IMNET Systems, Inc. Announces Third Quarter FY98 Results in Line With Pre-Release
Obtains a $15,000,000 Unsecured Line of Credit
ATLANTA--(BUSINESS WIRE)--April 27, 1998-- Finalizes a Product Financing Partner Arrangement
IMNET Systems, Inc. (Nasdaq/NMS: IMNT - news) today announced third quarter fiscal 1998 financial results consistent with its pre-release of results made on April 3, 1998.
The Company also announced the execution of a $15,000,000 unsecured credit facility, and the signing of a product financing partner relationship.
Revenue for the third quarter of fiscal 1998 was $13.2 million, approximating the $13.5 million in revenue reported in the third quarter of fiscal 1997. Gross margin of $6.5 million in the current quarter represented a gross margin rate of 50% and yielded an operating loss of $(2.5) million or (18)% operating margin rate for the quarter. The Company reported a third quarter fiscal 1998 net loss of $(1.5) million, or $(0.15) per share, substantially lower than the pro-forma net income of $2.3 million or $0.22 per share, reported in the corresponding period of 1997. These results are consistent with the preliminary results released by the Company on April 3, 1998.
Kenneth D. Rardin, Chairman and Chief Executive Officer stated, ''We are disappointed with the financial results of the Company for our fiscal third quarter, particularly in light of the many positive developments in our business and the growing demand for our technology solutions. As we have previously explained to the investment community, IMNET's business model as an emerging growth stage company remains dependent on the successful and timely execution of a relatively small number of high dollar value contracts each quarter. A couple of contracts we had anticipated closing during our fiscal third quarter did not execute as we had expected, resulting in a revenue and, therefore, earnings shortfall from expectations. However, we remain optimistic about our long-term prospects and we remain committed to building long-term shareholder value. Like many other emerging software companies, we view contracted backlog as one of the key indicators of the Company's long-term business prospects. At the end of the third quarter, the value of the Company's backlog of signed contracts for systems and services not yet delivered (contracted backlog) stood at a record $62 million, a 55% increase over the contracted backlog of $40 million at the end of the third quarter last year. This marks the eleventh consecutive quarter of contracted backlog growth.''
The Company also announced that it has established a $15,000,000 unsecured credit facility with Wachovia Bank, NA for working capital and general corporate purposes. The credit facility takes the form of an unsecured revolving line of credit, has a one year term, and is priced below the prevailing Prime Rate of interest. Although the Company has no immediate cash needs or planned utilization of the credit facility, the credit facility has been put in place to provide financial flexibility if such needs arise in the future.
Additionally, the Company announced that it has entered into a product financing relationship with Sun Data, Inc. Atlanta based Sun Data is one of the largest IT financing organizations in the country with extensive experience in the financing of hardware, software and service solutions in the healthcare industry. The agreement calls for Sun Data to provide lease financing terms to future IMNET customers as such needs arise, which should simultaneously provide IMNET with enhanced cash flow related to such contracts.
Scott A. Remley, Senior Vice President and Chief Financial Officer stated, ''Establishing a traditional credit facility with a financial institution and the selection of a long-term product financing partner are logical steps in the financial maturation of the Company. During the Company's development and early growth stages, the Company had relied almost exclusively on access to the venture capital and public equity markets to fund its growth and business strategies. As a maturing company, the use of an unsecured credit facility is a logical and relatively low-cost source of funding routine cash needs should such funding needs arise in the future. Further, the use of an external product financing vehicle is expected to result in a shortening of the sales cycle on large projects while improving the Company's cash flow.''
IMNET Systems, Inc. develops and markets electronic healthcare information and document management systems that capture, index, store and retrieve financial information, clinical information and medical images resident on most storage media. IMNET's Electronic Information Warehouse(tm), which supplies the missing link for the implementation of the Electronic Medical Record, is a true enterprise-wide solution that integrates with software from most leading Healthcare Information Systems providers.
Note regarding Private Securities Litigation Reform Act: Statements made by IMNET which are not historical facts, including projections, statements of plans, objectives, expectations, or future economic performance, are forward looking statements that involve risks and uncertainties and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. IMNET's future financial performance could differ significantly from that set forth herein, and from the expectations of management. Important factors that could cause IMNET's financial performance to differ materially from past results and from those expressed in any forward looking statements include, without limitation, variability in quarterly operating results, customer concentration, product acceptance, long sales cycles, long and varying delivery cycles, a backlog that includes long-term contracts, dependence on business partners, ability to manage growth, emerging technological standards, and risks associated with acquisitions. For further information on these and other risk factors, please refer to IMNET's Form 10-K for the year ended June 30, 1997, including the ''Business-Risk Factors'' section thereof.
IMNET Systems, Inc.
Unaudited Summary Financial Highlights
(in thousands, except per share amounts)
Condensed Consolidated
Statements of Operations Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997(1) 1998 1997(1)
-------- -------- -------- --------
Revenue $ 13,187 $ 13,543 $ 37,231 $ 34,313
Operating Expenses 15,666 10,200 42,819 28,769
-------- -------- -------- --------
Operating Income (Loss) (2,479) 3,343 (5,588) 5,544
Other Income, Net 61 344 482 1,234
Income Tax Expense
(Benefit)(2) (919) 1,401 (1,940) 2,576
-------- -------- -------- --------
Net Income (Loss) $ (1,499) $ 2,286 $ (3,166) $ 4,202
======== ======== ======== ========
Net Income (Loss)
Per Common Share:
Basic $ (0.15) $ 0.24 $ (0.32) $ 0.44
Diluted $ (0.15) $ 0.22 $ (0.32) $ 0.42
Shares Outstanding
For Earnings Per
Share Calculation:
Basic 9,775 9,619 9,764 9,604
Diluted 9,775 10,218 9,764 10,052
Condensed Consolidated Balance Sheets March 31, June 30,
1998 1997
Assets: ------- -------
Current Assets:
Cash and Marketable Securities $ 9,766 $20,739
Accounts Receivable, net 37,221 33,859
Other Current Assets 7,119 4,237
------- -------
Total Current Assets 54,106 58,835
Property and Equipment, net 6,775 6,242
Computer Software Development Costs, net 4,288 2,557
Goodwill and Other Intangibles, net 17,513 18,219
------- -------
Total Assets $82,682 $85,853
======= =======
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable and Accrued Expenses $13,767 $14,877
Deferred Revenues 1,873 1,186
------- -------
Total Current Liabilities 15,640 16,063
Long-Term Liabilities -- --
------- -------
Total Liabilities 15,640 16,063
Stockholders' Equity 67,042 69,790
------- -------
Total Liabilities and Stockholders' Equity $82,682 $85,853
======= =======
(1) The summary statements of operations for the three and nine
month periods ended March 31, 1997 exclude non-recurring charges
of $1,837 and $2,586 respectively.
(2) For comparability purposes, the summary statements of operations
for the three and nine month periods ended March 31, 1997 reflect
a pro-forma effective tax rate of 38%.
This financial data should be read in conjunction with the
disclosures contained in the Company's Form 10-K for the year
ended June 30, 1997 and in conjunction with the Company's upcoming
Form 10-Q filing for the quarter ended March 31, 1998. |
