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by Cerner Corporation
Published on October 24, 2019

All Key Metrics Within Company Guidance Ranges

Cerner Corporation (Nasdaq: CERN) today announced results for the 2019 third quarter that ended Sept. 28, 2019.

Bookings in the third quarter of 2019 were at the high-end of the company’s expectations at $1.651 billion.

Third quarter 2019 revenue was $1.429 billion, an increase of 7% compared to $1.340 billion in the third quarter of 2018, and in line with the company’s expectations.

On a U.S. Generally Accepted Accounting Principles (GAAP) basis, third quarter 2019 net earnings were $81.9 million and diluted earnings per share were $0.26. Third quarter 2018 GAAP net earnings were $169.4 million and diluted earnings per share were $0.51.

Adjusted Net Earnings for third quarter 2019 were $211.7 million, compared to $209.4 million of Adjusted Net Earnings in the third quarter of 2018. Adjusted Diluted Earnings Per Share were $0.66 in the third quarter of 2019, in line with the company’s expectations and up 5% compared to $0.63 of Adjusted Diluted Earnings Per Share in the year-ago quarter.

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:

  • Third quarter operating cash flow of $351.4 million and Free Cash Flow of $174.4 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.”
  • Third quarter days sales outstanding of 74 days, down from 78 days in the second quarter and 82 days in the year-ago quarter.
  • Total backlog of $13.31 billion.

“I am pleased with our execution in the third quarter as we again delivered against the expectations we set while also continuing to advance Cerner’s broader transformation,” said Brent Shafer, chairman and CEO, Cerner “I believe the balanced focus of near-term operational improvements combined with our innovation and growth strategies position Cerner to deliver sustainable and profitable growth.”

Future Period Guidance

Cerner currently expects:

  • Fourth quarter 2019 revenue between $1.410 billion and $1.460 billion.
  • Fourth quarter 2019 Adjusted Diluted Earnings Per Share between $0.73 and $0.75. *
  • Fourth quarter 2019 new business bookings between $1.450 billion and $1.650 billion.

*Future period non-GAAP guidance includes adjustments for items not indicative of our core operations, which may include, without limitation, items included in the accompanying schedule, titled “Reconciliation of GAAP Results to Non-GAAP Results.” Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual or unanticipated charges, expenses or gains or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP guidance to the most comparable GAAP measures.

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 Oct. 24, 2019. On the call, Cerner will discuss its third quarter 2019 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.

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

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”, “guidance”, “position”, “believe”, “expectations”, “plan”, “outlook”, “future”, “approximately”, “targeted”, “intend”, “potential”, “opportunity” or the negative of these words, variations thereof or similar expressions are intended to identify such forward-looking statements. For example, our forward-looking statements include statements regarding future period guidance. 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, or those of third parties with whom we have contracted (such as public cloud providers), 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 or the IT security of third parties on which we rely; 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 technology-enabled services; material adverse resolution of legal proceedings or other claims; 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; 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 or relating to disputes involving such acquisitions or combinations; risks associated with volatility and disruption resulting from global economic or market conditions; significant competition and our ability to quickly respond to market changes, changing technologies and evolving pricing and deployment methods 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; 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; non-compliance with laws, government regulation or certain industry initiatives or failure to deliver solutions or services that enable our clients to comply with laws or regulations applicable to their businesses; 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; inability to manage organizational change and reduce expenses and costs to the extent currently anticipated; risks that Cerner’s revenue growth may be lower than anticipated and/or that the mix of revenue shifts to low margin revenue; risk that our capital programs will not be fully implemented or enhance long-term shareholder value; and risks that Cerner’s business may be negatively affected as a result of future proxy fights or the actions of activist shareholders. 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,

Media Contact: Misti Preston, (816) 299-2037,