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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
Date of report (Date of earliest event reported): May 1, 2000
Shared Medical Systems Corporation
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-7416 23-1704148
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(State or Other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
51 Valley Stream Parkway, Malvern, Pennsylvania 19355
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 610-219-6300
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Not Applicable
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(Former name or former address, if changed since last report.)
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ITEM 5. Other Events.
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On May 1, 2000, the Company and Siemens Corporation announced that they
have entered into a definitive agreement for Siemens Corporation, a subsidiary
of Siemens AG, to acquire the Company.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits.
99.1 Press Release dated May 1, 2000
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.
SHARED MEDICAL SYSTEMS CORPORATION
By: /s/ Terrence W. Kyle
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Terrence W. Kyle
Senior Vice President,
Chief Financial Officer,
Treasurer, and Assistant
Secretary
May 1, 2000
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Exhibit 99.1
SMS TO BE ACQUIRED BY SIEMENS CORPORATION
SHARED MEDICAL SYSTEMS CORPORATION REPORTS RESULTS
FOR FIRST QUARTER ENDED MARCH 31, 2000
MALVERN PA -- May 1, 2000 - Siemens Corporation and Shared Medical System
Corporation (SMS) (NYSE: SMS) today announced that they have entered into a
definitive agreement for Siemens Corporation, a subsidiary of Siemens AG, to
acquire SMS.
Under the terms of the agreement, Siemens will make a cash tender offer for all
of the outstanding common stock of SMS at a price of $73 per share. The value of
the deal is approximately $2.1 billion. The transaction was approved by the SMS
Board of Directors. It is subject to certain conditions including, receipt of
regulatory approvals under the Hart-Scott-Rodino Antitrust Improvements Act of
1976 and receipt of approval from German antitrust authorities. The transaction
is expected to be completed before June 30, 2000.
Dr. Erich R. Reinhardt, President, Siemens AG's Medical Engineering Group
commented, "Combining Siemens innovative technology and know-how with SMS'
advanced information systems will enable us to generate greater efficiencies for
healthcare providers around the world. SMS' systems, services and the expertise
of its employees will help us to further our goal of providing complete
solutions for the healthcare industry."
Marvin S. Cadwell, President and CEO, of SMS stated, "This agreement unites SMS
with one of the world's largest and most profitable companies serving the
healthcare marketplace. We are excited about the opportunities that this
presents for our employees and customers and the value it provides to our
shareholders. We share a dedication to providing solutions that improve the
quality and efficiency of healthcare. I believe that this merger will enable us
to better meet the demands of today's dynamic healthcare marketplace."
At the same time, the Company reported total revenues for the first quarter of
$240.6 million, a decrease of 16% compared to $287.1 million for the same period
in 1999. Consolidated service and system fee revenues totaled $222.1 million, a
decrease of 15% compared with $259.8 million for first quarter 1999. Net income
for the first quarter was $2.7 million, compared with $18.3 million in the first
quarter of 1999. Diluted net income per share for the quarter was $.10, compared
with $.68 for the same period in 1999.
Added Marvin S. Cadwell, President and CEO of SMS, "During the quarter, our
earnings were negatively impacted by an industry-wide weakness in new software
sales and a slower than anticipated return in the demand for large-system
implementations following Y2K. We look forward to the opportunities ahead as we
transition to the Siemens organization."
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ABOUT SMS
SMS supplies information systems and professional services to over 5,000 health
enterprises and health providers in North America, Europe, and New Zealand. The
Company offers a full range of clinical, financial, and management applications
to support health providers across the continuum of care. In addition, SMS is a
leading provider of outsourcing, consulting, and implementation services.
Founded in 1969, SMS has over 30 years of network computing experience,
operating the industry's largest Information Services Center (ISC) and Health
Information Network for application hosting, e-commerce, enterprise systems
management, and managed Internet services. As the premier Application Service
Provider (ASP) in healthcare, SMS' ISC processes nearly 80 million transactions
a day with connections to over 400,000 customer workstations and 500 connections
to payers, representing 130 million covered lives. Based in Malvern,
Pennsylvania, SMS reported revenues in excess of $1.2 billion for fiscal year
1999. More information about SMS can be found at www.smed.com. For further
information or verification contact Terrence W. Kyle, Senior Vice President of
Finance, SMS or Julie McDowell, Director of Investor Relations, SMS.
This press release contains forward-looking statements. Such statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those reflected in such statements. Among such factors
are the continuation of the current decision-making delay in the healthcare IT
market for longer than expected; changes in length and composition of sales
cycles; non-renewals of customer contracts; inability to keep pace with
competitive, technological and market developments; failure to protect
proprietary software; delays in product development; undetected errors in
software products; customer reductions caused by health industry consolidation;
difficulties in product installation; dependence on suppliers; interruption of
availability of resources necessary to provide products and services;
difficulties encountered by the Company, customers, or others in dealing with
euro conversion issue; changes in economic, political and regulatory conditions
on the health industry, including but not limited to HIPAA; regulation of
additional products as medical devices by the US federal Food and Drug
Administration; fluctuations in the value of foreign currencies relative to the
US dollar, interest rates and taxes; and the risk that the transaction described
above might not be completed.
This release should not be construed as either a solicitation or recommendation
with respect to the tender offer for securities of Shared Medical Systems
Corporation.
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SHARED MEDICAL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
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(Amounts in thousands except for per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
March 31
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2000 1999
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(unaudited)
<S> <C> <C>
Revenues:
Service and system fees............................................ $222,088 $259,809
Hardware sales..................................................... 18,527 27,260
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240,615 287,069
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Cost and Expenses:
Operating and development.......................................... 128,681 121,487
Marketing and installation......................................... 68,964 92,876
General and administrative......................................... 19,509 20,103
Cost of hardware sales............................................. 15,584 21,018
Interest........................................................... 3,591 2,049
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236,329 257,533
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Income Before Income Taxes.......................................... 4,286 29,536
Provision for Income Taxes.......................................... 1,629 11,223
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Net Income.......................................................... $ 2,657 $ 18,313
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Net Income Per Share - Basic........................................ $.10 $.69
Net Income Per Share - Diluted...................................... $.10 $.68
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Shares Outstanding - Basic.......................................... 26,738 26,575
Shares Outstanding - Diluted........................................ 27,224 27,034
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</TABLE>
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SHARED MEDICAL SYSTEMS CORPORATION CONSOLIDATED BALANCE SHEET
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(Amounts in thousands)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
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(unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and short-term investments.............................. $ 88,724 $104,700
Accounts receivable, net..................................... 315,765 343,399
Prepaid expenses and other current assets.................... 31,325 31,443
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Total Current assets....................................... 435,814 479,542
Property and Equipment, net................................... 148,932 153,288
Computer Software, net........................................ 112,932 109,375
Other Assets.................................................. 171,917 173,539
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$869,595 $915,744
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Liabilities and Stockholders' Investment
Current Liabilities:
Notes Payable................................................ $ 47,598 $ 48,758
Current portion of long-term debt and capital
leases................................................... 2,217 2,255
Dividends payable............................................ 5,664 5,651
Accounts payable............................................. 26,414 30,934
Accrued expenses............................................. 59,670 89,399
Current deferred revenues.................................... 35,030 41,465
Accrued and current deferred income taxes.................... 23,251 28,147
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Total Current Liabilities.................................. 199,844 246,609
Deferred Revenues............................................. 8,416 6,938
Long-Term Debt and Capital Leases............................. 177,708 178,217
Deferred Income Taxes......................................... 26,846 26,846
Stockholders' Investment...................................... 456,781 457,134
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$869,595 $915,744
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</TABLE>
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SHARED MEDICAL SYSTEMS CORPORATION BUSINESS SEGMENT INFORMATION
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(Amounts in thousands)
<TABLE>
<CAPTION>
Quarter Ended
March 31
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<S> <C> <C>
2000 1999
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(unaudited)
Revenues:
North America....................................................... $203,599 $247,091
International....................................................... 37,016 39,978
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$240,615 $287,069
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Pretax Income/(Loss):
North America....................................................... $ 5,763 $ 31,706
International....................................................... (1,477) (2,170)
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$ 4,286 $ 29,536
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</TABLE>