Earnings Conference Call Scheduled for April 13, 2006, 8:30 a.m. ET
GREAT RIVER, N.Y., April 3 /PRNewswire-FirstCall/ -- Netsmart
Technologies, Inc. (NASDAQ:NTST), a leading provider of
enterprise-wide software for health and human services
organizations, today reported results for the year ended December
31, 2005. Revenue for the year ended December 31, 2005 was a record
$37,978,000, a 31 percent increase from the prior fiscal year. Net
income for the year ended December 31, 2005 was $1,590,000, or $.28
per share (basic) and $.27 per share (diluted), as compared to
$2,753,000 or $.52 per share (basic) and $.50 per share (diluted)
for 2004. Backlog of orders, including ongoing maintenance and data
center contracts for behavioral health information systems, was
$44,100,000 at December 31, 2005 compared to $25,800,000 at
December 31, 2004. Revenue for the fourth quarter ended December
31, 2005 was $14,273,000, an 88 percent increase from $7,572,000
for the same period last year. Net income for the fourth quarter
ended December 31, 2005 was $399,000 compared to $1,302,000 for the
same period in 2004. The decrease in net income for 2005 as well as
the quarter ended December 31, 2005 was substantially the result of
the 2004 tax provision being reduced by $952,000 as a result of the
reversal of the deferred tax valuation allowance with respect to
the utilization of a net operating loss carry forward. Earnings
before interest, taxes, depreciation and amortization (EBITDA),
were $1,870,000 for the quarter ended December 31, 2005 as compared
to $1,470,000 for the comparable quarter in 2004. "We are pleased
to report our continued strong growth as evidenced by record
revenues for 2005 and 30 consecutive quarters of profitability,"
said James L. Conway, chairman and CEO of Netsmart Technologies.
"Of particular note in 2005 was our acquisition of CMHC Systems,
which expanded our client base by more than one-third and
strengthened our ability to be an enterprise solutions provider for
inpatient, outpatient, institutional and community-based behavioral
healthcare systems. The acquisition also significantly impacted our
recurring revenue. If you annualize our fourth quarter recurring
revenue, our annual recurring revenue is estimated to be at a run
rate of approximately $29,000,000, which is approximately equal to
our total revenue for 2004." Mr. Conway continued, "In 2005 we also
acquired Addiction Management Systems (AMS) and ContinuedLearning.
AMS solidified Netsmart's position as the nation's largest supplier
of automated computerized methadone dispensing systems, enabling
Netsmart to serve more than 400 of the estimated 1,100 methadone
clinics in the U.S. by providing a range of offerings for small
"storefront" clinics and large clinics managed by institutional
health providers. ContinuedLearning, a Florida-based provider of
online training services, has been integrated into Netsmart's
existing customer training programs, with the combined offerings
branded as Netsmart University, providing a wide range of
Web-based, classroom and onsite training, as well as a learning
management system." The Company combined all of its existing and
acquired companies under the single Netsmart brand as part of the
integration of the three acquisitions made in 2005. It also created
a new stand-alone marketing department, and expanded and re-aligned
its sales organization on a vertical market basis, each of which is
designed to result in increased revenue in future periods.
Reconciliation of Earnings before Interest, Taxes, Depreciation and
Amortization (EBITDA) to Net Income EBITDA is calculated for any
period as the sum of net income, plus net interest expense, income
tax expense, and depreciation and amortization expense. We consider
EBITDA to be a widely accepted financial indicator of a company's
ability to service debt, fund capital expenditures and expand its
business. EBITDA is not calculated in the same way by all companies
and therefore may not be comparable to similarly titled measures
reported by other companies. EBITDA is not a measure in accordance
with accounting principles generally accepted in the United States.
EBITDA should not be considered as an alternative to net income, as
an indicator of operating performance or as an alternative to cash
flow as a measure of liquidity. The funds depicted by this measure
may not be available for management's discretionary use due to
legal or functional requirements, debt service, or other
commitments and uncertainties. Three Months Ended Year Ended
December 31 December 31 2005 2004 2005 2004 EBITDA $1,870,000
$1,470,000 $5,008,000 $4,689,000 Less: Depreciation and
Amortization (1,032,000) (430,000) (2,451,000) (1,624,000) Interest
Income (expense), net (2,000) 8,000 192,000 (3,000) Income Taxes
(437,000) 254,000 (1,159,000) (309,000) Net Income $399,000
$1,302,000 $1,590,000 $2,753,000 NETSMART TECHNOLOGIES, INC.
Comparative Operating Results for the Year and Three Months Ended
December 31 Year Three Months 2005 2004 2005 2004 Revenue
$37,978,000 $29,005,000 $14,273,000 $7,572,000 Income before Income
Tax Expense (Benefit) $2,749,000 $3,062,000 $835,000 $1,048,000
Income Tax Expense (Benefit) (1) $1,159,000 $309,000 $437,000
$(254,000) Net Income (1) $1,590,000 $2,753,000 $399,000 $1,302,000
Net Income Per Share Basic $0.28 $0.52 $0.06 $0.24 Weighted Average
Shares of Common Stock Outstanding Basic 5,684,191 5,331,700
6,483,710 5,338,867 Net Income Per Share Diluted $0.27 $0.50 $0.05
$0.24 Weighted Average Shares of Common Stock Outstanding Diluted
5,935,405 5,536,731 6,806,889 5,538,847 (1) The Company's tax
provision for 2004 has been reduced in all periods as a result of
available net operating loss carry-forwards. Conference
Call/Webcast Information Netsmart will host a conference call to
discuss its fourth quarter 2005 and year-end 2005 financial results
on Thursday, April 13, 2006 at 8:30 a.m. ET. The Company's prepared
remarks will be followed by a question-and-answer period. To listen
to the conference call, please dial 1-800-240-5318 or access the
live Webcast at http://www.ntst-ir.com/confcall/index.htm. A
written transcript of the prepared remarks and an audio file of the
conference call will be made available on the Netsmart Web site
http://www.ntst.com/. The material will be archived on that site
under the Investors Relations section for a one-year period. About
Netsmart Technologies, Inc. Netsmart Technologies, Inc., based in
Great River, N.Y., is an established, leading supplier of
enterprise-wide software solutions for health and human services
providers, with more than 1,250 clients, including 30 systems with
state agencies. Netsmart's clients include health and human
services organizations, public health agencies, mental health and
substance abuse clinics, psychiatric hospitals, and managed care
organizations. Netsmart's 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 website does not constitute a part of this release.
DATASOURCE: Netsmart Technologies, Inc. CONTACT: Anthony Grisanti,
Executive Vice President and CFO of Netsmart Technologies,
1-800-451-7503 Web site: http://www.ntst.com/
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