updated 10/28/2010 4:17:01 PM ET 2010-10-28T20:17:01

KANSAS CITY, Mo., Oct. 28, 2010 (GLOBE NEWSWIRE) -- Cerner Corporation (Nasdaq:CERN) today announced results for the 2010 third quarter that ended October 2, 2010, delivering strong levels of bookings, revenue, earnings and cash flow.

Bookings in the third quarter of 2010 were $495.7 million, up 17 percent from $424.3 million in the third quarter of 2009. Third quarter revenue was $462.7 million, up 13 percent compared to $409.4 million in the year-ago period.

On a Generally Accepted Accounting Principles (GAAP) basis, third quarter 2010 net earnings were $60.9 million, and diluted earnings per share were $0.71. Third quarter 2009 GAAP net earnings were $48.4 million, and diluted earnings per share were $0.57.

Adjusted (non-GAAP) Earnings

Adjusted third quarter 2010 net earnings were $65.0 million, an increase of 27 percent compared to $51.3 million of adjusted net earnings in the third quarter of 2009. Adjusted diluted earnings per share were $0.76 in the third quarter of 2010 compared to $0.61 of adjusted diluted earnings per share in the third quarter of 2009. Analysts' consensus estimate for third quarter 2010 adjusted diluted earnings per share was $0.74.

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 third quarter 2010 and 2009 net earnings and diluted earnings per share exclude share based compensation expense, which reduced third quarter 2010 net earnings and diluted earnings per share by $4.1 million and $0.05, respectively, and reduced third quarter 2009 net earnings and diluted earnings per share by $3.0 million and $0.04, respectively. 

Other Third Quarter Highlights:

  • Third quarter cash collections of $471.8 million and operating cash flow of $119.0 million.
  • Free cash flow of $79.1 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 91 days compared to 88 days in the second quarter of 2010 and 105 days in the year-ago quarter.
  • Total revenue backlog of $4.66 billion, up 21 percent over the year-ago quarter. This is comprised of $4.02 billion of contract backlog and $642 million of support and maintenance backlog.

"We are pleased with our strong results in the third quarter, including record cash flow and strong bookings, revenue and earnings," said Neal Patterson, Cerner chairman, CEO, president and co-founder. "Our third quarter and year-to-date results reflect strong performance in what we believe is the beginning of a multi-year period of increased demand as healthcare providers purchase solutions and services to help them qualify for healthcare information technology incentives included in the American Recovery and Reinvestment Act of 2009 (ARRA). Further, we believe additional demand for our solutions and services will be driven by healthcare reform and the increasingly complex and more clinically-focused requirements healthcare providers must meet to get reimbursed for their services," Patterson said.

Future Period Guidance

Cerner currently expects:

  • Fourth quarter 2010 revenue between $490 million and $510 million.
  • Fourth quarter 2010 adjusted diluted earnings per share before share based compensation expense between $0.80 and $0.85. 
  • Fourth quarter 2010 new business bookings between $490 million and $530 million.
  • Share based compensation expense to reduce diluted earnings per share by approximately $0.05 in the fourth quarter of 2010.

Earnings Conference Call

Cerner will host an earnings conference call to provide additional detail on third quarter results at 3:30 p.m. CT on October 28. The dial-in number for the conference call is (617) 597-5395; the passcode is Cerner. The company recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 6:30 p.m. CT, October 28 through 11:59 p.m. CT, October 31. The dial-in number for the re-broadcast is (888) 286-8010; the passcode is 79004643.

An audio webcast will be available live and archived on Cerner's website at www.cerner.com under the About Cerner section (click Investor Relations, then Presentations and Webcasts).

About Cerner

Cerner is transforming healthcare by eliminating error, variance and waste for healthcare providers and consumers around the world. Cerner® solutions optimize processes for healthcare organizations ranging in size from single-doctor practices, to health systems, to entire countries, for the pharmaceutical and medical device industries, employer health and wellness services industry and for the healthcare commerce system. These solutions are licensed by more than 8,500 facilities around the world, including approximately 2,300 hospitals; 3,400 physician practices covering more than 30,000 physicians; 600 ambulatory facilities, such as laboratories, ambulatory centers, cardiac facilities, radiology clinics and surgery centers; 700 home-health facilities; and 1,500 retail pharmacies. The trademarks, service marks and logos (collectively, the "Marks") set forth herein are registered and unregistered trademarks and/or service marks owned by Cerner Corporation and/or its subsidiaries in the United States and certain other countries throughout the world. Nasdaq: CERN. For more information about Cerner, please visit www.cerner.com , Twitter, Facebook, and YouTube .

This release contains forward-looking statements that involve a number of risks and uncertainties. It is important to note that the Company's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "believe", "guidance" and "expects" or the negative of these words, variations thereof or similar expressions are intended to identify such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: the possibility of product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities; our proprietary technology may be subject to claims for infringement or misappropriation of intellectual property rights of others, or may be infringed or misappropriated by others; risks associated with our non-U.S. operations; risks associated with our ability to effectively hedge exposure to fluctuations in foreign currency exchange rates; the potential for tax legislation initiatives that could adversely affect our tax position and/or challenges to our tax positions in the United States and non-U.S. countries; risks associated with our recruitment and retention of key personnel; risks related to our reliance on third party suppliers; risks inherent with business acquisitions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; risks associated with the ongoing adverse financial market environment and uncertainty in global economic conditions; variations in our quarterly operating results; potential inconsistencies in our sales forecasts compared to actual sales; the volatility in the trading price of our common stock; and, our directors' authority to issue preferred stock and the anti-takeover provisions in our corporate governance documents. Additional discussion of these and other factors affecting the Company's business is contained in the Company's periodic filings with the Securities and Exchange Commission. The Company 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.

Note 1: The presentation of Adjusted Net Earnings and Free Cash Flow, non-GAAP financial measures, are not meant to be considered in isolation, as a substitute for, or superior to, Generally Accepted Accounting Principles (GAAP) results and investors should be aware that non-GAAP measures have inherent limitations and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Adjusted Net Earnings and Free Cash Flow may also be different from similar non-GAAP financial measures used by other companies and may not be comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculations. The Company believes that Adjusted Net Earnings and Free Cash Flow are important to enable investors to better understand and evaluate its ongoing operating results and allows for greater transparency in the review of its overall financial, operational and economic performance.

Note 2: The Company provides earnings with and without stock options expense because earnings excluding this expense is used by management along with GAAP results to analyze its business, make strategic decisions and for management compensation purposes.

Note 3: The Company provides cash flow with and without capital purchases and software development cost because operating cash flows excluding these expenditures is used by management along with GAAP results to analyze its earnings quality and overall cash generation of the business.

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com