Reports required to be filed by Section 13 or 15(d) of the Securities


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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934
For the quarterly period ended April 1, 1995

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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934
For the transition period from to

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Commission File Number 0-15386

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CERNER CORPORATION

-----------------------------------------------------

(Exact name of registrant as specified in its charter)

Delaware 43-1196944

- - - - ---------------------------- ---------------

(State or other jurisdiction (I.R.S.Employer

of incorporation or organization) Identification Number)

2800 Rockcreek Parkway

Kansas City, Missouri 64117

(816) 221-1024

-----------------------------------------------------------

(Address of Principal Executive Offices, including zip code;

registrant's telephone number, including area code)
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) with the

Commission, and (2) has been subject to such filing requirements for the

past 90 days.
Yes X No

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There were 14,148,271 shares of Common Stock, $.01 par value,

outstanding at April 1, 1995.


CERNER CORPORATION AND SUBSIDIARIES

-----------------------------------
I N D E X

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Part I. Financial Information:
Item 1. Financial Statements:
Consolidated Balance Sheets as of April 1, 1995

and December 31, 1994 (unaudited)
Consolidated Statements of Earnings for the

three months ended April 1, 1995

and March 31, 1994 (unaudited)
Consolidated Statements of Cash Flows

for the three months ended April 1, 1995

and March 31, 1994 (unaudited)
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of

Financial Condition and Results of Operations
Part II. Other Information:
Item 6. Exhibits and Reports on Form 8-K


Part I. Financial Information

Item 1. Financial Statements

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)
April 1, December 31,

1995 1994

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(In thousands)
Assets

Current Assets:

Cash and cash equivalents $ 16,445 $ 15,305

Receivables 69,683 65,148

Inventory 1,667 2,218

Prepaid expenses and other 1,124 979

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Total current assets 88,919 83,650
Property and equipment, net 43,608 41,129

Software development costs, net 19,537 18,784

Intangible assets, net 6,059 6,390

Noncurrent receivables 4,261 4,508

Other assets 1,911 1,949

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$ 164,295 $ 156,410

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Liabilities and Stockholders' Equity

Current Liabilities:

Accounts payable $ 11,302 $ 13,485

Current installments of long-term debt 123 160

Advanced billings 4,112 3,737

Accrued income taxes 8,172 6,652

Accrued payroll and tax withholdings 5,186 4,689

Other accrued expenses 2,402 2,557

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Total Current Liabilities 31,297 31,280

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Long-term debt, net 31,453 30,235

Deferred income taxes 10,782 9,118
Stockholders' Equity:

Common stock, $.01 par value,50,000,000

shares authorized, 14,661,289 shares

issued in 1995 and 14,510,816 issued

in 1994 147 145

Additional paid-in capital 31,474 30,947

Retained earnings 64,895 60,353

Treasury stock, at cost

(513,018 shares in 1995 and 1994) (5,693) (5,693)

Foreign currency translation adjustment (60) 25

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Total stockholders' equity 90,763 85,777

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$ 164,295 $ 156,410

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See notes to consolidated financial statements.

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(UNAUDITED)

Three Months Ended

April 1, March 31,

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(In thousands, except per share data)
1995 1994

---- ----
Revenues:

System sales $ 29,988 $ 20,106

Support and maintenance 11,647 9,600

Other 1,557 809

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Total revenues 43,192 30,515

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Costs and expenses:

Cost of revenues 12,068 8,929

Sales and client service 11,176 9,091

Software development 7,621 5,082

General and administrative 4,043 2,605

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Total costs and expenses 34,908 25,707

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Operating earnings 8,284 4,808
Interest expense, net 468 84

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Earnings before income taxes 7,816 4,724

Income taxes 3,275 1,722

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Net earnings $ 4,541 $ 3,002

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Earnings per share $ 0.30 $ 0.20

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Weighted average shares outstanding 14,946 14,866
See notes to consolidated financial statements.

CERNER CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

Three Months Ended

April 1, March 31,

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(In thousands)

1995 1994

---- ----
Cash flows from operating activities:

Net earnings $ 4,541 $ 3,002

Adjustments to reconcile net earnings to

net cash provided by operating activities:

Depreciation and amortization 3,090 2,431

Issuance of stock as compensation 7 13

Provision for deferred income taxes 2,185 --

Loss on disposal of capital equipment 2 --

Changes in assets and liabilities:

Receivables (4,288) (2,444)

Inventory 551 (208)

Prepaid expenses and other (113) 2,020

Accounts payable (2,183) (1,225)

Accrued income taxes 1,000 1,270

Other accrued liabilities 717 (1,677)

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Total adjustments 968 180

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Net cash provided by operating activities 5,509 3,182

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Cash flows from investing activities:

Purchase of capital equipment (2,246) (2,237)

Purchase of land, building and improvements (1,681) --

Capitalized software development costs (2,061) (1,932)

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Net cash used in investing activities (5,988) (4,169)

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Cash flows from financing activities:

Net payments under short-term notes payable -- (2)

Proceeds from issuance of long-term debt 2,266 --

Repayment of long-term debt (1,085) (137)

Proceeds from exercise of options 523 137

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Net cash provided by (used in)

financing activities 1,704 (2)

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Foreign currency translation adjustment (85) (1)

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Net increase (decrease) in cash and cash equivalents 1,140 (990)
Cash and cash equivalents at beginning of period 15,305 16,784

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Cash and cash equivalents at end of period $ 16,445 $ 15,794

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See notes to consolidated financial statements.
CERNER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(1) Interim Statement Presentation
The consolidated financial statements included herein have been

prepared by the Company without audit, pursuant to the rules and

regulations of the Securities and Exchange Commission. Certain information

and footnote disclosures normally included in annual financial statements

prepared in accordance with generally accepted accounting principles have

been condensed or omitted pursuant to such rules and regulations, although

the Company believes that the disclosures are adequate to make the

information presented not misleading. It is suggested that these

consolidated financial statements be read in conjunction with the

consolidated financial statements and the notes thereto included in the

Company's latest annual report on Form 10-K.
In the opinion of management, the accompanying unaudited consolidated

financial statements include all adjustments (consisting of only normal

recurring accruals) necessary to present fairly the financial position at

April 1, 1995 and December 31, 1994 and the results of operations and cash

flows for the periods presented. The results of the three-month periods

are not necessarily indicative of the operating results for the entire

year.
(2) Earnings Per Share
Net earnings per share for the three months ended April 1, 1995 and

March 31, 1994 is based on the weighted average number of common shares and

common share equivalents outstanding during those periods. Common share

equivalents consist of shares issuable upon exercise of stock options using

the treasury stock method.


Item 2. Management's Discussion and Analysis of Financial Condition and

Results of Operations

Results of Operations
Revenues for the three month period ended April 1, 1995 increased

$12,677,000 (42%) over the same prior year period. Revenues for the first

quarter of 1995 reflect an increase in system sales of $9,882,000 (49%)

over the first quarter of 1994. The increases in systems sales result

principally from an increase in HNA-type agreements and incremental

hardware and software sold back to the client base. HNA contracts were 47%

of total systems sales for the first quarter of 1995 compared to 34% for

the same period in 1994. An HNA contract is an initial contract that

includes the Company's ProNet Order Management product and at least two

other clinical systems, or a contract that brings an existing client to

this level. ProNet Order Management gives clients access to the full

intrarelationship of the Company's products. The sale of additional

hardware and software products to the installed client base for the first

quarter of 1995 increased 91% over the first quarter of 1994.
Support and maintenance revenues for the first quarter of 1995

increased 21% over the same prior year period due primarily to the increase

in the Company's installed and converted client base.
Other revenues increased $748,000 (92%) over the same prior year

period. This increase is due primarily to real estate lease revenues from

unrelated parties.
The gross profit margin percentage for the first quarter of 1995 was

72% compared to 71% for the same period in 1994.
Total operating expenses (sales and client service, software

development and general and administrative) for the three month period

ended April 1, 1995 were 53% of total revenues compared to 55% in 1994.

Total operating expenses increased 36% over the same prior year period.

The increase in operating expenses is due primarily to increases in the

number of employees and employee related expenses. The increase in the

number of employees is due to the Company's expanded client base and

continued development of clinical information system products to complement

the exisiting product lines.
Net interest expense increased $384,000 in the first quarter of 1995

compared to the same period in 1994. This increase in interest expense is

due to financing the $20,000,000 purchase of its Kansas City headquarters

complex, which was completed on April 19, 1994. The higher interest expense

is more than offset by a reduction in the Company's rent expense and an

increase in lease revenues from unrelated parties.
The Company's quarterly revenues and net earnings have historically

been variable and cyclical. The variability is attributable primarily to

the number and size of system installation milestone events in any fiscal

quarter. The Company expects fluctuations in quarterly financial results

to continue.
Capital Resources and Liquidity
The Company's liquidity position remains strong with total cash and

cash equivalents of $16,445,000 at April 1, 1995 and working capital of

$57,622,000. The Company generated net cash from operations of $5,509,000

and $3,182,000 during the three month periods ended April 1, 1995 and March

31, 1994, respectively. The increase in accounts receivable was caused by

higher sales. The Company finances its operations, capital expenditures

(other than the purchase of its Kansas City headquarters complex and its

anticipated capital improvements), and working capital needs from

internally generated funds and bank borrowings. At April 1, 1995, the

Company had an availability of $16,750,000 on its line of credit.

Part II. Other Information


Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 10 (a) Licensing Agreement between APACHE Medical

Systems, Inc. and Cerner Corporation, dated

February 2, 1995
Exhibit 11 Computation of Earnings Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the

quarter ended April 1, 1995.

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.

CERNER CORPORATION

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Registrant

May 15, 1995 By:/s/ Maureen M. Evans

- - - - ------------ -----------------------

Date Maureen M. Evans

Treasurer and

Chief Financial Officer





LICENSING AGREEMENT

___________________
Between APACHE Medical Systems, Inc. ("APACHE") and

___________________________________________________
Cerner Corporation ("Cerner")

____________________________
Whereas APACHE has developed, acquired, and maintains updates
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