NTST Netsmart Technologies (MM)

Netsmart Announces Increased Revenues For Year End 2004 GREAT RIVER, N.Y., March 18 /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 year ended December 31, 2004. James Conway, CEO of Netsmart Technologies, stated that, "We are pleased to report another year of continued growth which now includes 26 consecutive quarters of profitability. Our balance sheet continues to strengthen with year end working capital at $18.2 million and a cash balance of $16.4 million. Our order backlog at December 31, 2004 is approximately $25.8 million, of which $15.5 million represents recurring revenue. We believe that our performance and client references will allow us to compete for even larger contract initiatives that should enable us to continue to create an even stronger demand for our services. Our marketplace is highly fragmented affording companies that are well capitalized the opportunity to successfully compete and increase market share. Potential clients not only evaluate our products and references, but also review our financial stability as part of any major buying decision." Revenue for the year ended December 31, 2004 was $29,005,000 as compared to $27,175,000 for the year ended December 31, 2003. Net income for the year ended December 31, 2004 was $2,753,000, or $0.52 per share (basic) and $.50 per share (diluted), as compared to $3,029,000 or $.69 per share (basic) and $.64 per share (diluted) for 2003. The reduction in net income and earnings per share for 2004 as compared to 2003 is primarily related to our provision for taxes in 2004, which was $309,000 as compared to a tax benefit in 2003 of $787,000. In addition, there were approximately 785,000 additional shares outstanding on a fully diluted basis for 2004 as compared to 2003. Our earnings before interest, taxes, depreciation and amortization "EBITDA", was $4,689,000, an increase of $1,087,000 over EBITDA for 2003. Net income for the fourth quarter ended December 31, 2004 was $1,302,000 as compared to $690,000 for the quarter ended December 31, 2003. Included in the fourth quarter of 2004 was a deferred tax benefit in the amount of $340,000. Revenue for the fourth quarter ended December 31, 2004 was $7,572,000 as compared to $7,359,000. Reconciliation of Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA") to Net Income.(1) (1) 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. 2004 2003 EBITDA $ 4,689,000 $ 3,602,000 Less: Depreciation and amortization (1,624,000) (1,234,000) Interest, net (3,000) (126,000) Income taxes (309,000) Add: Income tax benefit 787,000 Net Income $ 2,753,000 $ 3,029,000 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 Year and Three Months Ended December 31, Year Three Months 2004 2003 2004 2003 Revenue $29,005,000 $27,175,000 $7,572,000 $7,359,000 Income before Income Tax Expense (Benefit) $3,062,000 $2,242,000 $1,048,000 $693,000 Income tax Expense (Benefit) (1) $309,000 $(787,000) $(254,000) $3,000 Net Income (1) $2,753,000 $3,029,000 $ 1,302,000 $690,000 Net Income Per Share Basic $.52 $.69 $.24 $$.13 Weighted Average Shares of Common Stock Outstanding Basic 5,331,700 4,418,364 5,338,867 5,280,445 Net Income Per Share Diluted $.50 $.64 $.24 $.13 Weighted Average Shares of Common Stock Outstanding Diluted 5,536,731 4,752,068 5,538,847 5,464,977 (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. 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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