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player ready...Shares of Allscripts Healthcare Solutions plunged 36 percent Friday on news that earnings tumbled, the company’s chairman had been ousted, three directors had quit, and the chief financial officer will depart next month.
The Chicago-based electronic health records provider did not explain the reason for terminating Philip Pead’s role as chairman Wednesday, saying only that the board held “extensive deliberations regarding the leadership of the company” prior to making the decision.
Three directors, Catherine Burzik, Eugene Fife and Edward Kangas, disagreed with the decision and immediately offered their resignations, according to a filing Thursday with the Securities and Exchange Commission.
In the same filing, Allscripts said CFO William Davis notified the board Sunday that he is resigning, effective May 18, for another position. W. David Morgan, the company’s senior vice president of finance since August 2010, was appointed to become the company’s interim CFO.
“While the news of my departure coincides with the announcements of our first-quarter results and revised guidance, I want to make clear that the timing of my departure was not driven by these factors,” Davis said on an investor call Thursday. “I would have preferred to end my tenure with more upbeat news, but an attractive opportunity came along, and I couldn’t pass it up at this point in my personal and professional life.”
Allscripts said in its SEC filing that its severance agreement with Pead was for “termination without cause,” which entitles him to a package consisting of twice his salary and target bonus, medical benefits for one year and accelerated vesting of any outstanding equity awards, among other benefits
The news came as Allscripts announced a 54 percent decline in first-quarter earnings, to $5.8 million, or 3 cents a share, from $12.6 million, or 7 cents a share, a year ago.
Allscripts shares closed Friday at $10.30, down $5.72.
Allscripts has struggled following a 2010 merger with Eclipsys Corp. Allscripts CEO Glen Tullman told investors Thursday that some clients have delayed commitments as they wait for the company to demonstrate a more robust integration and roll out new releases. The directors who quit were from Eclipsys.
Tullman said on the call that the company will invest more than $190 million this year to improve performance and accelerate the integration process.
Tullman said the company will be naming a new chairman soon and adding new members to the board.
“There is no question that this was a very, very tough quarter, a very difficult quarter,” Tullman said. “In my career I am not sure I have had one that was this tough. What I can tell you is that our management team is focused and it will deliver, as we’ve done that before.”
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