GREAT RIVER, N.Y., Aug. 11 /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 second quarter ended June
30, 2005. Revenue for the quarter ended June 30, 2005 was
$7,759,000 as compared to $7,189,000 for the quarter ended June 30,
2004, representing an increase of 8%. Recurring revenue for the
quarter was $3,336,000, an increase of 13% from the $2,948,000 for
the comparable quarter last year. The gross profit margin for the
quarter was 50% as compared to 48% for the comparable quarter in
2004. The firm order backlog at June 30, 2005, was $27.7 million
with a recurring revenue component of $14.8 million as compared to
a firm order backlog of $25.4 million at June 30, 2004, which
included a recurring revenue component of $13.2 million. Net income
for the quarter ended June 30, 2005 was $449,000 or $0.08 per share
(basic and diluted) as compared to $493,000 or $0.09 per share
(basic and diluted) for the same period last year. Our earnings for
this quarter included a significant charge to bad debts in the
amount of $305,000 as a result of a bankruptcy filing by one
client. Revenue for the six months ended June 30, 2005, was
$15,188,000 as compared to $14,012,000 for the six months ended
June 30, 2004, representing an increase of 8%. Net income for the
six months ended June 30, 2005, was $813,000, or $.15 per share
(basic and diluted), as compared to $818,000, or $.15 per share
(basic and diluted) for the same period last year. James Conway,
CEO of Netsmart Technologies, Inc. stated, "We are very pleased to
report our 28th consecutive quarter of profitability as well as a
record high backlog of $27.7 million. During the quarter we
acquired both ContinuedLearning and Addictions Management Systems
and expect our profitability in future periods to improve as a
result of those acquisitions. Our earnings before interest, taxes,
depreciation and amortization, or "EBITDA", were $1,038,000 for the
quarter ended June 30, 2005, after absorption of a $305,000 charge
to bad debt referred to above as compared to $1,040,000 for the
comparable quarter in 2004." 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. Three Months Ended Six Months Ended June, 30 June
30, 2005 2004 2005 2004 EBITDA $1,038,000 $1,040,000 $1,988,000
$1,981,000 Less: Depreciation and Amortization (446,000) (394,000)
(853,000) (782,000) Interest income (expense) ,net 71,000 (2,000)
108,000 (12,000) Income taxes (214,000) (151,000) (430,000)
(369,000) Net Income $449,000 $493,000 $813,000 $818,000 About
Netsmart Technologies, Inc. Netsmart Technologies, Inc. of Great
River, N.Y., through Creative Socio- Medics, its wholly owned
subsidiary ("Creative"), 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 Six Months Ended June 30, Three Months Six Months
2005 2004 2005 2004 Revenue $7,759,000 $7,189,000 $15,188,000
$14,012,000 Net Income $449,000 $493,000 $813,000 $818,000 Net
Income Per Share Basic $.08 $.09 $.15 $.15 Weighted Average Shares
of Common Stock Outstanding Basic 5,372,000 5,336,000 5,355,000
5,326,000 Net Income Per Share Diluted $.08 $.09 $.15 $.15 Weighted
Average Shares of Common Stock and Common Stock Equivalents
Outstanding Diluted 5,584,000 5,563,000 5,571,000 5,558,000
DATASOURCE: Netsmart Technologies, Inc. CONTACT: James Conway, CEO
of Netsmart Technologies, Inc, 800-451-7503, ; or Stuart Fine of
Carpe DM, Inc. for Netsmart Technologies, Inc., +1-908-490-0075,
Web site: http://www.netsmartech.com/
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