Veradigm Inc (MDRX) 2008 Q3 法說會逐字稿

Good afternoon. My name is Ken and I will be your conference operator today. At this time, I would like to welcome everyone to the Allscripts-Misys investor presentation conference call. All phone lines have been muted to prevent any background noise during the call. After the presentation, there will be a question-and-answer session. (Operator Instructions)

At this time, I would like to turn it over to Mr. John Kiernan. Sir, go ahead.

Good afternoon everyone. My name is John Kiernan. I handle investor relations for Misys PLC. We are delighted to be here in New York today at Jefferies. We are here for an investor presentation for Allscripts-Misys. I've been asked to actually read some disclosure language concerning forward-looking statements.

This communication contains forward-looking statements including within the meaning of US Federal securities laws, statements regarding future events, developments, future performance, as well as management's expectations, beliefs, intentions, plans, estimates or projections relating to the future are forward-looking statements within the meaning of these laws. These forward-looking statements speak as of the date of this presentation are subject to a number of risks and uncertainties, several of which are outlined below.

As a result, actual results may vary materially from those anticipated by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are those highlighted in this presentation as well as the risk factors detailed from time to time, reports filed with the Securities and Exchange Commission including 2007 annual reports on Form 10-K which is available through the website maintained by the SEC at www.SEC.gov.

Neither Misys PLC or Allscripts-Misys Healthcare Solutions Inc. undertakes any obligation to update publicly any forward-looking statements whether as a result of new information, future events or otherwise.

Ladies and gentlemen at this time, it is my privilege to introduce the CEO of Misys PLC as well as the new Executive Chairman for Allscripts-Misys, Mike Lawrie.

Thanks, John. Good afternoon everyone and good morning. (technical difficulty) I appreciate everyone taking a little time so we can share some of our enthusiasm about the business that we are beginning to create here.

Let me just start out with why from my perspective we did this transaction. One, I think for the first time we are seeing three clear trends come together. One is a political trend. No matter who wins the election in a couple of weeks, it is clear that improving the healthcare system in the United States and using technology as part of that solution is squarely on everyone's agenda.

Two, demographic trends. As baby boom generation continues to age, demands on the US healthcare system are going to increase and that really sets up the third trend that is coming together is that the cost of medical care in this country is projected to consume 17% of GDP. It is just flat out unaffordable. Ergo, the requirement for technology to be part of the solution to take cost out.

From a more pragmatic level, one of the reasons that was overarching reasons why we wanted to do this transaction is Misys Healthcare had a fantastic install base in practice management, over 100,000 physicians in the United States.

What Misys Healthcare did not have of the new clinical applications like electronic medical records, ePrescription, all of the new applications that were going to be driven into the US physician marketplace. Quite candidly the cost of Misys developing those for that install base versus going out and merging and getting access to the best of three product and solutions that Allscripts has, it was a very straightforward make versus buy decision.

Now for those of you that are not quite as familiar with Misys overall, we have revenues of a little over $1.4 billion and the business is listed on the London Exchange and as you know, Allscripts-Misys will continue to be listed on the NASDAQ.

We have 30 years experience in the banking industry (technical difficulty) for banking systems and then we will call treasury capital market basically trading platforms. Our installed base is over 1200 financial (technical difficulty) institutions around the world and a very, very enviable client list.

The footprint, we have customers and clients in over 120 countries and have offices in 36 countries. The reoccurring revenue stream for not only the banking side of our business but now the new Allscripts-Misys side is roughly 50% plus is reoccurring revenues. These are largely the maintenance streams and our transaction businesses like Payerpath that are under contract going forward.

And perhaps one of the most important aspects is the geographic diversity. Over 70% now of the revenue of Misys PLC comes from businesses outside banking in Western Europe and the United States. So if you had to go head into a downturn to have a portfolio that is largely exposed to the US healthcare industry and exposed to financial services outside of Western Europe and the United States, that is the profile we'd like to have. And that is in fact the profile that Misys has.

And our market position is we are continuing to develop new platforms for the banking and treasurer and capital markets segments of our business and we are continuing to plow ahead with many of those key product platforms.

Now before I ask Glen to come up here, I'd like go down a level here in terms of what the rationale was for doing this transaction. (technical difficulty) shared with you the key aspect of the enormous quality and the device that the Allscripts solutions brought to the marketplace. But this new footprint now creates a leadership position in the United States. One out of three physicians and in some states as much as 70% of the physician base is now an Allscripts-Misys client. It's a huge footprint. This industry is beginning to consolidate and it will be a major, major factor going forward.

We are taking, as I said earlier, the best clinical applications that Allscripts had and we are taking that into the largest physician install base in the United States which was the old Misys install base. 80% of the physicians in this install base do not have an electronic health record and this represents an enormous opportunity for this new company that we are launching, an enormous opportunity to take this technology and these solutions into this largely unpenetrated install base.

And given the downturn that we have and although (technical difficulty) healthcare is certainly more immune to the ups and downs of the economic cycle, the fact is the value proposition here is to help physicians reduce costs and allow them to spend more time with more patients either improving the quality of the care that they deliver or being able to spend more time with patients which is a revenue-generating opportunity for those physicians.

And finally the US healthcare industry, and you could argue the education industry also, is probably the last industry on the planet that has yet to use information technology as a way of improving productivity; taking costs out and improving the overall quality, if you will, of the service and capabilities this provides.

Let me just put this in context. I think since I spent so many years with IBM I think those waves of technology. In the physician (technical difficulty) United States, it's really three ways of adoption here. The first wave which started many years ago was all about practice management. This was about getting the right scheduling, the right financial systems in place. And this phase of the industry's development was dominated by Misys Healthcare and that is what established the outstanding market presence that Misys Healthcare had.

The second phase -- of course these phases overlap so there's not a discrete beginning and a discrete ending, they overlap -- was all about clinical applications, electronic health records and other applications that could be added on top of practice management. At this phase, it's clearly been driven, been led and been dominated by Allscripts, their award-winning products, their award winning solutions. Particularly at the high end of the market; in other words. large practices with many physicians.

Now going to take that proven expertise and that proven set of results at the higher end of the physician market and we are moving down to the midsize physician practices and the smaller physician practices, which is the footprint that Misys had dominated from a practice management.

And the next phase of this we would believe it's about connecting, connecting all the venues of healthcare. So pharmacies, laboratories, hospitals, physician practices, the whole array of different venues within the US healthcare delivery system. And the real power will be to connect these venues of healthcare delivery so that they can share information and deliver it on a much more cost-effective basis.

If you use an information technology industry analog (inaudible), think of phase 1 as the mainframe. This was an error when IBM dominated. Think of phase 2 as the distributed compute model or the PC model. Think of this as capital, think about this as the IBM PC and Dell and so on and so forth, but the distributed nature of information technology. And think about the third phase as the Internet phase which was dominated by or is being dominated by Google.

So there is an analog that is very similar that has played out in the information technology industry and has played out in other industries. And that is another reason why we are so excited to be at the crossroads of these trends, of these phases in the industry and we frankly think this is the right time to be right smack in the middle of this industry as it really begins to move forward.

So with that, I would like to turn it over to Glen who will go through a little more substance. (technical difficulty)

Thanks, Mike. It pays to have (technical difficulty) I will try to figure this out and see if I can do it. (multiple speakers)

Well, first of all, I want to welcome all of you and welcome those people on the phone. It is great to see a lot of familiar faces again and appreciate those people on the phone joining and I also want to thank Jefferies for hosting us here for lunch today. And very happy to be here. I would have to tell you that if you read the prospectus, the original prospectus, you will see that Mike and I started these conversations what now it is 2.5 years ago. And we talked about putting these two organizations together 2.5 years ago because it made so much sense. And that was the leader and practice management at the mid to small range of the market and the leader in electronic health records.

And some of you may think that this strategy sounds familiar because you may recall that we did this once before with IDX. We had the leader in practice management for high-end practices and we were the leader in electronic health records and we combined in that case in a strategic relationship. Today we have about half of the IDX base. And as we were successful there and being in New York City, I would be negligent if I didn't say that I was that Columbia too their first set of practices live last week. Exciting stuff given the size of that enterprise and size of that deal.

But now we looked at the entire market and our vision and we said, okay, who is the IDX, if you will, of the small market? There was only one player. It was Misys, 110,000 -- 110,000 clients and 90,000 of those who didn't have an electronic health record. So the strategy was very sound. We worked on it, we worked on it; finally figured out a way to put it together.

So I am very excited about it and to hear Mike talk about it, I understand why he invested $330 million in Allscripts because obviously that story that he just told, a lot of what all of you and the key points that he made in terms of the waves of adoption and where we are, and that has practice management and moving to electronic health records. But then very quickly moving to this information and connectivity model that is so core to the eventual transaction model we are looking at that is critical.

So that is what I want to talk about today. And I also want to mention to those people both in the room and on the phone that I am joined today -- Mike and I are joined today by a few folks, Bill Davis, our Chief Financial Officer of Allscripts-Misys who is going to speak later and comment on our new guidance. Also in the room, Lee Shapiro, our President, who is in the back. Lee, you can wave.

And then to my right two key leaders in the company, Vern Davenport, who has responsibility of running what is now our largest sector of the business the professional group that is selling into this small to mid range practices. And that is where the bulk of the Misys assets will be housed. And then Jeff Surges, and Jeff is President of our Health Systems Group and Jeff is running the assets that sell to hospitals both emergency departments, care management and also from Misys, the homecare management products as well. So again, a big and very profitable recurring revenue part of the story.

So let me go ahead and address one of the first issues here. Any time that you put two organizations together there is a question about execution. Some of you have asked and you have said, okay, we understand the strategic rationale, it makes a lot of sense. They had 110,000 physicians, 90,000 don't have an electronic health record. You have great assets and electronic health records. We want to sell them into that. We get that. So now let's talk about a little bit about this issue of execution and --

Sensitive that little wheel there.

-- and so I'm going to jump ahead to that and talk about that. The first thing you have to do in when you put two companies together and what most companies do is they announce the transaction, they complete the transaction and then they start to focus on how to put it together. We took a very different track. From the day we announced the transaction we said, we want to be ready to go on day one and we took this very seriously. We organized 13 different teams across the company, made up of two individuals from Allscripts, two individuals from Misys and a third-party consultant. And the idea was to drive to best people, best practices across that entire organization.

And as of day one, I'm really excited to say that we were able to deliver. Number one, salesforce integration. Day one we had a fully trained sales force, 230 quota carrying individuals who were out selling our full product suite. That is the combined product suite. How did we do it? Well, two weeks before the transaction, we actually spent time training for a full week that entire sales force and they had a preview of what we were going to announce day one in terms of branding and in terms of product mix. And the different sales territories and the like. So day one they were ready. We did the entire salesforce organization.

Second, product strategy. There were a lot of questions about that. You have a number of different products. Which ones are go-forward products? And once again, we did something a little unique here. We said because of our respect for our clients, we said we are going to support all of the products out there. We are not going to tell somebody, well, because we made a change, you have to change tomorrow. We are going to support the existing products to maintain this great base we have.

But we are going to give very clear direction on a go-forward strategy, which products are we going to invest in? Which products are we going to take forward into the future? As it turns out, we actually are making a higher investment in virtually every product because it for those existing base customers who are using one of our many products, we want to make sure they stay satisfied. So when they are ready to move, when they are ready to go to the next level, they are happy with Allscripts and then they choose one of our products.

And of course along the way, we are going to continue to sell them services, to sell them upgrades, to sell them add-ons like our new kiosk which can be sold to our entire client base. So again, one of the things we wanted to do was make sure we had a clear product strategy and we did that day one.

Leadership team, we knew day one and in fact two weeks before some people said, well, are you sure about this? What if the transaction doesn't happen? And of course we said of coarse the transaction is going to happen. And then we had a little bit of a blip in there with the bankruptcy of Lehman, but in fact it did happen and we had made the decisions of who was going to lead the organization prior to that. So day when people knew who they were working for.

And of course the brand name. We couldn't take the Misys purple and the Allscripts red and put them together because it was brown. It didn't make sense so we decided to create a new identity and that is a big part of what you see here, an exciting brand that we have. So day one execution we are going today -- that is part of what is happening today -- we are delivering and our sales force knows what to sell; our clients know what they are doing.

And what are they selling? Well, they're talking about this idea of a new Allscripts. And while the company is Allscripts-Misys Healthcare Solutions, we in fact spent a lot of time surveying the clients and trying to come up with the brand that we thought made the most sense for Wave 2 moving to Wave 3, and that was if you want to sell electronic health records, you sell the brand most associated with it, and that was Allscripts.

So the new branding is Allscripts, and the focus is not just about selling innovative software solutions, but it's about connectivity and it's about information as well. And the idea is to sell that throughout our healthcare base, because we are talking about connecting these practices together. A lot of people think if a practice gets a computerized system, then you solve the problem. And all you have done is automate the island, but it's still an island.

The value comes as we have seen with computers moving to the Internet age that if you gave a kid a computer today, and if it didn't have a modem, they wouldn't know what to do with it because they couldn't connect to Google and they couldn't do IM, they couldn't do e-mail, and they couldn't go online to buy things from iTunes and all the other different services they use. So that is where the value is.

So when Mike talked about our footprint, 1 out of every 3 physicians in the United States and connecting that together, that is the next stage of healthcare. That is where it is going when we talk about connect to health, that is what we really mean.

What do we have today? A company about $700 million in sales, and Bill is going to give you more visibility to that, but importantly $400 million in recurring revenue. A big number, more than 50%. Of course, we will continue to be publicly traded MDRX. We will continue to report separately, but we are also benefiting from some of the value in Misys. I talk about when we did the A4 acquisition just over two years ago, it took us about seven or eight months to get the e-mail right, to get the phone system right. And what we did was effectively outsource that day one here to Misys TLC.

And they came in with their global expertise and day one, one system, one Internet, one set of phone numbers to call. And by the way all the same phone numbers, because our goal was our clients wouldn't have to change. So clients still dial all the same phone numbers to talk to the same people. And again, that was one of the values of this integration. And about 2500 employees today.

So let me move to the next slide and talk a little bit about, when I talk about being prepared to execute, you need to talk about the team that is going to drive that forward. And I'm really proud to say that we were able to take the best from Allscripts and the best from Misys and combine them into an integrated team. And there is no area of the Company today that doesn't share employees and management and leadership from both organizations, which is terrific because going forward we are one organization today.

You hear very little of that, because you can't be in a meeting without both sets of people, so it's hard to talk about the other guys. You can't do it, it doesn't work. That is really great, that was part of the design here.

And I mentioned Vern Davenport earlier, again Vern is President of our Professional Solutions Group, 21,000 clients all in the small to midsize. There's a few that fall outside of that. The average practice size of that base is about nine to 10 physicians, that is the sweet spot of where the market is going to be in the future. So a great market for us, responsible, Vern is for about 1700 employees and about 160 sales reps. Some of that being internal capability.

We move over to Laurie McGraw, who is not here today. Laurie is President of our Enterprise Solutions GROUP. That is formally some of some of you formally know that as TouchWorks, and they are selling to the large academics, the integrated delivery networks, those big organizations that are out there that by the way have become increasingly important because given Stark, they are now reaching out into the community and guess what they want? They want footprint in the community. And guess what we have now? Footprint in the community because in every community in the United States, you have Misys practice management users. And again, Laurie 5000 clients, about 350 employees about 35 high-end sales reps.

And finally, Jeff Surges, President of our Health Solutions, our Health Systems GROUP, and Jeff has about 700 hospitals in this new age of Stark where hospitals are stepping up and starting to play a role in the community, funded physician groups, it doesn't hurt -- in fact it helps a lot to have that footprint.

But we also see us making great progress on emergency departments, on care management which is the discharge what we think of as the door in, the emergency department and the door out, the discharge of the hospital.

And finally, the homecare element. Jeff's unit has over 6000 acute -- post acute care facilities. And again, 600 homecare agencies, about 300 employees, 35 sales reps. Three very experienced leaders in the healthcare industry. All of them I think are vying for my job, I'm not sure at any given day. But I wouldn't stand in front of a train in front of any of them. And they are all capable of it, all of them [playing] more than 15 years experience to the equation. So again, a great team to lead three key areas of our business.

If you look at our positioning what you will see is across the three major segments Allscripts is today the only company that is (technical difficulty) in fact satisfied all of the solutions that typical customers want, especially community. And so you see a large physician practices, small groups and the smallest independent. I just call out two points here. One, in the large groups we have been able to make great progress, 40% penetration and on average about 65,000 physicians in that. Allscripts has done a great job there.

We are pleased with penetration we have and we continue to penetrate because there is still a lot of growth in that area and we are starting to see the first replacement market in those first-generation systems from Epic and other companies come up for replacement. We can do it more cost effectively. We can add a whole web piece of the equation and we can give them more value for less money than they had in the first-generation system. So we are seeing that come to the fore.

In the midmarket and this is our sweet spot, again, 20% penetration, enormous growth opportunity. Remember we have today these two factors that 12 months ago we didn't have. One is Stark funding and the other one is CMS funding. CMS funding equates to $3000 to $5000 per physician. $3000 to $5000 so imagine you are selling a product that averages call it between $10,000 and $15,000 per physician and someone comes along and says we may give you almost 30% to 40% of that in funding.

And then between that -- between some of the state programs for example in New York State where we are broadcasting from today, you have the Heal grant, $50 million in Massachusetts and many other states. You have state funding, federal funding, you have hospitals funding, you have managed care organizations like Aetna and WellPoint creating funding programs. So tremendous adoption incentive.

And remember the CCHIT standard, certification commission on healthcare information technology says that if you are not using one of the approved systems, you can't qualify for much of this funding. And finally to ice that cake as if we needed to, Mike talked about what is happening in terms of change coming up in a few weeks and both presidential candidates have indicated that they are going to strongly support electronic health records. So again, we see tremendous upside here.

If you look at our portfolio, which is five for those folks on the final slide number 12, what you see here is we are stretching (technical difficulty) across the needs of the fast-growing ambulatory sector. And it's interesting people have said given the financial constraints we are under across our entire economy, what is the impact? And all of us and many of you used to say that healthcare is somewhat recession proof. But frankly this is beyond a recession. We are being very conservative about it.

That said, we like the fact that most of our transactions don't need to, these aren't large hospital transactions where you have to go out and get that funding. These are reasonably sized transactions. Most of them could be done out of operating funds. So again, we feel like in this market two things are going to happen. One, hospitals and other big capital expenditures may get delayed. That said, where they're going to put the money is how do I get business in, how do I connect to these physicians who are doing their referrals and what can I do that is affordable today? And there is where you see Allscripts fitting the solution across many of these.

I want to call out one section here on the left-hand side of the slide called business solutions. Because while we will continue to drive home that idea of about 110,000 Misys practice management customers of which 90,000 don't have an electronic health record, I want to also call out this fact that Payerpath, which is the revenue cycle management unit of the company today, is the third largest EDI processor in the country. And probably number one with a footprint with physicians.

So, again, we inherited that. Now what does that really mean? Well to give you an example, it's very viable. Allscripts does today about $15 million in what we would call revenue cycle management. And we do it with third parties outside the company. Our margins there are calling for 30%. When we shift that to our internal Payerpath unit, those margins go up to about 60%. You can do the math on that. Again, what we are talking about is millions of dollars to the bottom line. So that gives you a sense of where we are.

So let me summarize. One, in terms of product, a complete portfolio of solutions. In terms of the target market, again it is small practices, all sizes. That said, let's be very clear, not unlike what we did many years ago when we said we were happy to sell to anybody (technical difficulty) focused on that IDX base and we successfully executed. We have a laser focus on making sure that we are first and foremost servicing those Misys customers who need an electronic health record. That said. there is a lot more to sell to, there's a lot more market and we are moving against that market as well.

And last but not least across the footprint of one out of every three physicians in the United States. When you think about that and again, I will go back to the economy because you can't do these presentations without having that unfortunate umbrella of what is happening in the economy.

What happens when the economy isn't great? Well, you stick with what you have. The idea that 110,000 practice management customers in today's environment that are all of a sudden say I will go out and buy something new to replace something that is already working well is about zero. We are talking to them everyday. What they do say is I'd like to be able to build functionality on the practice management system I have. I want one phone call, I want one bill, I want one company. As a customer recently said to me, one throat to choke. That is what they want, smaller customers want to continue dealing with these [delivered] forms. And that is what this transaction is about.

So at this point, I want to turn the floor over to Bill Davis who is going to walk you through the financials and then we are going to try to get to some questions and we will leave time for that. Bill?

Thanks, Glen. Good afternoon, everybody. As hopefully everybody is well aware of by now, on Thursday Allscripts announced its preliminary third-quarter results but also at that same time provided an outlook for 2009 for the combined company. And our motivation for coming back together again today is the recognition of the amount of information that we brought to the market really a sincere hope that we be able to get to questions and answers as quickly as possible so that the information is as well understood as possible.

Bill why did you let Mike and I go before you -- you probably (multiple speakers)

There was a joke in there but since this is being broadcast I chose to avoid it. So there is really some new information in terms of the guidance that we provided on Thursday but there has clearly been a couple questions that have come to light that we did want to take the opportunity to address first and foremost. And also just make absolutely certain that people understand the basis of the outlook that we in fact have provided.

Just to reiterate for everybody working on slide 15, the revenue expectations for Misys -- or Allscripts-Misys taking into account that the transaction did in fact close on October 10 and some $700 million to $715 million. That translates into $76 million to $82 million in adjusted earnings and $0.49 to $0.53 per share.

One of the more pervasive questions that we have received in regard to this guidance is the recognition that Allscripts in this transaction is in fact the accounting acquiree, and as such it will be Allscripts balance sheet that gets revalued in this transaction. We have at the close of September just around $60 million of deferred revenue which will have a more significant impact as you think about our perspective for the year. And so everyone should anticipate that there will be a deferred revenue adjustment. Again, important to note that that is a non-cash adjustment that is very customary in any software transaction that you see done. And the guidance of $700 million to $715 million is exclusive of such adjustment.

We are in the process of working with independent third parties on the valuation and purchase price allocation and so I don't have more definitive direction for you at this point in terms of what that adjustment will actually be. If you heard the call last Thursday, what I refer people back to what the proxy assumptions that we made which was about a 25% haircut on that deferred revenue balance. So effectively anticipate that some $15 million about $60 million would in fact go away.

It is the company's intention so it's clearly visible for everybody that as we report these next couple of quarters through our fiscal '09, that we will be calling out on a GAAP basis how much of our results were impacted by this deferred revenue adjustment so you have clear visibility as to what effectively should be added back to reconcile to this guidance.

The other point I wanted to draw people's attention to is going back to the historical basis that we provided for you. We thought it was appropriate given the amount of public information that already exists to actually leverage that historical information to establish the appropriate baseline from which the company could be reasonably measured against.

And so what you have presented in the fiscal 2008 column is in fact the US GAAP prepared financial statements from Misys Healthcare which appear in Allscripts proxy statement so you're able to attain those by going to the proxy and that is for the fiscal year ended May 31, 2008. We added to it the trailing 12 months or the last four quarters for Allscripts for the period ended June 30 of 2008 so you would be able to take Allscripts last four quarters, aggregate them and add them to Misys's information. And again, we did that purposefully so you had a logical basis from which to draw upon in terms of not only validating these numbers but also measuring up on a go-forward basis.

We have also received a lot of questions in terms of the nature of adjustments that we have provided for in the context of the guidance that we previously had given. First and foremost it's important to note that the guidance that we gave pertains to calendar 2008. So that contemplated January 1 through December 31, it also assumes that the transaction would have in fact closed on January 1.

The first point in that regard is that it would have expected or anticipated that we would have gotten a full year effect of not only our physicians in our active business, which hopefully everybody is well aware that we sold by business effective September 30, but also it contemplated the first year of cost synergies of $15 million to $20 million.

I have added actually a new slide so this is a bit of new information, Slide 16 to the deck, because I have spent some time trying to walk people through specifically the synergy adjustments that appeared in the previous guidance provided, as well as what was contemplated in the amortization adjustment as well. As it pertains to the synergy adjustment, the difference is simply a function of the fact that, again, the original guidance provided by the Company contemplated a full-year realization of the synergies over the calendar year, January 1 through December 31.

And that the 2009 fiscal guidance contemplates what we believe we will be able to recognize in terms of synergies from the date the transaction is closed on October 10 through the end of the fiscal year. So to effectively evaluate what was in the base or the original guidance to that in which is appearing in our new guidance, you effectively have to move that out four months to take into account that the synergy realization would not in fact start until October 10.

So the expectation is, we commented on Thursday is that we have very, a high degree of confidence in the realization of the synergies and what they played there in terms of reconciling those two perspectives is one of timing. Again, hopefully the mathematics or the mechanics of that makes sense to everybody.

Relative to amortization the concept is very much the same in terms of just effectively shifting out what is expected to be realized there. The nature of those adjustments are a little bit different. For those of you who are familiar with the fact that Misys PLC as a public company reports on its results on a stand-alone basis, and we report on our stand-alone basis there is a meaningful difference between -- there is a couple of differences.

But one significant difference between those two reporting results -- and that was outlined for you in an 8-K that we filed a couple of months ago reconciling the Misys PLC healthcare information to that of the Misys GAAP financial information -- and that specifically pertains to the capitalization of software. Under US GAAP today, if you go to the footnotes of the Misys Healthcare financial statements it will outline for you the fact that those results do not contemplate any capitalization of software, yet their international -- their IFRS financial statements in fact do.

The reason for that is is that for those of you who are familiar with FAS 86, the documentation threshold under US GAAP is appreciably higher than the documentation requirements under IFRS and recognizing these we are being prepared on a carve out basis that that gave rise to the difference. It has always been the company's expectation that as we close this transaction, the capitalization policies of the two organizations would conform and we would in fact capitalize a certain amount of software as it pertains to the significant development work that is being done within Misys.

In a similar fashion, the capitalization of software (inaudible) benefits is probably the most difficult kind of adjustment to understand. Going back to my earlier point the fact that Allscripts will in fact be the accounting acquiree in this transaction. We today or just prior to this merger had an asset on our books called capitalized software that through this revaluation will actually become acquired software.

The impact of that change is what was amortization of capitalized software will now become a deal related cost amortization and therefore there will be results and benefit that comes about by virtue of that reconstitution of an asset.

So again, the impact in terms of what was contemplated in the original guidance to what's working through these adjustments again are one of timing but again, I thought it was appropriate to clarify for everybody the nature of those adjustments.

The final point that I wanted to draw to everyone's attention is as it pertains to the share count. Hopefully everybody saw the detailed reconciliation we provided to the investment community last Thursday in terms of our capital structure at the date of close. That represents just over 152 million shares and again, that detail is in the presentation that we provided and filed on Thursday.

But we also highlighted for the investor community an expectation that we would be issuing anywhere from 4 million to 4.5 million shares to effectively recharge management and the like through the stock-based incentive programs of the company that are working into our fully diluted share count assumption for the year as well. So in terms of reconciling from the 152 that we expect to start with and why we are using 155, it is effectively taking eight months worth of that 4 million and working it into our weighted average share count for the year. And with that information hopefully, you can then get back to the specific guidance that we provided.

Very quickly as it pertains to the definition of adjusted earnings on slide 17, for those who are familiar with Allscripts, this should be very familiar to you in terms of the reconciliation and the items that we do in fact provision for. And that is starting with GAAP earnings and then providing for the add back of both deal-related amortization as well as stock-based compensation. So our definition has not changed.

I did comment last week on our effective tax rate the fact that I still believe it's appropriate that everyone provision at the 39% level recognizing that we do believe that there is opportunity as we work through our tax planning for that to essentially come down but for the time being, I do believe that that expectation, that 39% is appropriate.

What I really wanted to highlight on this slide in addition to the definition is really the relative growth of the earnings or the earnings potential of the organization. Recognizing over relatively even a modest amount of revenue growth, we are very excited about the future prospects in terms of exponential growth on the earnings line as evidenced by our guidance for the year suggesting somewhere between the mid to high 20s and to the low 30s in terms of year-on-year earnings growth potential.

One of the primary drivers for that is again an increased confidence in the level of cost synergies that we expect to realize in this remaining eight months of even this fiscal year. We have talked about for the first 12 months total cost synergies in excess of $20 million and that ultimately growing to some $25 million to $30 million.

I wanted to take a moment if I may and just give you some greater visibility in terms of the nature of those cost synergies. You've heard us talk about the category in the past but to be very specific, one of the major categories is the order of magnitude of about $5 million of that $20 million is in fact expected to be realized in discretionary marketing spend. As you have heard us talk about in the past, the combined organization pre-synergy we're spending close to $20 million a year on discretionary marketing spend. And I believe in large part by virtue of the leadership position that Allscripts has enjoyed in this particular area, an opportunity to drive that down and so that is about $5 million of that $20 million.

Glen talked about preparedness of execution. The reality is is that we have notified and acted upon the exiting of close to 90 employees in the organization already and that was done prior to day one. And while some of those individuals are working through very short transition periods, the reality is the notification is complete and the expectation in terms of savings has been well established so that is another meaningful contributor.

As well as the third category I wanted to highlight for everybody is in the area of R&D. The reality is that we will be one of the largest spenders in terms of R&D in terms of overall cost structure but even with that being said, an opportunity in bringing these product portfolios together, the opportunity to drive meaningful cost synergies. And you can think about, the order of magnitude of some $4 million to $5 million of coming out of the combined R&D spend in terms of realization of these synergies.

And then the final category or there's obvious ones in terms of infrastructure and back office operations whether that is a consolidation of IT organization, finance organization, facilities and the like is what really rounds out our confidence in terms of the $20 million plus of synergies that we expect to save.

So really in closing before we get ready to answer your questions, I think Mike and Glen both did a great job in terms of really speaking to the motivation for doing this transaction at this particular time. And it is all about bringing two market leaders together both capable of very important both technological but expertise in areas that are driving healthcare IT adoption today. It represents in excess of a $10 billion market opportunity for the new Allscripts-Misys which we could not be more excited about. And then at a time that we are all experiencing a tremendous amount of uncertainty, it's being done with a tremendous amount of stability when you take into account that in excess of 55% of our revenues on a combined basis, will actually be reoccurring in nature.

So with that, we are more than welcome -- more than willing to take any questions that you might have. We will go ahead and take questions in the room first and then open up the lines and see if any callers have any questions. In the back.

Okay, Bill, good morning or good afternoon. If we could address the guidance for a second. There are a couple of areas I just want to make sure I understand completely specifically with the top line. If I hold Misys flat at the 384 (inaudible) 5 to 10 million. The guidance seems to imply 7% to 12.5% top line growth for the core [Allscripts] business which has been growing materially faster than that historically. I know we are coming off a soft quarter of bookings.

I guess -- and I also last Thursday I think you made mention that to achieve the $715 million, that implies some revenue synergies. Can you help explain to me why it appears that either I am miscalculating it or why it appears that the Allscripts core business is slowing down?

Yes, I would respond a couple of different ways. The question just to restate it was -- I can't restate all of your specific points but the substance of it was if you took the organic growth or the organic basis of Misys, coupled it with (inaudible) and you coupled it with our historical experience with an Allscripts, it implies that the growth rate of Allscripts may be slowing down.

I will tell you the way that we effectively look at this. I don't think that -- I guess the short answer is I don't believe that it's necessarily indicative of the Allscripts business slowing down. But it is in part a recognition of the times that we are in, the uncertainties that exist and quite frankly, a belief that this is a time for the company to be prudent in terms of the guidance that we are providing and in providing expectations that we are very comfortable with in terms of what we are able to execute against.

I think that more top-level mechanically thinking about Misys as a $375 million to $380 million contributor being basically a CPI, couple percentage type percent type grower and you took Allscripts at a 15 plus percent and you just took the weighted average of that, that would put you in a relative range of 6% to 9% which is the broader guidance that had been given for the healthcare business when you talk it on a full-year basis.

So I think that actually reconciles but in the context in terms of the individual pieces and how they may or may not be performing, I would simply respond by saying we really felt that this was the right time to be prudent in terms of how we are thinking about the outlook of the combined businesses.

Let me just add to that because a number of you -- some people in this room made it very clear that to be aggressive now with numbers, to do anything else than come out with very conservative numbers wouldn't make any sense. And frankly having had a challenging last few quarters, we took that advice and we are happy to take it. That said, do we believe there is upside in the numbers assuming the economy recovers to some extent? We believe that there may be upside in these numbers but we wanted to come forth with numbers that we felt very, very comfortable and confident that we would achieve.

[Difficult] questions maybe, Glen, can you talk -- when you talked about the opportunities that physicians have to really bring down the cost of adopting these technologies and you talked about the PMS and obviously these [stated] initiatives, what is the awareness among physicians today that they have these extra funding opportunities available to them? How is your sales force trained to alert them to it? And do you help them in the process of applying for these grants?

And then secondly, what is the turnaround on these grants? How long does it take from applying to CMS for this extra funding to getting that money? How does that affect your sales cycle as well?

So the question was, is our sales force aware of it? What is the turnaround? I'm going to answer and then I'm going to ask Vern Davenport to answer as well (multiple speakers) and physicians as well.

A few thoughts. One, our sales force are very well trained on these and you might imagine if you're trying to sell someone something, the lower you can make the cost, the better and as long as it's not taking it out of our margin, they are happy to talk about it, they are happy to help with it. I think physicians are very aware of this.

One of the organizations that I participate in, called CCHIT, or the Certification Commission on Healthcare information Technology, I talked about it before, provide essentially a certification for electronic health records. If you go back to the beginning of CCHIT, there were in excess of 300 different electronic health record providers. Today there are 60 certified and again, all the physicians who are out there buying understand CCHIT certification.

In fact, we have many cases where they come to us and say what year is your CCHIT certification to make sure it is the most current because you can't qualify with for the CMS program as an example without a CCHIT certified system.

So one, our sales force is aware of it. Two, physicians are aware of it. And three, in terms of timing that varies but the timing is reasonably short and I would say within a six-month period of time is what most of these organizations are finding out.

We are also seeing very direct interactions. For example, I was at Scripps Healthcare last week, very noted healthcare delivery system in California and they are absolutely focused on getting systems installed including either our electronic prescribing systems which qualify for CMS or a full electronic health record which also of course includes our electronic prescribing. They want those installed because they see the dollars and it provides more than 100% funding especially if you're looking at just electronic prescribing.

But, Vern, you are responsible for the bulk of the sales force out there selling to smaller physician groups. Why don't you give us your perspective?

Actually there is one more point. We are continuing in Allscripts something that we started in Misys which was a sales organization that focused on hospitals and those trying to be the aggregator of the MR decisions because their needs in deploying to physicians are different than physicians' needs of adopting a system within their practice.

So we have a team that focuses on calling on hospitals from the standpoint of how they develop their physician affinity strategy and how we can support them in that physician affinity strategy. Then we have a team of sales reps out in that geography that are working with and focused on the physician specifically.

So actually the two teams come together so when the spirit of knowing what is going on within that community is that communication between that hospital-based sales team calling on that CIO or CMO or CEO on their strategy of connecting the community. And then our dedicated reps whose sole interest is in the successful deployment of that system within that physicians' office and it is the marrying of those two sales organizations on that initiative that I think first gives us a very unique position in the marketplace but helps in that adaptation and adoption by the physician.

And most importantly, kind of takes a lot of the burden off the hospital and their deployment of community strategy.

So, largest sales force in the industry, selling them from all different directions from the hospital, Jeff's group, a separate group focused on hospitals for the Stark funding and then direct selling and then we also are supplying a distributor channel as well. So again, everywhere the physicians turn, they should see it. Thank you. Next question.

Yes, it seems like the key opportunity here is in that 4 to 25 range. Can you break it down? Because I kind of think of it differently between doctors in that 4 to 10 versus the 10 to 25. So as you look at the core Misys space historically, what is the split between those two groups? And then I have a follow-up question to ask.

There is a slide, it is on page 11 and that gives you actually a very specific breakout of the one to three physicians, 170,000 practices, about 10% penetration, about 241,000 physicians and then you see that midrange group as well. We have tried to focus our team, our direct selling efforts in that 4 to 25 space. We see some overlap in the 1 to 3 but that is where we also want our distributors selling the 1 to 3 because of cost of sales.

Well I think the question (multiple speakers). I think the specific question market is about -- and these are rough guesstimates -- but it's about one-third is in the 10 to 25 and about two-thirds and then about (multiple speakers)

This is why and that is what I had thought and my follow-up question is relative. So it seems like a lot of that is positioned more in that 4 to 10 range and the way I keep thinking about things is as we come down the spectrum here, the price sensitivity of the customer obviously goes up significantly.

So as we look at a backdrop of all these macroeconomic issues that are going on and the consumer falling out of bed, the average doc in a four-doc office or a six doc-office or a one to three is not feeling very good about his practice right now. So -- and probably not feeling very good about his personal wealth either. So in that context and when you look at all of these CMS grants and the state grants, the funding always comes out in that sort of three to five range, how do you think about the average cost of EMR that you sell and then the levels of funding being provided? And do we have to see a compression of ASPs across the board eventually to come down to the lower end as people feel bad about that?

Or do you think maybe they look at that just purely as a productivity tool and something to maybe enhance their business in a tough environment? How do you balance those two things when the macro picture for a doc is pretty tough?

Well, again, we see -- remember you've got multiple funding that can stack up. You may have a hospital who is wanting to connect to the physician, so that hospital is providing funding. You layer CMS on top of that. We think it does get it to the affordability range; that is number one.

Number two, the doctors need these tools because their actual operating costs are going up, and the paper is killing them in terms of operating. So whether it be billing, whether it be the revenue cycle management we provide or whether it be the actual clinical piece, again, they're seeing a very direct operating benefit.

And we do see some of these practices saying, I will start with certain of the tools first because, hey, better notes are great, but what I really want is to eliminate the paper and do document management. What I really want is electronic prescribing to get the CMS dollars. So I will go for the easy modular pieces first in order to make it cost a little less than get going in a faster fashion.

And maybe we see sort of a lumpy kind of adoption cycle where you take on a few modules, see how that works, you take on a few more?

Actually, from that perspective I think it's almost less lumpy because revenue req in terms of getting in one or two of the modules is faster than you would see if you deploy a whole electronic health record. The other piece, and Vern, you might want to touch on this, is at the lower end a lot of Vern's sales, they may find a prospect, close the prospect and we get it installed all within one quarter. So that is the other piece of that, but you may want to give a shot at that.

So on the low end, I think we will see some ASP trying to get a package that is affordable but the financing of a Mercedes. The decision is where they want to spend their money. But physicians have got to not only take cost out as Glen said, because of the administrative burden, but if they are going to commit to being a physician and being in practice, they've got to find ways to differentiate themselves against their competition.

And the only way they can do that meaningfully is to have a clinical system installed that they can truly document the outcomes which they produce the patients that they see. So physicians are very competitive by nature. The economy is making them more so. I think it's going to allow physicians to seek out those that really want to differentiate themselves to seek out systems to give them the capability to differentiating themselves with payers from a reimbursement standpoint and differentiating themselves in the marketplace.

Also, I think the 4 to 25 space is going to be the consolidator. So as physicians look to address those administrative costs, they are going to look to merge practices. So we are seeing a lot of the single doc, dual doc, three doc practices now moving and partnering with other doctors in five, eight, 10-doc practices so that they can leverage the infrastructure and help address those administrative costs.

Two other points I would make there. One, we've talked a lot about the carrier, so we have just said anywhere from 30% to 60% of the cost could be subsidized to all these other sources of funds. But it is also clear that if certain things are not adopted by physicians over the next couple of years, they will be reimbursed less money from outfits like Medicare. So you have a lot of things converging at the same time.

In addition, one of the things that is so unique about this merger is a doc can take an electronic health record but not have to switch out their practice management software. And in this economic backdrop, this is critically important. There is no doc in the world that is going to want to risk changing a system that is responsible for collecting their cash.

So even if they had the greatest deal on Electronic Health Record, if they were forced to make a change in their underlying practice management software, they would be reluctant to do that. But today we are offering a solution where they can take on these add-on modules like electronic prescription, like health records, but maintain the base software that runs their practice. That is a very compelling value proposition.

Now at the end of the day, your question is what about adoption? And that is can you close the gap enough to get a lot of these docs to adopt? But I'll also point out that remember, our adoption figures are very -- and in fact some people have criticized us -- hey, how come you are not growing it -- how come the synergy number isn't it bigger from a revenue standpoint? It's very conservative. So we are being conservative.

This is a market that has very little adoption in the less than 10 space. So we don't need the number of physicians there. We don't need to get up to 50% adoption or any number like that. We need modest adoption, and we will win our fair share and more than our fair share because of this practice management base.

So the idea was footprint, and you always want to go in uncertain economic times, the people with the base always win in every industry, no matter what it is, because people don't change out what is working. They do that when they have extra money, when they are willing to take risk. Now, what they are saying is I have something that works; it's what collects my revenue; I'm not messing with that. But I do want something that adds on to that that makes it better incrementally.

I guess my one last part of this is -- so I get the adoption argument, but I guess I think about it more from a business perspective in terms of profit for sale, also. So how do you think about it as -- I get the adoption argument, but the actual money that you are able to make on each of those little implementations have to add up.

We don't think the ASP goes down particularly, the average selling price. In respect to if you are comparing the average selling price of TouchWorks versus the average selling price of a professional module, that is different.

But I guess it's more from a profit dollar perspective, right, because you have to have a lot more hits at that lower end of the market to equal one TouchWorks?

Yes and no, yes and no. Please keep in mind that we have been in this segment of the market now for the better part of 2.5 years on the heels of our A4 acquisition, and we have actually had a lot of success in this space. And your point is correct, yes, our ASP is a little bit lower in these smaller practices in selling HealthMatics to that of TouchWorks. And I've talked about gross margin differential as much as 10 percentage point difference between TouchWorks solution and that of HealthMatics.

You tend to make about two-thirds of that up, in terms of lower cost of sale -- or lower selling cost and lower R&D in terms of the distribution of that R&D over more of those individual transactions.

So in terms of a net contribution basis, they actually are not materially different, and again that is where the doctors reside. The point I wanted to emphasize, we were very purposeful in terms of that delineation between 4 and above and below 4, because our experience would suggest that the preparedness and their capabilities in terms of practices of moderate size, they are very much in keeping with our expectations that you are going to see adoption occur in that subsegment. That is our firm belief.

Let's take one more in the room, and then we will open it up to a few questions, and then we will mix it up. Yes, go ahead.

Thank you. Did you talk at all about your NOL? I can't remember.

I did not comment specifically on the NOLs. We are actually in a valuation process right now in terms of assessing their limitations with a change of control transaction that occurred. Our expectation is that they will, in fact, be fully utilized. You are talking about $160 million plus of total NOLs. But as we complete those studies and have more definitive views, we will come back to the market. And right now, we are just in the process.

Do you want to follow up?

You all mentioned also interestingly that you had some concentration, geographic concentration I think in North Carolina or whatnot. Are there other areas that you have particular --?

That was a positive; that wasn't a negative.

We don't -- let me answer that. So in terms of -- the great news is we really don't have geographic concentration. We are across the whole country. We have very solid penetration. The point was that in a few states, frankly it's extraordinary in terms of the share that we have of the market, the ability to connect that market and start to provide an interconnected healthcare system which is what everybody talks about, frankly dreams about.

Operator, why don't we go ahead and take the first few calls, and then we will open it back up to the floor here.

(Operator Instructions)

Okay, while we are waiting, let's take one quick one here. Yes.

I wanted to ask about the salesforce segmentation within the professional group. Maybe Vern can speak to it, but how are you differentiating your sales approach between the Misys customer base and I assume you are still going after the greenfield accounts that are outside the Misys space? And then maybe also if there is a segmentation there, what percentage of it your 130 sales reps are going after Misys customers or legacy Misys customers versus greenfield?

We've got three sales organizations in professional. We had a direct salesforce made up of eight regions geographically dispersed, and they are effectively own all the dirt, to use our terminology, in that geography. They're focused initially on the install base of Misys, particularly the Tiger install base which is heavily prevalent in that 25 and under segment. So we are going aggressively after that Tiger install base with our direct salesforce, and there are 92 of those reps and then the management sort of on top of that.

We have a inside sales organization. That inside sales organization that sells primarily to customers. They will sell additional licenses in the case of an extension of EMR or extension of practice management as practices grow. And they sell all the ancillaries, hardware, even sell some consulting services via the phone. We have about 35 or so people in that organization.

And then lastly, focused primarily on the 1 to 3 space, we have a channel organization. Channel organization is working with our channel partners with the exclusive sell of Allscripts MyWay to that segment, which again will be exclusively sold through our channel partners itself. Does that help?

If I can clarify something, you had commented the first group of the direct salesforce, they are focused not only on the Misys base but also greenfield?

Yes, everything in their territory. They're initially focused on developing those relationships with the Misys install base and working those customers that have not yet made that EHR decision.

This idea is you get as a sales rep, you own this dirt. That is what we call it. You own the dirt, everything on it. Now you want to go for the low-hanging fruit first, and that is obviously if you have a Misys customer who has practice management, is very happy and wants to upgrade. But somebody calls in, we're at a trade show, leads come in. But you're expected to know every account in that area and call on 100% of the accounts in that area over time.

We're also -- Dan Michelson sitting in the back who is our Chief Marketing Officer, and his responsibility is whether it is Web, whether it is direct mail, whether it is shows, that everybody is getting touched; understands that we are there and we have solutions folks need.

May I ask one follow-up? I know you --

That's your second follow-up.

So you talked about quarterly independent structures for the salesforce in the past two quarters. Is that over or is that continuing?

We have a variety of incentive structures that we move around and apply where it makes the most sense. So we think what you want to do from a sales perspective is you want to consistently provide incentives but not the same incentives every quarter, because the salesforce is smart and they will figure out how to maximize that.

The greatest incentive that we give the salesforce this quarter is the deals done. So there is no more uncertainty from our customers or prospects about products or people or strategy or that sort of thing.

So it has been very good to get this deal done and get reengaged with those customers who were waiting to make a decision with the outcome of the merger to close.

What's really remarkable here is it's one salesforce. So normally when you do an integration like this, you sort of hedge a little bit and you have this group, have this product line, this group have that product line; no, no. This is one salesforce completely trained on every product that we are going forward with, and frankly, the territories were designed to give each rep X number of Misys install base accounts, so they were fairly evenly distributed across that salesforce. So we have a chance to get to those install base very quickly.

It also helped that other than a very few nonperformers, every quota carrying salesperson was retained and in addition, we're out hiring more. So from that perspective, it is always great if you are worried about you're competing with someone from the other side, this was, hey, we've got enough for everybody and then some.

In fact, today, one day post merger we are out there hiring, so the company continues to grow, continues to hire as well.

There was another question over here. Okay, on the phone? Let's take them -- I think she's going to come on if we have them on the phone. Go ahead.

Glen, I was just wondering, you sort of commented on the (inaudible) accounting environment and how it's affecting your business. I was just wondering if you could provide detail in terms of the timing? Is this something that started -- you started to see in mid September? Did it precede it or did it take place later as the stock market started to fall?

And then also if you could provide comments on the kinds of ways you are seeing it in the business in terms of are people lengthening the sales cycle, are they becoming more price sensitive, are they simply pushing things out saying, why don't you give me a call in sometime next year?

When we talk about the economy generally, we've not yet seen impacts to our business per se. I think we are being cautious from the standpoint of what is happening. And I think everybody is taking -- in every sector -- is taking more of a cautious approach to that. We think many of our situations will be immune. We've heard some conversations from hospitals talking about large capital expenditures that may have to be delayed. But again, given the size of our deals even in our enterprise unit or in our healthcare systems group, both of those are still -- they are not of a size where they are going to go outside for financing typically.

So that said, one of the concerns we will have to compete against is people just saying, we are putting everything on hold to see what happens to our business. I think that is consistent with every business leader I've talked to in every industry. We've got to be sensitive to that. Some people who are doing just fine are cutting back just in case. And we've got to be sensitive to that, but we've not yet seen any material impact in our business from that, but we are listening very closely to it.

If I can comment on -- we made very specific reference in the third quarter, I mean company specific the announcement of the Lehman situation, and its implication on our transaction absolutely had some ramification to the point that Vern just made. There is a certain level of overhang associated with the uncertainty around the transaction and preparedness of the salesforce coming together, what have you. So I would call that out.

Yes, and I think that Mike said that. The idea that people were uncertain as to whether the deal would happen, there's always uncertainty when you announce a deal. Then with the Lehman situation, there were a lot of people including our competitors out there saying, this is never going to happen; see, we told you.

And our salesforce, the best gift we could give them was Vern's comment which is, it is done, we are one, we are selling, we know the strategy, go at it. And that was the best thing. So you are right, Bill, that was a good call out.

Other questions? Yes.

Just following up on that, what is your normal sensitivity in terms of bookings toward the last two weeks in the quarter? Was this abnormally high just given the deal was going to happen, or I guess relative to at least our expectations, the miss was around 25% or year-over-year it was down 30%. Do you normally have that level of reliance on the last couple of quarters or so?

Well, I think there was clear sensitivity, and that is Bill's comment, which I'm glad he called it out, was there was question right toward the end. And I can tell you very specifically because I was sitting in front of one or two CEOs who said, Glen, we're going to make a commitment, in some cases a few million dollars. We aren't going to get started on this for another three weeks or a month because we are a bigger organization.

So why in the world, given what has happened with Lehman, would I sign today as opposed to waiting two or three weeks to make sure the deal gets done, make sure it's as you say? It's very tough to argue against that. That goes away once the deal is done, and you might expect we are back on the phone with those folks. But that is pretty -- so the deal uncertainty is different than the general economic uncertainty.

In terms of the closing of any quarter, it never ceases to amaze me. Mike has spent his career in sales heading IBM sales worldwide, and we were talking about now that we have shifted the timing on the quarter how amazing it is that salesforces know when the end of the quarter is. And it's not calendar; it's when that quarter ends. And it seems like the bulk of sales are always weighted toward the end of a quarter. I think that is just business.

That said, I'm not sure that it is more disproportionate than it has been in any other quarter that we have been at. Other questions? Yes.

(inaudible) I guess -- you understand on the Misys side why there would be deal uncertainty. But if I were buying TouchWorks, and if I get a little confused as to why that is going to throw any TouchWorks user off, I mean it's pretty evident that TouchWorks EMR is the product going forward. So unless I am thinking about buying a Misys tie here -- I'm doing this in two pieces. I'm going to buy TouchWorks now and Misys Tiger or Vision down the road; do I really care whether the deal goes forward if I'm one of your customers?

Well, as an example, you care because if you are a competitor, one of the things you are saying is, hey, Misys is buying Allscripts. All the Allscripts folks are going to leave, and you are going to have folks who are familiar who are expert at the smaller market running these big deals. You will say -- you're a salesperson; you are creating that FUD, that fear of uncertainty and doubt.

So those are the kinds of issues that you deal with, and people say let's just make sure, because this is -- remember, they are betting their careers on these decisions. So at the high end, you want to make certain that you know what the future strategy is. And if it is a matter of months, maybe you don't, maybe it doesn't matter. But when it's a week or two weeks or three weeks, you say we will know the answer, you are more likely to want to hold up.

That said, from a product perspective, I think TouchWorks now called Enterprise, no doubt that that is a go-forward strategy. So you are right.

I think -- I don't want to say it has very little to do with the product and everything to do. The quote/unqoute, doubt or uncertainty was around the company and what it was going to become, and less to do with the product strategy per se.

A perfect analogy I could give because I was in the midst of it was with AIG. All the noise was going on with AIG. We have actually a renewal process going on specific to certain insurance coverages. You want to do business with this company, there's all this uncertainty going around. At a minimum, it makes you do certain additional steps of due diligence, right?

So I think as a practical matter, that was at play.

Well, you've been generous with your time and we are coming up on two o'clock, so we appreciate it. We will be around; management will be around to answer your questions, but thanks very much. I can't tell you how we excited we are to have the transaction done and be out there selling. So thanks everybody.

This now concludes your conference call. You may now disconnect.