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Robert J' Colletti Senior Vice President and Chief Financial Officer John A' Adams Executive Vice Pr

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Title: Robert J' Colletti Senior Vice President and Chief Financial Officer John A' Adams Executive Vice Pr


1
Robert J. CollettiSenior Vice President and
Chief Financial Officer John A. AdamsExecutive
Vice President and Chief Administrative Officer
2
Safe Harbor Statement
  • The attached materials and managements 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 clients
    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
    Managements 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) Presidents 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
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
Growth in Recurring Revenue
21
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
Overall Financial Summary
42 Growth
  • Improving financial results
  • Financial model capitalize on recurring revenue
    model
  • Reduction in loss per share
  • Improving DSOs
  • 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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