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VantageMed Corp. Announces Second Quarter 2005 Results


10/19/2005 5:09:08 PM

RANCHO CORDOVA, Calif., Aug. 11 /PRNewswire-FirstCall/ -- VantageMed Corporation today announced financial results for the second quarter and six months ended June 30, 2005. Total revenues for the quarter ended June 30, 2005 were $3.9 million, down 11.3%, or $493,000, from the prior quarter and down 37.0%, or $2.3 million, from the year ago quarter ended June 30, 2004. Total revenues for the six months ended June 30, 2005 were $8.2 million, down 26.6%, or $3.0 million, from the six months ended June 30, 2004.

Revenue from discontinued legacy products was $295,000 in the second quarter of 2005, down from $1.6 million in the year ago quarter. Revenues from the RidgeMark product line, the replacement product line for the legacy products, were $1.3 million in the second quarter of 2005, down from $2.1 million in the year ago quarter, as the migration process concluded. The resources once committed to the support of discontinued legacy products and the migration process were reduced significantly in June and July 2005. The full effect of these cost reductions will be visible in future quarters. Company staffing levels were reduced from 174 at March 31, 2005 to 154 at July 31, 2005.

VantageMed reported a net loss of ($1.7) million, or ($0.12) per share, in the second quarter of 2005, compared to a loss of ($1.2) million, or ($0.13) per share, for the prior quarter and compared to a net loss of ($28,000), or ($0.00) per share, for the year ago quarter. Net loss for the six months ended June 30, 2005 was ($2.9) million, or ($0.21) per share compared to a net loss of net loss of ($734,000), or ($0.09) per share, for the six months ended June 30, 2004. As of June 30, 2005, we had cash and short term investments totaling $2.2 million.

Management Commentary

Steve Curd, VantageMed's CEO, commented, "With this quarter, we have put behind us the product migration initiatives associated with our legacy technology systems. Although it was a necessary process, it forced us to focus heavily on selling low margin migrations instead of selling higher margin systems to new customers. We are now able to focus on higher margin product lines while continuing to improve customer satisfaction.

"For example, we released a new version of the Northern Health Anesthesia product and are seeing expansion of our roughly 10% market share in this segment. Also, later this quarter we will begin selling an expanded version of our Helper product line. This new version will allow us to sell an entry level solution to a much larger medical provider segment. Finally, we are launching a value added reseller program to better leverage our internal sales efforts.

"We plan to eliminate our cash flow losses as we align RidgeMark costs with the associated revenue. Our plan remains to exit 2005 as a profitable, debt-free company with strong growth opportunities."

Conference Call

VantageMed will be hosting a conference call to discuss financial results today, August 11, 2005 at 5:00 P.M. Eastern Time. The call will be broadcast live over the Internet and can be accessed at http://phx.corporate-ir.net/playerlink.zhtml?c=76749&s=wm&e=1115829 or on the Company's investor relations page located at www.vantagemed.com. To participate in the call, please dial 1-800-946-0719 five to ten minutes prior to the scheduled conference call time. A replay of the call will be available on the Company's website for 30 days.

About VantageMed

VantageMed is a trusted provider of healthcare software products and services to more than 18,000 physician, anesthesiologist and behavioral health providers nationwide. These providers use VantageMed's core products including ChartKeeper Computerized Medical Records software as well as RidgeMark, Northern Health Anesthesia and our Helper family of Practice Management products, which are all supported by SecureConnect electronic transaction services. VantageMed is dedicated to providing these cost effective, easy to use solutions that empower healthcare providers and their staff with the tools and data they need to improve productivity and reimbursements. For more information about VantageMed or our products, please call 877-879-8633, or visit the company's Website at www.vantagemed.com.

This press release may be deemed to contain "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Any forward-looking statements are made as of today's date and we do not undertake any obligation to update forward-looking statements. You can identify such statements by our use of such words as "should", "expect," "will," "intends," and similar words and phrases which denote future events and which may depend on the future performance of the Company. Our assumptions underlying these statements are also "forward-looking" statements. Forward-looking statements are based on information and assumptions that are dynamic in nature and subject to rapid and sometimes abrupt changes. Our forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those stated or implied by the statements. These risks and uncertainties include risks related to our ability to successfully develop, sell and support our products, our ability to attract and retain new and existing customers, our ability to increase revenues, control our expenses and improve the rate at which we have utilized cash. Our forward-looking statements are also subject to important risks and uncertainties detailed in our latest reports filed with the SEC and available on its website at www.sec.gov.

VantageMed Corporation Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended Six Months Ended Jun 30 Mar 31 Jun 30 Jun 30 Jun 30 2005 2005 2004 2005 2004 Revenues: Software and systems $789 $957 $1,762 $1,746 $2,864 Customer support 2,040 2,308 3,144 4,348 5,960 Electronic services 1,032 1,089 1,219 2,121 2,366 Total revenues 3,861 4,354 6,125 8,215 11,190 Cost of revenues: Software and systems 292 348 896 640 1,364 Customer support 1,728 1,745 1,903 3,473 3,661 Electronic services 681 747 694 1,428 1,324 Total cost of revenues 2,701 2,840 3,493 5,541 6,349 Total gross margin 1,160 1,514 2,632 2,674 4,841 Operating expenses: Selling, general and administrative 2,058 2,038 1,999 4,096 4,050 Product development 635 589 674 1,224 1,393 Depreciation and amortization 61 67 128 128 254 Stock-based compensation 76 85 21 161 34 Asset impairment and restructuring charges -- (13) (147) (13) (147) Total operating costs and expenses 2,830 2,766 2,675 5,596 5,584 Loss from operations (1,670) (1,252) (43) (2,922) (743) Interest and other income (expense): Interest income 24 16 13 40 26 Interest and other expense (21) (12) 2 (33) (17) Total interest and other income (expense), net 3 4 15 7 9 Net income (loss) $(1,667) $(1,248) $(28) $(2,915) $(734) Basic and diluted net income (loss) per share $(0.12) $(0.13) $(0.00) $(0.21) $(0.09) Weighted-average shares-basic and diluted 13,505 9,326 8,271 13,741 8,313 VantageMed Corporation Consolidated Statements Of Cash Flows (In Thousands) (Unaudited) Six Months Ended June 30, 2005 2004 Cash flows from operating activities: Net loss $(2,915) $(734) Adjustments to reconcile net loss to net cash used for operating activities - Depreciation and amortization 128 268 Bad debt expense 118 124 Stock-based compensation 161 34 Changes in assets and liabilities - Accounts receivable 565 (263) Inventories (25) 114 Prepaid expenses and other 159 91 Accounts payable and accrued liabilities (676) 4 Customer deposits and deferred revenue (653) 214 Net cash used for operating activities (3,138) (148) Cash flows from investing activities: Purchases of property and equipment (46) (102) Proceeds from sale of investments 2,231 -- Purchase of investments (4,000) -- Net cash provided by (used for) investing activities (1,815) (102) Cash flows from financing activities: Principal payments on long-term debt (303) (299) Proceeds from sale of stock and warrants, net 4,576 -- Proceeds from stock option exercises 137 17 Net cash used for financing activities 4,410 (282) Net increase (decrease) in cash and cash equivalents (543) (532) Cash and cash equivalents, beginning of period 946 1,585 Cash and cash equivalents, end of period $403 $1,053 VantageMed Corporation Consolidated Balance Sheets (In Thousands, Except Share And Per Share Amounts) June 30, December 31, 2005 2004 (Unaudited) ASSETS Current assets: Cash and cash equivalents $403 $946 Short-term investments 1,769 -- Accounts receivable, net of allowance of $285 and $413, respectively 1,078 1,761 Inventories, net of reserve of $73 and $21, respectively 141 116 Prepaid expenses and other 395 396 Total current assets 3,786 3,219 Property and equipment, net 319 333 Other assets -- 6 Intangibles, net 382 392 Total assets $4,487 $3,950 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Current portion of long-term debt $236 $375 Accounts payable 1,685 1,754 Accrued liabilities 1,509 2,071 Customer deposits and deferred revenue 3,266 3,919 Total current liabilities 6,696 8,119 Long-term portion of restructuring reserve, net of current portion 48 93 Long-term debt, net of current portion 46 -- Total liabilities 6,790 8,212 Stockholders' deficit: Preferred Stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or outstanding -- -- Common stock, $0.001 par value, 40,000,000 shares authorized and 13,988,429 shares outstanding at June 30, 2005; 20,000,000 shares authorized and 8,279,323 shares issued and outstanding at December 31, 2004 14 8 Additional paid-in capital 77,493 72,625 Accumulated deficit (79,810) (76,895) Total stockholders' deficit (2,303) (4,262) Total liabilities and stockholders' deficit $4,487 $3,950

VantageMed Corporation

CONTACT: investors, Howard Kalt or Neal Rosen, both of Kalt Rosen &Company, 1-415-397-2686, or investor@vantagemed.com; or media, JenniferMorgano of VantageMed Corporation, +1-877-TRY-VMED, ext. 4851, ormedia@vantagemed.com


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