NTST Netsmart Technologies (MM)

Netsmart Announces Third Quarter Results Revenues Increase 8% from Third Quarter Fiscal 2003 GREAT RIVER, N.Y., Nov. 1 /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 third quarter ended September 30, 2004. James Conway, CEO of Netsmart Technologies, Inc. stated, "We are pleased to announce our 25th consecutive quarter of profitability. Our income before taxes was $827,000 for the quarter ended September 30, 2004 as compared to $738,000 for the comparable quarter last year. This represents a 12% increase over last year, before any provision for taxes." Revenue for the quarter ended September 30, 2004 was $7,421,000 as compared to $7,108,000 for the quarter ended September 30, 2003, representing an increase of 4%. Net income for the quarter ended September 30, 2004 was $633,000, or $0.12 per share (basic) and $.11 per share (diluted), as compared to $1,546,000 or $0.34 per share (basic) and $.33 per share (diluted), for the same period last year. The reduction in net income and earnings per share was attributable to a provision for taxes in the quarter ended September 30, 2004 of $194,000 as compared to a tax benefit of $808,000 for the same period last year. Although we accrued taxes at an effective tax rate of 28% of pre-tax income for the nine months ended September 30, 2004, we actually expect to pay taxes at a rate of 5% due to the deduction of prior years net operating losses on our tax returns. In addition, there were approximately 840,000 additional shares outstanding for the quarter ended September 30, 2004 as compared to the same period last year. Revenue for the nine months ended September 30, 2004 was $21,433,000 as compared to $19,816,000 for the nine months ended September 30, 2003, representing an increase of 8%. Net income for the nine months ended September 30, 2004 was $1,451,000, or $.27 per share (basic) and $.26 per share (diluted), as compared to $2,339,000, or $.56 per share (basic) and $.52 per share (diluted) for the same period last year. The reduction in earnings per share is associated with the increased tax provision together with the increased outstanding shares. Working capital increased to $16,829,000 at September 30, 2004 from $14,714,000 at December 31, 2003. Our cash balances increased to $16.5 million at September 30, 2004 from $15.9 million at December 30, 2003 after investing $707,000 into our new Corporate Headquarters at Great River. Recurring revenue for the quarter ended September 30, 2004 was $3,086,000, an increase of 19% from the $2,598,000 for the comparable quarter last year. The gross profit margin for the quarter was 53% as compared to 46% for the comparable quarter in 2003. This increase was primarily due to the reallocation of certain expenses from cost of revenues to research, development and maintenance costs. Our firm order backlog at September 30, 2004 was $26.0 million as compared to $25.5 million at September 30, 2003. The recurring revenue component of the September 30, 2004 backlog is equal to 56% of the total backlog. 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 Three and Nine Months Ended September 30, Three Months Nine Months 2004 2003 2004 2003 Revenue $7,421,000 $7,108,000 $21,433,000 $19,816,000 Income Before Income Tax Expense (Benefit) $827,000 $738,000 $2,014,000 $1,549,000 Income Tax Expense (Benefit)(1) $194,000 $(808,000) $563,000 $(790,000) Net Income(1) $633,000 $1,546,000 $1,451,000 $2,339,000 Net Income Per Share Basic $.12 $.34 $.27 $.56 Weighted Average Shares of Common Stock Outstanding Basic 5,339,000 4,513,000 5,330,000 4,160,000 Net Income Per Share Diluted $.11 $.33 $.26 $.52 Weighted Average Shares of Common Stock and Common Stock Equivalents Outstanding Diluted 5,548,000 4,706,000 5,545,000 4,469,000 (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. In addition, the Company recognized a $800,000 tax benefit during the September 2003 Quarter and a $900,000 tax benefit during the nine months ended September 30, 2003, as a result of a further reduction in its deferred tax asset valuation allowance. 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/

Copyright