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Cerner Reports First Quarter 2013 Results

Cerner Reports First Quarter 2013 Results

Strong Bookings, Earnings and Cash Flow

KANSAS CITY, Mo., April 25, 2013 (GLOBE NEWSWIRE) -- Cerner Corporation
(Nasdaq:CERN) today announced results for the 2013 first quarter that ended
March 30, 2013, delivering strong levels of bookings, earnings and cash flow.

Bookings in the first quarter of 2013 were $801.6 million, an all-time high
for a first quarter and an increase of 23 percent compared to first quarter
2012 bookings of $652.3 million.

First quarter revenue was $680.0 million, an increase of six percent compared
to $641.2 million in the year-ago period. Revenue growth was below Cerner's
expectations due to reduced levels of low-margin technology resale. This had
no material impact on earnings, which were above expectations due to strength
in other areas.

On a U.S. Generally Accepted Accounting Principles (GAAP) basis, first quarter
2013 net earnings were $110.0 million and diluted earnings per share were
$0.62. First quarter 2012 GAAP net earnings were $88.7 million and diluted
earnings per share were $0.51.

Adjusted (non-GAAP) Net Earnings

Adjusted net earnings for first quarter 2013 were $116.9 million, an increase
of 24 percent compared to $94.2 million of adjusted net earnings in the first
quarter of 2012. Adjusted diluted earnings per share were $0.66 in the first
quarter of 2013 compared to $0.54 of adjusted diluted earnings per share in
the year-ago quarter. Analysts' consensus estimate for first quarter 2013
adjusted diluted earnings per share was $0.63.

Adjusted net earnings is not a recognized term under GAAP and should not be
substituted for net earnings as a measure of Cerner's performance but instead
should be utilized as a supplemental measure of financial performance in
evaluating our business. Following is a description of adjustments made to net
earnings. For more detail, please see the accompanying schedule, titled
"Reconciliation of GAAP Results to Non-GAAP Results."

Adjusted net earnings and diluted earnings per share exclude share-based
compensation expense, which reduced first quarter 2013 net earnings and
diluted earnings per share by $6.9 million and $0.04, respectively; and
reduced first quarter 2012 net earnings and diluted earnings per share by $5.5
million and $0.03, respectively.

Other 2013 First Quarter Highlights:

  *First quarter cash collections of $784.0 million and operating cash flow
    of $213.6 million.
  *First quarter free cash flow of $129.9 million. Free cash flow is a
    non-GAAP financial measure defined as GAAP cash flows from operating
    activities less capital purchases and capitalized software development
    costs. For more detail, please see the accompanying schedule, titled
    "Reconciliation of GAAP Results to Non-GAAP Results."
  *First quarter days sales outstanding of 69 days, which is down from 76
    days in the year-ago quarter.
  *Total backlog of $7.58 billion, up 21 percent over the year-ago quarter.
    This was comprised of $6.83 billion of contract backlog and $747.9 million
    of support and maintenance backlog.

"We got off to a good start in 2013, with almost all key metrics above
expected levels, including very strong bookings, earnings and cash flow," Neal
Patterson, Cerner chairman, CEO, president and co-founder said. "We expect
2013 to be a very good year, as we have a significant pipeline of
opportunities both with existing clients and prospective clients. In addition,
we are continuing to invest heavily in research and development to widen our
competitive advantages and position ourselves for sustained growth throughout
this decade."

Future Period Guidance

Cerner currently expects:

  *Second quarter 2013 revenue between $705 million and $735 million.
  *Full year 2013 revenue between $2.95 billion and $3.05 billion.
  *Second quarter 2013 adjusted diluted earnings per share before share-based
    compensation expense between $0.66 and $0.68.
  *Full year 2013 adjusted diluted earnings per share before share-based
    compensation expense between $2.78 and $2.83, up from a prior range of
    $2.75 to $2.82.
  *Second quarter 2013 new business bookings between $825 million and $875
    million.
  *Share-based compensation expense to reduce diluted earnings per share by
    approximately $0.04 to $0.05 in the second quarter of 2013 and between
    $0.17 and $0.18 for the year.

Earnings Conference Call

Cerner will host an earnings conference call to provide additional detail on
these results at 3:30 p.m. CT on April 25. The dial-in number for the
conference call is (617) 614-3453; the passcode is Cerner. Cerner recommends
joining the call 15 minutes early for registration. The re-broadcast of the
call will be available from 5:30 p.m. CT, April 25 through 11:59 p.m. CT,
April 28. The dial-in number for the re-broadcast is (617)-801-6888; the
passcode is 82194650.

An audio webcast will be available live and archived on Cerner's website at
www.cerner.com under the About Cerner section (click Investor Relations, then
Presentations and Webcasts).

About Cerner

Cerner is contributing to the systemic change of health and care delivery. For
more than 30 years Cerner has been executing its vision to make health care
safer and more efficient. We started with the foundation of digitizing paper
processes and now offer the most comprehensive array of information software,
professional services, medical device integration, remote hosting and employer
health and wellness services. Cerner systems are used by everyone from
individual consumers, to single-doctor practices, hospitals, employers and
entire countries. Taking what we've learned over more than three decades,
Cerner is building on the knowledge that is in the system to support
evidence-based clinical decisions, prevent medical errors and empower patients
in their care.

Cerner^® solutions are licensed by approximately 10,000 facilities around the
world, including more than 2,700 hospitals; 4,150 physician practices; 45,000
physicians; 550 ambulatory facilities, such as laboratories, ambulatory
centers, behavioral health centers, cardiac facilities, radiology clinics and
surgery centers; 800 home health facilities; 45 employer sites and 1,750
retail pharmacies.

Certain trademarks, service marks and logos (collectively, the "Marks") set
forth herein are owned by Cerner Corporation and/or its subsidiaries in the
United States and certain other countries throughout the world. All other
non-Cerner Marks are the property of their respective owners. Nasdaq: CERN.
For more information about Cerner, please visit www.cerner.com,  Twitter,
Facebook and YouTube.

This release contains forward-looking statements that involve a number of
risks and uncertainties. It is important to note that Cerner's performance,
and actual results, financial condition or business could differ materially
from those expressed in such forward-looking statements. The words "expect",
"position", "guidance", "believe", "estimate" or the negative of these words,
variations thereof or similar expressions are intended to identify such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to: the possibility of
product-related liabilities; potential claims for system errors and
warranties; the possibility of interruption at our data centers or client
support facilities; our proprietary technology may be subject to claims for
infringement or misappropriation of intellectual property rights of others, or
may be infringed or misappropriated by others; risks associated with our
non-U.S. operations; risks associated with our ability to effectively hedge
exposure to fluctuations in foreign currency exchange rates; the potential for
tax legislation initiatives that could adversely affect our tax position
and/or challenges to our tax positions in the United States and non-U.S.
countries; risks associated with our recruitment and retention of key
personnel; risks related to our dependence on third party suppliers; risks
inherent with business acquisitions; the potential for losses resulting from
asset impairment charges; risks associated with uncertainty in global economic
conditions; managing growth in the new markets in which we offer solutions,
health care devices and services; changing political, economic, regulatory and
judicial influences; government regulation; significant competition and market
changes; variations in our quarterly operating results; potential
inconsistencies in our sales forecasts compared to actual sales; volatility in
the trading price of our common stock and the timing and volume of market
activity; our directors' authority to issue preferred stock and the
anti-takeover provisions in our corporate governance documents; and material
adverse resolution of legal proceedings. Additional discussion of these and
other risks, uncertainties and factors affecting Cerner's business is
contained in Cerner's periodic filings with the Securities and Exchange
Commission. The reader should not place undue reliance on forward-looking
statements, since the statements speak only as of the date that they are made.
Cerner undertakes no obligation to update forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
in future operating results, financial condition or business over time.

CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 30, 2013 and March 31, 2012
(unaudited)                                                
                                                          
(In thousands, except per share data)    Three Months Ended
                                        2013 (1)           2012 (1)
Revenues                                                   
System sales                             $198,902         $225,820
Support, maintenance and services        466,556           403,904
Reimbursed travel                        14,571            11,488
Total revenues                           680,029           641,212
                                                          
Margin                                                     
System sales                             117,419           108,865
Support, maintenance and services        435,381           374,339
Total margin                             552,800           483,204
                                                          
Operating expenses                                         
Sales and client service                 267,356           245,074
Software development                     81,063            71,145
General and administrative               47,812            39,546
Total operating expenses                 396,231           355,765
                                                          
Operating earnings                       156,569           127,439
                                                          
Other income, net                        3,044             2,624
                                                          
Earnings before income taxes             159,613           130,063
Income taxes                             (49,573)          (41,355)
Net earnings                             $110,040         $88,708
                                                          
Basic earnings per share                 $0.64            $0.52
                                                          
Basic weighted average shares            172,032           169,968
outstanding
                                                          
Diluted earnings per share               $0.62            $0.51
                                                          
Diluted weighted average shares          176,413           175,027
outstanding
                                                          
Note 1: Operating expenses for the three months ended March 30, 2013 and March
31, 2012 include share-based compensation expense. The impact of this expense
on net earnings and diluted earnings per share is presented below:
                                                          
(In thousands, except per share data)    Three Months Ended
                                        2013               2012
                                                          
Sales and client service                 $5,018           $3,862
Software development                     2,325             1,968
General and administrative               3,883             3,119
Total share-based compensation           11,226            8,949
Amount of related income tax benefit     (4,356)           (3,423)
Net impact on net earnings               $6,870           $5,526
                                                          
Decrease to diluted earnings per share   $0.04            $0.03


CERNER CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP RESULTS TO NON-GAAP RESULTS^1
For the three months ended March 30, 2013 and March 31, 2012
(unaudited)
                                                          
RECONCILIATION OF ADJUSTED NET EARNINGS TO GAAP NET EARNINGS^1
                                                          
(In thousands)                         Three Months Ended
                                      2013                 2012
Net Earnings                                               
Net earnings (GAAP)                    $110,040           $88,708
Share-based compensation expense       11,226              8,949
Income tax benefit of share-based      (4,356)             (3,423)
compensation
Adjusted net earnings (non-GAAP)^2     $116,910           $94,234
                                                          
RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE TO GAAP DILUTED EARNINGS
PER SHARE^1
                                                          
                                      Three Months Ended
                                      2013                 2012
Diluted Earnings Per Share                                 
Diluted earnings per share (GAAP)      $0.62              $0.51
Share-based compensation expense (net  0.04                0.03
of tax)
Adjusted diluted earnings per share    $0.66              $0.54
(non-GAAP)^2
                                                          
RECONCILIATION OF NON-GAAP FREE CASH FLOW TO GAAP OPERATING CASH FLOW^1
                                                          
(In thousands)                         Three Months Ended
                                      2013                 2012
Cash flows from operating activities   $213,648           $162,708
(GAAP)
Capital purchases                      (49,451)            (26,363)
Capitalized software development costs (34,334)            (23,080)
Free cash flow (non-GAAP)^3            $129,863           $113,265
                                                          
Note 1: The presentation of Adjusted Diluted Earnings per Share, Adjusted Net
Earnings and Free Cash Flow, non-GAAP financial measures, are not meant to be
considered in isolation, nor as a substitute for, or superior to, Generally
Accepted Accounting Principles (GAAP) results and investors should be aware
that non-GAAP measures have inherent limitations and should be read only in
conjunction with Cerner's consolidated financial statements prepared in
accordance with GAAP. Adjusted Diluted Earnings per Share, Adjusted Net
Earnings and Free Cash Flow may also be different from similar non-GAAP
financial measures used by other companies and may not be comparable to
similarly titled captions of other companies due to potential inconsistencies
in the method of calculations. We believe that Adjusted Diluted Earnings per
Share, Adjusted Net Earnings and Free Cash Flow are important to enable
investors to better understand and evaluate our ongoing operating results and
allows for more comprehensive review and understanding of our overall
financial, operational and economic performance.
                                                          
Note 2: Cerner provides earnings with and without share-based compensation
expense because earnings excluding this expense is used by management along
with GAAP results to analyze its business, make strategic decisions and for
management compensation purposes.
                                                          
Note 3: Cerner provides free cash flow because it takes into account the
capital expenditures necessary to operate our business.


CERNER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 30, 2013 (unaudited) and December 29, 2012
                                                                
(In thousands)                                       2013         2012
                                                                
Assets                                                           
Current assets:                                                  
Cash and cash equivalents                            $281,458   $317,120
Short-term investments                               723,693     719,665
Receivables, net                                     512,078     577,848
Inventory                                            22,106      23,681
Prepaid expenses and other                           149,406     113,572
Deferred income taxes, net                           38,819      38,620
Total current assets                                 1,727,560   1,790,506
                                                                
Property and equipment, net                          606,449     569,708
Software development costs, net                      279,516     267,307
Goodwill                                             306,155     247,616
Intangible assets, net                               151,193     132,045
Long-term investments                                515,858     509,467
Other assets                                         178,418     187,819
Total assets                                         $3,765,149 $3,704,468
                                                                
Liabilities and Shareholders' Equity                             
Current liabilities:                                             
Accounts payable                                     $148,877   $141,212
Current installments of long-term debt and capital   46,905      59,582
lease obligations
Deferred revenue                                     193,969     189,652
Accrued payroll and tax withholdings                 106,924     125,253
Other accrued expenses                               75,748      64,413
Total current liabilities                            572,423     580,112
                                                                
Long-term debt and capital lease obligations         135,470     136,557
Deferred income taxes and other liabilities          148,686     143,212
Deferred revenue                                     9,330       10,937
Total liabilities                                    865,909     870,818
                                                                
Shareholders' Equity:                                            
Common stock                                         1,726       1,721
Additional paid-in capital                           870,308     842,490
Retained earnings                                    2,104,734   1,994,694
Treasury stock                                       (63,241)    --
Accumulated other comprehensive loss, net            (14,287)    (5,255)
Total shareholders' equity                           2,899,240   2,833,650
Total liabilities and shareholders' equity           $3,765,149 $3,704,468

CONTACT: Investor Contact: Allan Kells, (816) 201-2445,
         akells@cerner.com
         Media Contact: Megan Moriarty, (816) 888-2470,
         megan.moriarty@cerner.com
         Cerner's Internet Home Page: www.cerner.com