Netsmart Announces Third Quarter Results Revenues Increase 8% from
Third Quarter Fiscal 2003 GREAT RIVER, N.Y., Nov. 1
/PRNewswire-FirstCall/ -- Netsmart Technologies, Inc.
(NASDAQ:NTST), a leading supplier of enterprise-wide software
solutions for health and human services providers, today reported
results for the third quarter ended September 30, 2004. James
Conway, CEO of Netsmart Technologies, Inc. stated, "We are pleased
to announce our 25th consecutive quarter of profitability. Our
income before taxes was $827,000 for the quarter ended September
30, 2004 as compared to $738,000 for the comparable quarter last
year. This represents a 12% increase over last year, before any
provision for taxes." Revenue for the quarter ended September 30,
2004 was $7,421,000 as compared to $7,108,000 for the quarter ended
September 30, 2003, representing an increase of 4%. Net income for
the quarter ended September 30, 2004 was $633,000, or $0.12 per
share (basic) and $.11 per share (diluted), as compared to
$1,546,000 or $0.34 per share (basic) and $.33 per share (diluted),
for the same period last year. The reduction in net income and
earnings per share was attributable to a provision for taxes in the
quarter ended September 30, 2004 of $194,000 as compared to a tax
benefit of $808,000 for the same period last year. Although we
accrued taxes at an effective tax rate of 28% of pre-tax income for
the nine months ended September 30, 2004, we actually expect to pay
taxes at a rate of 5% due to the deduction of prior years net
operating losses on our tax returns. In addition, there were
approximately 840,000 additional shares outstanding for the quarter
ended September 30, 2004 as compared to the same period last year.
Revenue for the nine months ended September 30, 2004 was
$21,433,000 as compared to $19,816,000 for the nine months ended
September 30, 2003, representing an increase of 8%. Net income for
the nine months ended September 30, 2004 was $1,451,000, or $.27
per share (basic) and $.26 per share (diluted), as compared to
$2,339,000, or $.56 per share (basic) and $.52 per share (diluted)
for the same period last year. The reduction in earnings per share
is associated with the increased tax provision together with the
increased outstanding shares. Working capital increased to
$16,829,000 at September 30, 2004 from $14,714,000 at December 31,
2003. Our cash balances increased to $16.5 million at September 30,
2004 from $15.9 million at December 30, 2003 after investing
$707,000 into our new Corporate Headquarters at Great River.
Recurring revenue for the quarter ended September 30, 2004 was
$3,086,000, an increase of 19% from the $2,598,000 for the
comparable quarter last year. The gross profit margin for the
quarter was 53% as compared to 46% for the comparable quarter in
2003. This increase was primarily due to the reallocation of
certain expenses from cost of revenues to research, development and
maintenance costs. Our firm order backlog at September 30, 2004 was
$26.0 million as compared to $25.5 million at September 30, 2003.
The recurring revenue component of the September 30, 2004 backlog
is equal to 56% of the total backlog. About Netsmart Technologies,
Inc. Netsmart Technologies, Inc. of Great River, N.Y., through
Creative Socio-Medics, is an established, leading supplier of
enterprise-wide software solutions for health and human services
providers with over 580 clients, including 25 systems with state
agencies. Creative's clients include health and human services
organizations, public health agencies, mental health and substance
abuse clinics, psychiatric hospitals, and managed care
organizations. Avatar Practice Management and the Avatar Clinician
Work Station, Creative's core products, are full-featured
information systems that operate on a variety of operating systems,
hardware platforms, and mobile devices and offer unlimited
scalability. Statement on Behalf of Netsmart Technologies, Inc.
Statements in this press release may be "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as "anticipate," "believe,"
"estimate," "expect," "intend" and similar expressions, as they
relate to the company or its management, identify forward-looking
statements. These statements are based on current expectations,
estimates and projections about the company's business based, in
part, on assumptions made by management. These statements are not
guarantees of future performance and involve risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual
outcomes and results may, and probably will, differ materially from
what is expressed or forecasted in such forward-looking statements
due to numerous factors, including those described above and those
risks discussed from time to time in Netsmart's filings with the
Securities and Exchange Commission. In addition, such statements
could be affected by risks and uncertainties related to product
demand, market and customer acceptance, competition, pricing and
development difficulties, as well as general industry and market
conditions and growth rates, and general economic conditions. Any
forward-looking statements speak only as of the date on which they
are made, and the company does not undertake any obligation to
update any forward-looking statement to reflect events or
circumstances after the date of this release. Information on
Netsmart's or Creative's website does not constitute a part of this
release. NETSMART TECHNOLOGIES, INC. Comparative Operating Results
for the Three and Nine Months Ended September 30, Three Months Nine
Months 2004 2003 2004 2003 Revenue $7,421,000 $7,108,000
$21,433,000 $19,816,000 Income Before Income Tax Expense (Benefit)
$827,000 $738,000 $2,014,000 $1,549,000 Income Tax Expense
(Benefit)(1) $194,000 $(808,000) $563,000 $(790,000) Net Income(1)
$633,000 $1,546,000 $1,451,000 $2,339,000 Net Income Per Share
Basic $.12 $.34 $.27 $.56 Weighted Average Shares of Common Stock
Outstanding Basic 5,339,000 4,513,000 5,330,000 4,160,000 Net
Income Per Share Diluted $.11 $.33 $.26 $.52 Weighted Average
Shares of Common Stock and Common Stock Equivalents Outstanding
Diluted 5,548,000 4,706,000 5,545,000 4,469,000 (1) The Company's
tax provision for 2004 and 2003 has been reduced in all periods as
a result of available net operating loss carry-forwards. In
addition, the Company recognized a $800,000 tax benefit during the
September 2003 Quarter and a $900,000 tax benefit during the nine
months ended September 30, 2003, as a result of a further reduction
in its deferred tax asset valuation allowance. DATASOURCE: Netsmart
Technologies, Inc. CONTACT: James Conway, CEO of Netsmart
Technologies, Inc., 1-800-451-7503, ; or Stuart Fine of Carpe DM,
Inc., +1-908-490-0075, , for Netsmart Technologies, Inc. Web site:
http://www.netsmartech.com/
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