customization of Eclipsys software is complex and time-consuming. Results depend upon a variety of factors and can vary by client. Each client's circumstances are unique and may include unforeseen issues that make it more difficult than anticipated to implement or derive benefit from software, implementation or consulting services. The success and timeliness of the company's services will depend at least in part upon client involvement, which can be difficult to control. Eclipsys is required to meet specified performance standards and regulatory requirements, and clients can terminate contracts, assess penalties or reduce contract scope under certain circumstances. More information about company risks is available in recent Form 10-K and other filings made by Eclipsys from time to time with the Securities and Exchange Commission. Special attention is directed to the portions of those documents entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Eclipsys Corporation
GAAP Income Statements (Unaudited)
(in thousands, except per share amounts)
Three Three
Months Months % Year-to-date Year-to-date %
Ended Ended $ Change Change September September $ Change Change
September September 30, 2009 30, 2008
30, 2009 30, 2008
Revenues:
Systems and $ 123,471 $ 127,575 $ (4,104 ) -3.2 % $ 379,283 $ 373,021 $ 6,262 1.7 %
services
Hardware 2,015 4,849 (2,834 ) -58.4 % 6,217 15,925 (9,708 ) -61.0 %
Total 125,486 132,424 (6,938 ) -5.2 % 385,500 388,946 (3,446 ) -0.9 %
revenues
Cost and
expenses:
Costs of
systems and 66,455 73,166 (6,711 ) -9.2 % 201,644 210,042 (8,398 ) -4.0 %
services
Costs of 1,672 5,457 (3,785 ) -69.4 % 5,278 13,408 (8,130 ) -60.6 %
hardware
Sales and 20,876 19,498 1,378 7.1 % 71,020 63,150 7,870 12.5 %
marketing
Research and 13,204 14,195 (991 ) -7.0 % 40,568 47,102 (6,534 ) -13.9 %
development
General and 10,772 8,202 2,570 31.3 % 35,223 26,877 8,346 31.1 %
administrative
Depreciation
and 7,980 5,145 2,835 55.1 % 24,132 15,651 8,481 54.2 %
amortization
Restructuring - - - 5,434 - 5,434 * N/M
In-process
research and - - - 850 (850 ) -100.0 %
development
charge
Total costs 120,959 125,663 (4,704 ) -3.7 % 383,299 377,080 6,219 1.6 %
and expenses
Income (loss) 4,527 6,761 (2,234 ) -33.0 % 2,201 11,866 (9,665 ) -81.5 %
from operations
Gain (loss) on 809 685 124 18.1 % 2,046 4,200 (2,154 ) -51.3 %
sale of assets
Gain (loss) on (871 ) - (871 ) * N/M (338 ) - (338 ) * N/M
ARS
Interest (716 ) (499 ) (217 ) 43.5 % (2,821 ) (1,219 ) (1,602 ) 131.4 %
expense
Interest 316 1,133 (817 ) -72.1 % 1,844 4,800 (2,956 ) -61.6 %
income
Income (loss)
before income 4,065 8,080 (4,015 ) -49.7 % 2,932 19,647 (16,715 ) -85.1 %
taxes
Provision for 185 (79,316 ) 79,501 * N/M 4,019 (76,549 ) 80,568 * N/M
income taxes
Net income $ 3,880 $ 87,396 $ (83,516 ) -95.6 % $ (1,087 ) $ 96,196 $ (97,283 ) -101.1 %
(loss)
Basic EPS:
Net income $ 3,880 $ 87,396 $ (83,516 ) -95.6 % $ (1,087 ) $ 96,196 $ (97,283 ) -101.1 %
(loss)
Less: Income
allocated to 34 971 (937 ) -96.5 % - 1,133 (1,133 ) -100.0 %
participating
securities
Net income (loss)
available to $ 3,846 $ 86,425 $ (82,579 ) -95.5 % $ (1,087 ) $ 95,063 $ (96,150 ) -101.1 %
common
shareholders
Basic weighted
average common 56,036 53,861 2,175 4.0 % 55,739 53,684 2,055 3.8 %
shares
outstanding
Basic net
income (loss) $ 0.07 $ 1.60 $ (1.53 ) -95.6 % $ (0.02 ) $ 1.77 $ (1.79 ) -101.1 %
per common
share
Diluted EPS:
Net income 3,880 87,396 (83,516 ) -95.6 % (1,087 ) 96,196 (97,283 ) -101.1 %
(loss)
Less: Income
allocated to 34 956 (922 ) -96.5 % - 1,115 (1,115 ) -100.0 %
participating
securities
Net income (loss)
available to $ 3,846 $ 86,440 $ (82,594 ) -95.6 % $ (1,087 ) $ 95,081 $ (96,168 ) -101.1 %
common
shareholders
Basic weighted
average common 56,036 53,861 2,175 4.0 % 55,739 53,684 2,055 3.8 %
shares
outstanding
Dilutive effect
of potential 946 855 91 10.6 % - 875 (875 ) -100.0 %
common shares
Diluted weighted
average shares 56,982 54,716 2,266 4.1 % 55,739 54,559 1,180 2.2 %
common
outstanding
Diluted earnings
(loss) per $ 0.07 $ 1.58 $ (1.51 ) -95.7 % $ (0.02 ) $ 1.74 $ (1.76 ) -101.1 %
common share
* N/M - not meaningful
ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
September 30, December 31,
2009 2008
(Unaudited)
Assets
Current assets:
Cash $ 122,106 $ 108,304
Marketable securities - 154
Accounts receivable, net of allowance for
doubtful accounts of $3,244 106,010 121,811
and $4,912, respectively
Prepaid expenses 25,490 23,975
Deferred tax asset 259 2,643
Other current assets 4,629 5,712
Total current assets 258,494 262,599
Long-term investments 85,964 107,215
Property and equipment, net 57,919 53,996
Capitalized software development costs, net 48,923 37,718
Acquired technology, net 32,060 39,710
Intangible assets, net 8,122 10,258
Goodwill 98,394 96,973
Deferred tax asset 88,272 89,063
Other assets 14,059 11,343
Total assets $ 692,207 $ 708,875
Liabilities and Stockholders' Equity
Current liabilities:
Deferred revenue $ 120,049 $ 123,733
Accounts payable 11,191 20,924
Accrued compensation costs 33,302 16,457
Deferred tax liability 3,318 -
Other current liabilities 18,846 22,481
Total current liabilities 186,706 183,595
Deferred revenue 6,012 5,743
Long term debt and capital lease 60,842 105,000
obligations
Other long-term 15,783 16,540
liabilities
Total liabilities 269,343 310,878
Stockholders' equity:
Common stock, $0.01 par value, 200,000,000
shares authorized; 567 561
issued and outstanding, 56,706,804 and
56,126,674, respectively
Additional paid-in capital 591,345 569,717
Accumulated deficit (165,799 ) (164,712 )
Accumulated other comprehensive income (3,249 ) (7,569 )
Total stockholders' equity 422,864 397,997
Total liabilities and $ 692,207 $ 708,875
stockholders' equity
ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
For the Nine Months Ended For the Three Months Ended
September 30, September 30,
2009 2008 2009 2008
Operating activities:
Net income $ (1,087 ) $ 96,196 $ 3,880 $ 87,396
Adjustments to
reconcile net income
to net cash
provided by
operating
activities:
Depreciation and 37,014 29,818 12,181 9,267
amortization
Provision for bad 2,446 2,655 450 1,255
debt
In-process research
and development - 850 - -
charge
Deferred income 3,777 (78,184 ) 103 (78,551 )
taxes
Gain on sale of
marketable (30 )
securities
Stock compensation 14,768 13,093 3,599 5,627
expense
Gain on sale of (2,046 ) (4,168 ) (809 ) (683 )
assets
Foreign Currency 924 (317 ) 413 (125 )
(gain) /loss
Interest Income - 588 - 64
Received, net
Changes in operating
assets and
liabilities,
excluding the
effect of
acquisitions and
dispositions:
Accounts receivable 7,066 (21,611 ) 5,118 (2,803 )
Prepaid expenses and 1,420 755 (160 ) 4,823
other current assets
Inventory - - - 18
Other assets 59 (289 ) 556 (1,336 )
Deferred revenue (1,217 ) (3,378 ) 2,414 5,127
Accrued compensation 16,964 (5,029 ) 8,331 1,678
Accounts payable and
other current (12,375 ) 5,936 (5,487 ) 2,038
liabilities
Long-term 1,739 3,971 174 1,033
liabilities
Other reconciling 745 692 1,681 162
items
Total adjustments 71,284 (54,648 ) 28,564 (52,406 )
Net cash provided
by operating 70,197 41,548 32,444 34,990
activities
Investing activities:
Purchases of
property and (17,556 ) (20,432 ) (5,002 ) (7,117 )
equipment
Purchase of
marketable (102,000 )
securities
Proceeds from sales
of marketable 24,061 151,100 23,911
securities
Proceeds from sale 698
of assets
Proceeds from sale
of debt and equity 2,541
securities
Capitalized software (22,728 ) (12,417 ) (8,076 ) (5,476 )
development costs
Restricted Cash 1,963 1,963
Earnout out on 2,079 3,578 838 996
disposition
Cash paid for
acquisitions, net of (2,984 ) (54,593 ) (165 ) (223 )
cash acquired
Net cash used in
investing (17,128 ) (29,562 ) 11,506 (9,857 )
activities
Financing activities:
Proceeds from stock 5,587 5,283 2,281 2,844
options exercised
Proceeds from
employee stock 666 615 212 240
purchase plan
Cash paid for debt (1,430 ) (1,009 )
issuance costs
Repayment of secured (45,000 ) (95,000 ) (45,000 ) (50,000 )
financing
Proceeds from 146,000 51,000
secured financing
Other (80 ) (21 )
Net cash provided
by financing (38,827 ) 55,468 (42,528 ) 3,075
activities
Effect of exchange
rates on cash and cash (440 ) (588 ) (241 ) (352 )
equivalents
Net increase
(decrease) in cash and 13,802 66,866 1,181 27,856
cash equivalents
Cash and cash
equivalents -- 108,304 22,510 120,925 61,520
beginning of period
Cash and cash
equivalents -- end of $ 122,106 $ 89,376 $ 122,106 $ 89,376
period
Eclipsys Corporation
Reconciliation of GAAP (Unaudited) to Non-GAAP Items
(in thousands, except per share amounts)
Three Months Three Months Year-to-date Year-to-date
Ended Ended September 30, September 30,
September September 2009 2008
30, 2009 30, 2008
Revenues:
GAAP Revenues $ 125,486 $ 132,424 $ 385,500 $ 388,946
Premise
acquisition 594 5,945
accounting (1)
Non-GAAP $ 126,080 $ 132,424 $ 391,445 $ 388,946
revenues
GAAP Recurring $ 89,425 $ 84,757 $ 267,435 $ 248,963
revenues
Premise
acquisition 154 882
accounting (1)
Non-GAAP
Recurring $ 89,579 $ 84,757 $ 268,317 $ 248,963
revenues
GAAP
Professional $ 25,468 $ 34,028 $ 84,616 $ 96,042
services
revenues
Premise
acquisition 160 1,082
accounting (1)
Non-GAAP
Professional $ 25,628 $ 34,028 $ 85,698 $ 96,042
services
revenues
GAAP Periodic $ 8,577 $ 8,809 $ 27,230 $ 28,116
revenues
Premise
acquisition 261 3,847
accounting (1)
Non-GAAP
Periodic $ 8,838 $ 8,809 $ 31,077 $ 28,116
revenues
GAAP Hardware $ 2,015 $ 4,849 $ 6,217 $ 15,925
revenues
Premise
acquisition 19 134
accounting (1)
Non-GAAP
Hardware $ 2,034 $ 4,849 $ 6,351 $ 15,925
revenues
Gross
Margin
Revenues $ 125,486 $ 132,424 $ 385,500 $ 388,946
Costs of
systems and (66,455 ) (73,166 ) (201,644 ) (210,042 )
services
Cost of (1,672 ) (5,457 ) (5,278 ) (13,408 )
hardware
GAAP Gross 57,359 53,801 178,578 165,496
margin (A)
Adjustments
Premise
acquisition 486 5,038
accounting (1)
Stock-based
compensation 501 2,433 1,500 5,818
expense (2)
Headquarter 419
relocation (3)
Restructuring 585 585
(4)
Professional
Services 1,080 1,080
Reorganization
(5)
Non-recurring 782 782
items (6)
Non-GAAP gross $ 58,931 $ 58,096 $ 185,701 $ 173,595
margin
Operating
Expenses
GAAP operating $ 52,832 $ 47,040 $ 176,377 $ 153,630
expenses (B)
Adjustments
Stock-based
compensation (3,098 ) (3,191 ) (13,266 ) (7,273 )
expense (2)
Headquarter (2,521 )
relocation (3)
Restructuring (556 ) (9,182 )
(4)
Professional
Services (298 ) (298 )
Reorganization
(5)
Derivative
litigation (1,353 )
(7)
Amortization (3,124 ) (1,121 ) (9,372 ) (2,666 )
(8)
EPSI research
and development (850 )
charge (9)
Valuation
allowance (177 ) (177 )
reversal (10)
Non-GAAP
operating $ 46,054 $ 42,253 $ 144,557 $ 138,492
expenses
Eclipsys Corporation
Reconciliation of GAAP (Unaudited) to Non-GAAP Items
(in thousands, except per share amounts)
Three Three Months
Months Ended Year-to-date Year-to-date
Ended September September September
September 30, 2008 30, 2009 30, 2008
30, 2009
Gross Research and
Development
Expenses
GAAP research and $ 13,204 $ 14,195 $ 40,568 $ 47,102
development
Adjustments
Stock-based
compensation (565 ) (401 ) (1,564 ) (991 )
expense (2)
Headquarter (159 )
relocation (3)
Restructuring (40 ) (40 )
(4)
Non-GAAP research 12,599 13,794 38,964 45,952
and development
Capitalized software
and development 8,076 5,281 22,728 12,417
costs
Non-GAAP gross
research and $ 20,675 $ 19,075 $ 61,692 $ 58,369
development expenses
Operating
Income
GAAP operating $ 4,527 $ 6,761 $ 2,201 $ 11,866
income
Adjustments
Premise
acquisition 486 5,038
accounting (1)
Stock-based
compensation 3,599 5,624 14,766 13,091
expense (2)
Headquarter 2,940
relocation (3)
Restructuring 1,141 9,767
(4)
Professional
Services 1,378 1,378
Reorganization (5)
Non-recurring 782 782
items (6)
Derivative
litigation 1,353
(7)
Amortization 3,124 1,121 9,372 2,666
(8)
EPSI research and
development charge 850
(9)
Valuation
allowance 177 177
reversal (10)
Non-GAAP
operating $ 12,877 $ 15,843 $ 41,144 $ 35,103
income
Pre-tax
income
GAAP pre-tax $ 4,065 $ 8,080 $ 2,932 $ 19,647
income
Adjustments
Premise
acquisition 486 5,038
accounting (1)
Stock-based
compensation 3,599 5,624 14,766 13,091
expense (2)
Headquarter 2,940
relocation (3)
Restructuring 1,141 9,767
(4)
Professional
Services 1,378 1,378
Reorganization (5)
Non-recurring 782 782
items (6)
Derivative
litigation 1,353
(7)
Amortization 3,124 1,121 9,372 2,666
(8)
EPSI research and
development charge 850
(9)
Valuation
allowance 177 177
reversal (10)
Gain on sale of (3,482 )
assets (11)
ARS Sale (12) 1,114 1,114
Non-GAAP $ 13,529 $ 17,162 $ 42,989 $ 39,402
pre-tax income
Eclipsys Corporation
Reconciliation of GAAP (Unaudited) to Non-GAAP Items
(in thousands, except per share amounts)
Three Three Months
Months Ended Year-to-date Year-to-date
Ended September 30, September September 30,
September 2008 30, 2009 2008
30, 2009
Net
Income
GAAP net $ 3,880 $ 87,396 $ (1,087 ) $ 96,196
income
Adjustments
Premise
acquisition 288 3,129
accounting (1)
Stock-based
compensation 2,488 5,624 10,153 13,091
expense (2)
Headquarter 2,940
relocation (3)
Restructuring 684 6,066
(4)
Professional
Services 1,378 1,378
Reorganization (5)
Non-recurring 782 782
items (6)
Derivative
litigation 1,353
(7)
Amortization 1,923 1,121 5,821 2,666
(8)
EPSI research and
development charge 850
(9)
Valuation
allowance (79,954 ) (79,954 )
reversal (10)
Gain on sale of (3,227 )
assets (11)
ARS Sale (12) 692 692
State tax
provision 1,540
(13)
Taxes (14) (1,727 ) 1,925
Non-GAAP net $ 8,228 $ 16,347 $ 26,699 $ 37,615
income
Diluted
earnings per
share
Diluted
earnings per $ 0.07 $ 1.58 $ (0.02 ) $ 1.74
share
Adjustments
Premise
acquisition 0.01 0.05
accounting (1)
Stock-based
compensation 0.04 0.10 0.18 0.24
expense (2)
Headquarter 0.05
relocation (3)
Restructuring 0.01 0.11
(4)
Professional
Services 0.02 0.02
Reorganization (5)
Non-recurring 0.01 0.01
items (6)
Derivative
litigation 0.02
(7)
Amortization 0.03 0.02 0.10 0.04
(8)
EPSI research and
development charge 0.02
(9)
Valuation
allowance (1.45 ) (1.45 )
reversal (10)
Gain on sale of (0.06 )
assets (11)
ARS Sale (12) 0.01 0.01
State tax
provision 0.03
(13)
Taxes (14) (0.03 ) 0.03
Non-GAAP diluted
earnings per $ 0.14 $ 0.30 $ 0.47 $ 0.68
share
Eclipsys Corporation
Reconciliation NOTES of GAAP (Unaudited) to Non-GAAP Items
1
Deferred revenue adjustments net of deferred costs adjustments related to
the Company's December 2008 acquisition of Premise Corporation. The amounts
represent the reduction of deferred revenue and related deferred costs
acquired from Premise as a result of purchase accounting adjustments.
2 Represents stock based compensation expense.
3
Amounts incurred to relocate the corporate headquarters from Boca Raton to
Atlanta, including salaries and benefits associated with the termination of
employees not relocating and other administrative costs associated with the
move.
4
Severance related activity primarily in the Company's professional services
organization. Also includes severance costs in the second quarter of 2009
associated with the departure of the Company's CEO.
5 Severance costs associated with the reorganization of the Company's
professional services organization in the third quarter of 2008.
6 Nonrecurring adjustments from prior years.
7
Charges incurred as a result of the voluntary stock option review completed
in the second quarter 2007 and are related primarily to legal fees
associated with the subsequent derivative litigation. These costs are net
of insurance recoveries in the second quarter 2008.
8 Amortization of intangible assets associated with 2008 acquisitions.
9 Write off of in-process research and development associated with our
acquisition of EPSI.
10 Income tax benefit associated with the reversal of the Company's deferred
tax valuation allowance.
11
Gain resulted from the achievement of certain post-closing milestones
associated with the December 2007 sale of the Clinical Practice Model
Resource Center (CPMRC) business.
12 Realized loss on the sale of one of the Company's auction rate securities
for $23.6 million.
13
Accounting rule issued related to Uncertainty in Income Taxes clarified the
criteria for recognizing income tax benefits. This charge was recorded as a
result of the review of uncertain state tax positions.
14
Represents a combination of discrete tax items, primarily deferred tax
asset adjustments for Canadian research and development credits in the
second quarter and non-GAAP tax adjustments to reflect the non-GAAP annual
effective tax rate.
Notes
A GAAP gross margin equals revenue less costs of systems and services and
costs of hardware.
B
GAAP operating expenses include sales and marketing expense, research and
development expense , general and administrative expense, depreciation and
amortization expense, restructuring charge, and in process research and
development charge.
Source: Eclipsys Corporation
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