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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
June 23, 2000
(Date of Report)
June 21, 2000
(Date of earliest event reported)
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Commission File Number 0-26816
IDX SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Vermont 03-0222230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 Shelburne Road
South Burlington, VT 05403
(Address of principal executive offices)
Registrant's telephone number, including area code: (802-862-1022)
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Exhibit Index on Page 2 of 5
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ITEM 5. OTHER EVENTS
On June 21, 2000, the Company announced preliminary second quarter
results and the implementation of a cost reduction and workforce restructuring
program estimated to result in a work-force reduction of approximately five
percent.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
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EXHIBIT NO. DESCRIPTION PAGE
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99 IDX News Release dated 4
June 21, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IDX SYSTEMS CORPORATION
(Registrant)
Date: June 23, 2000 /S/ JOHN A. KANE
__________________________________________
John A. Kane
Vice President, Finance and Administration
Chief Financial Officer, and Treasurer
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EXHIBIT 99
IDX Systems Corporation
1400 Shelburne Road
P.O. Box 1070
Burlington, VT 05402-1070
www.idx.com
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Contacts: Jack Kane Margo Happer
Chief Financial Officer Director - Investor Relations
802-862-1022 802-864-1758 X6169
FOR IMMEDIATE RELEASE
IDX SYSTEMS CORPORATION
REPORTS PRELIMINARY SECOND QUARTER RESULTS
ANNOUNCES COST-REDUCTION PROGRAM
BURLINGTON, VT - June 21, 2000 - IDX Systems Corporation (NASDAQ:IDXC) announced
that based on information available to date, total revenues for the second
quarter, ending June 30, 2000, are expected to be approximately $75-80 million
compared with $90.3 million in the second quarter of 1999. The Company expects a
second quarter net loss from continuing operations, excluding any special
charges, of ($0.30) to ($0.35), compared with net income from operations of
$0.02 during the same period last year. IDX plans to report final second quarter
results on July 20, 2000.
Anticipated second quarter revenue reflects continued weak sales in the
Company's core systems business, caused by an industry-wide slowdown in
healthcare information technology (HCIT) spending. Factors contributing to the
anticipated net loss in the second quarter include increased development
expenses associated with ChannelHealth, the Company's Internet subsidiary, and a
general decrease in gross margin. Gross margin decline is generally due to a
decrease in software license revenues, which provide higher gross profit margin,
as well as the effect of an increase in maintenance and service revenues, which
provide a lower gross profit margin.
"Although we continue to see increased interest in our products and services,
the sales cycle remains long," said Richard E. Tarrant, Chief Executive Officer
of IDX. "We expect the HCIT market to remain soft in the near term, as our
customers adapt to reduced budgets under the federal Balanced Budget Amendment
and await finalization of the Health Insurance Portability and Accountability
Act of 1996. Given current market conditions, we believe that total revenue
growth in 2000 will be below our previous guidance of 10% and that profitability
in the core business may be pushed out until late this year or early in 2001."
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"We have made significant progress in keeping administrative costs under
control, but given lower customer spending, we are taking further action," said
James H. Crook, Jr., President and Chief Operating Officer. "We are implementing
a cost reduction and workforce restructuring program that will focus our
resources on activities that we believe are most likely to be profitable and
drive growth. We will halt development and discontinue sales efforts on three
product lines that have failed to achieve business targets or have been deemed
non-strategic to the business going forward. In addition, we are implementing a
work-force reduction of approximately five percent. We are confident that taking
these steps now will enable us to better manage in this difficult environment as
well as position us to grow when the HCIT market recovers."
The Company expects the cost reduction program to decrease annual expenses by
approximately $10.0 million on a pre-tax basis. Savings in 2000 are expected to
total $6.0 million beginning in the third quarter. The program is expected to
result in a one-time charge to earnings in the range of approximately $19-23
million in the second quarter, primarily in connection with costs associated
with product discontinuations and severance arrangements.
Founded in 1969, IDX Systems Corporation provides complete healthcare
information solutions for physician group practices, management service
organizations, academic medical centers, and integrated delivery networks
(IDNs). To connect systems and sites across the enterprise, IDX offers a
comprehensive set of products and services designed to align physicians and
hospitals, streamline patient flow, enhance quality, and reduce costs. IDX
products are used by, or are under contract to be used by, more than 118,000
physicians and are installed at over 2,065 client sites. This includes more than
265 large physician group practices with more than 75 physicians, more than 510
physician practices with 75 or fewer physicians, and more than 280 IDNs
representing over 370 hospitals. EDiX Corporation, an IDX subsidiary, offers
Internet-based medical transcription and clinical documentation services to over
130 physician group and hospital customers. IDX subsidiary ChannelHealth(TM)
brings Internet services to physicians and patients and the connectivity and
e-commerce services required to improve the physician-patient experience and
support efficient healthcare delivery.
THIS MATERIAL CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS
AND UNCERTAINTIES. AMONG THE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS ARE
POSSIBLE DEFERRAL, DELAY OR CANCELLATION BY CUSTOMERS OF COMPUTER SYSTEM
PURCHASE DECISIONS, INCLUDING UNCERTAINTIES IN PURSUING THE COMPANY'S INTERNET
STRATEGY THROUGH CHANNELHEALTH, POSSIBLE DELAY OF SYSTEMS INSTALLATIONS,
DEVELOPMENT BY COMPETITORS OF NEW OR SUPERIOR TECHNOLOGIES, CHANGING ECONOMIC,
POLITICAL AND REGULATORY INFLUENCES ON THE HEALTHCARE AND INTERNET INDUSTRIES,
CHANGES IN PRODUCT PRICING POLICIES, GENERAL ECONOMIC CONDITIONS, AND FACTORS
DETAILED FROM TIME TO TIME IN THE COMPANY'S PERIODIC REPORTS AND REGISTRATION
STATEMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH IMPORTANT
FACTORS ARE INCORPORATED HEREIN BY REFERENCE. THE COMPANY 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.
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