Veradigm Inc (MDRX) 2002 Q4 法說會逐字稿

Good afternoon. My name is Derek, and I will be your conference facilitator. At this time I would like to welcome everyone to the fourth quarter Allscripts Healthcare Solutions earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number 1 on your telephone keypad. If you would like to withdraw your question, press star, then the number 2 on your telephone keypad.

At this time I would like to turn the call over to Glen Tullman, Chief Executive Officer of Allscripts Healthcare Solutions. Thank you, sir. You may begin.

Thank you. I'm pleased to welcome to you to the Allscripts fourth quarter conference call. This is Glen Tullman, chairman and CEO. Joining me is Bill Davis, our CFO.

We'll start by reading a copy of the Safe Harbor Statement. Bill?

Statements made by Allscripts or its representatives will include forward-looking statements that are based on current beliefs of our management. As well as assumptions made by and information currently available to Allscripts management. Wherever practical, Allscripts will identify these forward-looking statements by using words such as may, will, expect, anticipate, believe, intend, estimates, could or similar expressions.

These forward-looking statements are subject to a variety of risks and uncertainties, including those listed in the earnings press release issued by Allscripts today. And in Allscripts filings with the Securities and Exchange Commission which could cause Allscripts actual results, performance, prospects or opportunities for 2003 and beyond to differ materially from those expressed in or implied by these statements. Such as required by the federal securities laws, Allscripts undertakes no obligation to publicly update or revise any statements whether as a result of new information, future events, changed circumstances or any other reason after the date of this release. With that I'd like to turn it back over to our CEO, Glen Tullman.

Thanks, Bill. While many of you have already received our press release documenting our results, our objective on the call today is twofold. First we'd like to provide additional detail on the results for the quarter. And second, to provide guidance for 2003.

2002 has been a very challenging year for businesses across the economy. At Allscripts, we've had our share of challenges. That said, health care tends to be insulated from economic downturns. And the prospects for our business remain very strong, and frankly, very exciting to us. The trends are very favorable for our business, and I'd like to mention just a few.

First, physicians perhaps for the first time that we can remember are showing a clear willingness to change and adopt technology in software. Especially as costs come down for more computing power. There also continues to be a strong focus on reducing costs for their organizations, improving quality and reducing the hassles they face on a day-to-day basis.

The President's recent mention in his State of the Union address that it's now time to put control of our health care systems back in the hands of providers, paired with provider and patient empowerment, are also driving change. And, of course, patient safety initiatives, like Leapfrog and others, are all looking to force the change to systems like those we provide. In fact, we saw the patient safety initiatives as one of the key drivers in Aurora Healthcare's decision to move forward with our product on e-prescribing and then later decided to adopt more modules.

Hip initiatives are also driving change. In fact, the need for portability is one key driver of the electronic medical record. And in addition, electronic submission and ultimately the need to move this information electronically is the key driver of system replacement.

And finally, the information explosion on new medications, new treatments and the like are forcing physicians to adopt hardware, software and technology solutions to cope with these new changes. Our TouchWorks solutions and our physician education products are both products that address each of these trends, and we're starting to see this idea translate into real results.

So let me talk a bit about the fourth quarter. I'm pleased to report that during the fourth quarter we continued to demonstrate real progress in the two areas investors have told us are most important. First, continued progress toward Profitability. And second, sales traction in our growth businesses.

So how did we do? Let me steal some of the thunder from Bill's presentations by touching on some of the financial highlights. Today we reported our lowest loss per share since becoming a public company. Our cash burn was less than $1m, down from $1.5m in Q3. Our cash position of $65.3m remains one of the strongest in the industry. In our backlog increased from $30m to $35m. Although Bill will provide more detail on the financials later in the call, I think it's very clear that we are delivering a consistently better bottom line.

During the quarter, we continued to extend our leadership position in our two growth businesses. TouchWorks, our electronic medical record offering, and Physicians Interactive, which, as many of you know, provides e- detailing and interactive physician education, primarily paid for by large pharmaceutical companies.

This quarter we delivered traction in our TouchWorks business. Specifically, sales for the quarter exceeded $7.3m, up from $4.6m in the third quarter. Representing our second largest sales quarter ever. Another important indicator is our average contract size, which grew from $220,000 in the third quarter to a record $370,000 in the fourth quarter.

We issued press releases on a number of new client relationships earlier today. But what was especially exciting to me was that we had eight contracts that exceeded $400,000 during the quarter. Almost evenly split between new customers, like Cooper Clinic in Arkansas, and Summit Medical Group in New Jersey, both of which we announced earlier today. And existing customers who brought additional modules from us, like University of Minnesota physicians, and University of Tennessee medical group in Memphis.

We continue to make progress in the IDX base as well. And are launching an expanded marketing effort with IDX later this quarter, which should continue to drive new business as well as expanded sales with existing clients.

I'm also pleased to report that our 9.0 product release is now live in a number of sites. Our TouchWorks product is carving out a unique place in the MR market. The customer response continues to be very positive. Our efforts are also starting to get noticed as well. In one of the most detailed evaluations of EMRs ever conducted, our MEMR, what we refer to as our modular medical record, received a five-star rating from AC group. For those of you interested, this study is actually available on our Website.

In addition, we received very positive reviews from organizations such as Dartmouth, who actually rated us as the leader in mobile applications, both in vision and importantly in ability to execute. Our next release, our next products release, will feature care planning, which we believe will be a significant initiator as modularity and our ability to go live at sites in 60 days has been. Of course, that ability to go live in 60 days compares to an industry average that typically is in the years.

Now, to change the focus a bit, our Physicians Interactive e-detailing business had a very strong quarter as well. Pharmaceutical companies spend over $8b each year marketing their products to physicians. Our solutions enable pharmas to reach physicians more cost effectively and with a greater level of impact, supplementing traditional methods. PI is no longer an experiment, rather it's now a part of way these pharmaceutical companies bring products to market.

During the fourth quarter, our PI unit set a new record of $4.4m , up from $2.6m in the third quarter, and beating the previous sales record by over $1m. The number of e-details completed was also a record at 23,000 e-details completed during the quarter.

In addition, we launched our upgraded PI format, with more features for physicians and a better, easier to use interface. This business, as Bill will comment on in just a few moments, continues to be profitable for us. And deliver margins in excess of 50%. Year to year revenues is more than doubled since $4.2m to over $9.3m. Not bad for a business that two years ago did $1.8m in revenue. The message here is clear. We're growing our high margin software and information business.

Now, for a more detailed look at our financials, I'll turn it over to Bill Davis, our Chief Financial Officer.

Thanks, Glen. Hello, everybody.

As Glen indicated, I will review our fourth quarter results in a little more detail and spend the rest of my time reviewing our expectations for 2003. Let's start with our Q4 performance.

Turning first to sales. The sales or bookings for our TouchWorks business, the largest part of our software segment, continues to build. We closed $7.3m of TouchWorks business during the quarter, excluding ongoing support. Our fourth quarter sales represents a $2.7m, or 59% increase, over the prior quarter. Further, more than half of the contracts we signed are deals with existing customers. Which separate and apart from the dollars are important because they represent expanded commitment on the part of our clients to our products as an outcome of our ability to deliver results. And underscores the continuing success of our modular strategy.

What is equally, if not more encouraging, is that our pipeline continues to build. Driven both by existing and new customers. We also are encouraged by the fact that our average deal size for the quarter grew to $370,000 which represents a $150,000, or 68% increase over the prior quarter. The average number of modules purchased in the quarter was 5.

Our Physicians Interactive unit, the largest part of our information services segment, had record sales during the quarter of $4.4m. This compares to $2.6m in the third quarter. Total PI sales for the year were $14m versus $6.9m in 2001, a 103% increase. The average deal size remained relatively consistent quarter over quarter at $255,000.

Over 85% of our PI deals were worth repeat customers. Further emphasizing that we are successfully delivering significant value, becoming a standard part of the way these companies market their products. Our backlog, as Glen indicated, was $35m at the end of the quarter. This represents a 17% increase over the third quarter. The backlog breakdown is as follows. One-time fees, $21m, 60% of which relates to our TouchWorks products, approximately 40% from our Physicians Interactive group. Subscriptions, which is made up of recurring revenue screams that span over the next three to five years, represents 9.5 million of our backlog. And then SMA, our maintenance arrangements, represents $4.5m of our backlog.

Revenue for the quarter was $19.9m.

That represents a 7% increase over the fourth quarter of last year, and is slightly below the prior quarter. The $100,000 decline was due to a $1.3m decline in our meds revenue, offset by a $1.2m increase in our software and information services segment.

The $1.2m increase represents a 42% increase year- over-year and a 16% increase quarter-over-quarter. It is important to note that we delivered a record number of milestones in our TouchWorks business and e-details in our Physician Interactive business for the fourth quarter.

26 clients came live on one or more modules in Q4 versus 21 in the third quarter. And 13 for the first time. IDX customers continue to represent approximately 75% of our sales. We had 71 IDX customers as of December 31.

In terms of revenue mix, our software and information services segments were 42% of our total revenue for the quarter. This compares to 32% a year ago, and 36% in the prior quarter. The increase is due to the overall increases in revenue from our TouchWorks and Physician Interactive businesses. And in our decline in our med distribution business.

As discussed last quarter, the decline in our meds business was due to the third quarter benefiting from seasonal sales associated with flu vaccine and other seasonal medications.

Fourth quarter revenue by segment breaks down as follows. Meds were $11.5m, software and related services were $5.7m, information services were $2.7m. Total revenue for the year was $78.8m, versus $70.9m in 2001. There again representing an 11% increase.

Revenue for 2002 was $29.5m, versus $21.2m for our software and information services segments. This represents a 39% increase year-over-year. As it relates to our meds distribution business, revenue remained relatively flat year -over-year. Despite the fact that we exited several million dollars in unprofitable client relationships over the course of the year.

Margins continue to improve. As we see the impact of improving on our overall, implementation capabilities, shifting our revenue mix towards our higher margin businesses. Overall, gross margin was 29.3% in the fourth quarter versus 26.2% in the third quarter. Breaking that down by segment, our meds business had 18% gross margins in the fourth quarter which compares to 20% in Q3. Software and related services, 41% compared to 29% in the third quarter. And information services were at 52% compared to 54%.

The margin decline in our meds distribution segment quarter- over-quarter was due to a change in the mix of our products sold. While our software segment increased by 12 percentage points due to increased efficiencies with our implementation services. And the shift in revenue mix which included more software licenses than implementation services.

We experienced an anticipated decline of 2 percentage points in our information services segment. This decrease is due to us delivering on larger programs in the fourth quarter that had lower average price per participation. Gross margins for 2002 were 25.2% versus 6.5% in 2001. It is note worthy that we experienced gross margin increases in all three of our businesses year-over-year.

Now turning to our expenses. We continue to maintain tight control over our expenses. Operating expenses for the quarter were $8.2m versus $9m in the third quarter. Please note that both quarters include approximately $100,000 in amortization. And the third quarter included $600,000 in restructuring and other special charges. R&D expenditures as a percentage of software revenue were 34% in the fourth quarter. Demonstrating our commitment to future development of our products.

The fourth quarter included approximately $900,000 of software capitalization. This compares to $1.1m in the prior quarter. This amount will fluctuate from quarter-to-quarter depending on where we are in our product development cycle. Total operating expenses for the year were $37.6m, versus $477.4m in 2001. Please note that we had amortization, restructuring and other special charges of $1.1m and $419.5m in 2002, 2001 respectively.

With regard to head count, we ended the quarter with approximately 320 employees. Our loss for the quarter was $2 million, representing continued improvement from the $6m we lost in Q!, $4m in Q2, and $3.2m we lost in Q3. Our loss per share for the quarter was 5 cents versus 7 cents per share loss in the third quarter. Our loss per share for this year was 40 cents. Basic shares outstanding for the quarter were $38.4m, and fully diluted shares, $38.9m.

Quick review of the balance sheet. We had $65.3m in cash in marketable securities at the end of the quarter, which we believe provides us with ample financial resources to accomplish our goals. This reflects a cash burn of $935,000 in the quarter. And compares to $6.6m we burned in Q1, $4m in Q2, and $1.5m in Q3. In addition, the company has no debt.

Our accounts receivables increased modestly in the quarter due to a delay in receipt of one large payment received from a client in January. It also increased due to our ability to bill our clients in advance of work being performed, which is reflected in our $2m increase in deferred revenues quarter-over-quarter. With regards to DSOs, they remain relatively flat quarter over quarter.

Now turning to 2003. Glen and I, along with the rest of the management team, had an opportunity to review each of the businesses in detail. Based on such a review, we expect 2003 revenues to be in the range of $90m to $95m, with gross margins for the year of 35% to 38%, and net income in the range of one penny to 2 cents per share profit. As it relates to the individual business segments, we expect a modest 2 to 4% growth rate in our prepackaged medication distribution segment. Which is primarily a function of anticipated inflation. We expect margins to stay in the 17% to 19% range for that segment.

With regards to our software and related services segment, we are expecting 40% to 45% top line growth. This growth will come entirely from our TouchWorks business. It is based on expected new sales of $24m to $28m for the year. We anticipate that approximately half of those new sales will come from existing customers. Margins will continue to improve in this segment, settling in the mid to high 50s range.

Finally, on our information services segment, we expect revenue growth of 35% to 45% with gross margins remaining in the mid-50% range. This gross in the information services segment will primarily come from our Physicians Interactive business. But will be supplemented by a modest amount of high margin transaction revenue over the course of the year.

With regards to the first quarter of '03, we expect revenues to be in the $20m to $21m range with a net loss of 5 cents to 6 cents per share. Please note that we expect a $600,000 to $700,000 increase in operating expenses for the quarter due to a lower amount of software development costs being capitalized during the quarter. We estimate that we will capitalize approximately $150,000 to $250,000 during the first quarter. There again, this compares to approximately $900,000 capitalized in the fourth quarter. This will have a 2 cent adverse effect on our loss per share when compared to the fourth quarter.

Based on guidance just given, I would expect Allscripts to become profitable in the second half of 2003. In summary, we are pleased with the progress we have made in the fourth quarter in both of our growth businesses. And overall, with regards to our cost structure. Coupled this with our increasing backlog and strong financial position, we believe we are very well positioned to have a strong 2003.

With that I would like to turn it back over to Glen for some closing remarks.

Thanks, Bill. I'll just re-emphasize Bill's points. Strong sales results in the fourth quarter, growing backlog and strong repeat business from existing clients. Based on that, we really do believe that Allscripts is becoming an indispensable part in the way physicians practice medicine. And the way large pharmaceutical organizations will communicate with those physicians. We also believe that 2003 is going to be a solid year of growth and profitability.

We continue to make excellent progress, and the company is moving toward that profitability while at the same time investing in software and people that's going to extend our leadership position. We're building a long-term opportunity. And we're focused on providing information and access to a most valuable and influential people in health care - physicians. And if we're to address the problems facing health care today that we're also so aware of, that effort is going to have to start and end with the physicians. And we believe we'll be leading the way along with our clients.

Let me make a comment about our clients. Satisfied clients will lead the way for us this year, providing reference sites with demonstrative results and return on investments. And providing, as Bill mentioned, over half of our new sales in 2003. And our people will continue to be a substantial competitive advantage for us. They care. They want to make a difference. And every day they are making a difference at each one of our client's sites. That ultimately is going to drive our success in 2003.

I want to thank our employees for a great effort this quarter. And thank all of our investors for your continued support as we build Allscripts together. With that I'd like to close the official part of the call. And Bill and I would be happy to entertain your questions. Thank you.

At this time I would like to remind everyone in order to ask a question, press star, then the number 1 on your telephone keypad. We'll pause for just a moment to compile the Q and A roster. Your first question comes from Patrick Hojlo with Bank of America Securities.

Good afternoon, guys. I have a question about the meds business. I understand your explanation of seasonality. But I'm surprised that, in fact, your fourth quarter isn't the more seasonal quarter. Can you explain that for me?

Yeah, this is Bill. As I indicated, the primary reason for the drop was first and foremost the fact that the third quarter we benefited by about $600,000 or $700,000 related to some seasonality sales around the flu and other seasonal vaccinations. So we typically get a pop one quarter a year, and it fluctuates between whether it hits third quarter or fourth quarter.

So it was probably late September pop versus an October pop that you might otherwise hit?

That's correct.

And you didn't see -- you didn't see a jump in flu-related medications this quarter? I guess what I'm driving at is are you cutting out other unprofitable business still? Is that part of the decline here?

No. Generally, I'll tell you -- this is Glen. We won't take on business that may be unprofitable to push revenue. So that's very clear. But your feeling is right, which is the flu hits in the fourth quarter. The issue is they buy it -- they buy flu vaccine in advance. That's why we picked it up in the third quarter.

But we've also been very careful across all the businesses not to take on additional contracts, whether it be medication, or whether it be TouchWorks, or whether it be equipment if they aren't profitable. So we've been very careful in that respect.

Okay. Fair enough. Finally, you mentioned last quarter that as has been the case, you got some subsidies from some partners. And that helped your G&A. expense line last quarter. It looks like you got some help there this quarter as well. Because if I remember right, you said that G&A would be more like $9m this quarter. And it's obviously well short of that.

Yeah. A couple things. One is, we really did not benefit much at all in the fourth quarter with regards to marketing subsidies.

A couple things that happened in terms of driving the costs down further than we had expected. One was that we actually ended up capitalizing a little bit more in software than had originally been anticipated. And that was a function of when we went into general release product on version 9. And secondly, we continued to be very aggressive in management of our overall cost structure. So really it was a function of those two items, not further marketing.

Where will that be going forward?

We expect that our partners will be continuing to provide marketing subsidies, I should say. And we'll see some of that in the first quarter. But they'll be typically just a bit smaller amounts than we saw last year. And I think that's just a function of the mat rags of the process.

I would think, your question was with regards to overall SG&A levels. I still would think about them in terms of $9m to $9.2m. And then just take into consideration the amount of capitalized software that might hit a particular quarter.

Gotcha. Fair enough. Thanks a lot, guys.

Thank you.

Your next question comes from Seth Frank with A.G. Edwards.

Bill, maybe I missed it. But the bookings number in the release on TouchWorks, what was PI?

PI was $4.4m.

That compares to $2.6m in Q3?

Yes.

Okay. Do you have a cash flow from operations number for the quarter, by chance?

Yeah. It was positive the quarter, positive $200,000 in operations.

Okay. And then the other question that I had is just in terms of market dynamics. The increase in the average deal size. You picked up one module in terms of the number of modules. I guess it's being held for average deal. So does that account for the delta, Glen, or is there some price [strength] (ph) or a different mix, or what?

This is a question that we looked at prior to the call. And, actually, we found that the average pricing went up just slightly on a per module basis. This was a function of people initially stepping up and buying more modules and buying for more physicians right up front. Both really good trends. So there was no price degradation. In fact, there was a slight per-physician in pricing. That's consistent with the fact that last quarter we actually increased pricing across the product suite based on the sales.

So you are seeing, in terms of the contract commitments, larger number of utilization targets? If you will, or seats to deal?

Yes. In fact, again, that was one of the things that I mentioned in my comments but was very exciting. It wasn't just -- we've had quarters where the average contract size was high before, but it was typically driven by one large deal. What was exciting here was that we had eight different deals that exceeded $400,000. And many of those deals were not the entire deal. They were, you know, starts.

Let me give you an example. In the press release we did today for Cooper Clinic. That deal, well in excess of $400,000, was only for 25 of their physicians. And the rest of their physicians will come on based on successful implementation. And that number could be three or four times that amount. We could start to see that as soon as three to six months away based on successful implementation of the product.

So with very few exceptions, many of the new deals represent opportunities to continue to add modules and add physicians.

Okay. And then finally, do you guys have any thoughts on where your cash would be based on the financial projections for the end of '03? That is to say -- I heard about some up tick in expenditures and such. But do you think, Bill, that sort of $1m a quarter is going to continue or accelerate?

We have not done a completed detailed forecast of our cash direction. We're in the process of doing that. I will say that with regards to Q1, we do have anticipated cash outlays with regards to year-end payouts, if you will. So -- but I don't have a definitive number at this time.

Okay. Thank you.

Once again, if you do have a question, press star, then the number 1 on your telephone keypad.

Your next question comes from David Mills of Manchester Management.

Yes. I have kind of bad reception here on the call, so I may have missed this. You may have addressed it before. But I'm curious what sort of churn you've seen in your cap base this year?

This is Glen. Other than the churn that we saw with some of the TouchScript accounts. Which are the smaller independent physician groups, typically five physician groups. The size like that where we've actually helped a bit of that churn along. We've seen virtually no churn in the larger TouchWorks accounts that we've implemented or that we've continued. Again, I think we mentioned, probably one or two calls ago, that there were a few of the Channelhealth holdovers that dropped off, and that's probably two quarters ago. That probably is three accounts total. But other than that, we've seen no churn in terms of new customers.

So you would say that people you signed up in calendar '02. Of that group, there haven't been any dropouts?

I'm just trying to -- I don't believe there are any of our 2002 signings -- I don't think we've lost a customer.

Okay. Thanks.

Your next question comes from David Francis with Jeffries & Company.

Glen, can you tell us of the $35m in backlog that you're exiting the year with. How much of that you expect to get revenued in '03?

Yeah, this is Bill. Our projections are suggesting about 50% to 60% of that brought in over the course of the year.

Okay. And it's been a while since we've touched on this. Can you tell us what the sales organization looks like right now? In terms of quota-carrying bodies out there on the TouchWorks and the PI sides of the business?

Sure. Relative to the TouchWorks business, we have 24 individuals in that group that carry a quota. That quota aggregates about $44m.

Okay. And lastly, when you guys inked the deal with IDX to buy the Channelhealth business from them. IDX, as I recall, was obligated to meet certain quarterly and annual production targets in terms of new sales activity. Have they been meeting those, and are you still holding them to those obligations? Thanks.

Yeah, this is Glen. And I think Bill kind of only got half of that answered. Because you had asked about sales forces with TouchWorks and PI. So you want to just cover PI?

Yeah, PI, which were not in the numbers I indicated would be another five individuals. Total quota about $15m.

That's the Physicians Interactive e-detailing piece of the business. Relative to your question on IDX. The targets that you were talking about were focused on the first full year of operations. And on a go-forward basis, the IDX reps continue to carry quota. And as you can imagine, given That 75% of our sales are coming from IDX, that we're reasonably comfortable with the output there.

Part of what I just spent time with Jim Crook and Rich [Terron] (ph) on was how we further accelerate their contribution into that base. So we can pick up both the number of contacts and our progress in that base. But we're very comfortable with that.

So Glen, am I wrong in my recollection that there was a schedule attached to the purchase contract that had specific production targets for going out several years, as I recall? Is that wrong?

Again, I think what you're referring to is the guarantees. And those have expired, those guarantees. That was to make sure that we were both focused together on getting started. So we could ideally get to where we are today which is the bulk of our business would be coming from that base.

So yeah, there aren't existing set-out targets in the contract on a go-forward basis.

Okay. Thank you.

Your next question comes from Kevin Berg with First Albany.

Hi, guys. It's actually Noah [Yosha] (ph) sitting in for Kevin.

Just a quick question on the e-detailing business. I guess, Glen, can you speak a little bit to what pharma -- in terms of the pharma’s budget. If there are any changes there, if you could shed some color on that? And then -- I guess going to a little bit what they're asking you for now as opposed to what they wanted to do with their strategy twelve months ago?

Yeah. Let me answer the second question first. 12 months ago, much of what pharma was doing and customers were doing -- like I said, many of our customers were brand new customers. And they were doing essentially [pilots in] (ph) tests to experiment with the technology, to see if it worked, to see if it delivered what we said it delivered. And that has fundamentally changed.

Today what's happening is this is an important part of how they deliver products. I was just with Lee Shapiro, our president, at one of the large pharmaceutical organizations out there. And what they decided to do, we met in the -- this was at CEO level. And the CEO said, we've now decided that we're going to have it be a corporate program. We're going to select one vendor, and possibly one vendor internationally and one vendor domestically. And they will be the only people to provide this to all of our product managers and all of our brands. That was just another indication that this has gone from experiment to the way they do business.

In terms of what we're seeing out there in the market. What I would say is there continues to be pressure on pharma. We're all seeing that in overall pricing, their need to reduce cost. That turns out to be a very positive driver for us because that makes them realize that they have to make their detailed forces more effective and more efficient. They can use e-detailing to supplement that. And also in some cases when they're needing detail reps, they aren't replacing them but using more technology like e-detailing to supplement their detailed rep forces.

So both those trends are very positive. Again, we expect that the Internet, e-detailing, and the other physician education programs that we're starting to offer are going to become a larger and larger part of that $8b spend from pharma.

Okay. Great. Thanks.

At this point what I'd like to do, I think we've hit the number of questions. I'd like to thank everybody for joining us.

We think the fourth quarter was a very solid quarter for the company. We're able to demonstrate the sales traction in our growth businesses that investors have been looking for. We've demonstrated continued progress towards profitability both in terms of managing expenses as well as growing the business. We need to do both in this environment to be successful.

And if you look at our ‘03 numbers, what you'll see there is, again, continued confidence in the growth businesses. One of the questions that was asked was about the expectations on the '03 numbers. And I'll remind everyone that if you really build up to those numbers, half of that number is the meds number, which we consider to be a largely recurring part of the business. Of the remaining half that we have to deliver in terms of software, a significant chunk of that comes from the existing contracted backlog we have. So we think we have good reason to be confident in the results that we're going to deliver to our 2003.

So once again, thanks to everyone for your support and for your questions and for the time you spent with us today. Thank you.

This concludes today’s Allscripts Healthcare Solutions conference call. You may now disconnect.