Eclipsys sees Q1 net income decline due to charges

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Eclipsys posted mixed results for the first fiscal quarter of 2008, which ended March 31.

Revenues for the quarter were $124.4 million, compared with revenues of $113 million for the same quarter last year, an increase of 10 percent, according to the Altanta-based Eclipsys.

However, the company reported that its GAAP net income for the first quarter of 2008 was $290,000 compared to net income of $2.4 million in the first-quarter of 2007. Eclipsys attributed the year-over-year decline in net income on a GAAP basis to costs, which significantly exceeded costs excluded from non-GAAP net income for the first quarter of 2007.

The company listed the costs as:

  • $1.7 million associated with the relocation of the corporate headquarters from Boca Raton, Fla., to Atlanta;
  • $2 million associated with the defense and anticipated settlement of the derivative litigation, which was filed in July 2007 following completion of the voluntary stock option review, and tentatively settled in March, subject to court approval;
  • A $1.3 million charge for a write-off of in-process research and development and amortization of intangible assets associated with the acquisition of EPSi, which was completed in February; and
  • A $1.5 million charge, resulting from a change in the company’s estimate for uncertainties in income taxes.

As a result, Eclipsys said its operating cash flows for the first quarter of 2008 were $6.9 million, a decrease of $3.4 million compared to the first quarter of 2007. Eclipsys also said that it ended the quarter with $65.2 million in cash and marketable securities, as well as $112 million in auction rate securities that were previously classified as marketable securities and have been reclassified as long-term investments.