LanVision Systems, Inc. Reports First Quarter 2006 Operating Results and Record First Quarter Revenues

CINCINNATI, May 22  /PRNewswire-FirstCall/ -- LanVision Systems, Inc. (NASDAQ:LANV), which does business under the name Streamline Health, today announced the operating results for the first quarter ended April 30, 2006.

Revenues for the first quarter were $3.8 million, a record first quarter and a 43% increase when compared with $2.7 million reported in the comparable prior period.  The improvement was the result of a significant increase in System Sales in the current quarter.

The operating loss for the first quarter was $71 thousand, compared with an operating loss of $254 thousand in the first quarter of last year.  The decreased operating loss was a result of the significant increase in System Sales in the current quarter, offset to some extent by the planned increase in operating expenses.

The net loss for the first quarter was $80 thousand, or $0.01 per basic and diluted share, when compared with a net loss of $277 thousand, or $0.03 per basic and diluted share in the first quarter of last year.

J. Brian Patsy, president and chief executive officer, stated, "We are very pleased with our record first quarter performance, which was ahead of our internal operating plan. During our first quarter," Mr. Patsy continued, "we closed a large transaction through our largest remarketing partner, which had previously been delayed as a result of the uncertainty surrounding the recent consolidation within the healthcare IT marketplace.  Our 2006 operating plan calls for modest additional investment in people and technology necessary to take advantage of the market opportunities we see in the health care industry for process improvements through the use of our advanced workflow and document management technologies.  Although our significant growth in infrastructure as a part of our 2005 operating plan resulted in increased operating expenses during our first quarter of 2006, we believe that this is a strategic investment in our future.  The return on this investment has begun with the significant increase in first quarter system sales, including the addition of one major new client and a significant expansion of our system at an existing client, which resulted in the record first quarter revenues."

Mr. Patsy concluded, "We are very encouraged with the progress the Company has made during the last twelve months in developing a significantly larger pipeline of qualified prospects. We anticipate that we should be able to achieve our 2006 operating plans which call for approximately a 25% increase in annual revenues when compared to our prior fiscal year. Accordingly, our efforts continue to produce positive results, and we believe that our momentum is building for the remainder of the year and beyond."

CONFERENCE CALL INFORMATION

The first quarter conference call will be held at 10:00 a.m. Eastern Time, on Tuesday May 23, 2006.  The call will feature remarks from J. Brian Patsy, Chief Executive Officer, William A. Geers, Chief Operating Officer and Paul W. Bridge, Jr., Chief Financial Officer.

To access the call via the webcast, go to http://www.lanvision.com/ or http://www.streamlinehealth.net/ approximately twenty minutes before the call is scheduled to begin.  You will need to register as well as download the necessary audio software.  The webcast will also be available on the web site for 30 days.

About LanVision Systems dba Streamline Health

Streamline Health is a leading supplier of workflow and document management tools, applications and services that assist strategic business partners, healthcare organizations, and customers to create and improve operational efficiencies through business process re-engineering and automating demanding document-intensive environments.  The company's workflow- based services offer solutions to inefficient and labor-intensive healthcare business processes throughout the revenue cycle, such as chart coding, abstracting and completion, remote physician order processing, pre-admission registration scanning and signature capture, insurance verification, secondary billing services, explanation of benefits processing and release of information processing.  The company's solutions also address the document workflow needs of the Human Resource and Supply Chain Management departments of the healthcare enterprise.  All solutions are available for purchase or through a remote hosting services model that better matches customers' capital or operating budget needs.

Streamline Health's solutions create a permanent document-based repository of historical health information that is complementary and can be seamlessly integrated with existing disparate clinical, financial and administrative information systems, providing convenient electronic access to all forms of patient information from any location, including access using a web-browser through the Intranet/Internet.  These integrated systems allow providers and administrators to link systems with documents, which can dramatically improve the availability of patient information while decreasing direct costs associated with document retrieval, work-in-process, chart processing, document retention, and archiving.  For additional information, please visit our website at http://www.streamlinehealth.net/.

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995

Statements made by LanVision Systems, Inc. that are not historical facts are forward-looking statements that are subject to risks and uncertainties. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements, included herein.  These risks and uncertainties include, but are not limited to, converting pipeline opportunities into signed agreements, the impact of competitive products and pricing, product demand and market acceptance, new product development, key strategic alliances with vendors that resell LanVision products, the ability of the Company to control costs, availability of products produced from third party vendors, the healthcare regulatory environment, healthcare information systems budgets, availability of healthcare information systems trained personnel for implementation of new systems, as well as maintenance of legacy systems, fluctuations in operating results and other risks detailed from time to time in the LanVision Systems, Inc. filings with the U. S. Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis only as of the date hereof.  The Company undertakes no obligation to publicly release the results of any revision to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

  Visit our web site at: http://www.lanvision.com/



                  LANVISION SYSTEMS, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS
                                UNAUDITED

                                                     Three Months Ended
                                                          April 30,
                                                    2006           2005

  Revenues:
    Systems sales                                 $1,208,662       $140,804
    Services, maintenance and support              1,828,267      1,799,024
    Application-hosting services                     811,494        757,045
      Total revenues                               3,848,423      2,696,873

  Operating expenses:
    Cost of systems sales                            626,407        280,187
    Cost of services, maintenance and support        838,672        761,364
    Cost of application-hosting services             280,230        250,902
    Selling, general and administrative            1,414,878      1,056,881
    Product research and development                 759,679        601,657
      Total operating expenses                     3,919,866      2,950,991
  Operating ( loss )                                 (71,443)      (254,118)

  Other income (expense):
    Interest income                                   32,991         17,794
    Interest (expense)                               (41,426)       (40,195)
  Net (loss)                                        $(79,878)     $(276,519)

  Basic net (loss) per common share                   $(0.01)        $(0.03)
  Diluted net (loss) per common share                 $(0.01)        $(0.03)

  Number of shares used in basic
   per common share computation                    9,168,335      9,087,164

  Number of shares used in diluted
   per common share computation                    9,168,335      9,087,164



                  LANVISION SYSTEMS, INC. AND SUBSIDIARY
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                                UNAUDITED


                                                          April 30,
                         Assets                     2006            2005
  Current assets:
    Cash and cash equivalents                     $3,204,398     $2,818,347
    Accounts receivable, net of
     allowance for doubtful accounts of
     $200,000, respectively                        1,850,397      2,643,943
    Unbilled receivables                           2,578,577      1,240,979
    Prepaid expenses                                 516,990        414,559
    Deferred tax assets                              601,000        309,000
      Total current assets                         8,751,362      7,426,828

  Property and equipment:
    Computer equipment                             2,196,061      1,627,491
    Computer software                              1,056,892        865,985
    Office furniture, fixtures and equipment         775,957        702,387
    Leasehold improvements                           522,863         509,76
                                                   4,551,773      3,705,630
    Accumulated depreciation and amortization     (2,859,860)    (2,153,803)
                                                   1,691,913      1,551,827

  Non-current unbilled receivables                   728,541            -
  Capitalized software development costs,
   net of accumulated amortization of
   $4,304,066 and $3,433,229, respectively         2,835,862      2,156,700
  Other, including deferred tax assets             1,312,936        701,091
                                                 $15,320,614    $11,836,446

         Liabilities and stockholders' equity

  Current liabilities:
    Accounts payable                                $986,418       $523,456
    Accrued compensation                             368,514        342,382
    Accrued other expenses                           663,509        710,602
    Deferred revenues                              2,499,873      2,452,096
    Current portion of long-term debt              1,000,000            -
    Current portion of capitalized leases             86,425        110,745
      Total current liabilities                    5,604,739      4,139,281

  Non-current portion of capitalized leases          124,884            -
  Non-current lease incentives                       279,454        251,909
  Long-term debt                                   1,000,000      2,000,000

  Stockholders' equity:
    Preferred stock, $0.01 par value per share,
    5,000,000 shares authorized, no shares issued        -              -
    Common stock, $0.01 par value per share,
     25,000,000 shares authorized, 9,173,708 and
     9,093,535 shares issued, respectively            91,737         90,935
    Capital in excess of par value                35,130,256     35,012,491
    Accumulated (deficit)                        (26,910,456)   (29,658,170)
      Total stockholders' equity                   8,311,537      5,445,256
                                                 $15,320,614    $11,836,446



                  LANVISION SYSTEMS, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                                UNAUDITED

                                                          Three Months
                                                       2006           2005
  Operating activities:
    Net earnings (Loss)                             $(79,878)     $(276,519)
    Adjustments to reconcile net earnings to
     net cash provided by operating activities:
    Depreciation and amortization                    463,910        357,675
    Share-based compensation expense                  22,967            -

  Cash provided by (used for) assets and liabilities:
    Accounts, contract and installment receivables   (42,566)      (578,712)
    Other assets                                    (150,259)       (37,443)
    Accounts payable and accrued expenses           (920,796)      (364,350)
    Deferred revenues                               (117,311)       220,654
    Net cash (used for) operating activities        (823,933)      (678,695)

  Investing activities:
    Purchases of property and equipment             (182,175)      (470,889)
    Capitalization of software development costs    (399,999)      (300,000)
    Other                                            (20,150)       134,614
    Net cash (used for) investing activities        (602,324)      (636,275)

  Financing activities:
    Payment of capitalized leases                    (20,693)       (57,376)
    Exercise of stock options and
     stock purchase plan                              17,129          9,620
    Net cash (used for) financing activities          (3,564)       (47,756)
    Increase (Decrease) in cash
     and cash equivalents                         (1,429,821)    (1,362,726)
  Cash and cash equivalents at beginning of year   4,634,219      4,181,073
  Cash and cash equivalents at end of year        $3,204,398     $2,818,347

  Supplemental cash flow disclosures:
    Interest paid                                    $41,425        $40,598
    Income taxes paid (refund)                       $38,300        $(4,882)
    Leasehold improvements (included in property
     and equipment) paid for by the landlord as
     a lease inducement                                 $-         $326,000


DATASOURCE: LanVision Systems, Inc.



CONTACT:  Paul W. Bridge, Jr., Chief Financial Officer of LanVision

Systems, Inc., [phone]



Web site:  http://www.lanvision.com/

http://www.streamlinehealth.net/ 

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