Allscripts Announces it is Exploring a Sale; Q3 Revenues Miss Estimates

Allscripts Healthcare Solutions

announced on Thursday after the closing bell that it is exploring strategic alternatives that could result in a sale of the company. The announcement was made along with the release of the company's third-quarter financial results. "We are confirming today that in light of the ongoing interest expressed in the Company by third parties, the Company is evaluating strategic alternatives," Allscripts CEO Glen Tullman said in a statement. He added, "Regardless of the outcome of this process, Allscripts' primary focus is and will continue to be serving our clients through our industry-leading technology, services, and the support we provide to 1,500 hospitals and over 50,000 ambulatory physician practices and post-acute providers with whom we do business." Citigroup is advising Allscripts. The company said that it would not make further public comments about the process. The press release added that Allscripts was withdrawing its 2012 annual guidance "in light of the decision to evaluate strategic alternatives." During Thursday's trading session, ahead of the company's third-quarter earnings release, Allscripts shares were under significant pressure, falling around 6 percent to $12.27. The stock was halted in after hours trading prior to the announcement that Allscripts is exploring a sale, but have subsequently re-opened around 10 percent higher to $13.50. For the third-quarter, the company reported non-GAAP net income of $39.4 million or $0.23 per share, compared to $45.2 million or $0.24 per share, in last year's corresponding period. This beat Wall Street consensus earnings per share estimates of $0.22 by a penny. Sales in the quarter totalled $361.0 million versus $366.3 million in last year's third-quarter. This came up short of consensus Wall Street revenue estimates of $377.01 million. "While market uncertainty impacted our sales in the third quarter, we are pleased with our progress regarding important development initiatives," Tullman said. "There is significant market interest in our Open platform, our advanced Mobility and Care Coordination initiatives, and the upcoming release of Sunrise Financial Manager, our new revenue cycle management solution. We are also investing significantly to enhance the experience of our existing clients and lay the foundation for long-term growth."