Allscripts posts loss in first full quarter since leadership shakeup

Electronic health systems developer Allscripts Healthcare Solutions recorded a net loss of $11.6 million in its first full quarter under new leadership, the company reported after the markets closed Thursday.

Revenue for the first quarter, which ended March 30, was $347.1 million, down 4.8% compared with the same quarter last year, when the Chicago-based company earned $5.8 million on revenue of $364.7 million.

“While near term results are not what we would like to have seen, we're doing the right things for the future,” Allscripts President and CEO Paul Black said during a call with analysts.

Black, a former chief operating officer at Cerner Corp., was hired to replace 15-year Allscripts CEO Glen Tullman, who was ousted in a C-suite shakeup Dec. 19, 2012. The company has struggled to integrate its traditional line of EHRs for ambulatory-care physicians with its hospital EHR, acquired with the $1.3 billion stock-swap purchase of Eclipsys in 2010.

Black said Thursday that since he took over he has “visited more than 100 clients globally.” Relations with the client base are “improving,” he said, “but we still have more to do.”

Allscripts reported it increased spending on research and development by 19% for the quarter compared with the same period a year ago to keep pace with the needed upgrades to its systems for the upcoming shift to Stage 2 meaningful-use criteria under the federal EHR incentive payment program and the scheduled 2014 national shift to ICD-10 diagnostic and procedural codes.

In March, Allscripts acquired dbMotion, with offices in Pittsburgh and Israel, and Jardogs, Springfield, Ill. It paid about $235 million for dbMotion, a developer of software for systems interchange and data analytics, and an undisclosed amount for Jardogs, maker of a personal health record system and office-based patient registration kiosks.

The acquisitions brought with them $16.2 million in amortization expenses, $900,000 in a deferred-revenue adjustment, and $2 million in transaction-related costs, the company said.

In addition, Allscripts wrote off $6.2 million in “product consolidation costs” related to dropping its MyWay EHR for small office practices and $12.6 million in “severance and other costs primarily associated with site consolidation. The company said in a February filing that it would close 12 offices and one warehouse in order to become more efficient.

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