LanVision Systems, Inc. Reports Fourth Quarter and Fiscal Year 2004
Results Achieves Record Quarterly Revenues, Operating Profit and
Net Earnings CINCINNATI, March 29 /PRNewswire-FirstCall/ --
LanVision Systems, Inc. (NASDAQ:LANV) d/b/a Streamline Health today
announced the financial results for the fourth quarter and fiscal
year ended January 31, 2005. Revenues in the fourth quarter of
fiscal year 2004 were a record $5.0 million compared with $3.6
million in the fourth quarter of fiscal year 2003, an increase of
41%. Operating profits for the fourth quarter were a record $1.2
million compared with $970 thousand in the fourth quarter of fiscal
year 2003. Net earnings for the quarter were a record $1.6 million
or $0.18 per share, compared with $1 million or $0.11 per share in
the fourth quarter of fiscal year 2003. For the 2004 fiscal year
ended January 31, 2005, revenues were $12.75 million compared with
$12.80 million in fiscal year 2003. Operating profits for the
fiscal year were $936 thousand compared with $2.4 million in fiscal
year 2003. Net earnings for fiscal year 2004 were $558 thousand or
$0.06 per share compared with $1.0 million or $0.11 per share in
fiscal year 2003. J. Brian Patsy, President and Chief Executive
Officer, stated, "The first three quarters of 2004 were challenging
and below management's expectations. However, we anticipated and
achieved a strong fourth quarter and the prospects for 2005 are
very encouraging. Our major reselling partner sold one new system
in 2004 compared with four in 2003 and two in 2002, which was well
below management's expectations, resulting in a $1.9 million
decline in 2004 software revenues. Notwithstanding the decrease in
the number of new 2004 systems sales, the pipeline of opportunities
for 2005 and beyond has increased substantially as we expand our
sales infrastructure, and we anticipate returning to pre-fiscal
year 2004 system sales levels. "We achieved the following
milestones in fiscal 2004: - Achieved a 34% increase in our highly
profitable ASPeN(SM) application hosting services revenues, -
Achieved an 8% increase in services maintenance and support
revenues, - Achieved operating profitability for the fifth
consecutive year, - Produced a positive cash flow that allowed us
to retire our high interest rate debt in fiscal 2004, and secure
new debt financing at a very favorable rate, in addition to making
$1.5 million in payments on our new debt during the last half of
the fiscal year, - Executed re-marketing and referral relationships
with new strategic business partners, including the recently
announced Medical Coding Services, Inc., and - Introduced several
new workflow solutions, re-branded our solutions and announced our
new marketing name, 'Streamline Health,' to focus our product line
and sales efforts on the lucrative workflow process reengineering
opportunities in the healthcare market place, while maintaining our
leadership role in providing comprehensive document management
solutions." Mr. Patsy continued, "Our record fourth quarter
revenues primarily resulted form a significant new software
sublicense through our remarketing partner, additional software
licenses to our existing customers, and a large storage area
network hardware upgrade at one of our existing customers. Total
fourth quarter revenues also included a 20% increase in services,
maintenance and support and an 18% increase in our application
hosting revenues. Our costs, with the exception of the cost of
system sales which includes the cost of the hardware sale,
increased modestly when compared to the prior comparable quarter.
The selling, general and administrative expenses in 2004 increased
because of increased sales and marketing staff as the company
expands to respond to increased inquiries and sales opportunities,
additional expenses for tradeshows, marketing collateral and
marketing costs associated with the re-branding of the company as
'Streamline Health' in order to focus on new market opportunities
involving business process improvement via workflow automation
technologies." Paul W. Bridge, Jr., LanVision's Chief Financial
Officer, said, "Operating profits for fiscal year 2004 are not
comparable to 2003 in that 2003 was favorable impacted by the
reimbursement of approximately $520 thousand of prior year's legal
fees upon settlement of the LanVision proprietary technology
claims. It should however, be noted that during 2004 the operating
margins for our highly profitable services, maintenance and support
and application hosting lines of business increased to 61% and 64%,
respectively, from 59% and 54%, respectively in 2003. As new
clients are signed, these margins are anticipated to increase as
incremental costs for new clients are not significant. "Also,
LanVision recorded a tax benefit of $420 thousand in 2004 and $558
thousand in 2003 as a result of a reduction in the valuation
allowance, based on future earnings projections before income
taxes, on the deferred tax assets relating primarily to the
approximately $29 million tax loss carry forward." Mr. Bridge
concluded, "Our 2005 operating plan is predicated on investing in
additional product development and sales and marketing staffs to
enhance the current product line and provide the resources
necessary to achieve significant revenue growth in the years ahead.
Our goal for 2005 is a minimum 25% growth in revenues, which if
achieved, should produce an operating profit of approximately $1
million after the investment in the additional staff necessary to
increase and sustain significant year-to-year revenue growth in
future years." Mr. Patsy continued, "Our strategic focus for 2005
will be to make the necessary investments in personal and
infrastructure to execute our growth strategy. We will continue to
make sound business decisions to significantly expand our workflow
solutions set, strengthen our existing product line, enhance and
expand our distribution capabilities through our current and new
remarketing partners and to enlarge our direct sales and marketing
staff to enable us to apply additional resources to revenue
opportunities. During the last several years our high interest rate
debt service obligations constrained our ability to hire the
resources necessary to achieve significant revenue growth. One of
our major goals for 2005 and beyond is to make the necessary
investments to accelerate revenue growth." Mr. Patsy concluded,
"Our comprehensive workflow and document management technologies
and services provide solutions that address and improve inefficient
business processes via workflow automation technologies. The
Company is prepared for significant expansion into new markets for
workflow and document management solutions that address the
business process improvement initiatives throughout the hospital
enterprise, including Health Information Management, Patient
Financial Services, Supply Chain Management and Human Resources. We
are very excited about our workflow and document management
solutions that 'make information flow' seamlessly throughout
healthcare organizations thereby improving operating efficiencies.
Our business solutions offer healthcare organizations the tools
they need to provide improved productivity, reduced administrative
costs, and enhanced patient care." CONFERENCE CALL INFORMATION The
fourth quarter and fiscal year end conference presentation and call
will be held at 10:00 a.m. Eastern Time, on Wednesday March 30,
2005. The call will feature remarks from J. Brian Patsy, President
and Chief Executive Officer, William A. Geers, Chief Operating
Officer, and Paul W. Bridge, Jr., Chief Financial Officer. To
listen to the call please go to http://www.streamlinehealth.net/ or
http://www.lanvision.com/ approximately twenty minutes before the
conference call is scheduled to begin. You will need to register as
well as download and install any necessary audio software. The
webcast will be available on the LanVision website for 30 days.
About LanVision Systems, Inc. LanVision is a leading supplier of
workflow and document management tools, applications and services
that assist strategic business partners, healthcare organizations,
and customers to create and improve operational efficiencies
through business process re-engineering and automating demanding
document- intensive environments. The company's workflow-based
services offer solutions to inefficient and labor-intensive
healthcare business processes within the revenue cycle, such as
remote coding, abstracting and chart completion, remote physician
order processing, pre-admission registration scanning, insurance
verification, secondary billing services, explanation of benefits
processing and release of information processing. The solutions
also address the workflow needs of the Human Resource and Supply
Chain Management departments of the healthcare enterprise. All
solutions are available for purchase or through a remote hosting
services model that better matches customers' capital or operating
budget needs. The company's solutions create an integrated
repository of historical health information that is complementary
and can be seamlessly used with existing clinical, financial and
administrative information systems, providing convenient electronic
access to all forms of patient information from any location,
including access using a web-browser through the Intranet/Internet.
These integrated systems allow providers and administrators to
dramatically improve the availability of patient information while
decreasing direct costs associated with document retrieval,
work-in-process, chart completion, document retention, and
archiving. The company provides remote hosting services to various
healthcare providers including University Hospital, a member of The
Health Alliance of Greater Cincinnati, and Children's Medical
Center of Columbus, OH. In addition, the Company has installed its
workflow and document imaging solutions at leading healthcare
providers including Stanford Hospital and Clinics, Albert Einstein
Healthcare Network, Beth Israel Medical Centers, University of
Pittsburgh Medical Center, Medical University Hospital Authority of
South Carolina, and Memorial Sloan-Kettering Cancer Center. For
additional information please visit our website at
http://www.streamlinehealth.net/ . Safe Harbor statement under the
Private Securities Litigation Reform Act of 1995 Statements made by
LanVision that are not historical facts are forward- looking
statements that are subject to risks and uncertainties. The
forward- looking statements contained herein are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements,
included herein. These risks and uncertainties include, but are not
limited to, the impact of competitive products and pricing, product
demand and market acceptance, new product development, key
strategic alliances with vendors that resell LanVision products,
the ability of the Company to control costs, availability of
products produced from third party vendors, the healthcare
regulatory environment, healthcare information systems budgets,
availability of healthcare information systems trained personnel
for implementation of new systems, as well as maintenance of legacy
systems, fluctuations in operating results and other risks detailed
from time to time in the LanVision Systems, Inc. filings with the
U. S. Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
reflect management's analysis only as of the date hereof. The
Company undertakes no obligation to publicly release the results of
any revision to these forward-looking statements, which may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. LANVISION SYSTEMS,
INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME Three Months
Ended Fiscal Year Ended January 31, January 31, 2005 2004 2005 2004
Revenues: Systems sales $ 2,447,525 $ 1,394,700 $2,965,262 $
4,208,755 Services, maintenance and support 1,888,671 1,580,862
7,186,304 6,651,953 Application-hosting services 676,350 574,746
2,599,092 1,942,826 Total revenues 5,012,546 3,550,308 12,750,658
12,803,534 Operating expenses: Cost of systems sales 1,514,001
411,482 2,331,176 1,584,955 Cost of services, maintenance and
support 737,173 672,875 2,804,202 2,752,500 Cost of application-
hosting services 248,864 230,228 916,737 900,287 Selling, general
and administrative 822,680 765,870 3,701,443 3,158,239 Product
research and development 509,687 499,872 2,061,207 2,053,901 Total
operating expenses 3,832,405 2,580,327 11,814,765 10,449,882
Operating profit 1,180,141 969,981 935,893 2,353,652 Other income
(expense): Interest income 14,218 14,241 70,344 61,443 Interest
expense (52,644) (461,513) (904,314) (1,852,926) Earnings before
income taxes 1,141,715 522,709 101,923 562,169 Income tax benefit
(provision) 455,753 476,997 455,753 456,997 Net earnings $
1,597,468 $ 999,706 $ 557,676 $ 1,019,166 Basic net earnings per
common share $ 0.18 $ 0.11 $ 0.06 $ 0.11 Diluted net earnings per
common share $ 0.17 $ 0.11 $ 0.06 $ 0.11 Number of shares used in
per common share computations - basic net earnings 9,084,477
9,018,784 9,067,816 8,996,734 Number of shares used in per common
share computations - diluted net earnings 9,291,812 9,253,985
9,233,320 9,207,241 LANVISION SYSTEMS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS January 31, Assets 2005 2004
Current assets: Cash and cash equivalents $ 4,181,073 $ 6,227,236
Accounts receivable, net of allowance for doubtful accounts of
$200,000 and $400,000, respectively 1,901,846 2,386,723 Contract
receivables 1,404,364 2,972,356 Other 686,116 357,921 Total current
assets 8,173,399 11,944,236 Property and equipment: Computer
equipment 1,501,796 2,588,749 Computer software 832,304 812,591
Office furniture, fixtures and equipment 537,137 1,166,377
Leasehold improvements 37,504 157,492 2,908,741 4,725,209
Accumulated depreciation and amortization (1,996,129) (3,672,442)
912,612 1,052,767 Capitalized software development costs, net of
accumulated amortization of $3,233,228 and $2,600,228, respectively
2,056,701 1,689,701 Other 850,523 603,750 $ 11,993,235 $ 15,290,454
Liabilities and Stockholders' Equity Current liabilities: Accounts
payable $ 886,090 $ 637,222 Accrued compensation 276,292 265,095
Accrued other expenses 719,135 928,097 Deferred revenues 2,231,442
2,357,531 Current portion of capitalized leases 168,121 220,199
Current portion of long-term debt --- 1,000,000 Accrued interest on
long-term debt --- 4,635,169 Total current liabilities 4,281,080
10,043,313 Capitalized leases --- 168,121 Long-term debt 2,000,000
--- Stockholders' equity: Convertible redeemable preferred stock,
$0.01 par value per share, 5,000,000 shares authorized, no shares
issued --- --- Common stock, $0.01 par value per share, 25,000,000
shares authorized, 9,084,535 and 9,030,032 shares issued,
respectively 90,845 90,300 Capital in excess of par value
35,002,961 34,928,047 Accumulated (deficit) (29,381,651)
(29,939,327) Total stockholders' equity 5,712,155 5,079,020 $
11,993,235 $ 15,290,454 DATASOURCE: LanVision Systems, Inc.
CONTACT: Paul W. Bridge, Jr., Chief Financial Officer of LanVision
Systems, Inc., +1-513-794-7100 Web site:
http://www.streamlinehealth.net/ http://www.lanvision.com/
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