Allscripts focused on rebuilding confidence

Q2 results better than estimated, but more work ahead

CHICAGO  -  The second quarter of 2012 proved to be better than the troubled first quarter for Allscripts. The EHR company reported Q2 bookings of $194.1 million, revenue of $370 million and cash flow from operations at $58.8 million, better than what financial analysts expected.

Still, profits are down from $15.9 million a year ago, to $8 million in Q2 this year.

Many of the analysts on the Q2 conference call Aug. 8, congratulated CEO Glen Tullman on exceeding analyst estimates.

Sean Wieland, senior analyst at Piper Jaffray, concluded in a brief he issued Aug. 9 that the Q2 results showed things were not getting worse, but that Allscripts had much left to do to show its recovery and assured its clients.

"Expectations of flat sequential bookings and revenue for the rest of the year and back-end loaded EPS guidance leaves us wanting more," Wieland wrote. 

Tullman, for his part, delivered an upbeat message  -  one with a theme of focus and execution, noting that the second quarter results were solid and demonstrated improvement in several key business metrics.

 "We are aggressively focused on executing our business plan and delivering on our client commitments," said Tullman. "We remain on schedule to release important new solution enhancements during the fourth quarter of 2012. Allscripts remains well-positioned in a robust market with a comprehensive portfolio spanning the ambulatory, acute and post-acute care delivery environments."

Analysts point to Cerner, Quality Systems and athenahealth as key competitors for Allscripts in what is a highly competitive market. 

Interim Chief Financial Officer David Morgan elaborated on the Q2 numbers during the conference call. 

"We are pleased to see sales to existing ambulatory clients return to historical level," Morgan noted.

"The strength is encouraging and reflects in part the completion of the realignment of our sales and services organization, which we noted in our Q1 call, and our continued efforts to improve product performance and client experience."

Allscripts' outlook suffered during recent turmoil when its CFO left for another post  -  a move that company executives said was unrelated to the firing of the company's board chairman at the time. Tullman said during the Q2 conference call that the search for a new CFO was under way both internally and externally.