LanVision Systems Inc. Reports Strong Second Quarter Fiscal 2005 Results

Revenue Increased 59% Compared With Q2 Fiscal 2004 


CINCINNATI, Aug. 22  /PRNewswire-FirstCall/ -- LanVision Systems, Inc. (NASDAQ:LANV) today announced significantly improved financial results for the second quarter and first six months ended July 31, 2005.

Revenues for the second quarter of fiscal 2005 were up 59% to $4,065,731 compared with $2,558,295 reported in the second quarter of last year. The operating profit for the quarter was $547,196, compared with an operating loss of ($83,992) in the second quarter of last year.  The net income for the quarter was $519,269, or $0.06 per basic and diluted common share, compared with a net loss of ($462,328), or ($0.05) per basic and diluted common share in the second quarter of last year.

Revenues for the first six months of fiscal 2005 were up 30% to $6,762,604 compared with $5,199,850 reported in the first six months of last year.  The operating profit for the first six months of was $293,078 compared with an operating loss of ($125,639) in the first six months of last year.  The net income for the first six months was $242,750, or $0.03 per basic and diluted common share, compared with net loss of ($883,391), or ($0.10) per basic and diluted common share in the first six months of last year.

  Second Quarter Highlights included:

   * The announcement of the signing of a new contract with Sarasota
     Memorial Hospital a fully JCAHO accredited 845 bed hospital, located on
     the west coast of Florida and which is the second largest public
     hospital in the state of Florida.

     Sarasota Memorial will implement the Company's Health Information
     Management, Patient Financial Services, Supply Chain Management and
     Human Resource workflows and document management solutions.  The
     contract calls for an enterprise license for the deployment of
     Streamline Health's solutions throughout the Sarasota Memorial Health
     Care System and will seamlessly integrate with current Eclipsys
     Sunrise(TM) Clinical Manager, Access Manager/Patient Financial Manager,
     and PeopleSoft applications.

   * The announcement of the signing of a new contract with Oregon Health &
     Science University (OHSU) for its Health Information Management and
     Patient Financial Services workflows and document management solutions.
     The contract calls for an unlimited use license for the large-scale
     deployment of the company's solutions throughout the OHSU enterprise.
     Located in Portland Oregon, the OHSU Health System includes OHSU
     Hospital, Doernbecher Children's Hospital, and dozens of primary care
     and specialty clinics serving every county in Oregon.  The health
     system also includes four schools, multiple research institutes and
     several outreach and community service units.  In addition, OHSU has a
     research and education West Campus in Hillsboro, and multiple education
     and patient care facilities throughout the state.

     The announcement of the renewal of two existing remote application
     hosting services contracts for the company's comprehensive workflow and
     document management services.  The two contracts are valued at
     approximately $6.3 million in recurring subscription revenues over the
     terms of the agreements.



Brian Patsy, LanVision's Chairman and Chief Executive Officer, stated, "The planned investment for 2005 in our sales and marketing programs and infrastructure have begun to pay dividends.  As a result of the significant sales achievements noted above, during the first half of the current year our software sales increased by more than $1 million and our Application Hosting Revenues continued to increase by 18% or $227 thousand when compared to the prior comparable period. These increases in the highly profitable segments of our business resulted in a $418 thousand improvement in operating profitability for the first six months notwithstanding the almost $800 thousand in planned increases in operating costs.  "Also, the retirement of our high interest rate debt in July 2004 resulted in a reduction of our interest expense for the first six months of this year by more than $718,000."

Mr. Patsy continued, "Our sales pipeline is very strong and continues to grow as the healthcare market looks for ways to streamline inefficient business processes to lower expense and improve patient care."

Mr. Patsy concluded, "For the first half of our fiscal year, we are approximately 4 percent ahead of our business plan for anticipated revenue growth, and over $1 million ahead of plan for operating profitability.  We believe that we are on course to achieve continuing improved operating results in the final six months of the current fiscal year, and we continue to feel comfortable with our guidance regarding approximately 25 percent revenue growth for the entire year."

Conference Call Information

In conjunction with LanVision's Second Quarter Fiscal 2005 earnings release, you are invited to listen to its conference call which will be held at 10:00 a.m. eastern time, on Tuesday August 23, 2005.  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, dial 703-639-1163 approximately five minutes prior to the start of the call.  To access the call via the webcast, go to http://www.lanvision.com/ before the call is scheduled to begin.  The webcast will also be available on our web site for 30 days.

About LanVision Systems, Inc.

LanVision Systems, Inc., which does business under the name 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.

Streamline Health provides remote hosting services to various healthcare providers including University Hospital, a member of The Health Alliance of Greater Cincinnati, and Children's Medical Center of Columbus, OH.  In addition, the Company has installed its workflow and document management solutions at leading healthcare providers including Stanford Hospital and Clinics, Albert Einstein Healthcare Network, Beth Israel Medical Centers, University of Pittsburgh Medical Center, Medical University Hospital Authority of South Carolina, and Memorial Sloan-Kettering Cancer Center.

For additional information on LanVision, please visit our website at http://www.lanvision.com/.

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

Statements made by LanVision that are not historical facts are forward- looking statements that are subject to risks and uncertainties.  LanVision's future financial performance could differ materially from expectations of management and from results reported now or in the past.  Factors that could cause LanVision's financial performance to so differ include, but are not limited to, the impact of competitive products and pricing, product development, reliance on strategic alliances, availability of products procured from third party vendors, the healthcare regulatory environment, fluctuations in operating results, and other risks detailed from time to time in LanVision's filings with the U.S. Securities and Exchange Commission.

                  LANVISION SYSTEMS, INC. AND SUBSIDIARY
                  CONSOLIDATED STATEMENTS OF OPERATIONS

                          Three Months Ended        Six Months Ended
                               July 31,                  July 31,
                          2005         2004         2005         2004
  Revenues:
    Systems sales       $1,571,893     $165,467   $1,712,697     $452,350
    Services,
     maintenance
     and support         1,753,322    1,755,512    3,552,346    3,477,170
    Application-hosting
     services              740,516      637,316    1,497,561    1,270,330
      Total revenues     4,065,731    2,558,295    6,762,604    5,199,850

  Operating expenses:
    Cost of systems sales  666,753      241,238      946,940      600,150
    Cost of services,
     maintenance and
     support               742,634      711,236    1,503,998    1,391,481
    Cost of application-
     hosting services      237,793      221,147      488,695      437,795
    Selling, general
     and administrative  1,291,927      924,805    2,348,808    1,838,273
    Product research
     and development       579,428      543,791    1,181,085    1,057,790
      Total operating
       expenses          3,518,535    2,642,217    6,469,526    5,325,489
  Operating income (loss)  547,196      (83,922)     293,078     (125,639)
  Other income expense:
    Interest income         20,097       15,091       37,891       39,194
    Interest expense       (31,024)    (393,497)     (71,219)    (796,946)
  Earnings (loss) before
   taxes                   536,269     (462,328)     259,750     (883,391)
    Income taxes           (17,000)           -      (17,000)           -

  Net earnings (loss)     $519,269    $(462,328)    $242,750    $(883,391)

  Basic net earnings
   (loss) per common
   share                     $0.06       $(0.05)       $0.03       $(0.10)
  Diluted net earnings
   (loss) per common
   share                     $0.06       $(0.05)       $0.03       $(0.10)

  Number of shares used
   in per common
    Share computation
     - basic             9,108,146    9,067,700    9,097,564    9,051,973
  Number of shares used
   in per common
    Share computation
     - diluted           9,286,607    9,067,700    9,306,761    9,051,973



                  LANVISION SYSTEMS, INC. AND SUBSIDIARY
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                July 31,        July 31,    January 31,
  Assets                          2005            2004          2005
  Current assets:
    Cash and cash equivalents
     (restricted by long-term
     debt agreement)           $4,167,521      $4,538,655    $4,181,073
    Accounts receivable         1,777,285       1,436,999     2,101,846
    Contract receivables        1,396,192       1,826,147     1,404,364
    Allowance for doubtful
     accounts                    (200,000)       (400,000)     (200,000)
    Other, including deferred
     federal tax asset            788,297         424,361       686,116
      Total current assets      7,929,295       7,826,162     8,173,399

  Property and equipment:
    Computer equipment          1,732,431       2,660,267     1,501,796
    Computer software             938,232         947,654       832,304
    Office furniture, fixtures
     and equipment                726,215       1,167,497       537,137
    Leasehold improvements        520,322         157,492        37,504
                                3,917,200       4,932,910     2,908,741
    Accumulated depreciation
     and amortization          (2,319,303)     (3,941,069)   (1,996,129)
                                1,597,897         991,841       912,612
  Capitalized software
   development costs, net
   of accumulated Amortization
   of $3,633,230, $2,916,728 and
   $3,233,228 respectively      2,256,699       1,873,201     2,056,701
  Other, primarily deferred
   federal tax asset              708,241         633,036       850,523
                              $12,492,132     $11,324,240   $11,993,235


              Liabilities, convertible redeemable preferred
                      stock and stockholders' equity

  Current liabilities:
    Accounts payable             $858,934        $294,021      $886,090
    Accrued compensation          409,801         253,537       276,292
    Accrued other expenses        742,323         626,451       719,135
    Deferred revenues           2,191,968       2,102,374     2,231,442
    Current portion of
     capitalized leases            52,406         227,644       168,121
    Current portion of long
     term-debt                  1,000,000       1,166,667             -
      Total current liabilities 5,255,432       4,670,694     4,281,080

  Non-current portion of
   long-term debt               1,000,000
    2,333,333     2,000,000
  Non-current portion of lease
   incentive                      237,091               -             -
  Non-current portion of
   capitalized leases                   -          52,406             -

  Stockholders' equity:
    Convertible redeemable
     preferred stock, $0.01
     par value per share,
     5,000,000 shares authorized        -               -             -
    Common stock, $0.01 par value
     per share, 25,000,000 shares
     Authorized, 9,120,541 shares,
     9,081,701 shares and 9,084,535
     shares issued, respectively   91,205          90,817        90,845
    Capital in excess of par
     value                     35,047,305      34,999,709    35,002,961
    Accumulated (deficit)     (29,138,901)    (30,822,719)  (29,381,651)
      Total stockholders'
       equity                   5,999,609       4,267,807     5,712,155
                              $12,492,132     $11,324,240   $11,993,235


DATASOURCE: LanVision Systems, Inc.



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

Systems, Inc., [phone]



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

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