Title: Robert J' Colletti Senior Vice President and Chief Financial Officer John A' Adams Executive Vice Pr
1Robert J. CollettiSenior Vice President and
Chief Financial Officer John A. AdamsExecutive
Vice President and Chief Administrative Officer
2Safe 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.
3Who 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
4Health 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.
5Catalysts 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
6Eclipsys 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
7Eclipsys 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
8Eclipsys is The Outcomes Company
- We provide software, content and services that
help our customers transform healthcare and
improve their clinical, financial and
satisfaction outcomes.
9Our Software Optimizes Patient Flow
10The Connected Enterprise
11Our Customers
- Community
- Academic
- IDNs
- Specialty centers
- Ambulatory
- Regional
- Pediatric
12Partnership 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
13Partnership 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
14Financial Overview
- Summary of Financial Results
- Traditional Model vs. Software Recurring Revenue
Model - 2005 Success Factors
- Overall Financial Summary
15Revenue Growth
(in millions)
42 Growth
309.1
254.7
218.1
16Improving Financial Results
2003
2004
2005
17 Traditional Model vs. Software Recurring Revenue
Model
Affects of each model on a typical 10 million
contract
18Advantages 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
19Quarterly Revenue Composition
20Growth in Recurring Revenue
21Growth In Professional Services
222005 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
23Leverage Operating Expenses
24Overall 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
25Our mission