IDX Systems Corp Reports Fourth Quarter and Year -End Results

IDX Systems Corporation (NASDAQ:IDXC) reported results today for the fourth quarter and year ended December 31, 2002.
Revenues for the fourth quarter ended December 31, 2002 were $122
million compared with $103 million in the fourth quarter of 2001.
Revenues for the twelve-month period ended December 31, 2002
increased more than 17% to $460 million compared with revenues of
$391 million for the same period in 2001. Revenues reflect the adoption
of EITF 01-14, and all periods presented, including 2001, have been
reclassified to reflect this on a consistent basis.
Fourth Quarter Results excluding special items
IDX considers net income excluding special items to be the most relevant benchmark of the Company's core operating performance.
The Company reported fourth quarter 2002 net income of $5.0 million,
or $0.17 per share, excluding a lease abandonment charge, compared
with net income of $242,000, or $0.01 per share, in the comparable
2001 period, excluding a restructuring charge.
Including special items
Including a pretax lease abandonment charge of $9.2 million, IDX
reported a fourth quarter 2002 net loss of $1.1 million, or $0.04 per
share, compared with a net loss of $13.8 million, or $0.48 per share, in
the comparable 2001 period, including a pretax restructuring charge of
$19.5 million.
The lease abandonment charge is related to asset impairment and rent
obligations associated with the Company's Seattle office, which carries a
lease agreement through 2005. IDX recently moved to a new location in
Seattle and has been unable to secure a sub-tenant to assume its prior
lease. As a result of the charge, IDX raised 2003 earnings guidance by
$0.06 per share. The charge and corresponding increase in 2003
guidance was announced December 11, 2002.
Year-End Results Excluding special items
For the twelve months ended December 31, 2002, excluding special
items, IDX reported net income of $13.3 million, or $0.46 per share,
compared with a net loss of $7.6 million, or $0.26 per share, excluding
special items and the Company's ownership interest in Allscripts, an
unconsolidated affiliate, in the same period last year.
Including special items
For the twelve months ended December 31, 2002, IDX reported net
income of $10.0 million, or $0.34 per share including a $4.3 million
pretax gain on a sale of investment in a subsidiary and the $9.2 million
pretax lease abandonment charge compared with, in the same period
last year, a net loss of $8.6 million, or $0.30 per share, including a $35.5
million pretax gain on a sale of investment in a subsidiary, a $5.8 million
pretax gain on a sale of investment, a $19.5 million pretax restructuring
charge, and a $17.5 million pretax loss associated with the Company's
ownership interest in Allscripts, an unconsolidated affiliate.
Outlook and Guidance
"We are very pleased with our 2002 results," said Richard E. Tarrant,
Chairman of IDX. "We clearly demonstrated our ability to provide
leading solutions to address the increasing demands of the healthcare
information technology market. Our core products have exhibited
considerable momentum this year, signifying our unique ability to connect
participants in healthcare across the enterprise. We look forward to
continued success in 2003."
"IDX begins 2003 with firmly established traction in the market," said
James H. Crook, Jr, President and Chief Executive Officer of IDX.
"Our ability to execute our 2002 plan, despite difficulties at EDiX, is a
result of our unwavering focus on providing the best solutions to help our
customers make patient access simpler, care safer and accounting more
streamlined. We expect this strategy to serve us well this year and
beyond."
IDX remains comfortable with 2003 revenue guidance of $530 million.
The Company is raising earnings per share guidance to $0.77 from
$0.74 based on an anticipated lower effective tax rate of 30% related to
utilization of certain tax credits. Prior earnings guidance had assumed a
33% tax rate. Guidance assumes no special items in 2003.
Leading Solutions Address Industry Demands
IDX recently announced new division and sub-brand names for its
product portfolio:
Flowcastis the new name for the Enterprise Solutions Division
(ESD), home to IDXtend for the WebT, an integrated enterprise-
wide, web-based business performance solution.
Groupcastis the new name for the Systems Division (SD), which
includes GPMST and represents IDX's group practice product
suite for mid- to larger-size group medical practices and physicians
service organizations.
Carecastis the new name for the Integrated Solutions Division (ISD)
and is IDX's integrated clinical/financial solution and physician order
entry system.
Imagecastis the new name for the Radiology and Imaging Solutions
Division (RISD) and IDX's line of products for enterprise medical
image and information management, which includes an integrated
RIS-PACS solution.
EDiXwill remain the name of IDX's transcription and coding
services business due to its high existing brand awareness.
Separately today, the Company announced it had signed an IDX
CarecastT agreement with Vancouver Coastal Health Authority, the
largest health organization in Canada, and several significant agreements
for IDX ImagecastT, its leading PACS and radiology information
management solution. Fourth quarter revenues also included a number of
new Flowcast solutions for Washington University School of Medicine
in St. Louis, MO, where patient access and document imaging solutions
are expected to enable front-end workflow changes designed to
dramatically improve business performance across the organization.
Other noteworthy agreements include a GroupcastT sale to Charter
Professional Services, an 18-location, multi-specialty physician network
across Boston's North Shore and an expanded agreement with UCLA
Healthcare for EDiX services.