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by Cerner Corporation
Published on February 6, 2018

Cerner Corporation (Nasdaq: CERN) today announced results for the 2017 fourth quarter and full year that ended December 30, 2017.

Bookings in the fourth quarter of 2017 were $2.329 billion, which is an all-time high and an increase of 62 percent compared to $1.437 billion in the fourth quarter of 2016. Full-year 2017 bookings were also a record at $6.325 billion, up 16 percent compared to 2016 bookings of $5.446 billion.

Fourth quarter revenue was $1.314 billion, an increase of 4 percent compared to $1.258 billion in the fourth quarter of 2016 and in the Company’s guidance range. Full-year 2017 revenue was $5.142 billion, up 7 percent compared to 2016 revenue of $4.796 billion.

On a U.S. Generally Accepted Accounting Principles (GAAP) basis, fourth quarter 2017 net earnings were $336.7 million and diluted earnings per share were $1.00. Fourth quarter 2016 GAAP net earnings were $149.7 million and diluted earnings per share were $0.44. For the full year, 2017 GAAP net earnings were $867.0 million and diluted earnings per share were $2.57. Full year 2016 GAAP net earnings were $636.5 million and diluted earnings per share were $1.85.

Adjusted Net Earnings for fourth quarter 2017 were $195.7 million, compared to $206.2 million of Adjusted Net Earnings in the fourth quarter of 2016. Adjusted Diluted Earnings Per Share (EPS) were $0.58 in the fourth quarter of 2017, down from $0.61 of Adjusted Diluted EPS in the year-ago quarter. Analysts’ consensus estimate for fourth quarter 2017 Adjusted Diluted EPS was $0.61. For the full year 2017, Adjusted Net Earnings were $804.9 million and Adjusted Diluted EPS was $2.38, compared to full year 2016 Adjusted Net Earnings of $790.4 million and Adjusted Diluted EPS of $2.30.

Adjusted Net Earnings and Adjusted Diluted Earnings Per Share are not recognized terms under GAAP. These non-GAAP financial measures should not be substituted for GAAP net earnings or GAAP diluted earnings per share, respectively, as measures of Cerner’s performance, but instead should be utilized as supplemental measures of financial performance in evaluating our business. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results,” where our non-GAAP financial measures are defined and reconciled to the most comparable GAAP measures.

Other Highlights:

  • Fourth quarter operating cash flow of $348.9 million and full-year of $1.308 billion.
  • Fourth quarter Free Cash Flow of $185.1 million. For the full year, Free Cash Flow was $671.4 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. Please see the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.”
  • Fourth quarter days sales outstanding of 72 days, up from 69 days in the year-ago period.
  • Total backlog of $17.55 billion, up 10 percent over the year-ago quarter.

“We finished the year on a mostly positive note, with record bookings and all other key metrics except for earnings in line with our expectations,” said Zane Burke, President. “Our bookings were at record levels across several key areas, including population health, Cerner ITWorksSM, and revenue cycle, and also included strong contributions from outside of the U.S. We believe the strong bookings in the fourth quarter combined with our robust pipeline and strong competitive position sets us up for solid growth in 2018 and beyond.”

Future Period Guidance

Cerner currently expects:

  • First quarter 2018 revenue between $1.315 billion and $1.365 billion.
  • Full year 2018 revenue between $5.450 billion and $5.650 billion.
  • First quarter 2018 Adjusted Diluted Earnings Per Share between $0.57 and $0.59.
  • Full year 2018 Adjusted Diluted Earnings Per Share between $2.57 and $2.73.
  • First quarter 2018 new business bookings between $1.250 billion and $1.450 billion.

Tax Reform

Our results for the 2017 fourth quarter and full year that ended December 30, 2017, include our current estimates of the impact of certain U.S. tax reform enacted in December 2017. Relevant accounting guidance provides that the impact of such U.S. tax reform may be provisionally recorded, and adjusted during a measurement period of up to one year. The impacts of U.S. tax reform on our income tax balances are complex

and wide-reaching, and the enactment date of such U.S. tax reform fell in close proximity to our 2017 fiscal year-end. Accordingly, the adjustments we have made to our deferred and current tax balances are provisional, and it is reasonably possible that our estimates regarding the impact of U.S. tax reform on our current and deferred tax balances might materially change in the near-term due to, among other things, additional regulatory guidance that may be issued, changes to assumptions and interpretations that we have made, and actions we may take as a result of U.S. tax reform.

Earnings Conference Call

Cerner will host an earnings conference call to provide additional detail on the Company’s results and outlook at 3:30 p.m. CT on February 6, 2018. On the call, Cerner will discuss its fourth quarter 2017 results and answer questions from the investment community. The call may also include discussion of Cerner developments, and forward-looking and other material information about business and financial matters. The dial-in number for the conference call is (678)-509-7542; the passcode is Cerner. Cerner recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 6:30 p.m. CT, February 6, 2018 through 11:59 p.m. CT, February 9, 2018. The dial-in number for the re-broadcast is (855)-859-2056; the passcode is 9296298.

An audio webcast will be available live and archived on Cerner’s website at www.cerner.com under the About Us section (click Investor Relations, then Presentations and Webcasts).

About Cerner

Cerner’s health information technologies connect people, information and systems at more than 27,000 provider facilities worldwide. Recognized for innovation, Cerner® solutions assist clinicians in making care decisions and enable organizations to manage the health of populations. The company also offers an integrated clinical and financial system to help health care organizations manage revenue, as well as a wide range of services to support clients’ clinical, financial and operational needs. Cerner’s mission is to contribute to the systemic improvement of health care delivery and the health of communities. Nasdaq: CERN. For more information about Cerner, visit cerner.com, read our blog at blogs.cerner.com, connect with us on Twitter at twitter.com/cerner and on Facebook at facebook.com/cerner. Our website, blog, Twitter account and Facebook page contain a significant amount of information about Cerner, including financial and other information for investors.

Certain trademarks, service marks and logos set forth herein are property of Cerner Corporation and/or its subsidiaries.

All statements in this press release that do not directly and exclusively relate to historical facts constitute forward-looking statements.  These forward-looking statements are based on the current beliefs, expectations and assumptions of Cerner's management with respect to future events and are subject to a number of significant 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 “expects”, “expectations”, “guidance”, “position”, “believe”, “plan”, “opportunity”, “forecasted”, “estimate”, “would”, “should”, “could”, “target”, “outlook”, “anticipate” 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 significant costs and reputational harm related to product-related liabilities; potential claims for system errors and warranties; the possibility of interruption at our data centers or client support facilities that could expose us to significant costs and reputational harm; the possibility of increased expenses, exposure to legal claims and regulatory actions and reputational harm associated with a cyberattack or other breach in our IT security; 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; potential claims or other risks associated with relying on open source software in our proprietary software, solutions or services; material adverse resolution of legal proceedings; risks associated with our global operations, including without limitation greater difficulty in collecting accounts receivable; risks associated with fluctuations in foreign currency exchange rates; changes in tax laws, regulations or guidance that could adversely affect our tax position and/or challenges to our tax positions in the U.S. and non-U.S. countries; changes in interpretations and assumptions we have made with respect to the anticipated effects of the recently enacted U.S. tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017; the uncertainty surrounding the impact of the United Kingdom’s vote to leave the European Union (commonly referred to as Brexit) on our global business; risks associated with the unexpected loss or recruitment and retention of key personnel or the failure to successfully develop and execute succession planning to assure transitions of key associates and their knowledge, relationships and expertise; risks related to our dependence on strategic relationships and third party suppliers; risks inherent with business acquisitions and combinations and the integration thereof into our business; risks associated with volatility and disruption resulting from global economic or market conditions; significant competition and our ability to quickly respond to market changes and changing technologies and to bring competitive new solutions, devices, features and services to market in a timely fashion; managing growth in the new markets in which we offer solutions, health care devices or services; long sales cycles for our solutions and services; risks inherent in contracting with government clients, including without limitation, complying with strict compliance and disclosure obligations, navigating complex procurement rules and processes and defending against bid protests; risks associated with our outstanding and future indebtedness, such as compliance with restrictive covenants, which may limit our flexibility to operate our business; changes in accounting standards issued by the Financial Accounting Standards Board or other standard-setting bodies may adversely affect our financial statements; the potential for losses resulting from asset impairment charges; changing political, economic, regulatory and judicial influences, which could impact the purchasing practices and operations of our clients and increase costs to deliver compliant solutions and services; government regulation; variations in our quarterly operating results; potential variations 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; and our directors’ authority to issue preferred stock and the anti-takeover provisions in our corporate governance documents. Additional discussion of these and other risks, uncertainties and factors affecting Cerner's business is contained in Cerner's 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. Except as required by law, Cerner undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events, or changes in our business, results of operations or financial condition over time.

Investor Contact:  Allan Kells, (816) 201-2445, akells@cerner.com

Media Contact:  Dan Smith, (913) 304-3991, dan.smith1@cerner.com  

Cerner’s Internet Home Page:  www.cerner.com


Statement of Earnings GAAP and Condensed Consolidated Balance Sheets

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