Quovadx, Inc. (NASDAQ: QVDX), a global software and services
company, today announced financial results for the third fiscal
quarter ended September 30, 2006. Financial highlights for the
third quarter of 2006 included: Revenue of $20.4 million, up from
$20.2 million in the third quarter of 2005; Gross margin of 60
percent, up from 53 percent in the third quarter of 2005; Net loss
of $9,000, or $0.00 per share on a fully diluted basis (which
includes a $1.0 million refund, or $0.02 per fully diluted share,
related to an amended litigation settlement, as well as $0.5
million, or $0.01 per fully diluted share, of incremental FAS 123R
stock compensation expense), compared to a net loss of $1.7
million, or $0.04 per diluted share, in the third quarter of 2005;
Earnings before interest, taxes, depreciation and amortization
(EBITDA) of $2.6 million, up from EBITDA of $1.1 million in the
third quarter of 2005; Cash provided by operations of $3.1 million,
compared to cash provided by operations of $4.4 million in the
third quarter of 2005; Total cash, cash equivalents, investments
and restricted cash at September 30, 2006 of $30.6 million; and
Days sales outstanding, or DSO, of 48 days, down from 62 days a
year ago. �In the third quarter, we remained focused on supporting
our growth initiatives and continuing to improve on our financial
performance,� said Harvey A. Wagner, president and chief executive
officer, Quovadx. �This enabled us to continue to improve gross
margins, achieve the lowest days sales outstanding in the Company�s
history, deliver positive cash from operations, and increase our
cash balance from the previous quarter. In addition, we continued
to work toward a resolution of the legacy SEC investigation. �While
our revenue growth is slower than we would like, we continue to see
signs of momentum from our growth initiatives,� Wagner continued.
�In the third quarter, we added new customers, expanded services to
existing customers, and maintained 90-plus percent renewal rates
with our customers in all three divisions. We also signed new
agreements and expanded existing agreements with selling partners
in ISD and Rogue Wave, and we continued to make significant
progress on our efforts to deliver new and enhanced product and
service offerings to the marketplace. �We remain firm in our belief
that we operate in attractive markets with significant
opportunities for growth. While we review strategic alternatives,
as announced on August 31, we expect to continue to invest
selectively in targeted growth initiatives as we go forward,�
Wagner concluded. Business Division Highlights Integration
Solutions Division (ISD) ISD provides clinical and financial
interoperability solutions for hospitals, government entities,
health plans and healthcare communities, designed to improve
business process efficiency and leverage existing technology
infrastructure. ISD highlights for the third quarter of 2006
included the following: Sales to new customers, including Health
Texas Provider Network in Dallas, TX; LYNX Medical Systems,
Belleview, WA; Samaritan Health Services in Corvallis, OR; Smart
Systems for Health Agency in Ontario, Canada; and others; Expanded
or renewed sales to existing customers, including Health-Comm GMBH
in Essen, Germany; Novant Health in Winston-Salem and Charlotte,
North Carolina; and others; Sales to and through existing channel
partners, both domestically and abroad, including Cerner, eNovation
Lifeline, GTSI, OCS Healthcare, RxHub, Stinger Medical and others;
New and expanded partner relationships, including a new partnership
with 3M Corporation and an expanded partnership agreement with
RxHub; and The general availability (GA) release of Intelligent
Health Broker 2.0, which enables Cloverleaf� Integration Services
to consume and produce Web services and provides for SOAP and WSDL
communication protocols. These and other initiatives enabled ISD to
deliver third-quarter EBITDA of $2.2 million. CareScience Division
The CareScience division provides care management services and
analytical solutions to hospitals and health systems. CareScience
highlights for the third quarter of 2006 included the following:
Sales to new and existing customers, including Hoag Memorial
Hospital in Newport Beach, CA; Mercer Health and Benefits, LLC in
San Francisco, CA; Temple University Health System in Philadelphia,
PA; Cooper Health System, Camden NJ; and others; Multi-year
contract renewals with Banner Health in Phoenix, AZ; Baptist Health
Care Corporation in Pensacola, FL; St. Luke's
Episcopal-Presbyterian Hospital in Chesterfield, MO; and others;
Implementation of a solution to provide blood utilization reports
to the American Red Cross and its customers; and Ongoing product
enhancements, including expansion of the Company�s core measures
certification through the Joint Commission on Accreditation of
Health Organizations (JCAHO) and support of the newly announced
Surgical Care Improvement project (SCIP) quality measures. These
and other initiatives enabled CareScience to deliver third-quarter
EBITDA of $0.4 million. Rogue Wave Software Division The Rogue Wave
Software division specializes in high-performance development
tools, frameworks and software libraries for the professional
developer. Rogue Wave Software highlights for the third quarter of
2006 included the following: Sales of Rogue Wave� SourcePro� C++
Suite to new and existing enterprise customers in the
telecommunications, financial services and healthcare markets in
both the US and abroad. These sales continued to provide the
majority of Rogue Wave Software�s license revenue, while the
Company continues initiatives to grow consulting revenue and
increase sales of its new Rogue Wave� Hydra solution. Sales of
Rogue Wave Hydra to enterprise customers, systems integrators and
independent software vendors, including EnergySolve, an energy
services company that provides utility bill outsourcing and
web-based energy information reporting services; JackBe
Corporation, a leading provider of Rich Enterprise Application
solutions that extend SOA with Ajax to optimize business activity;
Solutions IQ, leading provider of information technology staffing,
outsourced services, and consulting; Tier 1 Innovation LLC, a
leading provider of management and systems integration consulting
services; and Verimatrix, Inc., a leading provider of
software-based content security and revenue enhancement
technologies in pay-TV networks; and others. These and other
initiatives enabled Rogue Wave Software to deliver third-quarter
EBITDA of $3.3 million. Other Matters On September 29, 2006, the
Company offered to enter into a settlement with the Securities and
Exchange Commission (�SEC�) to settle the formal SEC investigation
initiated April 12, 2004 pursuant to an �Order Directing Private
Investigation and Designating Officers to Take Testimony.� The
proposed settlement would not involve any financial penalty. The
settlement is subject to approval by the SEC. The Company�s
understanding is that the Staff of the Enforcement Division will
recommend to the SEC that the proposed settlement be approved. In
the class action captioned Heller v. Quovadx, Inc., et al, filed on
June�10, 2004, the court denied approval of the previously reported
settlement. The parties have reached an agreement to modify the
settlement to exclude claims that were objectionable to the court
and reduce the settlement fund from $10 million to $9 million. The
modified settlement agreement will be resubmitted to the court for
approval and, if approved, to the class members. As a result of the
reduced settlement amount, the plaintiffs returned $1 million from
the settlement fund to the Company in late October. In August, the
Company announced that it had engaged First Albany Capital, LLC, to
help it explore strategic alternatives to realize the Company�s
potential and enhance stockholder value. The Company does not
intend to update its process or disclose developments with respect
to potential initiatives unless or until the Board of Directors has
approved a specific transaction. Conference Call Quovadx will host
a conference call today, October 31, 2006, at 3:00 PM MT/5:00 PM
ET, which will be broadcast live over the Internet. Please visit
the "Investors" section of the Company's Website at
http://www.investors.quovadx.com and click on the Investor Events
page. For those who cannot access the live broadcast, a replay of
the presentation will be archived on the Web cast and Presentation
page of the Investor Relations section of the Company�s Website. In
addition, an audio replay of the call will be available through
November 7, 2006 by calling toll free at 888-286-8010 and entering
pass code 40873007. Non-GAAP Financial Measures This press release
contains �non-GAAP financial measure(s)� as defined in Item 10 of
Regulation S-K of the Securities Exchange Act of 1934, as amended,
including EBITDA on a consolidated basis and for each division for
the quarters ended September 30, 2006 and 2005 and DSO on September
30, 2006 and 2005. These �non-GAAP� measures should be viewed in
addition to, and not as an alternative for, the Company�s reported
results prepared in accordance with Generally Accepted Accounting
Principles in the United States (�GAAP�). Reconciliations of EBITDA
for the three and nine months ended September 30, 2006 and 2005, as
compared to the most directly similar GAAP financial measures, are
presented in the EBITDA reconciliation table at the end of the
press release. DSO is calculated as: net outstanding accounts and
unbilled receivables at the end of the quarter divided by total
revenue for the quarter, multiplied by 90. The Company believes
these measures provide useful information to management and to
investors. About Quovadx, Inc. Quovadx (Nasdaq: QVDX) offers
software and services for system development, extension,
integration and analysis to enterprise customers worldwide. Quovadx
has three divisions, including the Integration Solutions division
(ISD), which offers private and public healthcare organizations
software infrastructure to facilitate system interoperability and
leverage existing technology; the CareScience division, which
provides care management and analytical solutions to hospitals and
health systems; and the Rogue Wave Software division, which
provides software and services for enterprise-class application
development. Quovadx serves companies in the healthcare, financial
services, telecommunication and public sectors. For more
information, please visit http://www.quovadx.com. CARESCIENCE,
HYDRASDO and QUOVADX are trademarks, and CLOVERLEAF, ROGUE WAVE and
SOURCEPRO are registered trademarks, of Quovadx, Inc. All other
company and product names mentioned may be trademarks of the
companies with which they are associated. Cautionary Statement
Certain forward-looking statements are included in this release,
including statements relating to Company goals, growth strategy and
future business opportunities. These statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements reflect Quovadx management's
current expectations regarding future events and operating
performance and speak only as of the date of this release.
Investors are cautioned that all forward-looking statements in this
release involve risks and uncertainties that could cause actual
results to differ materially from those referred to in the
forward-looking statements. Factors that may limit the Company�s
ability to fulfill its goals of accelerating revenue growth,
investing in targeted growth initiatives and delivering sustainable
growth in revenue, cash and profits within expected timeframes
include: the ability of Quovadx�s business divisions to execute
growth strategies; increased market competition; market acceptance
of and demand for existing products; market acceptance and demand
for new solutions in the process of being introduced, including
Rogue Wave� Hydra, CareScience� Standards of Care and ISD�s
Intelligent Health Broker and related interoperability solutions;
the Company�s ability to replace revenue from an expected contract
termination (MUSC); longer-than-expected sales cycles; technology
adoption within the healthcare sector; the speed at which
communities adopt and fund electronic health and medical records,
computerized physician order entry systems, national provider ID
initiatives and community-based health information exchange
initiatives; the speed at which healthcare providers, payers and
communities adopt and fund pay-for-performance initiatives; the
rate at which software developers move away from C++ applications
in favor of Java or other program-language applications; the
Company�s ability to successfully execute marketing plans and
programs; the Company�s success in maintaining and expanding
current relationships, winning new customers and growing
internationally; the Company�s success with its partnership and
channel-sales marketing strategy; the Company�s ability to hit the
market window for new technologies and solutions; the outcome of
the Company�s previously announced review of strategic
alternatives; the Company�s ability to attract and retain personnel
while it is evaluating strategic alternatives; the full impact of
the ongoing SEC investigation and remaining class action
litigation; the Company�s ability to manage and mitigate the
liability it faces under privacy and security laws, regulations and
contract requirements; and other risks. A full discussion of known
risks and uncertainties is included in the Company's annual and
quarterly filings with the SEC, copies of which are available
without charge from the Company. These filings are also available
electronically through a link from the Quovadx Investor Relations
Web page or from the SEC Web site at www.sec.gov under "Quovadx,
Inc." If any of the events described in those filings were to
occur, either alone or in combination, it is likely that the
Company�s ability to reach the results described in the
forward-looking statements could be impaired and the Company�s
stock price could be adversely affected. Quovadx does not undertake
any obligation to update or correct any forward-looking statements
included in this release to reflect events or circumstances
occurring after the date of this release. Quovadx, Inc. Condensed
Consolidated Balance Sheets (in thousands) � � � September 30, 2006
December 31, 2005 (Unaudited) ASSETS Current assets: Cash and cash
equivalents $ 15,966� $ 17,806� Short-term investments 14,511�
14,850� Accounts receivable, net 9,773� 14,122� Unbilled accounts
receivable 1,125� 720� Prepaid and other 3,184� 1,771� Total
current assets 44,559� 49,269� � Property and equipment, net 4,253�
3,220� Software, net 6,921� 7,409� Other intangible assets, net
11,000� 13,862� Goodwill 46,724� 46,724� Restricted cash 134� 175�
Other assets 936� 484� Total assets $ 114,527� $ 121,143� �
LIABILITIES AND STOCKHOLDERS� EQUITY � Current liabilities:
Accounts payable $ 3,505� $ 3,383� Accrued liabilities 12,083�
11,175� Deferred revenue 16,005� 17,601� Total current liabilities
31,593� 32,159� � Long-term liabilities 1,252� 797� � Total
liabilities 32,845� 32,956� � Commitments and contingencies �
Stockholders' equity: Preferred stock, $.01 par value, 5,000,000
shares authorized; no shares issued and outstanding -� -� Common
stock, $.01 par value; 100,000,000 authorized and 42,159,118 and
41,641,606 shares issued and outstanding, respectively 422� 416�
Accumulated other comprehensive income (loss) 609� (199) Additional
paid-in capital 274,026� 272,260� Accumulated deficit (193,375)
(184,290) Total stockholders� equity 81,682� 88,187� Total
liabilities and stockholders� equity $ 114,527� $ 121,143� Quovadx,
Inc. Condensed Consolidated Statements of Operations (in thousands,
except per share amounts) (Unaudited) � � Three Months Ended Nine
Months Ended September 30, September 30, 2006� 2005� 2006� 2005� �
Revenue: Software licenses $ 7,078� $ 7,394� $ 22,128� $ 21,468�
Professional services 3,567� 3,005� 9,227� 10,091� Recurring
services 9,774� 9,787� 30,150� 29,902� Total revenue 20,419�
20,186� 61,505� 61,461� � Cost of revenue: Software licenses 1,707�
2,411� 5,643� 6,831� Professional services 1,889� 2,255� 5,371�
7,389� Recurring services 4,622� 4,755� 14,526� 13,542� Total cost
of revenue 8,218� 9,421� 25,540� 27,762� � Gross profit 12,201�
10,765� 35,965� 33,699� � Operating expenses: Sales and marketing
4,891� 3,865� 15,141� 12,285� General and administrative 3,696�
4,955� 19,653� 13,185� Research and development 2,649� 2,691�
7,700� 8,797� Amortization of acquired intangibles 943� 963� 2,862�
2,888� Total operating expenses 12,179� 12,474� 45,356� 37,155�
Income (loss) from operations 22� (1,709) (9,391) (3,456) � Other
income (expense), net (66) 42� (167) 139� Interest income, net 237�
72� 859� 276� Income (loss) before income taxes and cumulative
effect of accounting change 193� (1,595) (8,699) (3,041) Income tax
expense 202� 103� 397� 256� Loss before cumulative effect of
accounting change (9) (1,698) (9,096) (3,297) Cumulative effect of
accounting change -� -� 11� -� Net loss $ (9) $ (1,698) $ (9,085) $
(3,297) � Net loss before cumulative effect of accounting change
per common share � basic and diluted $ (0.00) $ (0.04) $ (0.22) $
(0.08) Cumulative effect of accounting change -� -� 0.00� -� Net
loss per common share � basic and diluted $ (0.00) $ (0.04) $
(0.22) $ (0.08) � Weighted average common shares outstanding
41,634� 41,015� 41,544� 40,800� Quovadx, Inc. Condensed
Consolidated Statements of Cash Flows (in thousands) (Unaudited) �
Three Months Ended Nine Months Ended September 30, September 30,
2006� � 2005� 2006� � 2005� Cash flows from operating activities
Net loss $ (9) $ (1,698) $ (9,085) $ (3,297) Adjustments to
reconcile net loss to net cash provided by operating activities: �
Depreciation and amortization 1,721� 1,831� 5,485� 5,850�
Amortization of acquired intangibles 943� 963� 2,862� 2,888� Stock
based compensation 513� 143� 1,535� 322� Recovery of losses on
accounts receivable (30) (129) -� (439) Change in assets and
liabilities: Accounts receivable 2,991� (16) 4,541� 1,378� Unbilled
accounts receivable (42) 105� (405) 344� Prepaid and other (1,804)
1,462� (1,791) 946� Accounts payable 732� 911� 112� (449) Accrued
liabilities (176) 370� 1,300� 550� Deferred revenue (1,746) � 412�
(1,724) (522) Net cash provided by operating activities 3,093� �
4,354� 2,830� 7,571� � Cash flows from investing activities
Purchase of property and equipment (581) (370) (2,678) (876)
Capitalized software (1,185) (239) (3,394) (538) Purchases of
short-term investments (12,279) (8,722) (42,750) (8,822) Sales of
short-term investments 12,994� � -� 43,089� -� Net cash used in
investing activities (1,051) � (9,331) (5,733) (10,236) � Cash
flows from financing activities Proceeds from issuance of common
stock 12� � 134� 270� 789� Net cash provided by financing
activities 12� � 134� 270� 789� � Effect of foreign exchange rate
changes on cash (11) � (47) 793� (797) � Cash and cash equivalents
Net (decrease) increase 2,043� (4,890) (1,840) (2,673) Beginning of
period 13,923� � 21,039� 17,806� 18,822� End of period $ 15,966� �
$ 16,149� $ 15,966� $ 16,149� � Short-term investments $ 14,511� $
14,847� $ 14,511� $ 14,847� Restricted cash 134� � 173� 134� 173�
Total cash, cash equivalents, short-term investments and restricted
cash $ 30,611� � $ 31,169� $ 30,611� $ 31,169� � Supplemental
Disclosure of Non-Cash Investing Activity � Retirement of fixed
assets - cost $ 832� $ -� $ 11,560� $ -� Retirement of fixed assets
- accumulated depreciation (822) -� (11,481) -� Net retirements of
fixed assets $ 10� $ -� $ 79� $ -� Quovadx, Inc. Selected Financial
Information by Division (in thousands) (Unaudited) � Integration
Solutions Division (ISD) Three Months Ended Sept. 30,2006 June
30,2006 March 31,2006 Dec. 31,2005 Sept. 30,2005 Revenue: Software
license $ 1,558� $ 1,866� $ 1,985� $ 3,194� $ 2,148� Professional
services 1,550� 1,003� 1,163� 1,301� 1,384� Recurring services
6,545� 6,171� 6,649� 6,316� 5,943� Total revenue 9,653� 9,040�
9,797� 10,811� 9,475� � Gross profit 4,427� 3,677� 3,818� 4,800�
3,053� Gross margin % 46% 41% 39% 44% 32% � � � � � Income from
operations[1] $ 1,204� $ 424� $ 378� $ 2,210� $ 338� � Depreciation
and amortization 984� 1,308� 1,252� 1,182� 1,259� EBITDA $ 2,188� $
1,732� $ 1,630� $ 3,392� $ 1,597� � Capitalized Software Additions
$ 285� $ 440� $ 331� $ 617� $ 239� � CareScience Division �
Revenue: Software license $ 1,499� $ 1,625� $ 1,498� $ 1,426� $
1,302� Professional services 1,744� 1,518� 1,626� 1,581� 1,403�
Recurring services 496� 809� 877� 939� 877� Total revenue 3,739�
3,952� 4,001� 3,946� 3,582� � Gross profit 1,690� 1,722� 2,099�
1,618� 1,402� Gross margin % 45% 44% 52% 41% 39% � � � � � Income
(loss) from operations[1] $ (32) $ (131) $ 579� $ (158) $ (38) �
Depreciation and amortization 472� 438� 451� 463� 477� EBITDA $
440� $ 307� $ 1,030� $ 305� $ 439� � Capitalized Software Additions
$ 329� $ 224� $ 149� $ -� $ -� � Rogue Wave Software Division �
Revenue: Software license $ 4,021� $ 4,531� $ 3,545� $ 3,704� $
3,944� Professional services 273� 194� 156� 237� 218� Recurring
services 2,733� 2,992� 2,878� 2,944� 2,967� Total revenue 7,027�
7,717� 6,579� 6,885� 7,129� � Gross profit 6,084� 6,743� 5,705�
6,116� 6,310� Gross margin % 87% 87% 87% 89% 89% � � � � � Income
from operations[1] $ 2,283� $ 2,506� $ 2,239� $ 2,009� $ 2,631� �
Depreciation and amortization 1,034� 1,003� 924� 916� 928� EBITDA $
3,317� $ 3,509� $ 3,163� $ 2,925� $ 3,559� � Capitalized Software
Additions $ 571� $ 460� $ 605� $ 353� $ -� [1] Does not include
allocation of corporate overhead Quovadx, Inc. EBITDA
Reconciliation (in thousands) (Unaudited) � Three Months
EndedSeptember 30, � Nine Months EndedSeptember 30, 2006� 2005�
2006� 2005� GAAP net loss $ (9) $ (1,698) $ (9,085) $ (3,297)
Interest income (237) (72) (859) (276) Depreciation &
amortization 2,664� 2,794� 8,347� 8,738� Income taxes 202� 103�
397� 256� EBITDA $ 2,620� $ 1,127� $ (1,200) $ 5,421� Quovadx, Inc.
(NASDAQ: QVDX), a global software and services company, today
announced financial results for the third fiscal quarter ended
September 30, 2006. Financial highlights for the third quarter of
2006 included: -- Revenue of $20.4 million, up from $20.2 million
in the third quarter of 2005; -- Gross margin of 60 percent, up
from 53 percent in the third quarter of 2005; -- Net loss of
$9,000, or $0.00 per share on a fully diluted basis (which includes
a $1.0 million refund, or $0.02 per fully diluted share, related to
an amended litigation settlement, as well as $0.5 million, or $0.01
per fully diluted share, of incremental FAS 123R stock compensation
expense), compared to a net loss of $1.7 million, or $0.04 per
diluted share, in the third quarter of 2005; -- Earnings before
interest, taxes, depreciation and amortization (EBITDA) of $2.6
million, up from EBITDA of $1.1 million in the third quarter of
2005; -- Cash provided by operations of $3.1 million, compared to
cash provided by operations of $4.4 million in the third quarter of
2005; -- Total cash, cash equivalents, investments and restricted
cash at September 30, 2006 of $30.6 million; and -- Days sales
outstanding, or DSO, of 48 days, down from 62 days a year ago. "In
the third quarter, we remained focused on supporting our growth
initiatives and continuing to improve on our financial
performance," said Harvey A. Wagner, president and chief executive
officer, Quovadx. "This enabled us to continue to improve gross
margins, achieve the lowest days sales outstanding in the Company's
history, deliver positive cash from operations, and increase our
cash balance from the previous quarter. In addition, we continued
to work toward a resolution of the legacy SEC investigation. "While
our revenue growth is slower than we would like, we continue to see
signs of momentum from our growth initiatives," Wagner continued.
"In the third quarter, we added new customers, expanded services to
existing customers, and maintained 90-plus percent renewal rates
with our customers in all three divisions. We also signed new
agreements and expanded existing agreements with selling partners
in ISD and Rogue Wave, and we continued to make significant
progress on our efforts to deliver new and enhanced product and
service offerings to the marketplace. "We remain firm in our belief
that we operate in attractive markets with significant
opportunities for growth. While we review strategic alternatives,
as announced on August 31, we expect to continue to invest
selectively in targeted growth initiatives as we go forward,"
Wagner concluded. Business Division Highlights Integration
Solutions Division (ISD) ISD provides clinical and financial
interoperability solutions for hospitals, government entities,
health plans and healthcare communities, designed to improve
business process efficiency and leverage existing technology
infrastructure. ISD highlights for the third quarter of 2006
included the following: -- Sales to new customers, including Health
Texas Provider Network in Dallas, TX; LYNX Medical Systems,
Belleview, WA; Samaritan Health Services in Corvallis, OR; Smart
Systems for Health Agency in Ontario, Canada; and others; --
Expanded or renewed sales to existing customers, including
Health-Comm GMBH in Essen, Germany; Novant Health in Winston-Salem
and Charlotte, North Carolina; and others; -- Sales to and through
existing channel partners, both domestically and abroad, including
Cerner, eNovation Lifeline, GTSI, OCS Healthcare, RxHub, Stinger
Medical and others; -- New and expanded partner relationships,
including a new partnership with 3M Corporation and an expanded
partnership agreement with RxHub; and -- The general availability
(GA) release of Intelligent Health Broker 2.0, which enables
Cloverleaf(R) Integration Services to consume and produce Web
services and provides for SOAP and WSDL communication protocols.
These and other initiatives enabled ISD to deliver third-quarter
EBITDA of $2.2 million. CareScience Division The CareScience
division provides care management services and analytical solutions
to hospitals and health systems. CareScience highlights for the
third quarter of 2006 included the following: -- Sales to new and
existing customers, including Hoag Memorial Hospital in Newport
Beach, CA; Mercer Health and Benefits, LLC in San Francisco, CA;
Temple University Health System in Philadelphia, PA; Cooper Health
System, Camden NJ; and others; -- Multi-year contract renewals with
Banner Health in Phoenix, AZ; Baptist Health Care Corporation in
Pensacola, FL; St. Luke's Episcopal-Presbyterian Hospital in
Chesterfield, MO; and others; -- Implementation of a solution to
provide blood utilization reports to the American Red Cross and its
customers; and -- Ongoing product enhancements, including expansion
of the Company's core measures certification through the Joint
Commission on Accreditation of Health Organizations (JCAHO) and
support of the newly announced Surgical Care Improvement project
(SCIP) quality measures. These and other initiatives enabled
CareScience to deliver third-quarter EBITDA of $0.4 million. Rogue
Wave Software Division The Rogue Wave Software division specializes
in high-performance development tools, frameworks and software
libraries for the professional developer. Rogue Wave Software
highlights for the third quarter of 2006 included the following: --
Sales of Rogue Wave(R) SourcePro(R) C++ Suite to new and existing
enterprise customers in the telecommunications, financial services
and healthcare markets in both the US and abroad. These sales
continued to provide the majority of Rogue Wave Software's license
revenue, while the Company continues initiatives to grow consulting
revenue and increase sales of its new Rogue Wave(R) Hydra solution.
-- Sales of Rogue Wave Hydra to enterprise customers, systems
integrators and independent software vendors, including
EnergySolve, an energy services company that provides utility bill
outsourcing and web-based energy information reporting services;
JackBe Corporation, a leading provider of Rich Enterprise
Application solutions that extend SOA with Ajax to optimize
business activity; Solutions IQ, leading provider of information
technology staffing, outsourced services, and consulting; Tier 1
Innovation LLC, a leading provider of management and systems
integration consulting services; and Verimatrix, Inc., a leading
provider of software-based content security and revenue enhancement
technologies in pay-TV networks; and others. These and other
initiatives enabled Rogue Wave Software to deliver third-quarter
EBITDA of $3.3 million. Other Matters On September 29, 2006, the
Company offered to enter into a settlement with the Securities and
Exchange Commission ("SEC") to settle the formal SEC investigation
initiated April 12, 2004 pursuant to an "Order Directing Private
Investigation and Designating Officers to Take Testimony." The
proposed settlement would not involve any financial penalty. The
settlement is subject to approval by the SEC. The Company's
understanding is that the Staff of the Enforcement Division will
recommend to the SEC that the proposed settlement be approved. In
the class action captioned Heller v. Quovadx, Inc., et al, filed on
June 10, 2004, the court denied approval of the previously reported
settlement. The parties have reached an agreement to modify the
settlement to exclude claims that were objectionable to the court
and reduce the settlement fund from $10 million to $9 million. The
modified settlement agreement will be resubmitted to the court for
approval and, if approved, to the class members. As a result of the
reduced settlement amount, the plaintiffs returned $1 million from
the settlement fund to the Company in late October. In August, the
Company announced that it had engaged First Albany Capital, LLC, to
help it explore strategic alternatives to realize the Company's
potential and enhance stockholder value. The Company does not
intend to update its process or disclose developments with respect
to potential initiatives unless or until the Board of Directors has
approved a specific transaction. Conference Call Quovadx will host
a conference call today, October 31, 2006, at 3:00 PM MT/5:00 PM
ET, which will be broadcast live over the Internet. Please visit
the "Investors" section of the Company's Website at
http://www.investors.quovadx.com and click on the Investor Events
page. For those who cannot access the live broadcast, a replay of
the presentation will be archived on the Web cast and Presentation
page of the Investor Relations section of the Company's Website. In
addition, an audio replay of the call will be available through
November 7, 2006 by calling toll free at 888-286-8010 and entering
pass code 40873007. Non-GAAP Financial Measures This press release
contains "non-GAAP financial measure(s)" as defined in Item 10 of
Regulation S-K of the Securities Exchange Act of 1934, as amended,
including EBITDA on a consolidated basis and for each division for
the quarters ended September 30, 2006 and 2005 and DSO on September
30, 2006 and 2005. These "non-GAAP" measures should be viewed in
addition to, and not as an alternative for, the Company's reported
results prepared in accordance with Generally Accepted Accounting
Principles in the United States ("GAAP"). -- Reconciliations of
EBITDA for the three and nine months ended September 30, 2006 and
2005, as compared to the most directly similar GAAP financial
measures, are presented in the EBITDA reconciliation table at the
end of the press release. -- DSO is calculated as: net outstanding
accounts and unbilled receivables at the end of the quarter divided
by total revenue for the quarter, multiplied by 90. The Company
believes these measures provide useful information to management
and to investors. About Quovadx, Inc. Quovadx (Nasdaq: QVDX) offers
software and services for system development, extension,
integration and analysis to enterprise customers worldwide. Quovadx
has three divisions, including the Integration Solutions division
(ISD), which offers private and public healthcare organizations
software infrastructure to facilitate system interoperability and
leverage existing technology; the CareScience division, which
provides care management and analytical solutions to hospitals and
health systems; and the Rogue Wave Software division, which
provides software and services for enterprise-class application
development. Quovadx serves companies in the healthcare, financial
services, telecommunication and public sectors. For more
information, please visit http://www.quovadx.com. CARESCIENCE,
HYDRASDO and QUOVADX are trademarks, and CLOVERLEAF, ROGUE WAVE and
SOURCEPRO are registered trademarks, of Quovadx, Inc. All other
company and product names mentioned may be trademarks of the
companies with which they are associated. Cautionary Statement
Certain forward-looking statements are included in this release,
including statements relating to Company goals, growth strategy and
future business opportunities. These statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These statements reflect Quovadx management's
current expectations regarding future events and operating
performance and speak only as of the date of this release.
Investors are cautioned that all forward-looking statements in this
release involve risks and uncertainties that could cause actual
results to differ materially from those referred to in the
forward-looking statements. Factors that may limit the Company's
ability to fulfill its goals of accelerating revenue growth,
investing in targeted growth initiatives and delivering sustainable
growth in revenue, cash and profits within expected timeframes
include: the ability of Quovadx's business divisions to execute
growth strategies; increased market competition; market acceptance
of and demand for existing products; market acceptance and demand
for new solutions in the process of being introduced, including
Rogue Wave(R) Hydra, CareScience(TM) Standards of Care and ISD's
Intelligent Health Broker and related interoperability solutions;
the Company's ability to replace revenue from an expected contract
termination (MUSC); longer-than-expected sales cycles; technology
adoption within the healthcare sector; the speed at which
communities adopt and fund electronic health and medical records,
computerized physician order entry systems, national provider ID
initiatives and community-based health information exchange
initiatives; the speed at which healthcare providers, payers and
communities adopt and fund pay-for-performance initiatives; the
rate at which software developers move away from C++ applications
in favor of Java or other program-language applications; the
Company's ability to successfully execute marketing plans and
programs; the Company's success in maintaining and expanding
current relationships, winning new customers and growing
internationally; the Company's success with its partnership and
channel-sales marketing strategy; the Company's ability to hit the
market window for new technologies and solutions; the outcome of
the Company's previously announced review of strategic
alternatives; the Company's ability to attract and retain personnel
while it is evaluating strategic alternatives; the full impact of
the ongoing SEC investigation and remaining class action
litigation; the Company's ability to manage and mitigate the
liability it faces under privacy and security laws, regulations and
contract requirements; and other risks. A full discussion of known
risks and uncertainties is included in the Company's annual and
quarterly filings with the SEC, copies of which are available
without charge from the Company. These filings are also available
electronically through a link from the Quovadx Investor Relations
Web page or from the SEC Web site at www.sec.gov under "Quovadx,
Inc." If any of the events described in those filings were to
occur, either alone or in combination, it is likely that the
Company's ability to reach the results described in the
forward-looking statements could be impaired and the Company's
stock price could be adversely affected. Quovadx does not undertake
any obligation to update or correct any forward-looking statements
included in this release to reflect events or circumstances
occurring after the date of this release. -0- *T Quovadx, Inc.
Condensed Consolidated Balance Sheets (in thousands) September 30,
2006 December 31, 2005 ------------------ -----------------
(Unaudited) ASSETS Current assets: Cash and cash equivalents
$15,966 $17,806 Short-term investments 14,511 14,850 Accounts
receivable, net 9,773 14,122 Unbilled accounts receivable 1,125 720
Prepaid and other 3,184 1,771 ------------------ -----------------
Total current assets 44,559 49,269 Property and equipment, net
4,253 3,220 Software, net 6,921 7,409 Other intangible assets, net
11,000 13,862 Goodwill 46,724 46,724 Restricted cash 134 175 Other
assets 936 484 ------------------ ----------------- Total assets
$114,527 $121,143 ================== ================= LIABILITIES
AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable
$3,505 $3,383 Accrued liabilities 12,083 11,175 Deferred revenue
16,005 17,601 ------------------ ----------------- Total current
liabilities 31,593 32,159 Long-term liabilities 1,252 797
------------------ ----------------- Total liabilities 32,845
32,956 Commitments and contingencies Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares authorized; no
shares issued and outstanding - - Common stock, $.01 par value;
100,000,000 authorized and 42,159,118 and 41,641,606 shares issued
and outstanding, respectively 422 416 Accumulated other
comprehensive income (loss) 609 (199) Additional paid-in capital
274,026 272,260 Accumulated deficit (193,375) (184,290)
------------------ ----------------- Total stockholders' equity
81,682 88,187 ------------------ ----------------- Total
liabilities and stockholders' equity $114,527 $121,143
================== ================= *T -0- *T Quovadx, Inc.
Condensed Consolidated Statements of Operations (in thousands,
except per share amounts) (Unaudited) Three Months Ended Nine
Months Ended September 30, September 30, -------------------
------------------ 2006 2005 2006 2005 -------------------
------------------ Revenue: Software licenses $7,078 $7,394 $22,128
$21,468 Professional services 3,567 3,005 9,227 10,091 Recurring
services 9,774 9,787 30,150 29,902 -------------------
------------------ Total revenue 20,419 20,186 61,505 61,461 Cost
of revenue: Software licenses 1,707 2,411 5,643 6,831 Professional
services 1,889 2,255 5,371 7,389 Recurring services 4,622 4,755
14,526 13,542 ------------------- ------------------ Total cost of
revenue 8,218 9,421 25,540 27,762 -------------------
------------------ Gross profit 12,201 10,765 35,965 33,699
------------------- ------------------ Operating expenses: Sales
and marketing 4,891 3,865 15,141 12,285 General and administrative
3,696 4,955 19,653 13,185 Research and development 2,649 2,691
7,700 8,797 Amortization of acquired intangibles 943 963 2,862
2,888 ------------------- ------------------ Total operating
expenses 12,179 12,474 45,356 37,155 -------------------
------------------ Income (loss) from operations 22 (1,709) (9,391)
(3,456) Other income (expense), net (66) 42 (167) 139 Interest
income, net 237 72 859 276 ------------------- ------------------
Income (loss) before income taxes and cumulative effect of
accounting change 193 (1,595) (8,699) (3,041) Income tax expense
202 103 397 256 ------------------- ------------------ Loss before
cumulative effect of accounting change (9) (1,698) (9,096) (3,297)
Cumulative effect of accounting change - - 11 - -------------------
------------------ Net loss $(9) $(1,698) $(9,085) $(3,297)
=================== ================== Net loss before cumulative
effect of accounting change per common share - basic and diluted
$(0.00) $(0.04) $(0.22) $(0.08) Cumulative effect of accounting
change - - 0.00 - ------------------- ------------------ Net loss
per common share - basic and diluted $(0.00) $(0.04) $(0.22)
$(0.08) =================== ================== Weighted average
common shares outstanding 41,634 41,015 41,544 40,800
=================== ================== *T -0- *T Quovadx, Inc.
Condensed Consolidated Statements of Cash Flows (in thousands)
(Unaudited) Three Months Ended Nine Months Ended September 30,
September 30, ------------------ ------------------ 2006 2005 2006
2005 ------------------ ------------------ Cash flows from
operating activities Net loss $(9) $(1,698) $(9,085) $(3,297)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization 1,721 1,831 5,485 5,850
Amortization of acquired intangibles 943 963 2,862 2,888 Stock
based compensation 513 143 1,535 322 Recovery of losses on accounts
receivable (30) (129) - (439) Change in assets and liabilities:
Accounts receivable 2,991 (16) 4,541 1,378 Unbilled accounts
receivable (42) 105 (405) 344 Prepaid and other (1,804) 1,462
(1,791) 946 Accounts payable 732 911 112 (449) Accrued liabilities
(176) 370 1,300 550 Deferred revenue (1,746) 412 (1,724) (522)
------------------ --------- -------- Net cash provided by
operating activities 3,093 4,354 2,830 7,571 ------------------
--------- -------- Cash flows from investing activities Purchase of
property and equipment (581) (370) (2,678) (876) Capitalized
software (1,185) (239) (3,394) (538) Purchases of short-term
investments (12,279) (8,722) (42,750) (8,822) Sales of short-term
investments 12,994 - 43,089 - ------------------ --------- --------
Net cash used in investing activities (1,051) (9,331) (5,733)
(10,236) ------------------ --------- -------- Cash flows from
financing activities Proceeds from issuance of common stock 12 134
270 789 ------------------ --------- -------- Net cash provided by
financing activities 12 134 270 789 ------------------ ---------
-------- Effect of foreign exchange rate changes on cash (11) (47)
793 (797) ------------------ --------- -------- Cash and cash
equivalents Net (decrease) increase 2,043 (4,890) (1,840) (2,673)
Beginning of period 13,923 21,039 17,806 18,822 ------------------
--------- -------- End of period $15,966 $16,149 $15,966 $16,149
================== ========= ======== Short-term investments
$14,511 $14,847 $14,511 $14,847 Restricted cash 134 173 134 173
------------------ --------- -------- Total cash, cash equivalents,
short-term investments and restricted cash $30,611 $31,169 $30,611
$31,169 ================== ========= ======== Supplemental
Disclosure of Non- Cash Investing Activity Retirement of fixed
assets - cost $832 $- $11,560 $- Retirement of fixed assets -
accumulated depreciation (822) - (11,481) - --------- --------
--------- -------- Net retirements of fixed assets $10 $- $79 $-
========= ======== ========= ======== *T -0- *T Quovadx, Inc.
Selected Financial Information by Division (in thousands)
(Unaudited) Integration Solutions Division (ISD) Three Months Ended
------------------------------------------------ Sept. 30, June 30,
March 31, Dec. 31, Sept. 30, 2006 2006 2006 2005 2005 ----------
-------- --------- -------- --------- Revenue: Software license
$1,558 $1,866 $1,985 $3,194 $2,148 Professional services 1,550
1,003 1,163 1,301 1,384 Recurring services 6,545 6,171 6,649 6,316
5,943 ---------- -------- --------- -------- --------- Total
revenue 9,653 9,040 9,797 10,811 9,475 Gross profit 4,427 3,677
3,818 4,800 3,053 Gross margin % 46% 41% 39% 44% 32% ----------
-------- --------- -------- --------- Income from operations(1)
$1,204 $424 $378 $2,210 $338 ========== ======== ========= ========
========= Depreciation and amortization 984 1,308 1,252 1,182 1,259
---------- -------- --------- -------- --------- EBITDA $2,188
$1,732 $1,630 $3,392 $1,597 ========== ======== ========= ========
========= Capitalized Software Additions $285 $440 $331 $617 $239
========== ======== ========= ======== ========= CareScience
Division Revenue: Software license $1,499 $1,625 $1,498 $1,426
$1,302 Professional services 1,744 1,518 1,626 1,581 1,403
Recurring services 496 809 877 939 877 ---------- --------
--------- -------- --------- Total revenue 3,739 3,952 4,001 3,946
3,582 Gross profit 1,690 1,722 2,099 1,618 1,402 Gross margin % 45%
44% 52% 41% 39% ---------- -------- --------- -------- ---------
Income (loss) from operations(1) $(32) $(131) $579 $(158) $(38)
========== ======== ========= ======== ========= Depreciation and
amortization 472 438 451 463 477 ---------- -------- ---------
-------- --------- EBITDA $440 $307 $1,030 $305 $439 ==========
======== ========= ======== ========= Capitalized Software
Additions $329 $224 $149 $- $- ========== ======== =========
======== ========= Rogue Wave Software Division Revenue: Software
license $4,021 $4,531 $3,545 $3,704 $3,944 Professional services
273 194 156 237 218 Recurring services 2,733 2,992 2,878 2,944
2,967 ---------- -------- --------- -------- --------- Total
revenue 7,027 7,717 6,579 6,885 7,129 Gross profit 6,084 6,743
5,705 6,116 6,310 Gross margin % 87% 87% 87% 89% 89% ----------
-------- --------- -------- --------- Income from operations(1)
$2,283 $2,506 $2,239 $2,009 $2,631 ========== ======== =========
======== ========= Depreciation and amortization 1,034 1,003 924
916 928 ---------- -------- --------- -------- --------- EBITDA
$3,317 $3,509 $3,163 $2,925 $3,559 ========== ======== =========
======== ========= Capitalized Software Additions $571 $460 $605
$353 $- ========== ======== ========= ======== ========= (1) Does
not include allocation of corporate overhead *T -0- *T Quovadx,
Inc. EBITDA Reconciliation (in thousands) (Unaudited) Three Months
Ended Nine Months Ended September 30, September 30,
------------------------------------ 2006 2005 2006 2005 ---------
-------- -------- -------- GAAP net loss $(9) $(1,698) $(9,085)
$(3,297) Interest income (237) (72) (859) (276) Depreciation &
amortization 2,664 2,794 8,347 8,738 Income taxes 202 103 397 256
--------- -------- -------- -------- EBITDA $2,620 $1,127 $(1,200)
$5,421 ========= ======== ======== ======== *T
Quovadx (NASDAQ:QVDX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Quovadx (NASDAQ:QVDX)
Historical Stock Chart
From Oct 2023 to Oct 2024