LANV Lanvision Systems (MM)

LanVision Systems Reports Fiscal Third Quarter 2004 Results CINCINNATI, Dec. 1 /PRNewswire-FirstCall/ -- LanVision Systems, Inc. (NASDAQ:LANV) today announced the financial results for the third fiscal quarter and first nine months ended October 31, 2004. Revenues for the fiscal third quarter were $2.5 million, compared with $3.7 million reported in the third quarter of last year. The operating loss for the quarter was $119 thousand compared with an operating profit of $985 thousand in the comparable prior quarter. The net loss for the third quarter was $156 thousand, or $0.02 per basic and diluted common share, compared with a net income of $482 thousand, or $0.05 net per basic and diluted common share in the third quarter of last year. Revenues for the first nine month were $7.7 million, when compared with $9.3 million reported in the comparable period of last year. The operating loss was $244 thousand compared with an operating profit of $1.4 million in the comparable prior period. The net loss for the period was $1 million, or $0.11 per basic and diluted common share, when compared with a net income of $19 thousand, or $0.00 net 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 disappointing in that a large software licensing agreement still in negotiations was not completed during the quarter. We believe that negotiations on this agreement can be finalized and signed during the fourth quarter. By way of comparison, the third quarter of last year LanVision had $1.1 million in software licensing revenues from a single agreement which a remarketing partner signed with a new customer. The absence of a similar software licensing agreement in the current quarter results had a significant impact on current operations when compared with last year. With the expected signing of the agreement, which we anticipated in the third quarter, and currently forecasted additional fourth quarter revenues, LanVision should have significantly improved operating results for the fourth quarter." 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 the increase was 32% and year to date 40% when compared with the comparable prior periods. Our current profit margin on our application hosting services is 65%, resulting primarily from a relatively fixed cost structure with increasing revenues. Recent successes in obtaining new ASPeN customers and increasing revenues from our existing customers and partners are an indication of the strength of our product offerings and the enhanced value proposition of our ASPeN application hosting services. During the third quarter, our interest expense decreased $440 thousand ($540 thousand for the first nine months) as a result of the repayment of our prior high interest rate debt. Also, during the quarter we repaid $700 thousand, or 20%, of the new debt which carries a current interest rate of 7%. We plan on continuing to reduce this debt as quickly as practicable as our cash flow permits." Patsy concluded, "We believe LanVision can improve current operations by expanding our direct sales organization and increasing our efforts to attract new remarketing partners. Accordingly, we are currently expanding our direct sales and marketing staff and developing new sales and marketing strategies to promote our expanded suite of state-of-the-art workflow technologies to the market place. We believe the time has come for LanVision to invest in the sales and marketing resources necessary to take advantage of what we see as significantly growing new opportunities in the healthcare industry as it expands its investments in workflow technologies necessary to improve operations and reduce escalating costs. As a result of our planned investment in additional sales and marketing personnel, we will be moving into a larger facility in the next quarter." Conference Call Information The third quarter conference call is scheduled at 10:00 a.m. Eastern Time, 9:00 a.m. Central on Thursday December 2, 2004. The call will feature remarks from J. Brian Patsy, President and Chief Executive 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 download and install any necessary audio software. The webcast will be available at our website for the next 90 days. About LanVision Systems LanVision is a healthcare information technology company focused on streamlining healthcare by providing solutions that improve document-centric information flows while complementing and enhancing existing transaction- centric healthcare information systems. The Company's workflow and document management solutions bridge the gap between current, inefficient paper-based processes and transaction-based healthcare information systems by 1) electronically capturing document-centric information from disparate sources, 2) electronically directing that information through vital business processes, and 3) providing access to the information for authenticated users (such as physicians, nurses, administrative and financial personnel and payers) across the continuum of care. The company's workflow-based products and services offer unique solutions to specific healthcare business processes within the Medical Record life cycle and the revenue cycle, such as remote coding, abstracting and chart completion, remote physician order processing, pre-admission registration scanning, insurance verification, financial screening, secondary billing services, explanation of benefits processing and release of information processing. LanVision's products and services also create an integrated document- centric repository of historical health information that is complementary and can be seamlessly "bolted on" to existing transaction-centric clinical, financial and management information systems, allowing healthcare providers to aggressively move toward fully Electronic Medical Record (EMR) processes while improving service levels and convenience for all stakeholders. 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. LanVision's systems can be provided on a subscription basis via remote hosting services or installed locally. LanVision provides ASPeN, ASP-based remote hosting services to The University Hospital, a member of The Health Alliance of Greater Cincinnati, M. D. Anderson Cancer Center and Children's Medical Center of Columbus, Ohio among others. In addition, LanVision has installed its workflow and document management solutions at leading healthcare providers including Stanford Hospital and Clinics, the Albert Einstein Healthcare Network, Parkview Health System, ProMedica Health System, Inc., the University of Pittsburgh Medical Center, Medical University Hospital Authority of South Carolina, and Memorial Sloan-Kettering Cancer Center. For additional information on LanVision, please visit our website at http://www.lanvision.com/ . "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 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, 2004 2003 2004 2003 Revenues: Systems sales $65,387 $1,301,596 $517,737 $2,814,055 Services, maintenance and support 1,820,463 1,871,538 5,297,633 5,071,091 Application-hosting services 652,412 493,520 1,922,742 1,368,080 Total revenues 2,538,262 3,666,654 7,738,112 9,253,226 Operating expenses: Cost of systems sales 217,025 267,703 817,175 1,173,473 Cost of services, maintenance and support 675,548 749,208 2,067,029 2,079,625 Cost of application -hosting services 230,078 240,563 667,873 670,059 Selling, general and administrative 1,040,490 914,128 2,878,763 2,392,369 Product research and development 493,730 509,923 1,551,520 1,554,029 Total operating expenses 2,656,871 2,681,525 7,982,360 7,869,555 Operating income (loss) (118,609) 985,129 (244,248) 1,383,671 Other income expense: Interest income 16,933 10,851 56,127 47,201 Interest expense (54,725) (494,325) (851,671) (1,391,413) Income (loss) before taxes (156,401) 501,655 (1,039,792) 39,459 Tax provision - (20,000) - (20,000) Net income (loss) $(156,401) $481,655 $(1,039,792) $19,459 Basic net income (loss) per common share $(0.02) $0.05 $(0.11) $0.00 Diluted net income (loss) per common share $(0.02) $0.05 $(0.11) $0.00 Number of shares used in per common Share computation - basic 9,082,494 9,011,131 9,062,221 8,989,303 Number of shares used in per common Share computation - diluted 9,082,494 9,219,150 9,062,221 9,195,854 LANVISION SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS October 31, October 31, January 31, Assets 2004 2003 2004 Current assets: Cash and cash equivalents (restricted by long-term debt agreement) $3,152,022 $4,750,839 $6,227,236 Accounts receivable 1,895,538 3,233,755 2,786,723 Contract receivables 1,523,077 2,106,118 2,972,356 Allowance for doubtful accounts (400,000) (400,000) (400,000) Other 430,252 434,706 357,921 Total current assets 6,600,889 10,125,418 11,944,236 Property and equipment: Computer equipment 2,717,522 2,484,920 2,588,749 Computer software 971,907 789,351 812,591 Office furniture, fixtures and equipment 1,167,497 1,161,551 1,166,377 Leasehold improvements 157,492 157,492 157,492 5,014,418 4,593,314 4,725,209 Accumulated depreciation and amortization (4,057,006) (3,542,926) (3,672,442) 957,412 1,050,388 1,052,767 Capitalized software development costs, net of accumulated Amortization of $3,074,978, $2,475,228 and $2,600,228 respectively 1,964,951 1,614,701 1,689,701 Installment receivable - 433,339 - Other, primarily deferred tax asset 587,961 38,050 603,750 $10,111,213 $13,261,896 $15,290,454 Liabilities, convertible redeemable preferred stock and stockholders' equity Current liabilities: Accounts payable $279,546 $338,131 $637,222 Accrued compensation 255,010 285,551 265,095 Accrued other expenses 665,365 506,081 928,097 Deferred revenues 1,774,053 1,899,460 2,357,531 Current portion of capitalized leases 208,070 216,571 220,199 Current portion of long-term debt 466,667 1,500,000 1,000,000 Accrued interest on long-term debt - 4,237,982 4,635,169 Total current liabilities 3,648,711 8,983,776 10,043,313 Non-current portion of capitalized leases 16,481 224,551 168,121 Non-current portion of long-term debt 2,333,333 - - 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, 9,083,201 shares 9,012,732 shares and 9,030,032 shares issued, respectively 90,832 90,127 90,300 Capital in excess of par value 35,000,974 34,902,476 34,928,047 Accumulated (deficit) (30,979,118) (30,939,034) (29,939,327) Total stockholders' equity 4,112,688 4,053,569 5,079,020 $10,111,213 $13,261,896 $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.lanvision.com/

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