<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
MARCH 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
____________ TO ___________
Commission file number: 0-28212
SUNQUEST INFORMATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 86-0378223
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
4801 East Broadway Boulevard
Tucson, Arizona 85711
(Address of principal executive office) (Zip Code)
(520) 570-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [ X ] Yes [ ] No
On May 8, 1998, there were 15,380,483 shares of Common Stock outstanding.
<PAGE>
Sunquest Information Systems, Inc.
Form 10-Q
For the Quarterly Period Ended March 31, 1998
Table of Contents
Page
----
Part I. Financial Information
Item 1. Financial Statements
(a.) Condensed consolidated balance sheets as 3
of March 31, 1998 (unaudited) and December 31,
1997
(b.) Unaudited condensed consolidated 4
statements of income and comprehensive income
for each of the three month periods ended
March 31, 1998 and March 31, 1997
(c.) Unaudited condensed consolidated 5
statements of cash flows for each of the three
month periods ended March 31, 1998 and March
31, 1997
(d.) Unaudited notes to condensed consolidated 6
financial statements
Item 2. Management's Discussion and Analysis of 9
Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About 14
Market Risk
Part II. Other Information
Item 1. Legal Proceedings 15
Item 2. Changes in Securities and Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security 15
Holders
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
(a.) Exhibits 15
(b.) Reports on Form 8-K 15
Signatures 16
2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Sunquest Information Systems, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $25,936 $23,692
Trade receivables, net 34,104 36,547
Other current assets 2,016 2,166
Deferred tax asset 1,898 1,898
------- -------
Total current assets 63,954 64,303
Property and equipment, net 11,288 11,513
Capital leases from related party, net 3,898 4,096
Software development costs, net 12,164 12,252
Deferred tax asset 189 346
Other assets, net 1,610 1,663
------- -------
Total assets $93,103 $94,173
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $2,322 $3,401
Accrued compensation and related taxes 5,354 4,523
Accrued expenses 4,669 4,957
Obligations under capital leases,
primarily from related party 835 800
Deferred revenue 11,221 11,519
Deferred income taxes 13 13
Other liabilities 1,000 1,000
------- -------
Total current liabilities 25,414 26,213
Obligations under capital leases,
primarily from related party 4,858 5,080
Deferred income taxes 1,167 1,167
Transition costs 837 891
Other liabilities - 1,000
Shareholders' equity
Common stock 50,514 50,474
Retained earnings 10,330 9,403
Accumulated other comprehensive loss (17) (55)
------- -------
Total shareholders' equity 60,827 59,822
------- -------
Total liabilities and
shareholders' equity $93,103 $94,173
======= =======
</TABLE>
See accompanying notes.
3
<PAGE>
Sunquest Information Systems, Inc.
Condensed Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
Revenues:
System sales $15,706 $12,818
Support and service 12,908 11,789
------- -------
Total revenues 28,614 24,607
------- -------
Operating expenses:
Cost of system sales 7,892 6,393
Client services 7,863 6,119
Research and development 3,883 3,310
Sales and marketing 3,797 3,179
General and administrative 3,501 3,414
------- -------
Total operating expenses 26,936 22,415
------- -------
Operating income 1,678 2,192
Other income (expense):
Interest income 275 385
Interest expense (296) (124)
Other (50) (166)
------- -------
Income before income taxes 1,607 2,287
Income tax provision 680 984
------- -------
Net income $927 $1,303
Other comprehensive income (loss),
net of tax:
Foreign currency translation
adjustment 38 (92)
------- -------
Comprehensive income $965 $1,211
======= =======
Net income per share:
Basic and diluted $.06 $.08
======= =======
Weighted-average shares outstanding:
Basic 15,376 15,364
======= =======
Diluted 15,394 15,364
======= =======
</TABLE>
See accompanying notes.
4
<PAGE>
Sunquest Information Systems, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $927 $1,303
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 1,962 1,857
Bad debt expense 86 312
Deferred revenue (298) (872)
Deferred income taxes 157 -
Changes in operating assets and liabilities:
Receivables 2,357 (3,393)
Inventory 310 377
Prepaid expenses and other (121) (213)
Other assets (43) 693
Accounts payable (1,079) 1,139
Accrued compensation and related taxes 831 306
Other accrued expenses 282 579
------- -------
Net cash provided by operating activities 5,371 2,088
------- -------
Cash flows from investing activities:
Purchase of property and equipment (655) (2,726)
Costs related to acquisitions (624) (435)
Capitalized software development costs (1,739) (1,687)
------- -------
Net cash used in investing activities (3,018) (4,848)
------- -------
Cash flows from financing activities:
Principal payments on debt - (289)
Principal payments on capitalized
leases, primarily from related party (187) (159)
Net proceeds from employee stock
purchase plan 40 35
------- -------
Net cash used in financing activities (147) (413)
------- -------
Foreign currency translation adjustment 38 (92)
------- -------
Net increase (decrease) in cash
and cash equivalents 2,244 (3,265)
Cash and cash equivalents at beginning of
period 23,692 31,911
------- -------
Cash and cash equivalents at end of period $25,936 $28,646
======= =======
</TABLE>
See accompanying notes.
5
<PAGE>
Unaudited Notes to Condensed Consolidated Financial Statements
Note 1 - Interim Statement Presentation
The unaudited condensed consolidated financial statements of
Sunquest Information Systems, Inc. (the "Company") have been
prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission (the "Commission") and in
accordance with generally accepted accounting principles for the
preparation of interim financial statements. Accordingly,
certain information and footnote disclosures normally included in
annual financial statements have been omitted or condensed.
These unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial
statements and the notes thereto incorporated by reference into
the Company's 1997 Annual Report on Form 10-K filed with the
Commission. The 1997 balance sheet amounts were derived from
audited statements.
In the opinion of management, all necessary adjustments have been
made to provide a fair presentation to the unaudited financial
information. The operating results for the three months ended
March 31, 1998 are not necessarily indicative of the results that
may be expected for any other interim period or for the full year
ending December 31, 1998.
Certain prior year amounts have been reclassified to conform to
the current year presentation.
Note 2 - Employee Stock Purchase Plan
In the three months ended March 31, 1998, the Company issued
4,521 shares of its Common Stock for approximately $40,000
pursuant to the Employee Stock Purchase Plan.
Note 3 - Net Income Per Share
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" ("SFAS No.
128") effective December 31, 1997. Under the new provisions for
calculating earnings per share, the dilutive effect of stock
options has been excluded in the determination of "basic"
earnings per share and only included in "diluted" earnings per
share.
6
<PAGE>
In accordance with the disclosure requirements of SFAS No. 128, a
reconciliation of the numerator and denominator of basic and
diluted net income per share follows.
Three Months Ended
March 31,
----------------------
1998 1997
---------- ----------
Numerator for basic and diluted net
income per share:
Net income $927,000 $1,303,000
========== ==========
Denominator:
Denominator for basic net income per
share -- weighted-average shares 15,376,012 15,363,532
Effect of diluted securities:
Stock options 18,264 496
---------- ----------
Denominator for diluted net income
per share -- adjusted weighted-
average shares 15,394,276 15,364,028
========== ==========
Basic net income per share $.06 $.08
========== ==========
Diluted net income per share $.06 $.08
========== ==========
Note 4 - Impact of Recently Issued Accounting Standards
As of January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"), which requires businesses to disclose
comprehensive income and its components in general purpose
financial statements with reclassification of prior period
financial statements. The adoption of SFAS No. 130 had no
significant impact on the Company's financial statements.
As of January 1, 1998, the Company adopted Statement of
Position ("SOP") 97-2, "Software Revenue Recognition," which
revised certain aspects of SOP 91-1. The adoption of SOP 97-2
did not affect the Company's revenue recognition policies with
respect to software license fees which are recognized as part of
the Company's overall software contracts and are determined based
upon actual hours incurred related to total estimated
installation hours.
In March 1998, the American Institute of Certified Public
Accountants issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP
98-1 requires companies to capitalize qualifying computer
software costs incurred during the application development stage.
SOP 98-1 is effective for fiscal years beginning after December
15, 1998 and permits early adoption. The Company adopted SOP 98-1
in the first quarter of 1998. The adoption had no impact on
net income as the Company's policy was materially consistent with
the requirements of SOP 98-1.
7
<PAGE>
In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), which redefines how operating
segments are determined and requires disclosure of certain
financial and descriptive information about a company's operating
segments. SFAS No. 131 is effective for fiscal years beginning
after December 15, 1997. The Company is currently evaluating the
effects, if any, the adoption of this pronouncement will have on
the disclosure of its historical data at year end.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Sunquest Information Systems, Inc. designs, develops,
markets, installs and supports health care information systems
for large and mid-sized hospitals, clinics and other facilities,
including integrated delivery networks. Revenues are derived
from the licensing of software, the provision of value-added
services and the sale of related hardware.
Year 2000 Compliance
- --------------------
The year 2000 issue is the result of computer programs being
written using two digits rather than four to define the
applicable year. Any of the Company's software programs, whether
sold as products of the Company or used internally, may recognize
a date using "00" as the year 1900 rather than the year 2000.
This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a
temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
Based on a recent assessment, the Company believes that the
current releases of its products are all year 2000 compliant.
The Company plans to have all clients converted to year 2000
compliant versions of its products by December 1999. Pursuant to
contract terms, clients are obligated to cooperate with the
Company in the installation of system enhancements, including the
current year 2000 compliant versions.
In addition, the Company has determined that only a small
portion of software programs developed by other vendors and
utilized internally will require upgrades to new versions to
properly utilize dates beyond December 31, 1999. After reviewing
the plans of these vendors, the Company believes that the
upgrades to such software programs will be completed by the end
of 1998. The cost of year 2000 compliant software related to
systems developed by other vendors and used internally is
included in maintenance agreements. The Company believes that
consulting costs incurred in accomplishing the installation of
year 2000 compliant software will be immaterial.
The results of operations for the three months ended March
31, 1998 are not necessarily indicative of the results that may
be expected for any other interim period or for the full year
ending December 31, 1998.
Results of Operations
- ---------------------
Comparison of Three Months Ended March 31, 1998 and March 31, 1997
Revenues. The Company's total revenues were $28.6 million
for the three months ended March 31, 1998 compared to $24.6
million for the three months ended March 31, 1997, an increase of
$4.0 million, or 16.3%. Revenues from system sales were $15.7
million for the three
9
<PAGE>
months ended March 31, 1998 compared to $12.8 million for the three
months ended March 31, 1997, an increase of $2.9 million, or 22.5%.
This increase was primarily attributable to increases in installations
of hardware and software for existing customers. Revenues from support
and service were $12.9 million for the three months ended March 31,
1998 compared to $11.8 million for the three months ended March
31, 1997, an increase of $1.1 million, or 9.5%. This increase
was primarily attributable to the Company's increased installed
customer base.
At March 31, 1998, the Company had a total contract backlog
of $96.7 million, which consisted of $43.2 million of system
sales and $53.5 million of support and service. The Company's
total contract backlog at December 31, 1997, was $99.5 million,
which consisted of $49.3 million of system sales and $50.2
million of support and service. The $2.8 million decrease from
December 31, 1997 was primarily attributable to hardware
shipments of sales booked in the fourth quarter of 1997. At
March 31, 1997, total contract backlog was $82.2 million, which
consisted of $37.0 million of system sales and $45.2 million of
support and service.
Cost of System Sales. Cost of system sales was $7.9 million
for the three months ended March 31, 1998 compared to $6.4
million for the three months ended March 31, 1997, an increase of
$1.5 million, or 23.4%. As a percentage of total revenues, cost
of system sales was 27.6% in 1998 compared to 26.0% in 1997. The
dollar increase was primarily attributable to increases in
hardware and operating system deliveries. Amortization of
previously capitalized software development costs was $827,000
for the three months ended March 31, 1998 compared to $875,000
for the three months ended March 31, 1997, a decrease of $48,000,
or 5.5%. The decrease in amortization was primarily attributable
to the reduction in carrying value of IntelliCare software in the
third and fourth quarters of 1997.
Client Services. Client services expenses were $7.9 million
for the three months ended March 31, 1998 compared to $6.1
million for the three months ended March 31, 1997, an increase of
$1.7 million, or 28.5%. As a percentage of total revenues,
client services expenses were 27.5% in 1998 compared to 24.9% in
1997. The dollar increase was primarily attributable to
additional staff dedicated to the support and installation of the
Company's systems, additional staff dedicated to providing
consulting services to customers and the addition of Sunquest
Pharmacy Information Systems, Inc. ("Sunquest Pharmacy"), a newly
formed subsidiary of the Company.
Research and Development. Research and development expenses
were $3.9 million for the three months ended March 31, 1998
compared to $3.3 million for the three months ended March 31,
1997, an increase of $573,000, or 17.3%. As a percentage of
total revenues, research and development expenses were 13.6% in
1998 compared to 13.4% in 1997. The dollar increase in research
and development expenses was primarily attributable to increased
staff dedicated to the development, enhancement and documentation
of the Company's laboratory, pharmacy, reference laboratory and
Clinical Event Manager systems partially offset by decreased
expenses related to the IntelliCare suite of products. During
the fourth quarter of 1997, the Company discontinued the sale of
its IntelliCare suite of products as an enterprise-wide
computerized patient record solution and the related development
of a nurse clinical documentation system.
10
<PAGE>
The Company capitalized $739,000 of its software development costs
for the three months ended March 31, 1998 compared to $687,000 for the
three months ended March 31, 1997.
Sales and Marketing. Sales and marketing expenses were $3.8
million for the three months ended March 31, 1998 compared to
$3.2 million for the three months ended March 31, 1997, an
increase of $618,000, or 19.4%. As a percentage of total
revenues, sales and marketing expenses were 13.3% in 1998
compared to 12.9% in 1997. The dollar increase was primarily
attributable to increased travel costs related to sales efforts
and increased sales staff specializing in new product offerings
partially offset by a decrease in advertising expense.
General and Administrative. General and administrative
expenses were $3.5 million for the three months ended March 31,
1998 compared to $3.4 million for the three months ended March
31, 1997, an increase of $87,000, or 2.5%. As a percentage of
total revenues, general and administrative expenses were 12.2% in
1998 compared to 13.9% in 1997. The dollar increase was
primarily attributable to the addition of Sunquest Pharmacy.
Transition Costs. For the three months ended March 31,
1998, the Company paid previously accrued transition costs
established at the time of the acquisition of Antrim of $481,000
as compared to $435,000 paid during the corresponding period in
1997. These costs were primarily associated with replacing
certain Antrim software products with Sunquest products. In
addition, during the three months ended March 31, 1998, the
Company paid transition costs related to the purchase of the
PreciseCare Medication Management System ("PreciseCare") of
$117,000. These costs were primarily associated with employee
costs and professional services related to the purchase.
Liquidity and Capital Resources
- -------------------------------
At March 31, 1998, the Company had cash and cash equivalents
of $25.9 million compared to $23.7 million at December 31, 1997
and $28.6 million at March 31, 1997, an increase of $2.2 million
and a decrease of $2.7 million, respectively. Cash provided by
operating activities was $5.4 million for the three months ended
March 31, 1998 compared to $2.1 million for the three months
ended March 31, 1997.
As of March 31, 1998, the Company had net trade receivables
of $34.1 million which consisted of $24.1 million in net billed
trade receivables and $10.0 million in unbilled trade
receivables. At December 31, 1997, the Company had net trade
receivables of $36.5 million which consisted of $27.9 million in
net billed trade receivables and $8.6 million in unbilled trade
receivables. Net trade receivables have decreased by $2.4
million since December 31, 1997, with $3.8 million related to
collections on the billed portion offset by an increase of $1.4
million in the unbilled portion. The unbilled receivables
represent revenue that has been recognized in accordance with the
percentage-of-completion accounting method, but which has not yet
been billed to customers under contractual milestone billings.
The Company believes that this increase in unbilled receivables
is primarily a result of the timing of system sales and
installations in the year. The Company maintains an allowance for
doubtful accounts that it believes is adequate to
11
<PAGE>
cover potential credit losses. The average collection period, a
rolling twelve-month average, on net billed trade receivables was
92 days at March 31, 1998 compared to 91 days at December 31, 1997.
Days sales outstanding ("DSO") was 107 at March 31, 1998 compared to
129 at December 31, 1997. The improvement in DSO was attributable
to accelerated collection efforts.
Cash used in investing activities was $3.0 million for the
three months ended March 31, 1998. Capitalized software
development costs totaled $1.7 million. Of this amount, $1.0
million was related to the second payment under the Value Added
Reseller ("VAR") agreement with Dynamic Healthcare Technologies,
Inc. ("Dynamic") for the license of a software program known as
CoPath Client/Server. Purchases of property and equipment
totaled $655,000 and consisted primarily of purchases of
computers and computer-related equipment. Costs related to
acquisitions totaled $624,000. Of this amount, $507,000 was
related to Antrim and was primarily associated with replacing
certain Antrim software products with Sunquest products. In
addition, the Company also paid transition costs related to the
purchase of the PreciseCare software of $117,000. These costs
were primarily associated with employee costs and professional
services related to the purchase.
Cash used in financing activities was $147,000 for the three
months ended March 31, 1998. Of this amount, $187,000 was used
for principal payments on capital leases. This amount was
partially offset by the issuance of 4,521 shares of the Company's
Common Stock for approximately $40,000 under the Employee Stock
Purchase Plan.
At March 31, 1998, working capital was $38.5 million
compared to $38.1 million at December 31, 1997.
The Company has a revolving line of credit with a bank
allowing the Company to borrow up to $10.0 million. Any
borrowings under the line of credit will bear interest at the
bank reference rate unless the Company elects a fixed rate or
certain variable rates contemplated by the agreement. All
outstanding principal and interest under the line of credit is
due April 30, 1999 except for any amounts outstanding under stand-
by letters of credit which have a maximum maturity of 365 days.
Borrowings under the line of credit are secured by all of the
Company's assets. Approximately $204,000 of the line of credit
is used to secure a letter of credit and is not available for
immediate expenditure. There were no borrowings outstanding as
of March 31, 1998.
Other than the final payment of $1.0 million related to the
VAR agreement with Dynamic, the Company has no significant
commitments for capital expenditures at this time. However, the
Company continues to be actively involved in identifying and
evaluating potential acquisitions which may result in the future
expenditure of funds.
Management believes that existing cash and cash equivalents,
cash available under its revolving line of credit and funds
generated from operations will be sufficient to meet operating
requirements for at least the next twelve months.
12
<PAGE>
To date, inflation has not had a material impact on the
Company's revenues or income, and the Company does not expect
inflation to have a material impact in the foreseeable future.
New Accounting Standards
- ------------------------
As of January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"), which requires businesses to disclose
comprehensive income and its components in general purpose
financial statements with reclassification of prior period
financial statements. The adoption of SFAS No. 130 had no
significant impact on the Company's financial statements.
As of January 1, 1998, the Company adopted Statement of
Position ("SOP") 97-2, "Software Revenue Recognition," which
revised certain aspects of SOP 91-1. The adoption of SOP 97-2
did not affect the Company's revenue recognition policies with
respect to software license fees which are recognized as part of
the Company's overall software contracts and are determined based
upon actual hours incurred related to total estimated
installation hours.
In March 1998, the American Institute of Certified Public
Accountants issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP
98-1 requires companies to capitalize qualifying computer
software costs incurred during the application development stage.
SOP 98-1 is effective for fiscal years beginning after December
15, 1998 and permits early adoption. The Company adopted SOP 98-
1 in the first quarter of 1998. The adoption had no impact on
net income as the Company's policy was materially consistent with
the requirements of SOP 98-1.
In June 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information" ("SFAS No. 131"), which redefines how operating
segments are determined and requires disclosure of certain
financial and descriptive information about a company's operating
segments. SFAS No. 131 is effective for fiscal years beginning
after December 15, 1997. The Company is currently evaluating the
effects, if any, the adoption of this pronouncement will have on
the disclosure of its historical data at year end.
13
<PAGE>
Forward-Looking Statements
- --------------------------
This report, and other reports and communications to
shareholders, contains forward-looking statements, including
statements which contain words such as "will," "expects,"
"believes," "plans," "anticipates" and words of similar impact.
Certain risk factors, including but not limited to dependence on
laboratory information system products, competition in the
marketplace, purchase and installation decisions of customers,
pricing decisions of competitors and development risks and
uncertainties could cause actual results to differ materially
from such forward-looking statements. These and other risks are
detailed in the Company's 1997 Annual Report on Form 10-K filed
with Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not applicable.
14
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
27G - Financial Data Schedule, filed herewith.
(b.) Reports on Form 8-K
No reports on Form 8-K were filed by the
registrant during the quarter ended March 31,
1998.
15
<PAGE>
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 thereunto duly authorized.
SUNQUEST INFORMATION SYSTEMS, INC.
(Registrant)
Date: May 11, 1998 By: /s/ Nina M. Dmetruk
____________________________________________
Nina M. Dmetruk
Executive Vice President and Chief
Financial Officer
(Principal Financial and Accounting Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 25936
<SECURITIES> 0
<RECEIVABLES> 35364
<ALLOWANCES> 1260
<INVENTORY> 355
<CURRENT-ASSETS> 63954
<PP&E> 19159
<DEPRECIATION> 7871
<TOTAL-ASSETS> 93103
<CURRENT-LIABILITIES> 25414
<BONDS> 0
0
0
<COMMON> 50514
<OTHER-SE> 10313
<TOTAL-LIABILITY-AND-EQUITY> 93103
<SALES> 28614
<TOTAL-REVENUES> 28614
<CGS> 7892
<TOTAL-COSTS> 15755
<OTHER-EXPENSES> 3883
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296
<INCOME-PRETAX> 1607
<INCOME-TAX> 680
<INCOME-CONTINUING> 927
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 927
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
