LANV Lanvision Systems (MM)

Revenues increased 25% over the comparable quarter last year CINCINNATI, Dec. 5 /PRNewswire-FirstCall/ -- LanVision Systems, Inc. (NASDAQ:LANV) d/b/a Streamline Health(TM) today announced the financial results for the third fiscal quarter and first nine months ended October 31, 2005. Revenues for the fiscal third quarter increased 25% to $3.2 million, compared with $2.5 million reported in the third quarter of last year. The operating loss for the quarter was $463 thousand compared with an operating loss of $119 thousand in the comparable prior quarter. The net loss for the third quarter was $454 thousand, or $0.05 per basic and diluted common share, compared with a net loss of $156 thousand, or $0.02 per basic and diluted common share in the third quarter of last year. Revenues for the first nine months increased 28% to $9.9 million, when compared with $7.7 million reported in the comparable period of last year. The operating loss was $170 thousand compared with an operating loss of $244 thousand in the comparable prior period. The net loss for the period was $212 thousand, or $0.02 per basic and diluted common share, when compared with a net loss of $1 million, or $0.11 per basic and diluted common share in the comparable prior period. Brian Patsy, LanVision's President and Chief Executive Officer commented, "The results for the third quarter were below management's revenue expectations but in line with our year to date operating loss expectations. The revenue shortfall occurred primarily because negotiations on a large software licensing agreement in which we were selected as vendor of choice was not completed as anticipated during the third quarter and carried over into our fourth quarter. As we have noted in the past, our quarter-to-quarter comparisons are not necessarily indicative of our operations because of the nature and timing of large systems sales agreements that significantly impact any particular quarter. More accurate assessments, we believe, are comparisons of annual financial results. We are confident that the large software licensing agreement we had hoped to close in the third quarter can be secured and signed during the fourth quarter. With the expected signing of this agreement, other anticipated large system sales and currently forecasted additional fourth quarter revenues, LanVision reiterates its guidance to achieve approximately a 25% increase in total revenues for the current fiscal year." Mr. Patsy continued, "Year-to-date our total revenues are $2.2 million or 28% ahead of last year. We anticipate this trend will continue with record fourth quarter revenues that will allow us to achieve or exceed our targeted revenue and operating profit plans for the year. As, planned, all increased revenues to date have been reinvested in our operations to expand our sales and software development staffs after years of severe restrictions due to our prior debt covenants and repayment obligations. The significantly lower year- to-date interest expense, resulting from the refinancing of our debt in July 2004, significantly reduced our year-to-date net loss." Paul W. Bridge, Jr., LanVision's Chief Financial Officer, said, "During the quarter our highly profitable ASPeN(SM) application hosting revenues continued to increase. For the third quarter and year-to-date, ASPeN revenues increased 18% when compared with the comparable prior periods. Our current profit margin on our application hosting services is 67%, resulting primarily from a relatively fixed cost structure with increasing revenues. Also, system sales, both hardware and software, increased during the quarter as the result of signing a new smaller customer and the expansion of software licensing within our installed base." Patsy concluded, "We believe our fourth quarter, as currently projected, will allow us to achieve the planned target of approximately 25% revenue growth for the fiscal year and complete the year with an operating profit ahead of our internal plans, notwithstanding the significant investment in the talent and technologies necessary to continue our long-term growth plans." Conference Call Information The third quarter conference call is scheduled at 10:00 a.m. Eastern Time, on Tuesday, December 6, 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. The Conference Call will be broadcast live via the Internet. To listen, please go to http://www.lanvision.com/ approximately twenty minutes before the conference call is scheduled to begin. You will need to download and install any necessary audio software. The webcast will be available at our website for the next 30 days. About LanVision Systems LanVision Systems, Inc., which does business as Streamline Health, 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 throughout the revenue cycle, such as chart coding, abstracting and completion, remote physician order processing, pre-admission registration scanning and signature capture, insurance verification, secondary billing services, explanation of benefits processing and release of information processing. The company's solutions also address the document 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. LanVision's solutions create a permanent document-based repository of historical health information that is complementary and can be seamlessly integrated with existing disparate 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 link systems with documents, which can dramatically improve the availability of patient information while decreasing direct costs associated with document retrieval, work-in-process, chart processing, document retention, and archiving. LanVision 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 management 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//http://www.lanvision.com/ or 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. LanVision's future financial performance could differ materially from expectations of management and from results reported now or in the past. Factors that could cause LanVision's financial performance to so differ include, but are not limited to, the signing of significant new agreements anticipated in the fourth quarter and the resulting impact on operations should they not be signed, the impact of competitive products and pricing, product development, reliance on strategic alliances, availability of products procured from third party vendors, the healthcare regulatory environment, fluctuations in operating results, and other risks detailed from time to time in LanVision's filings with the U.S. Securities and Exchange Commission. LANVISION SYSTEMS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Nine Months Ended October 31, October 31, 2005 2004 2005 2004 Revenues: Systems sales $621,519 $65,387 $2,334,216 $517,737 Services, maintenance and support 1,771,236 1,820,463 5,323,582 5,297,633 Application-hosting services 771,839 652,412 2,269,400 1,922,742 Total revenues 3,164,594 2,538,262 9,927,198 7,738,112 Operating expenses: Cost of systems sales 451,033 217,025 1,397,973 817,175 Cost of services, maintenance and support 786,290 675,548 2,290,288 2,067,029 Cost of application- hosting services 263,436 230,078 752,131 667,873 Selling, general and administrative 1,212,472 1,040,490 3,561,280 2,878,763 Product research and development 914,281 493,730 2,095,366 1,551,520 Total operating expenses 3,627,512 2,656,871 10,097,038 7,982,360 Operating (loss) (462,918) (118,609) (169,840) (244,248) Other income expense: Interest income 27,317 16,933 65,208 56,127 Interest expense (35,868) (54,725) (107,087) (851,671) (Loss) before taxes (471,469) (156,401) (211,719) (1,039,792) Tax (provision) benefit 17,000 - - - Net (loss) $(454,469) $(156,401) $(211,719) $(1,039,792) Basic net (loss) per common share $ (0.05) $ (0.02) $(0.02) $(0.11) Diluted net (loss) per common share $ (0.05) $ (0.02) $(0.02) $(0.11) Number of shares used in per common Share computation - basic 9,131,237 9,082,494 9,108,911 9,062,221 Number of shares used in per common Share computation - diluted 9,131,237 9,082,494 9,108,911 9,062,221 LANVISION SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS October 31, October 31, January 31, Assets 2005 2004 2005 Current assets: Cash and cash equivalents (restricted by long-term debt agreement) $3,149,633 $3,152,022 $4,181,073 Accounts receivable 1,966,952 1,895,538 2,101,846 Contract receivables 1,169,056 1,523,077 1,404,364 Allowance for doubtful accounts (200,000) (400,000) (200,000) Other 751,413 430,252 686,116 Total current assets 6,837,054 6,600,889 8,173,399 Property and equipment: Computer equipment 2,077,744 2,717,522 1,501,796 Computer software 969,374 971,907 832,304 Office furniture, fixtures and equipment 736,858 1,167,497 537,137 Leasehold improvements 522,863 157,492 37,504 4,306,839 5,014,418 2,908,741 Accumulated depreciation and amortization (2,481,506) (4,057,006) (1,996,129) 1,825,333 957,412 912,612 Capitalized software development costs, net of accumulated Amortization of $3,833,231, $3,074,978 and $3,233,228 respectively 2,356,698 1,964,951 2,056,701 Other, primarily deferred tax asset 695,991 587,961 850,523 $11,715,076 $10,111,213 $11,993,235 Liabilities, convertible redeemable preferred stock and stockholders' equity Current liabilities: Accounts payable $740,395 $279,546 $886,090 Accrued compensation 463,092 255,010 276,292 Accrued other expenses 640,820 665,365 719,135 Deferred revenues 1,810,483 1,774,053 2,231,442 Current portion of capitalized leases 99,983 208,070 168,121 Current portion of long-term debt 1,000,000 466,667 - Total current liabilities 4,754,773 3,648,711 4,281,080 Non-current portion of long-term debt 1,000,000 2,333,333 2,000,000 Non-current portion of capitalized leases 168,840 16,481 - Non-current portion of lease incentives 222,273 - - Stockholders' equity: Convertible redeemable preferred stock, $0.01 par value per share, 5,000,000 shares authorized - - - Common stock, $0.01 par value per share, 25,000,000 shares Authorized, 9,143,041 shares 9,083,201 shares and 9,084,535 shares issued, respectively 91,430 90,832 90,845 Capital in excess of par value 35,071,130 35,000,974 35,002,961 Accumulated (deficit) (29,593,370) (30,979,118) (29,381,651) Total stockholders' equity 5,569,190 4,112,688 5,712,155 $11,715,076 $10,111,213 $11,993,235 DATASOURCE: LanVision Systems, Inc. CONTACT: Paul W. Bridge, Jr., Chief Financial Officer of LanVision Systems, Inc., +1-513-794-7100 Web site: http://www.lanvision.com/ http://www.streamlinehealth.net/

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