Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Brooks O’Neil - Dougherty & Company LLC.
Brooks O’Neil - Dougherty & Company LLC
Hai, would it be appropriate to say that the dilution in the second half from the IPS acquisition might be in the range of a penny or two? Is that what you’re trying to communicate to us?
Hai Tran
Yes, I think that what we’re trying to communicate is that the lower end of the range is probably appropriate for us to target at this point in time. We’re working hard as I mentioned to absorb the expenditures given the leverage we’ve been able to demonstrate in managing our SG&A to date as well as the margin improvement. So I think that as part of the prepared remarks when I talked about targeting the lower half of our range, that’s where we think it’s probably going to come out.
Brooks O’Neil - Dougherty & Company LLC
Would it be accurate to estimate that the annualized revenues from IPS are somewhere in the range of $90 million to $100 million today?
Hai Tran
Yes.
Brooks O’Neil - Dougherty & Company LLC
You said that the HospiScript acquisition closed towards the end of May. Could you just help us frame the revenue and maybe gross profit contribution from HospiScript in the quarter? I understand that it’s a net revenue reporting company but I’m just trying to get a feel for whether there was much either revenue or gross profit contribution from that business this quarter?
Hai Tran
On the revenue side there was very minimal contribution. As you recall and as we’ve mentioned on previous public statements, HospiScript was already a customer of ours and to that extent from a claims count perspective and from a revenue perspective, we had already accounted for much of the numbers already. On the gross profit side, there was some impact but it was a modest impact from HospiScript in Q2 as they were only part of our company for a little over a month.
Brooks O’Neil - Dougherty & Company LLC
Could you guys just talk a little bit about the competitive environment you’re seeing out there? Are there any changes that you know from anybody in terms of either what people are promoting in terms of the competitive RFPs, pricing environment, features the customers are looking for in particular, etc.?
David T. Blair
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