KANSAS CITY, Mo., Feb. 8, 2011 (GLOBE NEWSWIRE) -- Cerner Corporation (Nasdaq:CERN) today announced results for the 2010 fourth quarter that ended Jan. 1, 2011, delivering strong levels of bookings, revenue, earnings and cash flow.
Bookings in the fourth quarter of 2010 were $626.2 million, significantly above the guidance range of $490 million to $530 million and second only to the all-time high level of $680.4 million in the fourth quarter of 2009. Full year 2010 bookings were a record $1.99 billion, up 9% compared to 2009 bookings of $1.83 billion.
Fourth quarter revenue was $500.2 million, up 7 percent compared to $466.3 million in the year-ago period. Full year 2010 revenue was $1.85 billion, up 11% compared to 2009 revenue of $1.67 billion.
On a Generally Accepted Accounting Principles (GAAP) basis, fourth quarter 2010 net earnings were $70.6 million and diluted earnings per share were $0.82. Fourth quarter 2009 GAAP net earnings were $60.5 million and diluted earnings per share were $0.71. For the full year, 2010 GAAP net earnings were $237.3 million and diluted earnings per share were $2.78. Full year 2009 GAAP net earnings were $193.5 million and diluted earnings per share were $2.31.
Adjusted (non-GAAP) Earnings
Adjusted fourth quarter 2010 net earnings were $75.0 million, an increase of 18 percent compared to $63.4 million of adjusted net earnings in the fourth quarter of 2009. Adjusted diluted earnings per share were $0.87 in the fourth quarter of 2010 compared to $0.75 of adjusted diluted earnings per share in the fourth quarter of 2009. Analysts' consensus estimate for fourth quarter 2010 adjusted diluted earnings per share was $0.84. For the full year 2010, adjusted net earnings were $252.8 million and adjusted diluted earnings per share were $2.96, compared to full year 2009 adjusted net earnings of $204.0 million and adjusted diluted earnings per share of $2.43.
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 fourth quarter 2010 and 2009 net earnings and diluted earnings per share exclude share based compensation expense, which reduced fourth quarter 2010 net earnings and diluted earnings per share by $4.3 million and $0.05, respectively, and reduced fourth quarter 2009 net earnings and diluted earnings per share by $2.9 million and $0.04, respectively. Share based compensation expense reduced full year 2010 net earnings and diluted earnings per share by $15.6 million and $0.18, respectively, and reduced full year 2009 net earnings and diluted earnings per share by $10.6 million and $0.12, respectively.
Other Fourth Quarter and Full Year 2010 Highlights:
- Fourth quarter cash collections of $497.6 million and operating cash flow of $121.7 million. For the full year, cash collections were $1.90 billion and operating cash flow was $456.4 million.
- Fourth quarter free cash flow of $75.6 million. For the full year, free cash flow was a record $273.2 million, up 98% from $138.3 million in 2009. 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 87 days compared to 91 days in the third quarter of 2010 and 90 days in the year-ago quarter.
- Total revenue backlog of $4.94 billion, up 17 percent over the year-ago quarter. This is comprised of $4.29 billion of contract backlog and $655 million of support and maintenance backlog.
"We are pleased with our exceptional results in the fourth quarter and full-year 2010, including record cash flow and strong bookings, revenue and earnings," said Neal Patterson, Cerner chairman, CEO, president and co-founder. "Our results reflect strong performance in what we believe is the beginning of a multi-year period of increased demand for our solutions and services driven by stimulus, healthcare reform, and other regulatory requirements, such as ICD-10 codes, that will require healthcare providers to make IT investments to operate effectively in the increasingly complex healthcare industry. During the year, we also made great progress at rolling out new services, such as Cerner ITWorksSM and Cerner RevWorksSM, that we believe will be major contributors to growth in coming years, and we introduced our Healthe Intent™ platform, a cloud-based platform that will serve as the foundation for many future offerings," Patterson said.
Future Period Guidance
Cerner currently expects:
- First quarter 2011 revenue between $475 million and $490 million.
- First quarter 2011 adjusted diluted earnings per share before share based compensation expense between $0.73 and $0.77.
- First quarter 2011 new business bookings between $435 million and $465 million.
- Full-year 2011 revenue between $2.05 billion and $2.10 billion.
- Full-year 2011 adjusted diluted earnings per share before share based compensation expense between $3.50 and $3.60.
- Share based compensation expense to reduce diluted earnings per share by approximately $0.05 in the first quarter of 2011 and between $0.20 and $0.22 for the year.
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 Feb. 8. The dial-in number for the conference call is (617) 786-4512; 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, Feb. 8 through 11:59 p.m. CT, Feb. 11. The dial-in number for the re-broadcast is (888) 286-8010; the passcode is 73280679.
An audio webcast will be available live and archived on Cerner's website at under the About Cerner section (click Investor Relations, then Presentations and Webcasts).
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 9,000 facilities around the world, including approximately 2,600 hospitals; 3,500 physician practices covering more than 30,000 physicians; 500 ambulatory facilities, such as laboratories, ambulatory centers, cardiac facilities, radiology clinics and surgery centers; 800 home-health facilities; and 1,600 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 ,, , and .
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; losses due to asset impairment charges; uncertainty in global economic conditions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; 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.
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