iSoft chief exits after revenue free fall

iSoft chief exits after revenue free fall

Beleaguered healthcare IT firm currently under review to put it back on track

Healthcare IT solutions provider, iSoft (ASX: ISF), has recorded a 20 per cent revenue loss, prompting the company’s CEO, Gary Cohen, to step down.

Revenue was at $431 million. Earnings before tax dropped 77 per cent to $30 million while operating cashflow sat at negative $690,000. All up it was a statutory loss of $383 million.

Results included a one-off impairment of $341 million mainly from goodwill.

“This financial result is a disappointing one that does not reflect the underlying strength and technical sophistication of iSoft’s products, the company’s global footprint or the quality and dedication of its staff,” iSoft chairman, Robert Moran, said in an ASX statement.

“A difficult economic environment, particularly in the public sector in a number of the company’s markets, adverse currency impact, delays in implementation of the National Program for IT in the UK and an increased cost structure all contributed to the result.”

iSoft’s board has initiated a review of business operations and has set a number of goals to improve the company’s difficult financial state.

This included operational cost savings of $50 million to be achieved by June next year as well as consolidation of product ranges.

Cohen agreed to leave his CEO role as part of the review but will stay on to aid the board in the mean time.

iSoft COO, Andrea Fiumicelli, has been called in to act as an interim CEO while the company looks for a replacement for Cohen.

The company will not pay dividends for financial year 2010.

It has been a tough year for iSoft. In January, UK Financial Services Authority launched fraud proceedings against four former directors of iSoft.

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