LEXANA, Kan., Sept. 2 /PRNewswire-FirstCall/ -- Mediware Information Systems, Inc. reviewed FY 2004 corporate financial results and divisional commercial activities at a scheduled teleconference call today. A replay is available until September 7, 2004 by calling 888 566-0167 or 402 530-9312
In reviewing recent division activities Chief Executive Officer George Barry said that starting in fiscal 2003, Mediware began expanding its products from vertical clinical activities, such as stand-alone pharmacy and blood bank systems, into horizontal processes.
As an example, he said that company has integrated clinician medication order entry and bedside medication administration into its pharmacy system that can be sold with its WORx products. This addresses medication safety that requires a closed loop from initiation of a med order through to the patient. This has been done both in North America and in the United Kingdom. The U.K. pharmacy systems vary significantly from the U.S. “We now sell both stand-alone pharmacy modules along with a closed loop order entry through bedside administration medication system,” he said.
The company reported its third consecutive year of record revenue for the fiscal year ended June 30, 2004 of $36.7 million, up 11 percent compared to $33.0 million for fiscal 2003. Operating income for the year just ended was $5.6 million versus $7.0 million for the prior year.
Net income for fiscal 2004 was $3.6 million, or 48 cents per basic share and 44 cents per fully diluted share, compared to net income of $4.4 million, or 60 cents per basic share and 56 cents per fully diluted share.
For the quarter just ended, revenue was $9.2 million, up 5 percent from the year-ago period. Net income for the fourth quarter of fiscal 2004 decreased to $875,000, or 12 cents per basic share and 11 cents per diluted share, compared to $1,169,000, or 16 cents per basic share and 15 cents per fully diluted share, for the fourth quarter of fiscal 2003.
In response to questions, Mr. Barry made the following comments:
Regarding management and succession planning he said, “I came to Mediware with a set mission. I wanted to see the products, development plans and market acceptance along with company infrastructure growing on an organic basis. I recently extended my contract with Mediware through fiscal 2006. I believe we have the products, market and management to accomplish my mission.”
He continued by expressing his belief that “Mediware has an exceptionally strong management team. Leading our two major divisions are seasoned healthcare managers who have both led public corporations in our industry. Mike Crabtree and Frank Poggio both have some 30 years’ broad healthcare management experience. I think these men are the best in our field. Rob Blay reports to Mike and heads up our U.K. operations. Rob has added to our positioning in the U.K. and we expect him to add greatly to our execution there. Both Jill Suppes our CFO and Rob Weber our general counsel have the skill set to manage the control and governance issues of Mediware for many years to come.
Regarding recent selling by insiders, Mr. Barry said, “the current board of directors (excluding Mr. Barry) holds approximately 515,000 in vested options. These options have accumulated in lieu of cash board payments going back to 1997. Over the last three years, this board has exercised and sold 14,000 options. 11,667 were exercised by Mrs. Frieberg after our board member, John Frieberg died. 2,500 options were exercised and sold by Dr. Weiman. Dr. Weiman, who is 80, has established a 10b5-1 plan to liquidate his remaining 39,067 options. As options have expired, the board exercised and held 36,671 shares. These options are non-qualified which means the board had to pay ordinary income tax on top of the exercise price to hold these shares. I have requested that the board be more aggressive in exercising and selling their options. My point has been that this would increase the float, reduce the option overhang, and provide Mediware with an estimated $4 million in cash from the tax shield and exercise price.
“After issuing a press release, I initiated and the board approved a 10b5- 1 plan for the exercise of my options. I am in the fourth year of the option grant. My options expire at the end of the 5th year. The last open trading window for the exercise of my options accrues to the September 2005 quarter. I have simply spread my option trades at a 5,000 per week rate over some 70 weeks. I thought this to be the most democratic approach. Jill Suppes and Mike Crabtree have the same situation with their options. Jill exercised 10,000 out of her 20,000 grant. Mr. Crabtree exercised 15,000 out of his 50,000 grant. Both will need to exercise these options prior to expiration.”
Regarding corporate governance policies and practices, Mr. Barry said that, “over the last three years, the company has placed focus upon corporate governance. The company’s committee structure, including the compensation, audit and strategic committees, have substantively addressed important governance issues.
“The compensation committee has expanded its membership and has adopted a new charter which formally addressed the committee’s mission and compliance. The committee engaged a nationally known compensation consulting company; developed and implemented an equity incentive plan; reviewed and/or approved the hiring of the Company’s senior executives; and engages in the ongoing review of executive compensation.
“The audit committee is under a new chairman who is a new independent board member with financial expertise, including being a CPA with broad SEC compliance experience. The committee has coordinated the engagement of Ernst & Young to aid the Company in ensuring Sarbanes-Oxley compliance. The audit committee meets on a regular basis to review the results, insights and other related activities performed by the Company’s external auditors. The Company’s financial controls have been supplemented through the new hire of several senior financial professionals, including a new corporate controller with substantial audit and SEC experience and two divisional controllers with CPA’s and broad operational accounting experience. The strategic committee reviews on an ongoing basis potential acquisitions, business combinations and other equity related issues.
“The Company deals in a complex environment. Sales are through sophisticated contracting; SEC and investor issues have changed substantially; and Board communication issues have increased in scope and legal requirements. To address those issues, Mediware has brought on board a skilled attorney with broad industry and corporate experience to ensure proper execution. Our General Counsel supplements the outside legal advice provided by Baker Botts LLP and other nationally recognized law firms provided on each material contract. Additionally, the General Counsel’s charter includes facilitation of Board governance issues along with aiding senior management with informed legal counsel.
“The Company has adopted a formal code of conduct policy which has been circulated and signed by employees. This policy addresses such topics as insider trading, whistle blower activities and other ethical dealings. This policy is available on our website for review.”
Mediware provides clinical information systems for hospitals and integrated healthcare delivery systems. Its products include HEMOCARE LifeLine(TM), Hemocare(R), LifeLine(R) and LifeTrak(R) (blood bank), WORx(R), Pharmakon(R), and Digimedics(TM) (pharmacy), Surgiware(TM) and Perioperative Solutions(TM) (operating room), as well as the JAC Stock Control System (pharmacy) in the United Kingdom. Mediware has over 1,100 systems installed in the U.S., Canada, the U.K., and elsewhere.
Certain statements in this press release may constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995, as the same may be amended from time to time (the “Act”) and in releases made by the SEC from time to time. Such forward-looking statements are not based on historical facts and involve known and unknown risks, uncertainties and other factors disclosed in the Company’s Annual Report on Form 10-K for the year ended June 30, 2004, which may cause the actual results of the Company to be materially different from any future results expressed or implied by such forward-looking statements. The Company disclaims any obligation to update its forward-looking statements.
Contact George Barry 913/307-1000 http://www.mediware.com/ Thomas Redington 203/222-7399 212/926-1733 http://www.redingtoninc.com/
Mediware Information Systems, Inc.
CONTACT: George Barry, +1-913-307-1000 of Mediware; or Thomas Redington,+1-203-222-7399, or +1-212-926-1733, for Mediware
Web Site: http://www.mediware.com/
