Cerner Reports Second Quarter 2013 Results
July 25, 2013
Cerner Reports Second Quarter 2013 Results
Record Bookings and Strong Earnings
KANSAS CITY, Mo. — July 25, 2013 — Cerner Corporation (Nasdaq: CERN)
today announced results for the 2013 second quarter that ended June 29, 2013,
delivering record levels of bookings and strong earnings performance.
in the second quarter of 2013 were $935.0 million, an all-time high for a second
quarter and an increase of 33 percent compared to second quarter 2012 bookings
of $700.5 million.
quarter revenue was $707.6 million, an increase of 11 percent compared to $637.4
million in the year-ago period. Revenue growth was at the low end of Cerner’s expectations due to reduced levels of
low-margin technology resale. This had no material impact on earnings, which were at the high end of expectations due
to strength in other areas.
U.S. Generally Accepted Accounting Principles (GAAP) basis, second quarter 2013
net earnings were $112.9 million and diluted earnings per share were $0.32. Second
quarter 2012 GAAP net earnings were $97.8 million and diluted earnings per
share were $0.28.
The number of shares and the per share amounts for all periods presented within
reflect the two-for-one stock split effective June 28, 2013.
Adjusted (non-GAAP) Net Earnings
Adjusted net earnings for second quarter 2013 were $119.6 million, an increase of 16
percent compared to $103.1 million of adjusted net earnings in the second
quarter of 2012. Adjusted diluted earnings per share were $0.34 in the second
quarter of 2013 compared to $0.29 of adjusted diluted earnings per share in the
year-ago quarter. Analysts’ consensus estimate for second quarter 2013 adjusted diluted earnings per share was $0.34.
net earnings is not a recognized term under GAAP and should not be
substituted for net earnings as a measure of Cerner’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 GAAP Results to Non-GAAP
net earnings and diluted earnings per share exclude share-based compensation
expense, which reduced second quarter 2013 net earnings and diluted earnings
per share by $6.7 million and $0.02, respectively; and reduced second quarter
2012 net earnings and diluted earnings per share by $5.3 million and $0.01,
Other 2013 Second Quarter Highlights:
- Second quarter cash collections of $718.7 million and operating cash flow of $176.5 million.
- Second quarter free cash flow of $47.4 million. Free cash flow is a non-GAAP financial measure defined as GAAP cash flows from operating activities less capital purchases and capitalized software development costs. For more detail, please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”
- Second quarter days sales outstanding of 68 days, which is down from 71 days in the year-ago quarter.
- Total backlog of $8.00 billion, up 23 percent over the year-ago quarter. This was comprised of $7.24 billion of contract backlog and $756.9 million of support and maintenance backlog.
record bookings, strong overall results, and positive outlook reflect an
ongoing favorable market environment for Cerner,” Neal Patterson, Cerner
chairman, CEO, president and co-founder said. “We believe our solutions and
services are well aligned with the needs of health care providers as they face
a growing list of measures and mandates that require effective use of
information technology. Significant investments in research and development have positioned us well for the current
market environment, and we continue to increase these investments as we believe
ongoing industry shifts will create substantial opportunities for Cerner for
many years to come.”
Future Period Guidance
Cerner currently expects:
- Third quarter 2013 revenue between $740 million and $770 million.
- Full year 2013 revenue between $2.95 billion and $3.05 billion.
- Third quarter 2013 adjusted diluted earnings per share before share-based
compensation expense between $0.35 and $0.36.
- Full year 2013 adjusted diluted earnings per share before share-based compensation
expense between $1.40 and $1.42, up from a prior range of $1.39 to $1.42.
- Third quarter 2013 new business bookings between $875 million and $925 million.
- Share-based compensation expense to reduce diluted earnings per share by approximately $0.02
to $0.03 in the third quarter of 2013 and between $0.08 and $0.09 for the year.
Earnings Conference Call
will host an earnings conference call to provide additional detail on these
results at 3:30 p.m. CT on July 25. The dial-in number for the conference call
is (617)-399-5135; the passcode is Cerner. Cerner recommends
joining the call 15 minutes early for registration. The re-broadcast of the
call will be available from 5:30 p.m. CT, July 25 through 11:59 p.m. CT, July 28.
The dial-in number for the re-broadcast is (617)-801-6888; the passcode
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
is contributing to the systemic change of health and care delivery. For more
than 30 years Cerner has been executing its vision to make health care safer
and more efficient. We started with the foundation of digitizing paper
processes and now offer the most comprehensive array of information software,
professional services, medical device integration, remote hosting and employer
health and wellness services. Cerner systems are used by everyone from
individual consumers, to single-doctor practices, hospitals, employers and
entire countries. Taking what we’ve learned over more than three decades,
Cerner is building on the knowledge that is in the system to support
evidence-based clinical decisions, prevent medical errors and empower patients
in their care.
Cerner® solutions are licensed by approximately 10,000 facilities around the world,
including more than 2,700 hospitals; 4,150 physician practices; 45,000
physicians; 550 ambulatory facilities, such as laboratories, ambulatory
centers, behavioral health centers, cardiac facilities, radiology clinics and
surgery centers; 800 home health facilities; 45 employer sites and 1,750 retail
Certain trademarks, service marks and
logos (collectively, the “Marks”) set forth herein are owned by Cerner
Corporation and/or its subsidiaries in the United States and certain other
countries throughout the world. All other non-Cerner Marks are the property of
their respective owners. 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 Cerner's
performance, and actual results, financial condition or business could differ
materially from those expressed in such forward-looking statements. The words
“believe”, “positioned”, “continue”, “guidance”, “expect” 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
dependence on third party suppliers; risks inherent with business acquisitions;
the potential for losses resulting from asset impairment charges; risks
associated with uncertainty in global economic conditions; managing growth in
the new markets in which we offer solutions, health care devices and services;
changing political, economic, regulatory and judicial influences; government
regulation; significant competition and market changes; variations in our
quarterly operating results; potential inconsistencies in our sales forecasts
compared to actual sales; volatility in the trading price of our common stock
and the timing and volume of market activity; our directors’ authority to issue
preferred stock and the anti-takeover provisions in our corporate governance
documents; and material adverse resolution of legal proceedings. Additional discussion
of these and other risks, uncertainties and factors affecting Cerner's business
is contained in Cerner's periodic filings with the Securities and Exchange
Commission. The reader should not place undue reliance on forward-looking
statements, since the statements speak only as of the date that they are made.
Cerner 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.
Investor Contact: Allan Kells, (816) 201-2445, firstname.lastname@example.org
Media Contact: Megan Moriarty, (816) 888-2470, email@example.com
Cerner’s Internet Home Page: www.cerner.com
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