SAN JOSE, Calif., Feb. 23 /PRNewswire-FirstCall/ -- Neoforma, Inc.
(NASDAQ:NEOF), a leading provider of supply chain management
solutions for the healthcare industry, generated total revenue of
$35.2 million on a generally accepted accounting principles (GAAP)
basis in the year ended December 31, 2005, an increase over the
$12.7 million generated in the previous year due to a reduction in
the level of amortization that was offset against revenue as
required under Emerging Issues Task Force Abstract No. 01-9 (EITF
No. 01-9). Excluding the impact of EITF No. 01-9, Neoforma
generated total adjusted revenue of $72.8 million in fiscal 2005, a
decrease from the $74.4 million reported in 2004. (Photo:
http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO ) In
2005, in accordance with GAAP, Neoforma's net loss and net loss per
share were $35.9 million and $1.81, respectively, an improvement
from the $61.2 million net loss and $3.17 net loss per share
recorded in the prior year. On an adjusted basis, Neoforma's net
income and net income per share were $16.6 million and $0.84,
respectively, a decrease as compared to the $21.2 million net
income and $1.10 net income per share recorded in 2004. Neoforma's
adjusted financial information, which is not in accordance with
GAAP, excludes the application of EITF No. 01-9 and certain
expenses, gains and losses. Adjusted financial information serves
as a measure of the performance of Neoforma's ongoing core
operations. A description of the adjusted financial information for
the periods presented and a reconciliation of these results to GAAP
financial information are included in the attached financial
statements and are available in the investor relations section of
Neoforma's Web site at http://www.neoforma.com/. GHX Transaction On
October 10, 2005, Neoforma entered into a definitive merger
agreement with Global Healthcare Exchange, LLC (GHX) for GHX to
acquire Neoforma. Neoforma has scheduled a vote of its stockholders
regarding the proposed transaction for March 2, 2006. If the
majority of the shares that are cast and that are not held by VHA
Inc., University HealthSystem Consortium (UHC) or their affiliates
are voted in favor of adopting the merger agreement with GHX, the
transaction is expected to close shortly thereafter, pending GHX's
receipt of anticipated debt financing. On January 23, 2006,
Neoforma filed a definitive proxy statement with the Securities and
Exchange Commission (SEC) in connection with the proposed
transaction; the definitive proxy statement and other information
filed with the SEC are available on Neoforma's Web site at
http://www.neoforma.com/. Fiscal Year 2005 Financial Results For
the year ended December 31, 2005, on a GAAP basis, Neoforma
generated $35.2 million in total revenue, comprised of $24.1
million in related party revenue and $11.1 million in non-related
party revenue. The Company's total revenue increased $22.5 million
from the $12.7 million recognized in the previous year; in 2004,
Neoforma's total revenue was comprised entirely of non-related
party revenue. The increase in related party revenue in 2005 was
primarily the result of a decrease in the level of amortization
that was offset against revenue as required under EITF No. 01-9. In
accordance with EITF No. 01-9, Neoforma classifies non-cash
amortization of partnership costs as an offset against related
party revenue, up to the lesser of the two amounts each quarter. As
the reductions to operating expenses and revenue are equal within
each period, the application of EITF No. 01-9 has no impact within
a particular period on income or loss from operations, net income
or loss, net income or loss per share or total cash flow. In the
third quarter of 2005, the amortization of partnership costs
resulting from the initial shares granted to VHA and UHC in July
2000 was completed. As a result, gross amortization of partnership
costs decreased to $39.1 million in 2005, a $29.1 million decrease
from the $68.2 million in gross amortization of partnership costs
recorded in the previous year. This decrease resulted in a
reduction of $24.3 million in the amortization of partnership costs
offset against related party revenue in 2005 as compared to 2004.
Primarily as a result of this reduced offset, related party revenue
and total revenue on a GAAP basis increased $24.1 million and $22.5
million, respectively, as compared to the prior year. On an
adjusted basis, excluding the impact of EITF No. 01-9, Neoforma
generated total revenue of $72.8 million in 2005, consisting of
$61.5 million in related party revenue and $11.2 million in
non-related party revenue. The Company's total, related party and
non-related party revenue results, on an adjusted basis, represent
decreases from the $74.4 million, $61.8 million and $12.7 million,
respectively, recorded in 2004. The $1.4 million decrease in
adjusted non-related party revenue, the principal cause of the
decline in total adjusted revenue, was due to an $859,000 decrease
in revenue from suppliers and a $561,000 decrease in other revenue.
The decline in revenue from suppliers was primarily due to the
cancellation, in late 2004, of a significant pharmaceutical market
intelligence services contract. The decline in other revenue was
due to the expiration, in the third quarter of 2004, of the ratable
revenue being recognized related to a 2001 technology license sale.
In 2005, Neoforma's GAAP operating expenses totaled $72.1 million,
an improvement from the $74.3 million recorded in the previous
year. The reduction in operating expenses was primarily the result
of a $4.7 million decrease in amortization of partnership costs
classified as an operating expense. In addition, while the Company
recorded a $4.1 million write-off of stockholder notes receivable
in 2004, there was no such expense recorded in 2005. These
reductions in operating expenses in 2005 were partially offset by a
$2.2 million increase in depreciation and amortization of property
and equipment, $2.0 million in costs incurred for third-party
services in connection with Neoforma's evaluation of strategic
alternatives and its proposed merger with GHX, a $1.9 million
decrease in software development costs capitalized and $1.0 million
of other charges incurred in 2005, including $723,000 in
restructuring charges and a $284,000 write-off of software. In
fiscal 2005, adjusted operating expenses equaled $57.2 million, an
increase from the $53.6 million recorded in the prior year. This
increase was primarily due to $2.0 million in costs incurred with
the evaluation of strategic alternatives, a $1.9 million reduction
in software development costs capitalized and a $1.2 million
increase in cost of services. These increases were partially offset
by a $1.9 million decrease in selling and marketing expenses. On a
GAAP basis, in 2005, Neoforma's loss from operations totaled $36.9
million, an improvement from the $61.6 million loss in the previous
year. The $24.7 million improvement in the Company's loss from
operations was primarily a result of the $29.1 million decrease in
gross amortization of partnership costs in 2005, as compared to
2004. On an adjusted basis, in 2005, Neoforma generated $15.6
million in EBITDA, a decrease from the $20.8 million generated in
the prior year. As of December 31, 2005, Neoforma's cash, cash
equivalents and short-term investments totaled $44.4 million, a
$5.1 million increase from the total as of the end of the third
quarter of 2005 and an $18.6 million increase from the total as of
year-end 2004. Neoforma remains debt-free. Neoforma's free cash
flow in 2005 totaled $16.9 million. Free cash flow is calculated as
net cash used in operating activities, plus amortization of
partnership costs offset against related party revenue, minus
purchases of property and equipment and capitalization of software
development costs. Fourth Quarter 2005 Financial Results In the
fourth quarter ended December 31, 2005, Neoforma generated total
revenue of $17.0 million on a GAAP basis, consisting of $14.6
million in related party revenue and $2.5 million in non-related
party revenue. In comparison to the same quarter of the prior year,
the Company's total revenue results increased $13.6 million from
the $3.4 million recognized in the fourth quarter of 2004;
Neoforma's total revenue was comprised entirely of non-related
party revenue in the fourth quarter of 2004. The increase in
related party revenue in the fourth quarter of 2005 was due to the
decrease in the level of amortization that was offset against
revenue as required under EITF No. 01-9. Because the amortization
of partnership costs resulting from the initial shares granted to
VHA and UHC in July 2000 was completed in the third quarter of
2005, gross amortization of partnership costs decreased by $16.2
million in the fourth quarter of 2005, as compared to the same
quarter in the previous year. This decrease resulted in a $14.7
million reduction in the amortization of partnership costs offset
against related party revenue and was the principal reason for the
$14.6 million and $13.6 million increases in Neoforma's related
party and total revenue, respectively, on a GAAP basis in the
fourth quarter of 2005, as compared to the same quarter in 2004. On
an adjusted basis, excluding the impact of EITF No. 01-9, Neoforma
generated total revenue of $17.8 million in the fourth quarter of
2005, consisting of $15.3 million in related party revenue and $2.5
million in non- related party revenue and representing decreases
from the $18.9 million in total revenue, $15.4 million in related
party revenue and $3.4 million in non-related party revenue
recorded in the same period in the previous year. The $984,000
decrease in adjusted non-related party revenue, the primary reason
for the $1.1 million decline in total adjusted revenue, was due to
a $604,000 decrease in revenue from hospitals and group purchasing
organizations, predominantly for Neoforma Data Management
Solution(TM) (Neoforma DMS), and a $459,000 decrease in revenue
from suppliers. In the fourth quarter of 2005, Neoforma's total
GAAP operating expenses were $16.6 million, an improvement from the
$18.6 million recorded in the same quarter in the prior year.
Adjusted operating expenses for the fourth quarter totaled $13.6
million, an improvement from the $14.0 million in adjusted
operating expenses recorded in the same quarter in 2004. In the
fourth quarter of 2005, Neoforma incurred approximately $1.1
million in expenses for third-party services in connection with its
proposed transaction with GHX. On a GAAP basis, in the fourth
quarter of 2005, Neoforma generated income from operations equaling
$421,000, an improvement from the $15.2 million loss from
operations recorded in the fourth quarter of 2004. Neoforma
generated $4.2 million in EBITDA in the fourth quarter of 2005, a
decrease from the $4.9 million generated in the same period in
2004. In accordance with GAAP, in the fourth quarter of 2005,
Neoforma's net income was $753,000, and both basic and diluted net
income per share were $0.04, representing improvements from the
$15.1 million net loss and $0.78 net loss per share reported in the
same quarter in the previous year. In the fourth quarter of 2005,
Neoforma achieved its first profit on a GAAP basis. On an adjusted
basis, the Company's net income and net income per share equaled
$4.5 million and $0.22, respectively, decreasing from the $5.0
million in net income and $0.26 in net income per share recorded in
the fourth quarter of 2004. About Neoforma Neoforma is a leading
supply chain management solutions provider for the healthcare
industry. Through a unique combination of technology, information
and services, Neoforma provides innovative solutions to over 1,800
hospitals and suppliers, supporting approximately $15 billion in
annualized marketplace volume. By bringing together contract
information and order data, Neoforma's integrated solution set
delivers a comprehensive view of an organization's supply chain,
driving significant cost savings and better decision-making for
both hospitals and suppliers. For more information, point your
browser to http://www.neoforma.com/ . This news release contains
forward-looking information within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements include, but are not limited to, the expected timing of
the close of the proposed transaction with GHX. There are a number
of risks that could cause actual results to differ materially from
those anticipated by these forward-looking statements. These risks
include the risk of the proposed transaction with GHX not closing
or being delayed. Some of these risks and other risks are described
in Neoforma's periodic reports filed with the SEC, including its
Form 10-Q for the quarter ended September 30, 2005, and the
definitive proxy statement filed on January 23, 2006. These
statements are current as of the date of this release and Neoforma
assumes no obligation to update the forward-looking information
contained in this news release. NOTE: Neoforma is a trademark of
Neoforma, Inc. Other Neoforma logos, product names and service
names are also trademarks of Neoforma, Inc., which may be
registered in other countries. Other product and brand names are
trademarks of their respective owners. NEOFORMA, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per
share amounts) (unaudited) Three Months Ended Year Ended December
31, December 31, 2004 2005 2004 2005 REVENUE: Related party, net of
amortization of partnership costs of $15,427, $775, $61,787 and
$37,457 for the three months ended December 31, 2004 and 2005 and
the twelve months ended December 31, 2004 and 2005, respectively
$-- $14,572 $-- $24,068 Non-related party, net of write-off of
purchase option of $140 for the twelve months ended December 31,
2005 3,437 2,453 12,659 11,100 Total revenue 3,437 17,025 12,659
35,168 OPERATING EXPENSES: Cost of services 3,119 3,028 10,620
11,961 Operations 2,842 3,317 11,485 12,832 Product development
4,587 4,205 16,889 19,106 Selling and marketing 3,750 2,751 14,407
12,715 General and administrative 2,616 3,230 9,787 12,230
Amortization of intangibles 147 117 588 538 Amortization of
partnership costs 1,573 -- 6,365 1,630 Write-off of stockholder
notes receivable -- -- 4,115 -- Write-down of note receivable -- --
-- 38 Write-off of software -- -- -- 284 Restructuring -- (44) --
723 Total operating expenses 18,634 16,604 74,256 72,057 Income
(loss) from operations (15,197) 421 (61,597) (36,889) OTHER INCOME
(EXPENSE) 133 365 367 1,058 Income (loss) before income taxes
(15,064) 786 (61,230) (35,831) Provision for income taxes -- (33)
-- (33) Net income (loss) $(15,064) $753 $(61,230) $(35,864) NET
INCOME (LOSS) PER SHARE: Basic $(0.78) $0.04 $(3.17) $(1.81)
Weighted average shares - basic 19,400 20,038 19,297 19,838 Diluted
$(0.78) $0.04 $(3.17) $(1.81) Weighted average shares - diluted
19,400 20,592 19,297 19,838 In addition to our consolidated
financial statements presented in accordance with GAAP, Neoforma,
Inc. uses non-GAAP, or adjusted, measures of operating results, net
income and net income per share, which are adjusted from results
based on GAAP to exclude the application of EITF No. 01-9 and
certain expenses, gains and losses. Neoforma management believes
that the non-GAAP adjusted results provide added insight into the
Company's performance by focusing on results generated by the
Company's ongoing core operations. Neoforma management uses the
non-GAAP adjusted results when assessing the performance of its
ongoing core operations, in making resource allocation decisions
and for planning and forecasting. Additionally, incentive
compensation for the Company, including management, is based on
results on this basis. In addition, because we historically have
reported adjusted results, we believe the inclusion of comparative
numbers provides consistency in our financial reporting. The
non-GAAP financial measures should be considered in addition to,
not as a substitute for, or superior to, the measures of financial
performance prepared in accordance with GAAP. Investors are
encouraged to review the reconciliation of the non-GAAP financial
measures to their most directly comparable GAAP financial measures.
NEOFORMA, INC. ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (1) (in thousands, except per share amounts) (unaudited)
Three Months Ended Year Ended December 31, December 31, 2004 2005
2004 2005 REVENUE: Related party $15,427 $15,347 $61,787 $61,525
Non-related party 3,437 2,453 12,659 11,240 Total adjusted revenue
18,864 17,800 74,446 72,765 OPERATING EXPENSES: Cost of services
2,628 2,499 8,583 9,791 Operations 2,123 2,585 9,126 9,964 Product
development 3,897 3,478 14,951 16,148 Selling and marketing 3,252
2,337 12,841 10,986 General and administrative 2,071 2,740 8,132
10,269 Adjusted operating expenses 13,971 13,639 53,633 57,158
EBITDA 4,893 4,161 20,813 15,607 OTHER INCOME (EXPENSE) 133 365 367
1,058 Adjusted income before income taxes 5,026 4,526 21,180 16,665
Provision for income taxes -- (33) -- (33) Adjusted net income
$5,026 $4,493 $21,180 $16,632 ADJUSTED NET INCOME PER SHARE: Basic
$0.26 $0.22 $1.10 $0.84 Weighted average shares - basic 19,400
20,038 19,297 19,838 (1) These adjusted condensed consolidated
statements of operations exclude the impact of EITF No. 01-9 and
certain expenses, gains and losses. Under EITF No. 01-9, the
Company offsets non-cash amortization of partnership costs against
related party revenue in an amount equal to the lesser of the two
in any period. Any amortization of partnership costs in excess of
related party revenue in any period is classified as an operating
expense. As a result of the adoption of EITF No. 01-9, the Company
offset $15,427, $775, $61,787 and $37,457 of amortization of
partnership costs against related party revenue in its GAAP
condensed consolidated statements of operations for the three
months ended December 31, 2004 and 2005 and the twelve months ended
December 31, 2004 and 2005, respectively. In addition, under EITF
01-9 the Company offset a $140 write-off of a purchase option
acquired from a vendor against non-related party revenue in its
GAAP condensed consolidated statements of operations for the twelve
months ended December 31, 2005. As reclassifications, the
application of EITF No. 01-9 had no impact on income (loss) from
operations, net income (loss) or net income (loss) per share. The
excluded expenses, gains and losses consisted of depreciation and
amortization of property and equipment, amortization of
intangibles, amortization of deferred compensation, amortization of
partnership costs, write-down of note receivable, write-off of
stockholder notes receivable, write-off of software and
restructuring. NEOFORMA, INC. RECONCILIATION OF ADJUSTED CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS TO GAAP (in thousands, except
per share amounts) (unaudited) Three Months Ended December 31, 2005
Excluded Application of Adjusted Expenses, Gains EITF Results and
Losses No. 01-9 REVENUE: Related party $15,347 $-- $(775)
Non-related party 2,453 -- -- Total revenue 17,800 -- (775)
OPERATING EXPENSES: Cost of services 2,499 -- -- Operations 2,585
-- -- Product development 3,478 -- -- Selling and marketing 2,337
-- -- General and administrative 2,740 -- -- Adjusted operating
expenses 13,639 EBITDA 4,161 Depreciation and amortization of
property and equipment -- 2,081 -- Amortization of intangibles --
117 -- Amortization of deferred compensation -- 811 -- Amortization
of partnership costs -- 775 (775) Restructuring -- (44) -- Total
operating expenses 3,740 (775) Income from operations (3,740) --
OTHER INCOME (EXPENSE) 365 -- -- Income before income taxes 4,526
(3,740) -- Provision for income taxes (33) -- -- Net income $4,493
$(3,740) $-- NET INCOME PER SHARE: Basic $0.22 Weighted average
shares - basic 20,038 Three Months Ended December 31, 2005 GAAP
Allocations Depreciation and Amortization of Amortization of
Deferred GAAP Results Property and Equipment Compensation As
Reported REVENUE: Related party $-- $-- $14,572 Non-related party
-- -- 2,453 Total revenue -- -- 17,025 OPERATING EXPENSES: Cost of
services 363 166 3,028 Operations 629 103 3,317 Product development
548 179 4,205 Selling and marketing 264 150 2,751 General and
administrative 277 213 3,230 Adjusted operating expenses EBITDA
Depreciation and amortization of property and equipment (2,081) --
-- Amortization of intangibles -- -- 117 Amortization of deferred
compensation -- (811) -- Amortization of partnership costs -- -- --
Restructuring -- -- (44) Total operating expenses -- -- 16,604
Income from operations -- -- 421 OTHER INCOME (EXPENSE) -- -- 365
Income before income taxes -- -- 786 Provision for income taxes --
-- (33) Net income $-- $-- $753 NET INCOME PER SHARE: Basic $0.04
Weighted average shares - basic 20,038 Three Months Ended December
31, 2004 Excluded Application of Adjusted Expenses, Gains EITF
Results and Losses No. 01-9 REVENUE: Related party $15,427 $--
$(15,427) Non-related party 3,437 -- -- Total revenue 18,864 --
(15,427) OPERATING EXPENSES: Cost of services 2,628 -- --
Operations 2,123 -- -- Product development 3,897 -- -- Selling and
marketing 3,252 -- -- General and administrative 2,071 -- --
Adjusted operating expenses 13,971 EBITDA 4,893 Depreciation and
amortization of property and equipment -- 1,728 -- Amortization of
intangibles -- 147 -- Amortization of deferred compensation --
1,215 -- Amortization of partnership costs -- 17,000 (15,427) Total
operating expenses 20,090 (15,427) Loss from operations (20,090) --
OTHER INCOME (EXPENSE) 133 -- -- Net income (loss) $5,026 $(20,090)
$-- NET INCOME (LOSS) PER SHARE: Basic $0.26 Weighted average
shares - basic 19,400 Three Months Ended December 31, 2004 GAAP
Allocations Depreciation and Amortization of Amortization of
Deferred GAAP Results Property and Equipment Compensation As
Reported REVENUE: Related party $-- $-- $-- Non-related party -- --
3,437 Total revenue -- -- 3,437 OPERATING EXPENSES: Cost of
services 274 217 3,119 Operations 565 154 2,842 Product development
433 257 4,587 Selling and marketing 242 256 3,750 General and
administrative 214 331 2,616 Adjusted operating expenses EBITDA
Depreciation and amortization of property and equipment (1,728) --
-- Amortization of intangibles -- -- 147 Amortization of deferred
compensation -- (1,215) -- Amortization of partnership costs -- --
1,573 Total operating expenses -- -- 18,634 Loss from operations --
-- (15,197) OTHER INCOME (EXPENSE) -- -- 133 Net income (loss) $--
$-- $(15,064) NET INCOME (LOSS) PER SHARE: Basic $(0.78) Weighted
average shares - basic 19,400 NEOFORMA, INC. RECONCILIATION OF
ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS TO GAAP (in
thousands, except per share amounts) (unaudited) Year Ended
December 31, 2005 Excluded Application of Adjusted Expenses, Gains
EITF Results and Losses No. 01-9 REVENUE: Related party $61,525 $--
$(37,457) Non-related party 11,240 -- (140) Total revenue 72,765 --
(37,597) OPERATING EXPENSES: Cost of services 9,791 -- --
Operations 9,964 -- -- Product development 16,148 -- -- Selling and
marketing 10,986 -- -- General and administrative 10,269 -- --
Adjusted operating expenses 57,158 EBITDA 15,607 Depreciation and
amortization of property and equipment -- 7,710 -- Amortization of
intangibles -- 538 -- Amortization of deferred compensation --
3,976 -- Amortization of partnership costs -- 39,087 (37,457)
Restructuring -- 723 -- Write-down of note receivable -- 38 --
Write-off of software -- 284 -- Write-off of purchase option -- 140
(140) Total operating expenses 52,496 (37,597) Loss from operations
(52,496) -- OTHER INCOME (EXPENSE) 1,058 -- -- Income (loss) before
income taxes 16,665 (52,496) -- Provision for income taxes (33) --
-- Net income (loss) $16,632 $(52,496) $-- NET INCOME (LOSS) PER
SHARE: Basic $0.84 Weighted average shares - basic 19,838 Year
Ended December 31, 2005 GAAP Allocations Depreciation and
Amortization of Amortization of Deferred GAAP Results Property and
Equipment Compensation As Reported REVENUE: Related party $-- $--
$24,068 Non-related party -- -- 11,100 Total revenue -- -- 35,168
OPERATING EXPENSES: Cost of services 1,420 750 11,961 Operations
2,347 521 12,832 Product development 1,994 964 19,106 Selling and
marketing 975 754 12,715 General and administrative 974 987 12,230
Adjusted operating expenses EBITDA Depreciation and amortization of
property and equipment (7,710) -- -- Amortization of intangibles --
-- 538 Amortization of deferred compensation -- (3,976) --
Amortization of partnership costs -- -- 1,630 Restructuring -- --
723 Write-down of note receivable -- -- 38 Write-off of software --
-- 284 Write-off of purchase option -- -- -- Total operating
expenses -- -- 72,057 Loss from operations -- -- (36,889) OTHER
INCOME (EXPENSE) -- -- 1,058 Income (loss) before income taxes --
-- (35,831) Provision for income taxes -- -- (33) Net income (loss)
$-- $-- $(35,864) NET INCOME (LOSS) PER SHARE: Basic $(1.81)
Weighted average shares - basic 19,838 Year Ended December 31, 2004
Excluded Application of Adjusted Expenses, Gains EITF Results and
Losses No. 01-9 REVENUE: Related party $61,787 $-- $(61,787)
Non-related party 12,659 -- -- Total revenue 74,446 -- (61,787)
OPERATING EXPENSES: Cost of services 8,583 -- -- Operations 9,126
-- -- Product development 14,951 -- -- Selling and marketing 12,841
-- -- General and administrative 8,132 -- -- Adjusted operating
expenses 53,633 EBITDA 20,813 Depreciation and amortization of
property and equipment -- 5,539 -- Amortization of intangibles --
588 -- Amortization of deferred compensation -- 4,016 --
Amortization of partnership costs -- 68,152 (61,787) Write-off of
stockholder notes receivable -- 4,115 -- Total operating expenses
82,410 (61,787) Loss from operations (82,410) -- OTHER INCOME
(EXPENSE) 367 -- -- Net income (loss) $21,180 $(82,410) $-- NET
INCOME (LOSS) PER SHARE: Basic $1.10 Weighted average shares -
basic 19,297 Year Ended December 31, 2004 GAAP Allocations
Depreciation and Amortization of Amortization of Deferred GAAP
Results Property and Equipment Compensation As Reported REVENUE:
Related party $-- $-- $-- Non-related party -- -- 12,659 Total
revenue -- -- 12,659 OPERATING EXPENSES: Cost of services 1,387 650
10,620 Operations 1,936 423 11,485 Product development 1,040 898
16,889 Selling and marketing 622 944 14,407 General and
administrative 554 1,101 9,787 Adjusted operating expenses EBITDA
Depreciation and amortization of property and equipment (5,539) --
-- Amortization of intangibles -- -- 588 Amortization of deferred
compensation -- (4,016) -- Amortization of partnership costs -- --
6,365 Write-off of stockholder notes receivable -- -- 4,115 Total
operating expenses -- -- 74,256 Loss from operations -- -- (61,597)
OTHER INCOME (EXPENSE) -- -- 367 Net income (loss) $-- $--
$(61,230) NET INCOME (LOSS) PER SHARE: Basic $(3.17) Weighted
average shares - basic 19,297 NEOFORMA, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands, except per share amounts) (unaudited)
ASSETS December 31, December 31, 2004 2005 CURRENT ASSETS: Cash and
cash equivalents $13,277 $31,115 Short-term investments 12,593
13,312 Accounts receivable, net of allowance for doubtful accounts
2,898 2,546 Related party accounts receivable 5,250 -- Prepaid
expenses and other current assets 2,983 2,674 Total current assets
37,001 49,647 PROPERTY AND EQUIPMENT, net 11,501 9,268 INTANGIBLES,
net 1,434 896 GOODWILL 1,652 1,652 CAPITALIZED PARTNERSHIP COSTS,
net 40,996 1,909 RESTRICTED CASH 1,020 1,020 OTHER ASSETS 845 366
Total assets $94,449 $64,758 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: Accounts payable $3,994 2,468 Accrued payroll
3,974 5,523 Other accrued liabilities 2,839 3,729 Deferred revenue,
current portion 1,564 1,424 Total current liabilities 12,371 13,144
DEFERRED RENT 387 94 DEFERRED REVENUE, less current portion 326 190
Total liabilities 13,084 13,428 STOCKHOLDERS' EQUITY: Common Stock
$0.001 par value: Authorized -- 300,000 shares at December 31, 2005
Issued and outstanding: 20,244 and 20,733 shares at December 31,
2004 and 2005, respectively 20 21 Additional paid-in capital
839,307 842,936 Notes receivable from stockholders (225) (93)
Deferred compensation (3,775) (1,656) Unrealized loss on
available-for-sale securities (25) (77) Accumulated deficit
(753,937) (789,801) Total stockholders' equity 81,365 51,330 Total
liabilities and stockholders' equity $94,449 $64,758 NEOFORMA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (all items
unaudited) Year Ended December 31, 2004 2005 CASH FLOWS FROM
OPERATING ACTIVITIES: Net loss $(61,230) $(35,864) Adjustments to
reconcile net loss to net cash used in operating activities:
Provision for doubtful accounts 122 188 Accrued interest receivable
on stockholder notes receivable (15) (7) Depreciation and
amortization of property and equipment 5,539 7,710 Amortization of
intangibles 588 538 Amortization of partnership costs classified as
an operating expense 6,365 1,630 Amortization of deferred
compensation 4,016 3,976 Write-off of stockholder notes receivable
4,115 -- Write-down of note receivable -- 38 Restructuring -- 723
Write-off of software -- 284 Change in assets and liabilities:
Accounts receivable (4,038) 5,414 Prepaid expenses and other
current assets (208) 271 Other assets 614 479 Accounts payable 648
(907) Accrued liabilities and accrued payroll (759) 1,613 Deferred
revenue (1,315) (276) Deferred rent (80) (190) Net cash used in
operating activities (45,638) (14,380) CASH FLOWS FROM INVESTING
ACTIVITIES: Purchases of marketable investments (15,512) (8,658)
Proceeds from the sale or maturity of marketable investments 9,531
7,887 Purchases of property and equipment (3,239) (2,394)
Capitalization of software development costs (5,656) (3,805) Net
cash used in investing activities (14,876) (6,970) CASH FLOWS FROM
FINANCING ACTIVITIES: Amortization of partnership costs offset
against related party revenue 61,787 37,457 Cash received related
to options exercised 836 598 Proceeds from the issuance of common
stock under the employee stock purchase plan 1,090 961 Common stock
repurchased, net of notes receivable issued to common stockholders
(177) -- Collections of notes receivable from stockholders 274 172
Net cash provided by financing activities 63,810 39,188 Net
increase in cash and cash equivalents 3,296 17,838 Cash and cash
equivalents, beginning of period 9,981 13,277 Cash and cash
equivalents, end of period $13,277 $31,115
http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO
http://photoarchive.ap.org/ DATASOURCE: Neoforma, Inc. CONTACT:
investors, Amanda Mogin of Neoforma, +1-408-468-4251, or Web site:
http://www.neoforma.com/
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