EX-99.1 2 a5743745ex991.htm EXHIBIT 99.1

Exhibit 99.1

Eclipsys Releases Financial Results for Quarter Ended June 30, 2008

ATLANTA--(BUSINESS WIRE)--Eclipsys Corporation® (NASDAQ: ECLP), The Outcomes Company®, today released results for the quarter ended June 30, 2008.

Second-Quarter Results

Revenues for the quarter ended June 30, 2008 were $132.1 million, compared with revenues of $119.0 million for the quarter ended June 30, 2007, an increase of approximately 11 percent.

Non-GAAP Results

Non-GAAP net income for the quarter was $13.2 million, or $0.24 per diluted share, compared to non-GAAP net income of $9.7 million, or $0.18 per diluted share for the second quarter in 2007. This represents a 33 percent growth in non-GAAP EPS year over year. Non-GAAP net income excludes stock-based compensation expense and certain other items incurred in the quarter that the company does not consider to be indicative of its ongoing business as follows:

· Expense of $4.1 million, or $0.08 per diluted share for stock-based compensation.

· Insurance recoveries of $658,000, or $0.01 per diluted share from the previously disclosed derivative litigation, the settlement of which is pending final court approval.

· Gain of $1.2 million, or $0.02 per diluted share, resulting from the achievement of certain post-closing milestones associated with the December 2007 sale of the Clinical Practice Model Resource Center business.

· Costs of $1.3 million, or $0.02 per diluted share associated with completing the relocation of the corporate headquarters from Boca Raton, FL to Atlanta, GA.

· Expense of $1.1 million or $0.02 per diluted share for amortization of intangible assets associated with the February 2008 acquisition of EPSi.

GAAP Results

On a GAAP basis, net income for the second quarter of 2008 was $8.5 million, or $0.16 per share on a diluted basis, compared to net income of $5.7 million, or $0.11 per share on a diluted basis in the second quarter of 2007. This represents a net income increase of 49 percent and per share increase of 45 percent.

Cash Flows

The company’s operating cash flows for the six months ending June 30, 2008 were $6.6 million, a decrease of $10.2 million compared to six months ended June 30, 2007. Eclipsys ended the quarter with $61.7 million in cash and marketable securities, as well as $111.4 million in long-term investments.

The following table summarizes (unaudited) select financial data:


                                 
In thousands, except per share data In thousands, except per share data
Three months ended June 30 Six months ended June 30
(unaudited) (unaudited)
  2008     2007  

$ Change

  % Change     2008     2007  

$ Change

  % Change  
Revenues $ 132,142 $ 119,019 $ 13,123 11 % $ 256,522 $ 232,049 $ 24,473 11 %
 
GAAP Results:                
Net income $ 8,511 $ 5,694 $ 2,817 49 % $ 8,800 $ 8,095 $ 705 9 %
Earnings per common share, diluted $ 0.16 $ 0.11 $ 0.05 45 % $ 0.16 $ 0.15 $ 0.01 7 %
 
Non-GAAP Results:                

Net income(a)

 

$ 13,154 $ 9,679 $ 3,475 36 % $ 21,268 $ 15,850 $ 5,418 34 %

Earnings per common share, diluted(a)

$ 0.24 $ 0.18 $ 0.06 33 % $ 0.39 $ 0.30 $ 0.09 30 %
 

(a) A reconciliation of GAAP to non-GAAP results is included in the attached table.

“For the second quarter, I am very pleased with Eclipsys’ revenue and EPS growth as well as the expansion of our margins. In addition, we are making great progress with Sunrise Clinical Manager™ 5.0 with several clients now live and operational,” said R. Andrew Eckert, Eclipsys president and chief executive officer. “Eclipsys’ proven ability to help healthcare organizations improve clinical and financial outcomes in an increasingly complex reimbursement and regulatory environment has significantly improved our competitive position and ability to win new business. Additionally, the EPSi acquisition continues to exceed our expectations as we won several new deals this quarter and have built a substantial pipeline.”

Added Eckert, “The agreement we signed with Barbara Ann Karmanos Cancer Institute in the second quarter was a great win for Eclipsys as it demonstrates trust in our ability to not only successfully implement our clinical and financial solutions, but also to manage an entire IT operation.”

Investor Teleconference July 30

Eclipsys senior executives will discuss the results on a teleconference for investors scheduled for 4:30 p.m. Eastern time on July 30. Persons interested in participating in the teleconference should call (800) 230-1096 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.

About two hours after its completion, an audio replay of the call will be available on www.eclipsys.com for approximately 48 hours.

Non-GAAP Measures

The financial results reported in this press release have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). In addition to the GAAP results, the company has provided net income and earnings per share information on a non-GAAP basis for the three and six month periods ended June 30, 2008 and for the three and six month periods ended June 30, 2007 to exclude non-cash stock-based compensation expenses and certain items incurred that the company does not consider to be indicative of its ongoing business, as listed on the attached GAAP to non-GAAP tables. 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. Internally, management uses this non-GAAP information 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 ongoing business derives from the fact that episodic charges of these kind 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 cash expenditures associated with such matters. Management compensates for these limitations by using both the GAAP and non-GAAP measures.

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. For example, omitting the stock-based compensation expense facilitates review by the majority of the company’s analysts, who model the company’s earnings excluding stock-based compensation charges.

The company has provided reconciling tables attached to this release.

About Eclipsys

Eclipsys is a leading provider of advanced integrated clinical, revenue cycle and access management software, clinical content and professional services that help healthcare organizations improve clinical, financial, operational and client satisfaction outcomes. For more information, see www.eclipsys.com or email info@eclipsys.com.

Special Note

Statements in this news release or the investor call referenced herein concerning the company’s sales, marketing and operational initiatives; future financial results, operating performance, and development efforts; and the benefits provided by Eclipsys software and services are forward-looking statements and actual results may differ from those projected 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. Sales may be slower than expected due to market conditions, competition, and other factors. Costs may be greater than anticipated due to the potential need to increase spending to ensure performance in accordance with commitments to clients and other factors. Software development may take longer and cost more than expected, and incorporation of anticipated features and functionality 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 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 and The Outcomes Company are registered trademarks of Eclipsys Corporation. Sunrise Clinical Manager is a trademark of Eclipsys Corporation.


Eclipsys Corporation
Non-GAAP Income Statements
(in thousands, except per share amouts)
                     
Non-GAAP Non-GAAP Non-GAAP Non-GAAP
 
Three Months Ended June 30, 2008 Three Months Ended June 30, 2007

$ Change

% Change Year-to-date June 30, 2008 Year-to-date June 30, 2007

$ Change

% Change
               
Revenues:
Systems and services $ 126,308 $ 114,266 $ 12,042 10.5 % $ 245,446 $ 223,449 $ 21,997 9.8 %
Hardware   5,834   4,753   1,081   22.7 %   11,076   8,600   2,476   28.8 %
Total revenues   132,142   119,019   13,123   11.0 %   256,522   232,049   24,473   10.5 %
 
Cost and expenses:
Costs of systems and services 67,413 66,456 957 1.4 % 133,072 129,873 3,199 2.5 %
Costs of hardware 3,615 3,737 (122 ) -3.3 % 7,951 6,651 1,300 19.5 %
Sales and marketing 20,916 17,191 3,725 21.7 % 40,242 34,639 5,603 16.2 %
Research and development 15,465 13,226 2,239 16.9 % 32,158 26,955 5,203 19.3 %
General and administrative 7,051 6,003 1,048 17.5 % 14,879 12,410 2,469 19.9 %
Depreciation and amortization 4,619 4,296 323 7.5 % 8,961 8,735 226 2.6 %
In-process research and development charge   -   -   -  

(a)N/M

  -   -   -  

(a)N/M

Total costs and expenses   119,079   110,909   8,170   7.4 %   237,263   219,263   18,000   8.2 %
 
Income (loss) from operations 13,063 8,110 4,953 61.1 % 19,259 12,786 6,473 50.6 %
Gain (loss) on sale of assets - - -

(a)N/M

33 - 33

(a)N/M

Interest income, net   828   1,588   (760 ) -47.9 %   2,947   3,102   (155 ) -5.0 %
Income (loss) before income taxes 13,891 9,698 4,193 43.2 % 22,239 15,888 6,351 40.0 %
Provision for income taxes   737   19   718  

(a)N/M

  971   38   933  

(a)N/M

Net income (loss)

 

$ 13,154 $ 9,679 $ 3,475   35.9 % $ 21,268 $ 15,850 $ 5,418   34.2 %
Net income (loss) per share:
Basic net income (loss) per common share $ 0.25 $ 0.18 $ 0.07   38.9 % $ 0.40 $ 0.30 $ 0.10   33.3 %
Diluted net income (loss) per common share $

0.24

$ 0.18 $ 0.06   33.3 % $ 0.39 $ 0.30 $ 0.09   30.0 %
Weighted average common shares outstanding:
Basic   53,657   52,596   1,061   2.0 %   53,595   52,471   1,124   2.1 %
Diluted   54,570   53,737   833   1.6 %   54,592   53,629   963   1.8 %
 

(a) Not Meaningful


Eclipsys Corporation
GAAP Income Statements (Unaudited)
(in thousands, except per share amouts)
                     
GAAP GAAP GAAP GAAP
 
Three Months Ended June 30, 2008 Three Months Ended June 30, 2007

$ Change

% Change Year-to-date June 30, 2008 Year-to-date June 30, 2007

$ Change

% Change
               
Revenues:
Systems and services $ 126,308 $ 114,266 $ 12,042 10.5 % $ 245,446 $ 223,449 $ 21,997 9.8 %
Hardware   5,834   4,753   1,081   22.7 %   11,076   8,600   2,476   28.8 %
Total revenues   132,142   119,019   13,123   11.0 %   256,522   232,049   24,473   10.5 %
 
Cost and expenses:
Costs of systems and services 69,316 67,555 1,761 2.6 % 136,876 132,048 4,828 3.7 %
Costs of hardware 3,615 3,737 (122 ) -3.3 % 7,951 6,651 1,300 19.5 %
Sales and marketing 22,781 17,901 4,880 27.3 % 43,652 36,319 7,333 20.2 %
Research and development 15,753 13,799 1,954 14.2 % 32,907 28,057 4,850 17.3 %
General and administrative 7,713 7,606 107 1.4 % 18,676 15,208 3,468 22.8 %
Depreciation and amortization 5,740 4,296 1,444 33.6 % 10,506 8,735 1,771 20.3 %
In-process research and development charge   -   -   -  

(a)N/M

 

  850   -   850  

(a)N/M

 

Total costs and expenses   124,918   114,894   10,024   8.7 %   251,418   227,018   24,400   10.7 %
 
Income (loss) from operations 7,224 4,125 3,099 75.1 % 5,104 5,031 73 1.5 %
Gain/(loss) on sale of assets 1,451 - 1,451

(a)N/M

3,515 - 3,515

(a)N/M

Interest income, net   828   1,588   (760 ) -47.9 %   2,947   3,102   (155 ) -5.0 %
Income (loss) before income taxes 9,503 5,713 3,790 66.3 % 11,566 8,133 3,433 42.2 %
Provision for income taxes   992   19   973  

(a)N/M

 

  2,766   38   2,728  

(a)N/M

 

Net income (loss) $ 8,511 $ 5,694 $ 2,817   49.5 % $ 8,800 $ 8,095 $ 705   8.7 %
Net income (loss) per share:
Basic net income (loss) per common share $ 0.16 $ 0.11 $ 0.05   45.5 % $ 0.16 $ 0.15 $ 0.01   6.7 %
Diluted net income (loss) per common share $ 0.16 $ 0.11 $ 0.05   45.5 % $ 0.16 $ 0.15 $ 0.01   6.7 %
Weighted average common shares outstanding:
Basic   53,657   52,596   1,061   2.0 %   53,595   52,471   1,124   2.1 %
Diluted   54,570   53,737   833   1.6 %   54,592   53,629   963   1.8 %
 

(a) Not Meaningful


ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
       
June 30, December 31,
2008 2007
(Unaudited)
Assets
Current assets:
Cash $ 61,520 $ 22,510
Marketable securities 155 168,925
Accounts receivable, net of allowance for doubtful accounts of $4,532 and $4,240, respectively 117,591 99,260
Prepaid expenses 28,890 27,289
Deferred tax asset 8,387 7,524
Other current assets   6,862     1,759  
Total current assets 223,405 327,267
 
Long-term investments 111,427 -
Property and equipment, net 49,788 45,657
Capitalized software development costs, net 36,183 38,206
Acquired technology, net 12,536 594
Intangible assets, net 6,214 1,376
Deferred tax asset 36,321 31,187
Goodwill 39,055 7,772
Other assets   11,564     13,374  
Total assets $ 526,493   $ 465,433  
 
 
 
Liabilities and Stockholders’ Equity
Current liabilities:
Deferred revenue $ 99,666 $ 105,115
Accounts payable 20,939 11,679
Accrued compensation costs 17,655 24,473
Notes payable 50,000 -
Deferred tax liability 2,013 1,777
Other current liabilities   15,949     19,381  
Total current liabilities 206,222 162,425
 
Deferred revenue 5,300 9,860
Deferred tax liability 37,363 31,235
Other long-term liabilities   6,836     3,899  
Total liabilities 255,721 207,419
 
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; issued and outstanding, 54,369,132 and 53,806,742, respectively 544 538
Additional paid-in capital 528,912 519,112
Accumulated deficit (255,419 ) (264,218 )
Accumulated other comprehensive income   (3,265 )   2,582  
Total stockholders’ equity   270,772     258,014  
Total liabilities and stockholders’ equity $ 526,493   $ 465,433  

ECLIPSYS CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
         
For the Six Months Ended June 30,
2008 2007
 
Operating activities:
Net income $ 8,800 $ 8,095
Adjustments to reconcile net income to net cash provided by operating activities:
 
Depreciation and amortization 20,551 19,263
Provision for bad debt 1,400 900
In-process research and development charge 850 -
Deferred income taxes 367 38
Gain on sale of marketable securities - (10 )
Stock compensation expense 7,466 5,547
Gain on sale of assets (3,515 ) -
Changes in operating assets and liabilities, excluding the effect of acquisitions and dispositions:
Accounts receivable (18,808 ) (2,126 )
Prepaid expenses and other current assets (4,086 ) (9,724 )
Inventory - 946
Other assets 1,047 26
Deferred revenue (8,505 ) (7,809 )
Accrued compensation (6,707 ) 2,394
Accounts payable and other current liabilities 3,898 (859 )
Long-term liabilities 2,938 65
Other reconciling items   862     -  
Total adjustments   (2,242 )   8,651  
Net cash provided by operating activities   6,558     16,746  
Investing activities:
Purchases of property and equipment (13,315 ) (8,425 )
Purchase of marketable securities (102,000 ) (52,945 )
Proceeds from sales of marketable securities 153,641 37,844
Proceeds from sale of assets 698 -
Capitalized software development costs (6,941 ) (9,825 )
Restricted Cash

-

(1,969 )
Earnout out on disposition 2,582 -
Cash paid for acquisitions, net of cash acquired   (54,370 )   (686 )
Net cash used in investing activities (19,705 ) (36,006 )
Financing activities:
Proceeds from stock options exercised 2,439 7,497
Proceeds from employee stock purchase plan 375 -
Cash paid for debt issuance costs (421 ) -
Repayment of secured financing (45,000 ) -
Proceeds from secured financing   95,000     -  
Net cash provided by financing activities 52,393 7,497
 
Effect of exchange rates on cash and cash equivalents   (236 )   403  
Net increase (decrease) in cash and cash equivalents 39,010 (11,360 )
Cash and cash equivalents — beginning of period   22,510     41,264  
Cash and cash equivalents — end of period $ 61,520   $ 29,904  

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
                     
GAAP Non-GAAP
 

Three Months
Ended
June 30,
2008 (Unaudited)

Stock-based comp expense (1) Derivative Litigation (2) EPSI (3) Gain on sale of assets (4) Headquarter Relocation (5)

Three Months
Ended
June 30,
2008

             
Revenues:
Systems and services $ 126,308 $ 126,308
Hardware   5,834             5,834
Total revenues   132,142   -     -     -     -     -     132,142
 
Cost and expenses:
Costs of systems and services 69,316 (1,777 ) (126 ) 67,413
Costs of hardware 3,615 3,615
Sales and marketing 22,781 (1,488 ) (377 ) 20,916
Research and development 15,753 (288 ) 15,465
General and administrative 7,713 (566 ) 658 (754 ) 7,051
Depreciation and amortization 5,740 (1,121 ) 4,619
In-process research and development charge   -             -
Total costs and expenses   124,918   (4,119 )   658     (1,121 )   -     (1,257 )   119,079
 
Income (loss) from operations 7,224 4,119 (658 ) 1,121 1,257 13,063
Gain/(loss) on sale of assets 1,451 (1,451 ) -
Interest income, net   828             828
Income (loss) before income taxes 9,503 4,119 (658 ) 1,121 (1,451 ) 1,257 13,891
Provision for income taxes   992   -     -     -     (255 )     737
Net income (loss) $ 8,511 $ 4,119   $ (658 ) $ 1,121   $ (1,196 ) $ 1,257   $ 13,154
Net income (loss) per share:
Basic net income (loss) per common share $ 0.16 $ 0.08   $ (0.01 ) $ 0.02   $ (0.02 ) $ 0.02   $ 0.25
Diluted net income (loss) per common share $ 0.16 $ 0.08   $ (0.01 ) $ 0.02   $ (0.02 ) $ 0.02   $ 0.24
Weighted average common shares outstanding:
Basic   53,657   53,657     53,657     53,657     53,657     53,657     53,657
Diluted   54,570   54,570     54,570     54,570     54,570     54,570     54,570
 
 
1 Represents stock-based compensation expense.
 
2 This reduction in general and administrative expenses is associated with insurance recoveries related to the previously disclosed derivative litigation, the settlement of which is pending final court approval.
 
3 This expense is the amortization of intangible assets associated with the February 2008 acquisition of EPSi.
 
4 This gain resulted from the achievement of certain post-closing milestones associated with the December 2007 sale of the Clinical Practice Model Resource Center business.
 
5 This cost was related primarily to amounts incurred to relocate the corporate headquarters from Boca Raton to Atlanta. These include salaries and benefits associated with termination of employees not relocating and other administrative costs associated with the move.

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
             
GAAP Non-GAAP
 
Year-to-date June 30, 2008 (Unaudited) Stock-based comp expense (1) Derivative Litigation (2) EPSI (3) Gain on sale of assets (4) Headquarter Relocation (5) Tax Provision (6) Year-to-date June 30, 2008
               
Revenues:
Systems and services $ 245,446 $ 245,446
Hardware   11,076               11,076
Total revenues   256,522   -     -     -     -     -     -     256,522
 
Cost and expenses:
Costs of systems and services 136,876 (3,385 ) (419 ) 133,072
Costs of hardware 7,951 - 7,951
Sales and marketing 43,652 (2,585 ) (825 ) 40,242
Research and development 32,907 (590 ) (159 ) 32,158
General and administrative 18,676 (907 ) (1,353 ) (1,537 ) 14,879
Depreciation and amortization 10,506 (1,545 ) 8,961
In-process research and development charge   850       (850 )         -
Total costs and expenses   251,418   (7,467 )   (1,353 )   (2,395 )   -     (2,940 )   -     237,263
 
Income (loss) from operations 5,104 7,467 1,353 2,395 2,940 19,259
Gain/(loss) on sale of assets 3,515 (3,482 ) 33
Interest income, net   2,947               2,947
Income (loss) before income taxes 11,566 7,467 1,353 2,395 (3,482 ) 2,940 - 22,239
Provision for income taxes   2,766   -     -     -     (255 )     (1,540 )   971
Net income (loss) $ 8,800 $ 7,467   $ 1,353   $ 2,395   $ (3,227 ) $ 2,940   $ 1,540   $ 21,268
Net income (loss) per share:
Basic net income (loss) per common share $ 0.16 $ 0.14   $ 0.03   $ 0.04   $ (0.06 ) $ 0.05   $ 0.03   $ 0.40
Diluted net income (loss) per common share $ 0.16 $ 0.14   $ 0.02   $ 0.04   $ (0.06 ) $ 0.05   $ 0.03   $ 0.39
Weighted average common shares outstanding:
Basic   53,595   53,595     53,595     53,595     53,595     53,595     53,595     53,595
Diluted   54,592   54,592     54,592     54,592     54,592     54,592     54,592     54,592
 
 
1 Represents stock-based compensation expense.
 
2 These charges were 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.
 
3 These amounts relate to a charge of $850 for a write off of in-process research and development and amortization of intangible assets recorded as part of the purchase price allocation of the February 2008 acquisition of EPSi.
 
4 This gain was recorded in conjunction with contingent consideration earned related to the December 2007 sale of the Clinical Practice Model Resource Center business to Elsevier Inc.
 
5 This cost was related primarily to amounts incurred to relocate the corporate headquarters from Boca Raton to Atlanta. These include salaries and benefits associated with termination of employees not relocating and other administrative costs associated with the move.
 
6 FASB Interpretation 48 "Accounting for Uncertainty in Income Taxes" clarifies the criteria for recognizing income tax benefits. This charge was recorded as a result of the review of uncertain state tax positions.

Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
         
 

GAAP

Non-GAAP

 

Voluntary Stock Option review (2)

 

Three Months Ended
June 30,
2007 (Unaudited)

Stock-based comp expense (1) Three Months Ended June 30, 2007
       
Revenues:
Systems and services $ 114,266 $ 114,266
Hardware   4,753       4,753
Total revenues   119,019   -     -     119,019
 
Cost and expenses:
Costs of systems and services 67,555 (1,099 ) 66,456
Costs of hardware 3,737 3,737
Sales and marketing 17,901 (710 ) 17,191
Research and development 13,799 (573 ) 13,226
General and administrative 7,606 (405 ) (1,198 ) 6,003
Depreciation and amortization 4,296 4,296
In-process research and development charge   -       -
Total costs and expenses   114,894   (2,787 )   (1,198 )   110,909
 
Income (loss) from operations 4,125 2,787 1,198 8,110
Gain/(loss) on sale of assets - -
Interest income, net   1,588       1,588
Income (loss) before income taxes 5,713 2,787 1,198 9,698
Provision for income taxes   19       19
Net income (loss) $ 5,694 $ 2,787   $ 1,198   $ 9,679
Net income (loss) per share:
Basic net income (loss) per common share $ 0.11 $ 0.05   $ 0.02   $ 0.18
Diluted net income (loss) per common share $ 0.11 $ 0.05   $ 0.02   $ 0.18
Weighted average common shares outstanding:
Basic   52,596   52,596     52,596     52,596
Diluted   53,737   53,737     53,737     53,737
 
 
1 Represents stock-based compensation expense.
 
2

These charges were incurred as a result of the voluntary stock option review completed in the second quarter 2007 and relate to legal and professional fees for analysis completed to conduct the review.


Eclipsys Corporation
Reconciliation of GAAP to Non-GAAP Pro Forma Results
(in thousands, except per share amounts)
           

GAAP

Non-GAAP

 

 

Voluntary Stock Option review (2)

 

Year-to-date June 30,
2007 (Unaudited)

Stock-based comp expense (1)

Year-to-date
June 30,
2007

       
Revenues:
Systems and services $ 223,449 $ 223,449
Hardware   8,600       8,600
Total revenues   232,049   -     -     232,049
 
Cost and expenses:
Costs of systems and services 132,048 (2,175 ) 129,873
Costs of hardware 6,651 6,651
Sales and marketing 36,319 (1,680 ) 34,639
Research and development 28,057 (1,102 ) 26,955
General and administrative 15,208 (590 ) (2,208 ) 12,410
Depreciation and amortization 8,735 8,735
In-process research and development charge   -       -
Total costs and expenses   227,018   (5,547 )   (2,208 )   219,263
 
Income (loss) from operations 5,031 5,547 2,208 12,786
Gain/(loss) on sale of assets - -
Interest income, net   3,102       3,102
Income (loss) before income taxes 8,133 5,547 2,208 15,888
Provision for income taxes   38       38
Net income (loss) $ 8,095 $ 5,547   $ 2,208   $ 15,850
Net income (loss) per share:
Basic net income (loss) per common share $ 0.15 $ 0.11   $ 0.04   $ 0.30
Diluted net income (loss) per common share $ 0.15 $ 0.10   $ 0.04   $ 0.30
Weighted average common shares outstanding:
Basic   52,471   52,471     52,471     52,471
Diluted   53,629   53,629     53,629     53,629
 
 
1 Represents stock-based compensation expense.
 
2 These charges were incurred as a result of the voluntary stock option review completed in the second quarter 2007 and relate to legal and professional fees for analysis completed to conduct the review. These fees were not excluded from the previously announced Non-GAAP net income of $5.2 million, or $0.10 of earnings per diluted share for the first quarter 2007.

CONTACT:
Eclipsys
Jason Cigarran, 404-847-5965
Director, Investor Relations
jason.cigarran@eclipsys.com
or
Robert J. Colletti, 404-847-5975
Chief Financial Officer
investor.relations@eclipsys.com