KANSAS CITY, Mo., Jul 22, 2008 (BUSINESS WIRE) ----Cerner Corp. (NASDAQ: CERN) today announced results for the 2008 second quarter that ended June 28, delivering strong levels of bookings, earnings and cash flow.

Bookings in the second quarter of 2008 were $404 million. Second quarter 2007 bookings were $487 million. Second quarter 2007 bookings included $98 million related to Cerner's participation in the National Health Service (NHS) initiative to automate clinical processes and digitize medical records in England and approximately $20 million of higher than expected hardware bookings. Second quarter 2008 bookings are 10 percent higher than adjusted second quarter 2007 bookings of $369 million. Second quarter revenue increased 4 percent over the year-ago period to $402.8 million.

On a Generally Accepted Accounting Principles (GAAP) basis, second quarter 2008 net earnings were $35.3 million, and diluted earnings per share were $0.42. Second quarter 2007 GAAP net earnings were $26.8 million, and diluted earnings per share were $0.32.

Adjusted (non-GAAP) Earnings

Adjusted second quarter 2008 net earnings were $42.5 million, compared to $29.6 million of adjusted net earnings in the second quarter of 2007. Adjusted diluted earnings per share were $0.51 in the second quarter of 2008 compared to $0.36 in the second quarter of 2007. Analysts' consensus estimate for second quarter 2008 adjusted diluted earnings per share was $0.50.

Adjusted Net Earnings is not a recognized term under GAAP and should not be substituted for net earnings as a measure of the Company'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 second quarter net earnings. For more detail, please see the accompanying schedule, titled "Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings Per Share to GAAP Net Earnings and Diluted Earnings Per Share."

Adjusted second quarter 2008 and 2007 net earnings and diluted earnings per share exclude the impact of accounting pursuant to Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment, which requires the expensing of stock options. The effect of accounting under SFAS 123R reduced second quarter 2008 net earnings and diluted earnings per share by $2.1 million and $0.03, respectively, and reduced second quarter 2007 net earnings and diluted earnings per share by $2.7 million and $0.04, respectively.

Adjusted earnings and diluted earnings per share in the second quarter 2008 also exclude the impact of a third party supplier settlement that increased sales and client service expense by $8.0 million, decreased net earnings by $5.0 million, and decreased diluted earnings per share by $0.06. During the second quarter, the Company finalized a settlement with a third party provider of software related to the use of the third party's software in the Company's remote hosting business. The settlement included compensation for use of the software for periods prior to the second quarter of 2008 as well as compensation for licenses of the software for future use for existing clients as well as additional clients through January 2009. Based on a relative value allocation of the settlement amount, the amount attributable to the utilization of software for current and prior periods is $8.0 million, which was recognized in the second quarter, and the amount attributable to the license for future use is approximately $15 million, which will be amortized ratably over the hosting period for the applicable arrangement. The Company determined that approximately $5 million of the amount expensed in the 2008 second quarter should have been recorded in prior periods. The Company determined that the effect of this adjustment on prior annual and interim periods is not material to any previously reported results.

Other Second Quarter Highlights:

-- Cash collections of $426 million and operating cash flow of $85 million, up from $62 million in the second quarter of 2007.

-- Days sales outstanding of 90 days compared to 92 days in the first quarter of 2008 and 86 days in the year-ago quarter.

-- Total revenue backlog of $3.3 billion, up 10 percent over the year-ago quarter. This is comprised of $2.7 billion of contract backlog and $0.6 billion of support and maintenance backlog.

"Our second quarter results demonstrate another quarter of solid execution," said Neal Patterson, Cerner co-founder, chairman and chief executive officer. "While declines in sales of hardware, a non-core part of our business, again impacted our overall revenue growth, our core business is strong, as evidenced by our strong levels of bookings, earnings growth, operating margin expansion and cash generation in the second quarter and year to date."

"Cerner's strategic worldwide footprint across healthcare is unmatched, with clients spanning acute care, ambulatory care, retail pharmacy, laboratory, pharmaceutical companies, and employers. This footprint, our unmatched depth and breadth of solutions and services, and our strategic initiatives that continue to expand Cerner's boundaries, uniquely position us for strong sustainable growth," Patterson said.

Future Period Guidance

The company expects revenue in the third quarter of 2008 to be approximately $410 million to $425 million. For the year 2008, Cerner continues to expect revenue growth of approximately 10 percent over 2007.

Cerner expects adjusted diluted earnings per share before stock options expense in the third quarter to be between $0.55 and $0.56. For the year, the Company remains comfortable with the current consensus EPS of $2.17, which is before options expense and the third party supplier settlement, plus the $0.01 over-attainment this quarter, leading to an estimate of $2.18.

The company expects SFAS No. 123R share-based compensation expense to reduce diluted earnings per share in the third quarter and full year by approximately $0.03 and $0.12, respectively.

Cerner expects new business bookings in the third quarter of 2008 to be between $370 million and $400 million.

Earnings Conference Call

Cerner will host an earnings conference call to provide additional detail on second quarter results at 3:30 p.m. CT, July 22. The dial-in number for the conference call is 617-614-3669; the passcode is Cerner. The company recommends joining the call 15 minutes early for registration. The re-broadcast of the call will be available from 5:30 p.m. CT, July 22 through 11:59 p.m. CT, July 25. The dial-in number for the re-broadcast is 888-286-8010; the passcode is 21143886.

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

About Cerner

Cerner is taking the paper chart out of healthcare, eliminating error, variance and waste in the care process. With more than 6,000 clients worldwide, Cerner is the leading supplier of healthcare information technology. The following are trademarks of Cerner: Cerner, Cerner Millennium and Cerner's logo. (NASDAQ: CERN), www.cerner.com

This release contains forward-looking statements that involve a number of risks and uncertainties. It is important to note that the Company's performance, and actual results, financial condition or business could differ materially from those expressed in such forward-looking statements. The words "position," "guidance," "expects," and "comfortable" 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 global operations; risks associated with our ability to effectively hedge exposure to fluctuations in foreign currency exchange rates; risks associated with our recruitment and retention of key personnel; risks related to our reliance on third party suppliers; risks inherent with business acquisitions; changing political, economic and regulatory influences; government regulation; significant competition and market changes; variations in our quarterly operating results; potential inconsistencies in our sales forecasts compared to actual sales; and the volatility in the trading price of our common stock. Additional discussion of these and other factors affecting the Company's business is contained in the Company's periodic filings with the Securities and Exchange Commission. 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.

 CERNER CORPORATION CONSOLIDATED
   STATEMENT OF EARNINGS (unaudited) Three Three Months Months Ended YTD Ended YTD (In thousands, except per June 28, June 28,
   June 30, June 30, share data) 2008 2008 2007 2007 (1)(2) (1)(2) (1) (1) --------- --------- --------- --------- Revenue System
   sales $120,633 236,865 130,097 252,967 Support, maintenance and services 271,470 531,264 246,210 480,099 Reimbursed travel
   10,697 19,436 10,281 19,374 --------- --------- --------- --------- Total revenue 402,800 787,565 386,588 752,440 Margin System
   sales 74,789 150,838 74,569 150,439 Support, maintenance and services 256,225 500,567 231,057 448,576 --------- ---------
   --------- --------- Total margin 331,014 651,405 305,626 599,015 --------- --------- --------- --------- Operating expenses
   Sales and client service 182,915 353,997 165,844 323,002 Software development 65,890 135,054 63,715 130,313 (Includes amortization
   of software development costs of $13,408 and $24,425, for the three and six months ended June 28, 2008; and $13,357 and $26,687
   for the three and six months ended June 30, 2007.) General and administrative 28,988 52,667 27,887 54,342 --------- ---------
   --------- --------- Total operating expenses 277,793 541,718 257,446 507,657 --------- --------- --------- --------- Operating
   earnings 53,221 109,687 48,180 91,358 Interest income 3,245 7,074 3,361 6,490 Interest expense (2,785) (5,583) (2,937) (5,946)
   Other income 42 (171) (415) (737) --------- --------- --------- --------- Non-operating income (expense), net 502 1,320 9
   (193) Earnings before income taxes 53,723 111,007 48,189 91,165 Income taxes (18,436) (38,903) (21,340) (36,605) ---------
   --------- --------- --------- Net earnings $35,287 72,104 26,849 54,560 ========= ========= ========= ========= Basic earnings
   per share $0.44 0.90 0.34 0.69 ========= ========= ========= ========= Basic weighted average shares outstanding 80,618 80,500
   79,223 78,967 Diluted earnings per share $0.42 0.86 0.32 0.66 ========= ========= ========= ========= Diluted weighted average
   shares outstanding 83,581 83,553 83,092 82,879 Note 1: Operating expenses for the three months ended June 28, 2008 and June
   30, 2007, and the six months ended June 28, 2008 and June 30, 2007 include share-based compensation expense. The impact of
   this expense on net earnings is presented below: Three Six Three Six Months Months Months Months Ended Ended Ended Ended June
   28, June 28, June 30, June 30, 2008 2008 2007 2007 --------------------------------------- Sales and client service $1,732
   $3,567 $2,648 $5,006 Software development 621 1,397 751 1,518 General and administrative 1,075 2,027 987 1,674 Amount of related
   income tax benefit (1,277) (2,604) (1,678) (3,136) --------------------------------------- Net impact on net earnings $2,151
   4,387 $2,708 $5,062 ======================================= Decrease to diluted earnings per share $0.03 $0.06 $0.04 $0.06
   Note 2: Includes the impact of a third party supplier settlement that impacted sales and client service expense by $8.0 million
   and net earnings by $5.0 million. During the second quarter, the Company finalized a settlement with a third party provider
   of software related to the use of the third party's software in the Company's remote hosting business. The settlement included
   compensation for use of the software for periods prior to the second quarter of 2008 as well as compensation for licenses
   of the software for future use for existing clients as well as additional clients through January 2009. Based on a relative
   value allocation of the settlement amount, the amount attributable to the utilization of software for current and prior periods
   is $8.0 million, which was recognized in the second quarter, and the amount attributable to the license for future use is
   approximately $15 million, which will be amortized ratably over the hosting period for the applicable arrangement. The Company
   determined that approximately $5 million of the amount expensed in the 2008 second quarter should have been recorded in prior
   periods. The Company determined that the effect of this adjustment on prior annual and interim periods is not material to
   any previously reported results. Three Six Three Six Months Months Months Months Ended Ended Ended Ended June 28, June 28,
   June 30, June 30, 2008 2008 2007 2007 --------------------------------------- Sales and client service $8,014 $8,014 $- $-
   Amount of related income tax benefit (2,984) (2,984) $- $- --------------------------------------- Net impact on net earnings
   $5,030 5,030 $- $- ======================================= Decrease to diluted earnings per share $0.06 $0.06 $- $- 

   CERNER CORPORATION Reconciliation of Adjusted Net Earnings and Adjusted Diluted Earnings Per Share to GAAP Net Earnings and
   Diluted Earnings Per Share(1) (unaudited) -------------------------------------- Three Six Three Six Months Months Months
   Months Net Earnings Ended Ended Ended Ended (In thousands) June 28, June 28, June 30, June 30, 2008 2008 2007 2007 --------------------------------------
   Net earnings $35,287 $72,104 $26,849 $54,560 Share-based compensation expense(2) 3,428 6,991 4,386 8,198 Income tax benefit
   of share- based compensation(2) (1,277) (2,604) (1,678) (3,136) Third party supplier settlement(2) 8,014 8,014 - - Income
   tax benefit of supplier settlement(2) (2,984) (2,984) - - -------------------------------------- Adjusted net earnings (non-
   GAAP) $42,468 $81,521 $29,557 $59,622 ====================================== Diluted Earnings Per Share Diluted earnings per
   share(2) $0.42 $0.86 $0.32 $0.66 Share-based compensation expense (net of tax)(2) 0.03 0.06 0.04 0.06 Third party supplier
   settlement (net of tax)(2) 0.06 0.06 - - -------------------------------------- Adjusted diluted earnings per share (non-GAAP)
   $0.51 $0.98 $0.36 $0.72 ====================================== Note 1: The presentation of Adjusted Net Earnings, a Non-GAAP
   financial measure, is not meant to be considered in isolation, 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 the Company's consolidated financial statements prepared in accordance with GAAP. Adjusted Net Earnings
   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 calculation. The Company believes that
   Adjusted Net Earnings is important to enable investors to better understand and evaluate its ongoing operating results and
   allows for greater transparency in the review of its overall financial, operational and economic performance. Note 2: The
   Company provides earnings with and without stock options expense and unique items such as the third party supplier settlement
   because earnings excluding these items are used by management along with GAAP results to analyze its business, make strategic
   decisions and for management compensation purposes. 

 CERNER CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands)
   June 28, December 29, 2008 2007 ------------- ------------- Assets (unaudited) Cash and cash equivalents $291,395 182,914
   Short-term investments 0 161,600 Receivables, net 398,371 391,060 Inventory 12,741 10,744 Prepaid expenses and other 65,980
   61,878 Deferred income taxes 10,218 10,368 ------------- ------------- Total current assets 778,705 818,564 Property and equipment,
   net 470,701 462,839 Software development costs, net 211,488 200,380 Goodwill, net 148,440 143,924 Intangible assets, net 54,641
   46,854 Long-term investments 101,649 - Other assets 17,152 17,395 ------------- ------------- Total assets $1,782,776 1,689,956
   ============= ============= Liabilities Accounts payable $75,464 79,812 Current installments of long-term debt 13,847 14,260
   Deferred revenue 103,682 98,802 Accrued payroll and tax withholdings 58,532 65,011 Other accrued expenses 39,700 30,238 -------------
   ------------- Total current liabilities 291,225 288,123 ------------- ------------- Long-term debt 170,820 177,606 Deferred
   income taxes 78,252 68,738 Deferred revenue 17,974 21,775 ------------- ------------- Total liabilities 558,271 556,242 -------------
   ------------- Minority owners' equity interest in subsidiary 1,286 1,286 Stockholders' Equity Common stock 808 801 Additional
   paid-in capital 475,576 451,876 Retained earnings 743,545 671,440 Accumulated other comprehensive income 3,290 8,311 -------------
   ------------- Total stockholders' equity 1,223,219 1,132,428 Total liabilities and equity $1,782,776 1,689,956 =============
   ============= 

SOURCE: Cerner Corp.

Cerner Corp. Investor Contact: Allan Kells, 816-201-2445 akells@cerner.com
   or Media Contact: Kay Hawes, 816-885-3560 kay.hawes@cerner.com www.cerner.com 

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