Jul 29 2010
Cerner Corporation (Nasdaq:CERN) today announced results for the 2010 second quarter that ended July 3, 2010, delivering strong levels of bookings, revenue, earnings and cash flow.
Bookings in the second quarter of 2010 were $467.8 million, up 19 percent from $394.0 million in the second quarter of 2009. Second quarter revenue was $456.0 million, up 13 percent compared to $403.8 million in the year-ago period.
On a Generally Accepted Accounting Principles (GAAP) basis, second quarter 2010 net earnings were $55.5 million, and diluted earnings per share were $0.65. Second quarter 2009 GAAP net earnings were $43.8 million, and diluted earnings per share were $0.52.
Adjusted (non-GAAP) Earnings
Adjusted second quarter 2010 net earnings were $59.1 million, an increase of 29 percent compared to $46.0 million of adjusted net earnings in the second quarter of 2009. Adjusted diluted earnings per share were $0.69 in the second quarter of 2010 compared to $0.55 of adjusted diluted earnings per share in the second quarter of 2009. Analysts' consensus estimate for second quarter 2010 adjusted diluted earnings per share was $0.68.
Adjusted Net Earnings is not a recognized term under GAAP and should not be substituted for net earnings as a measure of the Company's performance but instead should be utilized as a supplemental measure of financial performance in evaluating our business. Following is a description of adjustments made to net earnings. For more detail, please see the accompanying schedule, titled "Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings Per Share to GAAP Net Earnings and Diluted Earnings Per Share."
Adjusted second quarter 2010 and 2009 net earnings and diluted earnings per share exclude share based compensation expense, which reduced second quarter 2010 net earnings and diluted earnings per share by $3.6 million and $0.04, respectively, and reduced second quarter 2009 net earnings and diluted earnings per share by $2.2 million and $0.03, respectively.
Other Second Quarter Highlights:
- Second quarter cash collections of $447.0 million and operating cash flow of $110.2 million.
- Free cash flow of $65.6 million. Free cash flow is a non-GAAP financial measure defined as operating cash flow less capital expenditures and capitalized software. For more detail, please see the accompanying schedule, titled "Reconciliation of GAAP Operating Cash Flow to non-GAAP Free Cash Flow."
- Days sales outstanding of 88 days compared to 89 days in the first quarter of 2010 and 100 days in the year-ago quarter.
- Total revenue backlog of $4.48 billion, up 21 percent over the year-ago quarter. This is comprised of $3.85 billion of contract backlog and $637 million of support and maintenance backlog.
"Our second quarter results were very solid across nearly all key metrics, including record cash flow and strong bookings, revenue and earnings," said Neal Patterson, Cerner chairman, CEO, president and co-founder. "Our strong bookings, highlighted by several new client relationships, included demand associated with the healthcare information technology provisions in the American Recovery and Reinvestment Act of 2009 (ARRA). Cerner remains very well positioned to continue benefiting from this demand due to the depth and breadth of our proven solutions and differentiated services capabilities," Patterson said.
Future Period Guidance
Cerner currently expects:
- Third quarter 2010 revenue between $455 million and $470 million.
- Third quarter 2010 adjusted diluted earnings per share before share based compensation expense between $0.71 and $0.76.
- Third quarter 2010 new business bookings between $450 million and $480 million.
- Full-year 2010 revenue between $1.83 billion and $1.875 billion, which is up from a prior range of $1.80 billion and $1.875 billion.
- Full-year 2010 adjusted diluted earnings per share before share based compensation expense between $2.85 and $2.92, which is up from a prior range of $2.80 and $2.90.
- Share based compensation expense to reduce diluted earnings per share by approximately $0.04 to $0.05 in the third quarter of 2010 and between $0.17 and $0.18 for the year.
Source Cerner Corporation