Veradigm Inc (MDRX) 2003 Q3 法說會逐字稿

Good afternoon. At this time, I would like to welcome everyone to Allscripts Healthcare Solutions third quarter conference call. (Operator’s instructions) I would now like to turn over to Mr. Glen Tullman, Chief Executive Officer. Mr. Tullman, you may begin.

Thank you. I'm pleased to welcome you to the Allscripts Healthcare Solutions third quarter call. This is Glen Tullman, Allscripts' Chairman and Chief Executive Officer. Joining me on the call today is Bill Davis, our Chief Financial Officer. Let's start by reading a copy of the Safe Harbor statement. Bill?

The statements made by Allscripts or its representatives in this conference call will include certain forward-looking statements that are based on the current beliefs of Allscripts' 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, expects, anticipates, believes, intends, estimates, could, or similar expressions.

These forward-looking statements are subject to a variety of risks and uncertainties, including those listed in the earnings release issued by Allscripts today and in Allscripts filings with the Securities and Exchange Commission which could cause Allscripts actual results, performance, prospect or opportunities to differ materially from those expressed or implied by these statements.

Except as required by federal securities law, Allscripts undertakes no obligation to publicly why you update or revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances, or any other reason after the date of this release.

With that, I'd like to turn the call back over to our CEO, Glen Tullman.

Thanks, Bill. I want to begin today by sharing with you some highlights from what we consider to be a very solid quarter. Revenue grew from $19.7 million in the second quarter to $22.5 million during the third quarter, which represents 14% quarter over quarter growth. We had record revenues in both our TouchWorks EMR, and Physicians Interactive business units.

The growth in our TouchWorks EMR and our Physicians Inter active units contributed to overall margin improvement of 5 points, from 33% in Q2 to over 38% in Q3. Software margins also grew, from 43% in Q2 to 53.5% in Q3, a 10 point improvement. And for the third quarter in a row, we had positive cash flow from operations.

With an EPS loss of 2 cents we were 3 cents better than last quarter and are on track for profitability in the fourth quarter of this year.

Our confidence stems from the positive sales momentum in the market. We see a market that is clearly tipped, an observation confirmed by a report released earlier this week by the California Healthcare Foundation which concluded that over 50% of physician practices plan on investigating in an EMR in the near future. Clearly, this is a market that is heating up.

Sales for the quarter were $10.2 million overall with TouchWorks contributing $6.8 million, exceeding last quarter and up 50% from the third quarter of last year. In addition to the trends noted above, traditionally the fourth quarter in health care information technology tends to be the strongest. And, as you saw from one of our press releases earlier today, were off to a very robust start.

We announced a $2.6 million contract with the Iowa health system which, of course, is not reflected in the revenue or sales numbers for the third quarter. The pipeline for TouchWorks has never been stronger.

I'm also pleased to report that we have closed the two acquisitions, Advanced Imaging Concepts and RxCentric, that we announced last quarter, and we expect them to contribute to our bottom line beginning in the fourth quarter. Both acquisitions increased our competitive advantage, expanded product functionality, and added experienced sales and product professionals to drive our TouchWorks and Physicians Inter active businesses.

Our acquisitions are providing immediate value as well. I'm pleased to announce that we have reached an agreement with IBX to provide their group catch division with a financial document management solution that they will market. This software is from advanced imaging concepts. This is another confirmation of the strong relationship we have developed with IBX and demonstrates how we are closely work working together to deliver solutions to the market. We've been making many joint presentations to flow cast and group cast customers who are showing an increasing level of interest in our TouchWorks electronic medical record offering.

I believe we are working more closely together today than in any time during our relationship.

Turning our focus on the individual business units, I'm pleased with our Q3 operating results in each of the three units. In our Allscripts direct unit, results were more consistent with our expectations. During Q3 we made some management changes and operating changes, and that stabilized the revenue and will allow for modest growth in the fourth quarter.

Our TouchWorks unit deliver its highest revenue ever, exceeding $6.9 million for the quarter. due largely to our ability to more happened rapidly implement accounts from lack backlog.

Sales were strong and many prominent organizations, including UT examinations ever physicians and Iowa health systems to name just two, either became clients or expanded their relationship with us.

TouchWorks was also recognized by the Emerging Technologies in Healthcare Innovations Conference as the most innovative technology for physician practices. And we received a third consecutive five-star rating from the AC group, which publishes, I should say, the most comprehensive independent evaluation of electronic medical records available on the market today.

Additionally, we had a very strong showing last week at the MGMA, the premier show for physician practices. In our Physicians Interactive unit we set a number of new records. EI completed in excess of 29,000 new details in the quarter, a new record. It also delivered a record number in terms of revenue of $3.2 million.

We are also very pleased to announce that our PI team has signed an agreement with Abbott Laboratories, one of the ten largest pharmaceutical companies in the world, to be a preferred provider of online product education services for physicians.

We have been work than with Abbott for three years now, and this is evidence that our team has delivered results. PI has now conducted interactive education programs with 9 of the 10 largest pharmaceutical companies in the world. TI was able to make some progress despite the challenges that regulatory concerns have caused at a few of our clients.

And let me spend just a moment to expand upon the value of the services we offer in Physicians Inter active. The average pharmaceutical detail representative spends about two minutes per interaction with a physician and makes an average of four calls per day. That's eight minutes a day interaction with physicians.

In contrast, our average E detail is 10 minutes of interactive time directly with a physician, and physicians can access information 24/7 when they want to see it.

It's not a coincidence that over 70% of our interactions take place outside the normal 8 to 5 time frame, when detail reps would normally interact with physicians. That's not to say that our technology will replace detail reps but rather that interactive communications with physicians will be an increasingly important tool for pharmaceutical organizations to use in the future, especially given the increasing financial pressure they are under.

And with the FDA drug approvals up 20%, according to the latest reports, the demand for the services PI offers will only increase in the months to come.

So why are we confident about the long-term value we're building in all scripts? Well a few quarters back the market asked to us do 3 things. Number, 1, to generate positive cash flow, number 2, to increase revenues and sales, and number 3, to turn the company profitable.

This is the third quarter we've had positive cash flow from operations, revenues have increased to a new record, and sales exceeded $10 million this quarter alone, and we expect strong sales in the fourth quarter as well. And today, we are reaffirming that we expect to be profitable in the fourth quarter.

Prior to year-end we expect to release our 2004 numbers, which will demonstrate is on solid profitability for next year. Simply stated, the business is performing and we're delivering. And the reasons for this are clear. Our customers are being successful using our software and information solutions; there is more and more documented evidence in both our EMR and interactive physician education programs to prove that we deliver real measurable return to investment; and, as I mentioned previously, the markets have tipped, and every new client now understands how critical automation is in order to fix health care from both a quality and a cost perspective.

And we continue to maintain a leadership role in each of our businesses. But we're not resting on our laurels. In fact, we're investing in software, in education, and in our clients in order to extend our leadership position.

For a more detailed look at our financials, I'm going to turn it over to Bill Davis our Chief Financial Officer.

Thanks, Glen, and hello everyone, I will first review our Q3 results in more detail and then provide further insight into our two acquisitions that were closed during the third quarter. Finally, I will provide an update related to our expectations for the fourth quarter.

Turning first to our third quarter results. Q3 included several significant achievements for Allscripts. Our first achievement is our third quarter revenue of $22.5 million which represents the highest quarterly revenue for the company since going public, and represents a 14% increase over the second quarter. Second is our loss per share. Our reported EPS of 2 cents per share loss compares, to a 5 cents per share loss in the second quarter, and an 8 cents per share loss in the third quarter a year ago. Third, we are pleased to report that our operations generated positive cash flow for the third consecutive quarter.

Total sales or booking during the quarter were approximately $10.2 million. Our TouchWorks business, the largest part of our software segment, contributed $6.8 million in sales during the quarter, excluding ongoing support. This compares to $6.1 million in the second quarter and $4.6 million in the third quarter of 2002, representing a 48% increase year-over-year. This does not include the $2.6 million related to Iowa health system that Glen commented on.

TouchWorks year-to-date sales of $19.1 million, represents a 59% increase over the same period a year ago. It's worth noting that more than half of our contracts signed this year are with existing customers in the form of add-on sales.

We also are encouraged by the fact this our average deal size for the quarter grew to approximately $475,000 from $300,000 in Q2 of 2003. Our Physicians Interactive unit, the largest part of our information services segment, had sales during the court quarter of $2.8 million. This compares to $2.5 million mountain second quarter and $2.6 million in the third quarter of 2002. We are also encouraged by the fact that our average deal size increased slightly quarter over quarter to approximately $305,000 from $289,000 in the second quarter of this year.

Our AIC and RxCentric acquisitions contributed the main sales in the quarter subsequent to the acquisition dates. Please note that this does not reflect the full quarter results in either instance.

Total backlog t the end of the quarter was $41.1 million. and represents a 6% increase over the second quarter and a 17% increase since the beginning of the year. It is important to note that we added approximately $2.7 million backlog in the quarter related to our acquisition.

The backlog breakout is as follows: One-time fees represent $25.6 million, our subscription represents $10.1 million, and our SMA is $5.4 million for a total of $41.1 million. It's important to note, consistent with prior periods that we only include one year's after SMA in our backlog numbers.

Given that most customers sign a ten-year license Agreement, it is reasonable to assume that we have in excess of an additional $45 million of SMA fees not reflected in our reported backlog.

Now turning to revenue. Revenue for the quarter was $22.5 million. This $2.8 million increase over Q2 was due to a $2.2 million increase in our software and related services and an $800,000 increase in our information services revenue offset by a $200,000 decline in our medication revenue.

$1.5 million of the $2.8 million increase is due to the fact that both our TouchWorks and Physicians Interactive businesses experienced 18% sequential growth. We attribute the increase to our continued focus on improving our touch work implement takes efforts and the successful integration of PI programs. Both the TouchWorks and Physicians Interactive third quarter revenue amounts represent new revenue records for both of our growth businesses.

Our two acquisitions closed in August, and as a result contributed approximately $1.5 million of the $3 million increase in software and information services segment revenue. Please note that our acquired businesses contributed break even results for the quarter, largely due to the amortization that we recognize associated with purchase accounting.

The slight decline in medications revenue is attributed to the mix of products we sold in the quarter, but as Glen noted we are confident that the revenue here is stabilizing.

With regards to our TouchWorks business, 11 clients came live (ph) on one or more (inaudible) in the third quarter and three for the first time. Consistent with prior quarters, IDF customers continue to represent a significant portion of our sales.

In terms of revenue mix, our software and information services segment continued to grow, representing 51% of our total revenue for the quarter compared with 43% in the prior quarter and 36% a year ago. This is also a milestone for the company because it reflects the first time that our gross businesses have exceeded revenue over medication businesses.

Our software and service information increases are due to the overall growth of our TouchWorks and physician interactive businesses. The addition of approximately $1.5 million in revenue related to AIC and RxCentric offset by a slight decline had our medication revenue.

Third quarter by segment is as follows. Our medication revenue contributed $11 million or 49%, our software and related service contributed $8.2 million or 36%, there again that's up over $6 million in the prior quarter, and our information services contributed $3.3 million or 15% of the total.

Year-to-date revenue was $62.2 million. Revenue from software and information services have grown 32% to $27.9 million from $21.1 million for the 9 month period ended September 30, 2003, versus the same period a year ago. The revenue increase was 25% when you exclude the $1.5 million of revenue related to AIC and RxCentric.

Margins also continue to improve as we enhance our implement implementation capabilities and shift our revenue mix towards the higher margin businesses. Overall our gross margins was 38.5% in the third quarter versus 33.1% in the second quarter of 2003, and it also compares to 26.2% a year ago.

Margins are as follows--our medications businesses contributed 21% gross margin, our software and related services contributed 54%, up from 43% in the prior quarter, and our information services remained fairly consistent at 60% quarter over quarter, contributing to the total of 38.5%.

We are encouraged by the consistent margins being delivered in our information services segment, as well as the progress made in our software segment. Here again, it's important to note that our soft care gross margin increased in part due to the addition of AIC. Excluding impact of AIC our gross margins in our software segment were 48% for the quarter compared to 43% a quarter ago.

Turning now to expenses, we continue to maintain tight control over our expenses. Operating expenses for the quarter were $9.9 million, versus $8.9 million in the second quarter. This expected $1 million increase is attributed to the AIC and RxCentric acquisitions that added approximately $900,000 of operating expense in the quarter and includes approximately $200,000 of incremental amortization-expense.

We capitalized approximately $0.5 million dollars in the software development cost in the quarter. This amounts, consistent with my comments previously, will fluctuate from quarter to quarter depending on our product development cycle.

R&D as a percentage of our software revenue were approximately 30% in the third quarter.

With regards to head count, we ended the quarter with 330 employees. This is up from 301 employees at the end of the second quarter due to the addition of AIC and RxCentric employees.

Our loss for the quarter was 2 cents per share. This is an I improvement from 5 cents per share loss in the second quarter. Basic shares outstanding for the quarter were $38.6 million and fully diluted shares were $29.7 million had he been profitable. As indicated previously, we ended the quarter with $52.2 million in cash and marketable securities. Approximately $36 million (ph) of that balance is classified as non-current assets due to the expected maturities of those investments. Given that we no longer need the cash for operations, we ever extend aid portion of the investments to achieve better returns.

We did disburse approximately $15 million during the quarter related to the consummation of our two acquisitions.

Now I would like to provide some additional information regarding those two acquisitions.

First, with regards to AIC, we dispersed $13.5 million in cash during the if I if I third quarter related to this transaction, and expect to use an additional $2 million to $3 million of cash to complete this transaction. The majority of remaining cash will not be dispersed until 2004 when the holdback period expires. We also issued 906,000 Allscripts stock options related to that transaction.

Based on the preliminary independent valuation that has been performed, we have allocated the purchase price to the net changeable assets acquired as well as to purchase technology, customer relationships, trademark, and employee agreements, with the residual amount being recorded as goodwill.

Please note that we expect the valuation to be completed during the fourth quarter, and it is possible that such valuation could result in an in process research and development charge being taken during that quarter.

We are very pleased with how quickly AIC has been integrated into our business. We expect AIC to contribute approximately $1.5 million to $2 million of profitable revenue in the fourth quarter. Amortization-expense related on this acquisition will be approximately $250,000 a quarter on a go-forward basis.

As we look forward to 2004, we expect AIC to contribute in excess of $10 million of profitable revenue, and generate in pegs of $3.5 million of positive cash flow for our business.

Turning now to our second acquisition, we consummated our acquisition of substantially all the assets of RxCentric during the quarter. We paid approximately $1.4 million in cashing related to this acquisition during the quarter, and assumed approximately $2.8 million of operating liability, the most significant of which was $2.1 million of deferred revenue for which our out-of-pocket costs to satisfy is something substantially less than the stated amount.

We expect to use another 200 to $400,000 $400,000 in the fourth quarter to complete this transaction once the holdback provision has been satisfied. We have allocated the purchase price associated with this transaction primarily to goodwill.

Here, too, we are encouraged by how quickly we have been able to integrate this business into the Physicians Inter active business. We expect the addition of RxCentric sales resources to have a positive impact on our Q4 sales numbers, the benefit of which will start to be realized in 2004. Given RxCentric’s current backlog, we expect them to contribute approximately $750,000 to $1 million in revenue in the fourth quarter, with a modest amount of profit associated with that revenue.

As indicated previously, we have fully independent grated RxCentric our operations into PI and as such expect it to account for approximately $4 million of growth in PI next year.

Turning now to the fourth quarter, as we look forward to the balance of the year, we continue to execute a plan that is turning profitable in the fourth quarter. We expect each of our businesses to contribute to the significant milestone for Allscripts and will position us well for next year. Speaking of next year, we are currently finalizing our with 2004 budget and expect to be able to provide detailed guidance later this quarter of. With that said we clearly expect the momentum we have created in 2003 to continue into next year.

In summary, we are very end courageous by our current quarter performance, and believe we are well-positioned to deliver profitable results next quarter. We also continue to be encouraged by the key indicators of our growth businesses, which include our sales prospects, total backlog, and our strong cash position. Couple this with key strategic acquisitions in both our software and physician interactive businesses, we believe we are well-positioned for future profitable growth.

With that, I will turn it back over to Glen for some grossing remarks.

Thanks, Bill. I just want to comment on the quarter as well.

We think we had a very solid quarter with record third quarter revenues in our two growth businesses and our best financial results since becoming a public company. We have seen a stronger demand than ever for our products, and we are on track, as I mentioned previously, for a profitable fourth quarter.

In addition, we believe we are very well-positioned to deliver a very solid year in 2004. We believe that our strong financial positions, our market leadership, client satisfaction with our solutions, and our ability to demonstrate proven results makes Allscripts a very attractive investment.

Healthcare continues to take center stage on the nation's agenda, with both houses of Congress affirming support for electronic prescribing, with the efforts of CMS to shape the dialogue on electronic medical Records, and with concern mounting over medication cost containment, as evidenced by the increasing desire of many to close the gap between drug costs in the U.S. and the rest of the world.

Allscripts is uniquely positioned as a provider of solutions that address many of the pressing issues of the day. We're confident about our future . So let me conclude the call today by thanking our employees for putting out such a great effort during the quarter, progress that we will continue to build upon each and every day. I also want to thank our clients for their confidence in you us and thank our investors for your continued support as we build the Allscripts success story together.

At this point Bill and I are happy to answer any questions you might have. Thank you for joining us today.

(Operator’s instructions) Your first question comes from the line of David Francis with Jeffries & Co.

Hi. Glen, can you tell us when each AIC and RxCentric transactions actually closed and what the revenue contribution for each was in the quarter? If you said that earlier I missed it. I apologize.

I will ask Bill to take that.

The AIC acquisition, actually, both of them closed the early part of August. AIC contributed approximately $1 million of the revenue and RxCentric was about a half a million beyond.

Okay. Terrific quarter, guys. Thanks.

Thank you.

Your next question comes from the line of Jim Denling (ph) with Hanley & Company.

Good afternoon, guys. Just a question--as far as the TouchWorks business is concerned, do you guys have a rough estimate of how many units you have in the field deployed today? And I guess looking into the backlog, could you get a feel for handheld unit growth?

Well, we have not yet released the actual number of units deployed, and, frankly, it's a little more difficult measure than you might imagine. A number of our physicians use multiple units. Some use a handheld, a tablet, and a desktop. We have physicians who don't operate full-time, for example, at a place like University and Minnesota Physicians, there are 600 physicians, 450 full-time, but there is another group of care givers and support people that use the devices as well.

So at this point we have not yet released separately tracked device counts.

What I'm basically trying to get a hold of is the potential transactional revenue stream for script writing somewhere down the line. Can you address that?

Yes. I can -- first of all, I think it's the right question to ask if in the sense that we think the transactions are very important part have our future revenue stream, high-profit and something that we are focused on.

I think one way to look at that is to look at organizations like in Aurora (ph) , the largest provider of health care in the state of Wisconsin, or the deal that we just announced, Iowa health systems, the largest provider in the state of Iowa. When we're working with those organizations, at Aurora, all of their physicians are writing electronic prescriptions, using our devices, and I think the numbers at Aurora are something like 10,000 scripts per week that are getting written just from that one customer.

So as you see these very large sites, these very large group practices you can see that volume expanding. The other point I would make is that RxHub, we are their largest transaction processor, number one in processing transactions for RxHub today which I think gives you an idea of where this can go.

Having said that, is correct I would tell you that today transactions revenue is not a very large part of our revenue stream. But, again, we have said over and over again that we're not building the company; we're building a long-term very viable software and information services organization, and that's going to be an important part of the stream.

Okay. So at this point, really, you haven't flipped the switch on the transactional side of your business? You're building out more infrastructure in?

That's correct. We have a solid base that's producing transactions each and every day, about you it's a very small piece today. As all of these sites gear up and as their physicians -- remember, some of these large sites that are rolling out are modular electronic medical records may not start with E-prescribing as their first application, so that's going to come on stream.

More and more sites are going to sign off or sign up. And then finally, of the sites that are on, some of those physicians may not be using it 100% yet, but as you look at the legislation that's pending, and as you look at the number of devices that we are deploying I think you can part start to understand what's going to happen and how important a revenue stream that will be for us in the future. What's nice about it is it's a recurring revenue stream, and, again, I think the best lead indicator is that we are today the number 1 processor for RxHub.

And that would lead to my final question, which is I have seen a fair number of WebMD commercials lately, that seem to be featuring that handheld technology. Where are those guys at in your estimation, as far as their technology, the product, and penetrated market share at this point?

Well, you know, we don't generally comment on competitors or potential competitors, although I would say they have great placement in the world series advertising.

Okay. Great. Thanks.

Your next question comes from the line of Sean Weiland with WR Hambrecht & Co..

Congratulations on a super quarter. Can you point to the one or two things that happened in the quarter that really got the revenue recognition ball rolling? Seems like we got over that hump, and can you point to the one or two things that was the catalyst for that?

Yes. Sean, as we have said in prior quarters, when you're first deploying some of this software, there is a learning process that takes place. I think that each quarter we're starting to put in place the processes that allow us to deploy this quickly, and there is a tremendous learning curve that we're moving up on, so that's one. And that impacts not only our ability to recognize the revenue but, of course, the margins as well.

Second, clients are asking us to install more modules, and so that's helping as well.

As this demand we talked about the fact that the market all of a sudden has tipped and we see more of these clients coming to us and saying, can we install faster, and that's also helped, so it's a combination of internal work through our Chief Operating Officer, Joe Carey, and Laurie McGraw, who runs our service and some great work by our service People. But in addition it's the clients now saying that we want to get this up and operating.

Did you outsource any insulation activities?

We are positioning ourselves to be able to outsource it and we've trained a number of outside consulting firms, but we have not yet outsourced any. We expect in the fourth quarter to outsource one or two projects to third party organizations.

Okay. And do you, Bill, do you have an estimate for the percentage of bookings that was recognized in the quarter?

I have historically not, not disclosed that, Sean, and I don't have that readily sable.

Okay. And then one final thing is do you think that there is -- I think you said that you expect a $4 million increase in the PI business as a result of the acquisition.

Is there going to be on top of that another revenue impact on Abbott or was that the guidance for the entire division?

I think the $4 million, and, Bill, ought to comment on this, I think the $4 million was what that would contribute next year in '04.

That's correct. What I was trying to give guidance on is relative to the RxCentric acquisition, incremental to what the base PI business might do, we expect the RxCentric's relationships to contribute to the $4 million.

Okay. So is there -- can you give us a sense of what you think with revenue impact would be from the Abbott agreement?

Well, on the Abbott agreement essentially what Abbott concluded is, we were working with them over the past three years on a number of projects and there were a number of other, somewhere between 5 and 10 different organizations servicing Abbott.

As Abbott has concluded that this is a strategic initiative, they brought it all to their corporate office. They said, we're going to select one, maybe two organizations, make them preferred providers, negotiate a contract, and then tell all of our divisions and all of our brands that you may only work with these 1 or 2 organizations.

And we're pleased that we have worked out a master services agreement, that it's been announced, and that we've been selected in that role, and now each of their brands, if they want to have e-Detailing, physician education, or interactive learning kinds of services, that they don't have to negotiate a separate contract with us. They I can pick up the phone and call us and we're there for them.

So it's a great agreement. We haven't put any specific dollars around it, but I can tell you that we are doing business with them today, and we expect this role actually to expand the amount of business and also the number of brands we work with.

Okay. Great. Thanks, and congratulations again a good quarter.

Thank you.

Your next question comes from line of Daren Marhula with US Bancorp Piper Jaffray.

Just a few questions. You mentioned you're cash flow positive. Could you give Tuesday actual number?

Yes. Our cash flow from operations was $800,000. We had about $200,000 of capital expenditures in the quarter. I’d mentioned $0.5million dollars of capitalized software, and then we are going to have about $100,000 net coming through in financing activities.

Okay. And the two acquisitions, how did they impact cash flow in the quarter?

As indicated, we utilized about $15 million in the quarter to consummate those acquisitions. A vast majority of that was related to AIC, close to $13.5 million dollars, and the balance was related the to RxCentric.

I guess my question is since the two deals closed if you look at that $800,000 in cash flow from ops, did AIC and Rx sent Vic add did I have or diluted from that cash flow number?

Net-net it was dilute I have but very close to being neutral, and largely because of the liabilities that were assumed relating to RxCentric acquisition. There was a modest amount of receivables that were brought over in both the acquisitions.

But just to be clear we don't expect them to be diluted from a cash stand appointment going forward.

Absolutely not.

And then lastly, look than at the balance sheet, you accounts payable were up about $3.5 million dollars sequentially. How much of that -- I know there was 2.1 in deferred revenue from Rx centric but how much of that sequential shaping was from the new acquisition and how much was organic?

The vast majority of that was as a result through the acquisitions, and I can look up the exact number here.

So they contributed a lot more in the accounts payable than on the receivables side it looks like?

Yes, they did, and there again it's primarily related to the RxCentric acquisition because most of that consideration came in the form after assumed liabilities.

Okay. Already all right. Thanks, guys.

Thank you. We'll take one more question.

Your last question comes from the line of James Kumpel with Raymond James.

Hi. Good afternoon. Can you give us a sense of how much of the bookings actually came from AIC and RxCentric?

Yes, absolutely. As indicated, our $10.2 million of bookings, $6.8 million of them came from TouchWorks, $2.8 million came from Physicians Inter active, and the balance came from AIC and RxCentric.

And did you start recognizing any of the corrections Corp. deal that you announced back in July?

We did. We had a reasonable amount of production on that engage am in the quarter.

And what's a reasonable time stand to model that out for?

I think the expectation is that that will come in -- the vast majority of the balance will come in in the fourth and the first part of the first quarter.

Very good. Thanks very much.

I want to thank all of you for joining us, again, to summarize we think it was a very solid quarter for the company.

We're very pleased with how each of the business units performed, and with our financial results as well, and we're looking forward to the fourth quarter and taking the next steps in terms of moving the company forward. Thanks very much. Have a great afternoon.

This concludes Allscripts Healthcare Solutions third quarter conference call. You may now disconnect.