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Safe Harbor Statement

Robert J. Colletti Senior Vice President and Chief Financial Officer John A. Adams Executive Vice President and Chief Administrative Officer. Safe Harbor Statement.

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Safe Harbor Statement

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  1. Robert J. CollettiSenior Vice President and Chief Financial OfficerJohn A. AdamsExecutive Vice President and Chief Administrative Officer

  2. Safe Harbor Statement The attached materials and management’s prepared remarks include forward-looking statements, and management may make additional forward-looking statements in response to questions. These materials may include, but are not limited to, statements concerning our anticipated performance, including revenue, margin, cash flow, balance sheet and profit expectations; development and implementation of our software; duration, size, scope and revenue expectations associated with client contracts; benefits provided by Eclipsys software, outsourcing and consulting services; business mix; sales and growth in our client base; market opportunities; industry conditions; and our accounting, including its effects and potential changes in accounting. Actual results might differ materially from the results projected due to a number of risks and uncertainties. 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. We may change our product strategy in response to client requirements, market factors, resource availability, and other factors. Implementation of some of our software is complex and time consuming. Results depend upon a variety of factors and can vary by client. Each client’s circumstances may include unforeseen issues that make it more difficult or costly than anticipated to implement or derive benefit from software, outsourcing or consulting services. The success and timeliness of our services often depends at least in part upon client involvement, which can be difficult to control. We are required to meet specified performance standards, and contracts can be terminated or their scope reduced under certain circumstances. Competition is vigorous, and competitors may develop more compelling offerings or offer more aggressive pricing. New business is not assured and existing clients may migrate to competing offerings. Financial performance targets might not be achieved due to various risks, including slower-than-expected business development or new account implementation, or higher-than-expected costs to develop products, meet service commitments or sign new contracts. Our cash consumption may exceed expected levels if profitability does not meet expectations or strategic opportunities require cash investments. More information about Eclipsys’ risks is available in Eclipsys’ recent Form 10-Q 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.”

  3. Who we are…. • Founded in 1995 • Became a publicly traded company in 1998 • NASDAQ: ECLP • 1500+ facilities using our solutions • 2000+ employees • Headquarters: Boca Raton, FL • 2004 revenues: $300 million+

  4. Health Care IT Market • HCIT is forecasted to grow at a compounded annual rate of 7% from $36.5B in 2003 to $47.0B in 20071 • EHR solutions reported to be ordered by 30% as of end of 2003, by acute-care hospitals, with 80% penetration rate expected by 20162 Sources: (1) “North American Healthcare IT Spending Forecasts to 2007”, ID Number: M-22-6133, April 24, 2004, Gartner Research, Michael Davis, Joanne Galimi. (2) “The Diffusion and Value of Healthcare Information Technology”, Rand Corporation, Anthony Bower.

  5. Catalysts for HCIT Adoption • Government: One goal is for Americans to have personal EMR w/in 10 yrs1 • Non-Governmental: Leapfrog Group focusing on patient safety and quality care • Consumerism: 70% of Americans turn to the Internet for healthcare decisions2 • Workforce: Shortage of healthcare profssionals3 • Capital constraints: Financing future growth is looming issue4 • Information systems5 • 18% of provider respondents indicate that they have a fully operational EMR • 53% of respondents state IT purchases to reduce med errors is top priority Sources: (1) President’s Information Technology Advisory Committee, Health Care Delivery and Information Technology (HIT) Subcommittee: Draft Recommendations, April 13, 2004 (2) Survey: Consumers Want More Healthcare Info, Consumeraffairs.com, March 28, 2005. (3) “Competing for Talent” The Advisory Board, 2004. (4) “Financing the Future”, The Advisory Board, 2003. (5) 16th Annual HIMSS Leadership Survey, HIMSS, February 14, 2005

  6. Eclipsys: Leadership in NHIN Initiatives • President Bush: NHIN (National Health Information Network) infrastructure by 2015 • Established ONCHIT (Office of the National Coordinator for Health Information Technology), David Brailer, MD as head (4/04) • Published strategic plan to achieve NHIT (6/04) • Strategic Plan • Achieve Interoperable Health Records • Interconnect Clinicians • Personalize Care • Improve Population Health

  7. Eclipsys: Leadership in NHIN Initiatives • Eclipsys Providing Leadership • Eclipsys XA ObjectsPlus offering promoting interoperability between disparate systems • Web-based Remote Access Services (RAS) interconnecting physicians • eLink and Standards-based interfaces • Founding member of HIMSS EHRVA which is committed to a leadership role in standards development, EHR certification, interoperability, advancing performance and quality measures • NHIN prototypes design and testing with EHRVA (Electronic Health Record Vendor Association) • Founding member of Integrating the Healthcare Enterprise (IHE) initiative • Driving HIMSS 2006 interoperability showcase w/ Sunrise XA connected to HCO, VA and Dept of Defense HIS

  8. Eclipsys is The Outcomes Company • We provide software, content and services that help our customers transform healthcare and improve their clinical, financial and satisfaction outcomes.

  9. Our Software Optimizes Patient Flow

  10. The Connected Enterprise

  11. Our Customers • Community • Academic • IDNs • Specialty centers • Ambulatory • Regional • Pediatric

  12. Partnership: Turning Vision into Reality Sarasota Memorial Health Care System, Sarasota, FL Computerized Physician Order Entry • 90% reduction in Medicare denials for ED-ordered EKGs and chest X-rays • $2 million estimated annual savings in printing and labor costs • Reduced average medication order completion time • from 3 hours to 45 minutes • Reduced lab turnaround times • 89% for ASAP physician orders • 53% for routine orders

  13. Partnership: Turning Vision into Reality El Camino Hospital, Mountain View, CA Network Services, Wireless • Installed a wireless network instead of upgrading the existing wired network • Reduced annual labor and materials costs by 66% • Avoided business interruptions • Project completed in less than 4 months

  14. Financial Overview • Summary of Financial Results • Traditional Model vs. Software Recurring Revenue Model • 2005 Success Factors • Overall Financial Summary

  15. 2002 2004 2003 Revenue Growth (in millions) 42% Growth $309.1 $254.7 $218.1

  16. Improving Financial Results 2003 2004 2005

  17. Traditional Model vs. Software Recurring Revenue Model Affects of each model on a typical $10 million contract

  18. Advantages of Contracting Model • Improves long term visibility of the business model • Helps build foundation for sustainable profitability • Strategic selling advantage • Helps insulate business model in capital reimbursement environment • Better aligns customer payments with value received

  19. Quarterly Revenue Composition

  20. 5.2% 12.9% $62.9 2.1% $59.6 4.7% $51.9 2.9% 4.7% 2.5% $50.8 6.6% $48.4 7.8% $47.0 $44.8 $43.7 $40.8 $37.6 Q1 Q2 Q3 Q4 Q3 Q4 Q1 Q2 Q1 Q2 2003 2004 2005 Growth in Recurring Revenue

  21. 23.6% $21.2 6.8% 7.3% 19.2% -4.3% $16.2 6.9% $15.1 18.0% $14.6 0.0% -11.0% $14.0 $13.1 $12.2 $11.8 $11.8 $10.0 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 2003 2004 2005 Growth In Professional Services

  22. 2005 Success Factors • Improve professional service margins throughout year • Capitalize on content offering and add-on software opportunities • Successful implementations • 2004 • 54 major system activations for 2004 • 18 major system activations in Q4 • 23 Sunrise Clinical Manager 3.5XA activations in 2H04 • 2005 • 33 major clinical activations in 1H05 • 40 additional major clinical activations scheduled for 2H05 • 27 Sunrise Clinical Manager 4.0XA planned for balance of the year • Continue to leverage operating expenses • Successful releases of Sunrise Clinical Manager 4.0 XA (released in March ’05) and Sunrise Clinical Manager 4.5 XA

  23. Leverage Operating Expenses

  24. 2002 2003 2004 ($0.67) ($0.70) ($1.23) Overall Financial Summary 42% Growth • Improving financial results • Financial model – capitalize on recurring revenue model • Reduction in loss per share • Improving DSO’s: • 12/31/2002 - 79 days • 12/31/2003 - 75 days • 12/31/2004 - 67 days • 03/31/2005 - 63 days • 06/30/2005 – 61 days • Increase in deferred revenue: • 12/31/2002 - $80.1 million • 12/31/2004 - $125.0 million • Leverage operating expenses • Objective is build a financial model that generates sustained profitability $309.1 $254.7 $218.1 2002 2004 2003 Revenue growth Loss per share improvement

  25. Our mission

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