Allscripts experiences 'trifecta miss' of bookings, revenue and profit in Q3
Allscripts CEO Glen Tullman made it official Thursday: His firm is indeed looking at what it calls "strategic alternatives" amidst recent speculation about a sale of the company. Tullman also announced falling sales in Q3, with net income for the quarter nearly $10 million less than a year ago – $9.4 million, compared with $19.1 million.
[See also: Allscripts hires new CFO amid turmoil]
Bookings were down 39 percent at $161.9 million.
“We are confirming today that in light of the ongoing interest expressed in the company by third parties, the company is evaluating strategic alternatives,” Tullman told investment analysts on a teleconference call Thursday.
Allscripts withdrew its 2012 guidance in light of its decision to explore options.
Tullman said he would not comment further regarding the strategic alternatives.
Piper Jaffrey Senior Analyst Sean Wieland called the Q3 results a “trifecta miss” of bookings, revenue and profit. In a brief published on Friday, he said Piper Jaffrey would downgradefrom neutral to underweight given that “bookings are accelerating downwards and margins going nowhere.”
Wieland also noted that Allscripts continued to try to integrate outdated products while at the same time “embarking on an ambitious release cycle of new products.”
For his part, Tullman struck an optimistic note during the conference call, emphasizing Allscripts’ open platform and mobility offerings.
“While market uncertainty impacted our sales in the third quarter, we are pleased with our progress regarding important development initiatives.” he 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,” he added.
As for the slowdown in bookings and sales, Tullman blamed in part “the noise” generated around speculation that Allscripts was in search of a buyer, and he also noted that clients were waiting for new products from Allscripts.
"Clients delayed decisions in the quarter due to speculation about Allscripts's future corporate autonomy," Tullman told analysts on the call. He said he expected the market for health information technology to grow.
“Our view is that industry demand will continue to accelerate, especially now that the uncertainty around Obamacare is gone,” he said.