LMS Third Quarter 2008 Financial Results - Q3 Revenue Increases 88% to $1.0 Million - YTD Revenue Increases 87% to $2.6 Million
13 February 2008 - 10:10AM
PR Newswire (US)
MONTREAL, Feb. 12 /PRNewswire-FirstCall/ -- LMS Medical Systems
(TSX: LMZ, AMEX: LMZ), a healthcare technology company and
developer of the CALM(R)clinical information system and risk
management software tools for obstetrics, today reported its
unaudited financial results for the third quarter ended December
31, 2007. All amounts are in Canadian dollars. On the strength of
new installations and growing recurring maintenance and technical
service revenues, our comparative quarterly revenues for Q3 2008
grew 88% to $952,000 from $506,000 in Q3 2007. As a result of the
growth in our installed client base, our recurring maintenance and
service revenues increased by 46% to $1,058,000 from $726,000 for
the comparative nine-month period. For the third quarter, these
revenues increased 70% to $355,000 from $209,000. Following the
implementation of a program to streamline operations during Q3
2008, operating expenses were reduced by $906,000 for the third
quarter of fiscal 2008, from $2,991,000 for Q3 2007 to $2,085,000
for Q3 2008, and by $1,389,000 for year-to-date, from $8,768,000
for the nine months ended December 31, 2006 to $7,379,000 for the
nine months ended December 31, 2007. The reduction for Q3 2008 is
explained mainly by a decrease in research and development expenses
of $405,000, lower selling marketing product management expenses of
$193,000 and lower administrative expenses of $272,000. Included in
operating expenses are non-cash, stock-based compensation expenses
of $305,000 for Q3 2008 and $870,000 on a year-to-date basis. The
combination of the increase in revenues of $446,000 and lower
overall expenses of $906,000 reduced the comparative operating loss
by $1,297,000 from $2,563,000 ($0.14 per share) in Q3 2007 to
$1,266,000 ($0.06 per share) in Q3 2008, and decreased the cash
used in operating activities before net changes in non-operating
working capital items by $1,211,000 to $935,000 for Q3 2008
compared to $2,146,000 for Q3 2007. Cash, cash equivalents and
short-term investments held to maturity, as at December 31, 2007
totaled $0.5 million compared to $3.38 million as at March 31,
2007. In addition, under our contract with a distributor, LMS is
entitled to receive amounts for contracts contained in our backlog,
described below. As at December 31, 2007, this amount, which does
not qualify as a receivable under generally accepted accounting
principles, amounted to $0.6 million and will provide short term
additional liquidity. As such, the total cash, cash equivalents,
short term investments and accounts receivable, including this
amount, amounted to $1.8 million as at December 31, 2007. THIRD
QUARTER HIGHLIGHTS: - In conjunction with a seasonally stronger
spring quarter (Q4) and corporate streamlining of operations, we
anticipate reaching a cash flow break even for the last quarter of
the current fiscal year. - Both the backlog of signed contracts and
identified sales opportunities were maintained at $4.6 million and
$25 million, respectively. - In total, we added six new hospitals
to our client base as well as four insurance contracts during the
third quarter of fiscal 2008. - We implemented a program to
streamline operations, thus substantially reducing LMS expenses
with the objective of reaching near term positive cash flow and
ensuring profitability. There are reductions in consulting expenses
and salaries in research and development and other non core
expenditures. All operational, sales and core development
activities have been maintained. Also, management has demonstrated
its commitment to the future of LMS by making a collective decision
to temporarily suspend a portion of salaried compensation for the
balance of fiscal 2008. Upon meeting certain milestones, the board
of directors will have an option to pay the suspended salaries in
the form of LMS common shares or a cash payment, subsequent to the
year end, including a 25% premium. There have been only minimal
cash restructuring costs related to the implementation of this
plan. LMS complete results for the quarter ended December 31, 2007
along with Management's Discussion and Analysis will be released in
normal course on or about February 12th and will be available in
Canada at http://www.sedar.com/, in the United States at
http://www.sec.gov/ and at http://www.lmsmedical.com/. ABOUT LMS
LMS is a leader in the application of advanced mathematical
modeling and neural networks for medical use. The LMS CALM(TM)
Suite provides physicians, nursing staff, risk managers and
hospital administrators with clinical information systems and risk
management tools designed to improve outcomes and patient care for
mothers and their infants during childbirth. Except for historical
information contained herein, the matters discussed in this news
release are forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, there
are important factors that could cause actual results to differ
materially from those expressed implied by the forward-looking
statements including, but without limitation, economic conditions
in general and in the healthcare market, the demand for and market
for our products in domestic and international markets, our current
dependence on the CALM product suite, the challenges associated
with developing new products and obtaining regulatory approvals if
necessary, research and development activities, the uncertainty of
acceptance of our products by the medical community, the lengthy
sales cycle for our products, third party reimbursement,
competition in our markets, including the potential introduction of
competitive products by others, our dependence on our distributors,
physician training, enforceability and the costs of enforcement of
our patents, potential infringements of our patents and the other
factors set forth from time to time in the Company's filings with
the United States Securities and Exchange Commission and with the
Canadian Securities Commissions. The Company has no intention of or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
DATASOURCE: LMS MEDICAL SYSTEMS INC. CONTACT: Yves Grou, Chief
Financial Officer, LMS Medical Systems Inc., (514) 488-3461 Ext.
238, Fax: (514) 488-1880, , http://www.lmsmedical.com/
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