Allscripts (MDRX) to Consolidate MyWay, Professional Suite; Sees $10M - $13M non-Cash Charge

Allscripts (Nasdaq: MDRX) issued the following operational update:

• On October 3, 2012, in order to better serve its clients and the healthcare market, the Company initiated a plan to standardize its small office electronic health record and practice management systems. As part of this plan, Allscripts will converge, over time, its MyWay Electronic Health Record System (“MyWay”) and Professional Suite Electronic Health Record System.
  
  
• The Company plans to upgrade MyWay clients electing to migrate to the converged platform between January 2013 and September 2013, at no additional cost to the MyWay clients. The upgrade will position MyWay clients for Meaningful Use Stage 2 and ICD-10 compliance, and prepare them for the shift to value-based care that focuses on costs, quality and outcomes. MyWay clients not electing to upgrade will continue to have use of the application.
  
  
• The Company determined that by focusing its investment on a single Electronic Health Record solution for small to mid-size physician practices, it will be able to enhance its offerings for its clients, maximize innovation and address regulatory requirements more quickly and in a more cost effective manner.
  
  
• As a result of the above decision, the Company expects to record a non-cash charge to earnings in the quarter ended September 30, 2012 related to the impairment of previously capitalized software development costs for MyWay of approximately $10 -$13 million, on a pre-tax basis. Additional non-recurring period costs will be incurred in future quarters to upgrade the MyWay clients that elect to upgrade. The incremental period costs will be partially offset by cost savings the Company expects to realize through lower development and support costs. The amount of such costs and anticipated savings are not determinable at this time and will ultimately be based on the number of clients electing to migrate.

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