Cerner sees record Q2 results
'We're going to invest in our business.'
Second quarter financial results were not a disappointment for EHR behemoth Cerner Corp., as officials announced Thursday afternoon a record "all time high" for Q2 results.
As Chief Financial Officer Marc Naughton reported, Q2 2014 bookings stood at $1.08 billion, representing an increase of 15 percent compared to second quarter 2013 bookings of $935.0 million. The quarter was marked by a high number of go-lives and "strong results" of the company's population health platform.
[See also: Is Cerner eyeing a Siemens acquisition?.]
Revenue reached $851.8 million, up 20 percent from the second quarter last year, which stood at $707.6 million.
Q2's GAAP net earnings totaled $129.0 million, with diluted earnings per share at $0.37, compared to Q2 2013 GAAP net earnings which stood at $112.9 million and diluted earnings per share were $0.32.
Adjusted non-GAAP net earnings second quarter 2014 were $138.9 million, compared with $119.6 million of adjusted net earnings in Q2 2013. Adjusted diluted earnings per share were $0.40 in the second quarter of 2014, an increase of 18 percent compared to $0.34 of adjusted diluted earnings per share in the year-ago quarter.
When asked about the company's strong cash flow and whether or not there would be significant mergers and acquisitions in the near future, Naughton said, "we're going to invest in our business."
"There's some element of strategic acquisition potential in our approach to use of cash," he added. We'll "continue to look at things that complement Millennium."
There have been recent reports that Siemens Healthcare's IT arm is up for sale, and Cerner may be eyeing a deal in the near future.
Other 2014 Q2 highlights include:
- Cash collections of $843.8 million and operating cash flow of $248.3 million.
- Free cash flow of $143.8 million.
- Days sales outstanding of 66 days, which is down from 68 days in the year-ago quarter.
- Total backlog of $9.69 billion, up 21 percent over the year-ago quarter. This was comprised of $8.88 billion of contract backlog and $806.6 million of support and maintenance backlog.
"Our outstanding second quarter results reflect Cerner's strong position in a growing industry," said Neal Patterson, Cerner chairman, CEO and co-founder, in a prepared statement.
Cerner currently expects:
- Third quarter 2014 revenue between $840 million and $870 million.
- Full year 2014 revenue between $3.3 billion and $3.4 billion, which is up from a prior range of $3.25 billion to $3.4 billion.
- Third quarter 2014 adjusted diluted earnings per share before share based compensation expense between $0.41 and $0.42.
- Full year 2014 adjusted diluted earnings per share before share based compensation expense between $1.64 and $1.67, which is up from a prior range of $1.63 to $1.67.
- Third quarter 2014 new business bookings between $1 billion and $1.1 billion.
- Share based compensation expense to reduce diluted earnings per share by approximately $0.03 in the third quarter of 2014 and between $0.11 and $0.12 for the year.
