IDX Systems Corporation Reports 2005 Second Quarter Results First
Half Year-Over-Year Revenues Increase More Than 24% BURLINGTON,
Vt., July 28 /PRNewswire-FirstCall/ -- IDX Systems Corporation
(NASDAQ:IDXC) 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 DATASOURCE: IDX Systems Corporation 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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