LENEXA, KS--(Marketwire - February 03, 2009) -
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Mediware Information Systems |
Commenting on the quarter, Mediware president and chief executive officer, Kelly Mann, said: "I'm pleased to report that despite growing global economic challenges and the deterioration of the British Pound to U.S. dollar exchange rate, our second quarter performance generated both quarterly and six-month period revenue and earnings growth. During the period we were focused on deploying our growth programs and continuing a practice of sound operational management."
Keys to the quarter include continued strong sales from the company's UK-based medication management business, new sales in Blood Center Technologies, and the benefit of aggressive cost management programs.
Among the quarter's highlights:
-- The company achieved a 16-percent growth in quarterly revenue while
reducing SG&A expenses by 11-percent compared to the same quarter in the
prior fiscal year;
-- Strong sales in the UK-based medication management business of
pharmacy and e-prescribing software solutions, including the addition of 40
new facilities in South Africa;
-- The addition of several new blood center customers, including new
sales to two of the top five independent blood centers in the United
States;
-- Purchase of the assets of Hann's On Software for approximately $3.5M,
expanding presence in new market segments;
-- Service revenues increased to $8.0M in the second quarter in support
of new system implementations and regular product upgrades.
Mr. Mann continued: "The global economy is beginning to have an effect on our business and we are seeing some sales delays. Further, revenue contributions from the UK were negatively impacted by declining foreign currency exchange rates. As a result, revenues were adversely impacted by approximately $479,000 in the six months ended December 31, 2008. However, I am confident that we are taking the appropriate steps to proactively manage and grow our business."
Mediware's strategic new products, which can deliver significant cost controls to the customer and provide low barriers to entry through flexible subscription plans, are being positively received and provide the company a channel to new revenue.
Supporting this strategy, on November 20, 2008, Mediware acquired substantially all of the assets of Hann's On Software, Inc (HOS). The purchase price paid for the assets of HOS consists of an initial purchase price of $3,455,000 paid in cash, with an additional earn out opportunity based on operational performance and a working capital adjustment.
Mediware added approximately 320 subscription-based pharmacy customers as a result of the acquisition. Further, the acquired products allow Mediware to expand its presence with small acute care and behavioral health hospitals, specialty pharmacies and home infusion treatment providers. This acquisition follows Mediware's November 2007 purchase of the business of Integrated Marketing Solutions (IMS) that resulted in the launch of Mediware's Blood Center Technologies business.
A conference call to discuss first quarter's results is scheduled for today, Tuesday, February 3, 2009 at 10:00 am Eastern Standard Time, 9:00 am Central Standard Time. Individuals seeking to participate in the teleconference are encouraged to register for access online at http://www.directeventreg.com/registration/event/82929414 at least 5 minutes prior to the start of the conference. The conference ID is 82929414. Participants may also register by phone by calling toll-free 888-869-1189 (direct dial 706-643-5902) fifteen minutes prior to the call.
A replay of the call will be available after the call's completion for 5 days at 800-642-1687 (direct dial 706-645-9291). The conference ID is 82929414. After 5 days, the replay will be available on the company's web site: www.mediware.com.
Mediware Information Systems, Inc.
Income Statement Highlights
(in thousands, unaudited):
Three Months Ended Six Months Ended
December 31, December 31,
---------------- -----------------
2008 2007 2008 2007
-------- ------- -------- --------
System Sales $ 2,023 $ 2,032 $ 4,452 $ 6,222
-------- ------- -------- --------
Services $ 7,992 $ 6,627 $ 15,396 $ 13,181
-------- ------- -------- --------
Total Revenue $ 10,015 $ 8,659 $ 19,848 $ 19,403
-------- ------- -------- --------
Expenses $ 9,672 $ 9,469 $ 19,293 $ 19,381
-------- ------- -------- --------
Operating Income (loss) $ 343 $ (810) $ 555 $ 22
-------- ------- -------- --------
Net Income (loss) $ 303 $ (337) $ 521 $ 126
-------- ------- -------- --------
Earnings (loss) Per Share - Diluted $ 0.04 $ (0.04) $ 0.07 $ 0.01
-------- ------- -------- --------
Condensed Balance Sheet Highlights
(in thousands) (unaudited):
As of
December 31,
-----------------------
2008 2007
----------- -----------
Cash and Cash Equivalents $ 18,631 $ 20,949
----------- -----------
Working Capital $ 16,578 $ 20,706
----------- -----------
Stockholders’ Equity $ 40,089 $ 42,402
----------- -----------
EXPLANATION OF FOREIGN CURRENCY EXCHANGE RATE IMPACT ON REVENUES
AND NET INCOME
For the Six Months Ended December 31, 2008
(In 000's)
Unaudited
The impact of foreign currency exchange rates on revenues for the six months ended December 31, 2008 is presented herein, and the impact of rates on revenue and net income for the three and six months ended December 31, 2008 is presented below, because it is used by management to evaluate and understand the performance of Mediware's U.K.-based business. Revenue from Mediware's U.K.-based business represented approximately 13% and 14% of Mediware's consolidated revenue for the three- and six-months ended December 31, 2008, respectively. The U.K.-based business operates in British pounds and its operating results are converted into U.S. dollars for reporting as part of Mediware's consolidated results of operations in accordance with United States Generally Accepted Accounting Principles ("GAAP"). As foreign exchange rates change, the translation of the income statements into U.S. dollars is effectuated at a different throughout the reporting period. Foreign exchange rate movements are complex and changes are linked to macroeconomic factors not specific Mediware. To evaluate the U.K.-based business during a company period with a substantial intra-period change in the effective British pound-U.S. dollar exchange rate, management sometimes applies an artificially fixed exchange rate to results for the entire fiscal period. This is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for the consolidated statements of operations prepared in accordance with GAAP as an indication of the Company's operating performance. Among other things, this measure ignores any actions that Mediware, its customers or competitors may have taken or may take in the future to adjust operating strategies to a different exchange rate environment.
UK Revenue
----------------------------
3-Months 6-Months
Ended Ended
12/31/2008 12/31/2008
------------- -------------
Impact of Foreign Currency Exchange Rate
Changes on UK Based Business
UK based business results in functional
currency (GBP) GBP 834,000 GBP 1,622,000
Exchange rate, beginning of period (USD to
GBP) 1.8175 1.9954
------------- -------------
UK based business results in US Dollars,
based on exchange rates at beginning of
period $ 1,516,000 $ 3,237,000
UK based business GAAP results in US Dollars,
as reported $ 1,291,000 $ 2,758,000
------------- -------------
Net adverse impact of foreign currency
exchange rate change on UK based business $ (225,000) $ (479,000)
============= =============
UK Net Income
----------------------------
3-Months 6-Months
Ended Ended
12/31/2008 12/31/2008
------------- -------------
Impact of Foreign Currency Exchange Rate
Changes on UK Based Business
UK based business results in functional
currency (GBP) GBP 73,000 GBP 158,000
Exchange rate, beginning of period (USD to
GBP) 1.8175 1.9954
------------- -------------
UK based business results in US Dollars,
based on exchange rates at beginning of
period $ 133,000 $ 315,000
UK based business GAAP results in US Dollars,
as reported $ 102,000 $ 248,000
------------- -------------
Net adverse impact of foreign currency
exchange rate change on UK based business $ (31,000) $ (67,000)
============= =============
About Mediware
Mediware delivers powerful software solutions that encapsulate patient care instructions, reinforce patient safety practices and improve efficiencies to lower costs. For blood medication management, Mediware offers specialized solutions proven to improve operational effectiveness and clinical outcomes. Mediware customers include prestigious hospitals, clinics, correctional institutions, blood centers and other public and private health care institutions throughout the world. Visit www.mediware.com for more information about Mediware products and for other information about the company, which is regularly posted or otherwise available on its Investor Relations page.
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 Mediware's Annual
Report on Form 10-K for the year ended June 30, 2008 and in Mediware's
subsequent Quarterly Reports on Form 10-Q, 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. Mediware
disclaims any obligation to update its forward-looking statements.
Contact:
Mark Williams
913.307.1000
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