MONTREAL, QUEBEC -- 02/08/08 --
MediSolution Ltd. (TSX: MSH), a Brookfield Asset Management company and a leading healthcare and service sector information technology company, today announced its results for the third quarter ended December 31, 2007.
Third Quarter Highlights
For the quarter ended December 31, 2007, the Corporation reported a loss of $(0.3) million, compared to a loss of $(0.2) million in the same period in fiscal 2007.
Overall, new systems revenue in the third quarter of fiscal 2008 decreased by 6% as compared to the same quarter in the prior year, totalling $3.6 million ($3.8 million, Q3 fiscal year 2007). Consolidated revenue in the third quarter of fiscal 2008 decreased by 1% as compared to the same quarter in the prior year, totalling $10.9 million ($11.0 million, Q3 fiscal year 2007).
The Corporation's EBITDA(1) decreased by $0.1 million to $0.7 million before interest, taxes, depreciation, amortization and loss on foreign exchange, reported in the same quarter in the prior year.
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Three months ended December 31
(in millions of dollars) 2007 2006
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System sales 3.56 $ 3.78 $
Support and processing 7.38 7.22
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Total Revenues 10.94 11.00
Cost of revenues 6.85 6.31
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Gross profit 4.09 4.69
Sales and marketing expenses 1.86 1.86
Software development expenses 0.41 0.47
General and administrative expenses 1.08 1.59
EBITDA 0.74 0.77
Depreciation of property and equipment 0.12 0.16
Amortization of intangible assets 0.83 0.77
Interest expense 0.07 0.11
Loss (gain) on foreign exchange 0.03 (0.03)
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Net earnings (loss) (0.31)$ (0.24)$
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Fiscal Year-to-Date Highlights
While the third quarter was generally flat on a year-over-year basis, the Corporation achieved the following significant improvements in the first 9 months of fiscal 2008 as compared to the same period in the prior year:
- an 11% increase in total revenue to $34.2 million from $31.0 million in the same period prior year;
- a 37% increase in new system revenue to $12.6 million from $9.2 million in the same period prior year;
- a 122% increase in EBITDA(1) to $3.0 million in the first nine months of fiscal 2008 from $1.4 million in the same period prior year; and
- a 10% reduction in indirect costs totaling $1.1 million. Indirect costs include Sales & Marketing, General & Administrative, Software Development, and restructuring charges;
The Corporation also delivered improved results across its two major segments in the first nine months of the fiscal year as compared to the same period in the prior year:
- Total Healthcare Information Systems revenue increased by $1.3 million or 7% in the first nine months of fiscal 2008 with an increase of 20% in new system revenue to $7.5 million
- Total Resource Management revenue increased by $2.0 million or 15% with a 46% increase in gross margins, a 73% increase in new system revenue to $5.1 million, and a $2.5 million improvement in EBITDA(1)
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Nine months ended December 31
(in millions of dollars) 2007 2006
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Total Revenue
Healthcare Information Systems $19.29 $17.98
Resource Management Systems 14.95 12.97
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34.24 30.95
Gross
Healthcare Information Systems 7.36 8.81
Resource Management Systems 6.15 4.20
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13.51 13.01
Earnings (loss) before the undernoted items
Healthcare Information Systems 1.36 2.19
Resource Management Systems 1.62 (0.84)
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2.98 1.35
Depreciation of property and equipment 0.41 0.46
Amortization of intangible assets 2.48 2.38
Interest expense 0.11 0.17
Loss on foreign exchange 0.14 0.02
Loss on settlement of lawsuit 0.11 -
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Net earnings (loss) $(0.27) $(1.68)
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"On a year-to-date basis we are on track to achieve our objectives for 2008 and our results are significantly ahead of last year", said Paul Lepage, President and Chief Executive Officer. "We continue delivering improved solutions to our customers while focusing on sustainable growth and profitability".
About MediSolution
MediSolution (TSX: MSH), a Brookfield Asset Management company, is a leading healthcare and public sector information technology company, providing software, solutions and services to customers across North America. More than 500 hospitals and other healthcare facilities and close to 200 public sector and related organizations rely on MediSolution's systems to maximize their operational efficiencies, lower their costs, and improve the delivery of services. MediSolution has two operating segments. The Resource Management Systems segment is comprised of Financial Management software such as accounts receivable, budgeting and materials management as well as Human Capital Management tools including human resource management, staff scheduling and payroll processing. The Healthcare Information Systems segment is comprised of clinical solutions such as patient tracking, electronic patient health records, pharmacy, radiology and laboratory software for healthcare organizations.
For more information, visit www.medisolution.com.
This press release contains "forward-looking statements" regarding MediSolution. The words "believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements because they involve known an unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.
(1) "EBITDA" (earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, loss(gain) on foreign exchange and loss on settlement of lawsuit) does not have a standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and may not be comparable to similar measures presented by other publicly traded companies. We use EBITDA amongst other measures, to assess the operating performance of our business.
MediSolution Ltd.
Consolidated Balance Sheets (unaudited)
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As at (in thousands of dollars) December 31, 2007 March 31, 2007
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ASSETS
Current Assets
Cash $245 $856
Accounts receivable and accrued
revenue 9,672 21,178
Tax credit receivable 1,135 640
Inventory 720 507
Sundry deposits and prepaid expenses 1,473 1,071
Deferred expenses 222 91
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13,467 24,343
Property and equipment 982 1,151
Intangible assets 8,871 8,808
Goodwill 8,340 8,340
Deferred expenses 3,390 3,537
Other long term asset 173 -
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$35,223 $46,179
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LIABILITIES
Current Liabilities
Short-term loans $6,530 $2,323
Accounts payable and accrued
liabilities 6,619 10,694
Deferred revenue 7,407 18,899
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20,556 31,916
Deferred revenue 5,761 6,267
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26,317 38,183
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SHAREHOLDERS' EQUITY 8,906 7,996
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$35,223 $46,179
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MediSolution Ltd.
Consolidated Statements of Operations and Comprehensive Income (loss)
(unaudited)
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(in thousands of dollars Three months ended Nine months ended
except share amounts) December 31 December 31
2007 2006 2007 2006
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REVENUE
System sales $3,563 $3,784 $12,565 $9,172
Support and processing 7,374 7,218 21,674 21,779
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10,937 11,002 34,239 30,951
Cost of revenue 6,848 6,315 20,727 17,944
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Gross profit 4,089 4,687 13,512 13,007
Sales and marketing
expenses 1,863 1,863 5,279 5,618
Software development
expenses 412 466 1,441 1,506
General and
administrative
expenses 1,071 1,500 3,925 4,279
Restructuring charges 4 84 (117) 258
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Earnings before the
undernoted items: 739 774 2,984 1,346
Depreciation of property
and equipment 120 157 415 458
Amortization of
intangible assets 826 774 2,475 2,382
Interest expense 66 108 116 169
Loss (gain) on foreign
exchange 36 (28) 139 15
Loss on settlement of
lawsuit - - 112 -
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Earnings (loss) before
income tax $(309) $(237) $(273) $(1,678)
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Income tax recovered - - (3) -
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Net earnings (loss)
and comprehensive
income (loss) $(309) $(237) $(270) $(1,678)
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Net earnings (loss) per
share - basic and fully
diluted (0.00) (0.00) (0.00) (0.01)
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Weighted average number
of common shares
outstanding 158,282,332 157,525,424 158,152,970 157,509,606
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MediSolution Ltd.
Consolidated Statements of Deficit (unaudited)
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Nine months ended December 31
(in thousands of dollars) 2007 2006
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Deficit, beginning of period $(1,850) $(2,080)
Net earnings (loss) (270) (1,678)
Interest on share purchase financing 9 36
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Deficit, end of period $(2,111) $(3,722)
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MediSolution Ltd.
Consolidated Statements of Cash Flows (unaudited)
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(in thousands of dollars) Three months ended Nine months ended
December 31 December 31
2007 2006 2007 2006
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INFLOW (OUTFLOW) RELATED
TO THE FOLLOWING
ACTIVITIES
Operating
Net earnings (loss) $(309) $(237) $(270) $(1,678)
Items not affecting cash:
Depreciation of property
and equipment 120 157 415 458
Amortization of
intangible assets 826 774 2,475 2,382
Stock-based compensation 80 134 234 342
Non-cash portion of
restructuring charges 4 84 (117) 258
Changes in non-cash
operating
working capital items 315 522 6,266 5,833
Change in deferred revenue (3,718) (3,732) (11,998) (9,901)
Change in deferred expenses (247) (601) 16 (1,178)
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(2,929) (2,899) (2,979) (3,484)
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Investing
Additions to property
and equipment (68) (92) (246) (515)
Additions to intangible
assets, net of tax credits (929) (816) (2,538) (2,482)
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(997) (908) (2,784) (2,997)
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Financing
Share purchase plan loan - - 800 -
Issuance of common shares - - 136 52
Interest on share purchase
financing - 13 9 36
Increase of short-term
loans Trilon 4,000 3,500 2,001 3,000
Increase (decrease) of
short-term loans (171) 591 2,206 2,847
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3,829 4,104 5,152 5,935
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Increase (decrease) in
cash and cash equivalents (97) 297 (611) (546)
Cash, beginning of period 342 123 856 966
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Cash, end of period $245 $420 $245 $420
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Supplemental cash flow
information
Interest paid $66 $80 $116 $130
Income taxes received - - 3 -
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Contacts:
MediSolution Ltd.
Paul Lepage
President and Chief Executive Officer
514-850-5040
info@medisolution.com
