LanVision Systems Reports Fiscal Third Quarter 2004 Results

LanVision Systems Reports Fiscal Third Quarter 2004 Results 


CINCINNATI, Dec. 1  /PRNewswire-FirstCall/ -- LanVision Systems, Inc.
(NASDAQ:LANV) today announced the financial results for the third fiscal
quarter and first nine months ended October 31, 2004.

Revenues for the fiscal third quarter were $2.5 million, compared with $3.7
million reported in the third quarter of last year.  The operating loss for the
quarter was $119 thousand compared with an operating profit of $985 thousand in
the comparable prior quarter.  The net loss for the third quarter was $156
thousand, or $0.02 per basic and diluted common share, compared with a net
income of $482 thousand, or $0.05 net per basic and diluted common share in the
third quarter of last year.

Revenues for the first nine month were $7.7 million, when compared with $9.3
million reported in the comparable period of last year.  The operating loss was
$244 thousand compared with an operating profit of $1.4 million in the
comparable prior period.  The net loss for the period was $1 million, or $0.11
per basic and diluted common share, when compared with a net income of $19
thousand, or $0.00 net per basic and diluted common share in the comparable
prior period.

Brian Patsy, LanVision's President and Chief Executive Officer commented, "The
results for the third quarter were disappointing in that a large software
licensing agreement still in negotiations was not completed during the quarter.
 We believe that negotiations on this agreement can be finalized and signed
during the fourth quarter.  By way of comparison, the third quarter of last
year LanVision had $1.1 million in software licensing revenues from a single
agreement which a remarketing partner signed with a new customer.  The absence
of a similar software licensing agreement in the current quarter results had a
significant impact on current operations when compared with last year.  With
the expected signing of the agreement, which we anticipated in the third
quarter, and currently forecasted additional fourth quarter revenues, LanVision
should have significantly improved operating results for the fourth quarter."

Paul W. Bridge, Jr., LanVision's Chief Financial Officer, said, "During the
quarter our highly profitable ASPeN(SM) application hosting revenues continued
to increase.  For the third quarter the increase was 32% and year to date 40%
when compared with the comparable prior periods.  Our current profit margin on
our application hosting services is 65%, resulting primarily from a relatively
fixed cost structure with increasing revenues.  Recent successes in obtaining
new ASPeN customers and increasing revenues from our existing customers and
partners are an indication of the strength of our product offerings and the
enhanced value proposition of our ASPeN application hosting services.  During
the third quarter, our interest expense decreased $440 thousand ($540 thousand
for the first nine months) as a result of the repayment of our prior high
interest rate debt.  Also, during the quarter we repaid $700 thousand, or 20%,
of the new debt which carries a current interest rate of 7%.  We plan on
continuing to reduce this debt as quickly as practicable as our cash flow
permits."

Patsy concluded, "We believe LanVision can improve current operations by
expanding our direct sales organization and increasing our efforts to attract
new remarketing partners.  Accordingly, we are currently expanding our direct
sales and marketing staff and developing new sales and marketing strategies to
promote our expanded suite of state-of-the-art workflow technologies to the
market place.  We believe the time has come for LanVision to invest in the
sales and marketing resources necessary to take advantage of what we see as
significantly growing new opportunities in the healthcare industry as it
expands its investments in workflow technologies necessary to improve
operations and reduce escalating costs.  As a result of our planned investment
in additional sales and marketing personnel, we will be moving into a larger
facility in the next quarter."

Conference Call Information

The third quarter conference call is scheduled at 10:00 a.m. Eastern Time, 9:00
a.m. Central on Thursday December 2, 2004.  The call will feature remarks from
J. Brian Patsy, President and Chief Executive Officer, and Paul W. Bridge, Jr.,
Chief Financial Officer.

The Conference Call will be broadcast live via the Internet.  To listen, please
go to http://www.lanvision.com/ approximately twenty minutes before the
conference call is scheduled to begin.  You will need download and install any
necessary audio software.  The webcast will be available at our website for the
next 90 days.

About LanVision Systems

LanVision is a healthcare information technology company focused on
streamlining healthcare by providing solutions that improve document-centric
information flows while complementing and enhancing existing transaction-
centric healthcare information systems.  The Company's workflow and document
management solutions bridge the gap between current, inefficient paper-based
processes and transaction-based healthcare information systems by 1)
electronically capturing document-centric information from disparate sources,
2) electronically directing that information through vital business processes,
and 3) providing access to the information for authenticated users (such as
physicians, nurses, administrative and financial personnel and payers) across
the continuum of care.

The company's workflow-based products and services offer unique solutions to
specific healthcare business processes within the Medical Record life cycle and
the revenue cycle, such as remote coding, abstracting and chart completion,
remote physician order processing, pre-admission registration scanning,
insurance verification, financial screening, secondary billing services,
explanation of benefits processing and release of information processing.

LanVision's products and services also create an integrated document- centric
repository of historical health information that is complementary and can be
seamlessly "bolted on" to existing transaction-centric clinical, financial and
management information systems, allowing healthcare providers to aggressively
move toward fully Electronic Medical Record (EMR) processes while improving
service levels and convenience for all stakeholders.  These integrated systems
allow providers and administrators to dramatically improve the availability of
patient information while decreasing direct costs associated with document
retrieval, work-in-process, chart completion, document retention and archiving.

LanVision's systems can be provided on a subscription basis via remote hosting
services or installed locally.  LanVision provides ASPeN, ASP-based remote
hosting services to The University Hospital, a member of The Health Alliance of
Greater Cincinnati, M. D. Anderson Cancer Center and Children's Medical Center
of Columbus, Ohio among others.  In addition, LanVision has installed its
workflow and document management solutions at leading healthcare providers
including Stanford Hospital and Clinics, the Albert Einstein Healthcare
Network, Parkview Health System, ProMedica Health System, Inc., the 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.
                  CONSOLIDATED STATEMENTS OF OPERATIONS

                             Three Months Ended       Nine Months Ended
                                 October 31,              October 31,
                              2004        2003         2004       2003

  Revenues:
    Systems sales            $65,387  $1,301,596     $517,737  $2,814,055
    Services, maintenance
     and support           1,820,463   1,871,538    5,297,633   5,071,091
    Application-hosting
     services                652,412     493,520    1,922,742   1,368,080
      Total revenues       2,538,262   3,666,654    7,738,112   9,253,226

  Operating expenses:
    Cost of systems sales    217,025     267,703      817,175   1,173,473
    Cost of services,
     maintenance and support 675,548     749,208    2,067,029   2,079,625
    Cost of application
     -hosting services       230,078     240,563      667,873     670,059
    Selling, general and
     administrative        1,040,490     914,128    2,878,763   2,392,369
    Product research and
     development             493,730     509,923    1,551,520   1,554,029
      Total operating
       expenses            2,656,871   2,681,525    7,982,360   7,869,555
  Operating income (loss)   (118,609)    985,129     (244,248)  1,383,671
  Other income expense:
    Interest income           16,933      10,851       56,127      47,201
    Interest expense         (54,725)   (494,325)    (851,671) (1,391,413)
  Income (loss) before
   taxes                    (156,401)    501,655   (1,039,792)     39,459
     Tax provision                 -     (20,000)           -     (20,000)
  Net income (loss)        $(156,401)   $481,655  $(1,039,792)    $19,459

  Basic net income (loss)
   per common share           $(0.02)      $0.05       $(0.11)      $0.00
  Diluted net income (loss)
   per common share           $(0.02)      $0.05       $(0.11)      $0.00

  Number of shares used in
   per common Share
   computation - basic     9,082,494   9,011,131    9,062,221   8,989,303
  Number of shares used
   in per common Share
   computation - diluted   9,082,494   9,219,150    9,062,221   9,195,854


                         LANVISION SYSTEMS, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                       October 31,  October 31,  January 31,
                Assets                    2004         2003         2004
  Current assets:
    Cash and cash equivalents
     (restricted by long-term debt
     agreement)                        $3,152,022   $4,750,839   $6,227,236
    Accounts receivable                 1,895,538    3,233,755    2,786,723
    Contract receivables                1,523,077    2,106,118    2,972,356
    Allowance for doubtful accounts      (400,000)    (400,000)    (400,000)
    Other                                 430,252      434,706      357,921
      Total current assets              6,600,889   10,125,418   11,944,236

  Property and equipment:
    Computer equipment                  2,717,522    2,484,920    2,588,749
    Computer software                     971,907      789,351      812,591
    Office furniture, fixtures and
     equipment                          1,167,497    1,161,551    1,166,377
    Leasehold improvements                157,492      157,492      157,492
                                        5,014,418    4,593,314    4,725,209
    Accumulated depreciation and
     amortization                      (4,057,006)  (3,542,926)  (3,672,442)
                                          957,412    1,050,388    1,052,767
  Capitalized software development
   costs, net of accumulated
   Amortization of $3,074,978,
   $2,475,228 and $2,600,228
   respectively                         1,964,951    1,614,701    1,689,701
  Installment receivable                        -      433,339            -
  Other, primarily deferred tax asset     587,961       38,050      603,750
                                      $10,111,213  $13,261,896  $15,290,454


         Liabilities, convertible redeemable preferred stock and
                           stockholders' equity

  Current liabilities:
    Accounts payable                     $279,546     $338,131     $637,222
    Accrued compensation                  255,010      285,551      265,095
    Accrued other expenses                665,365      506,081      928,097
    Deferred revenues                   1,774,053    1,899,460    2,357,531
    Current portion of capitalized
     leases                               208,070      216,571      220,199
    Current portion of long-term debt     466,667    1,500,000    1,000,000
    Accrued interest on long-term debt          -    4,237,982    4,635,169
      Total current liabilities         3,648,711    8,983,776   10,043,313

  Non-current portion of capitalized
   leases                                  16,481      224,551      168,121
  Non-current portion of long-term debt 2,333,333            -            -

  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, 9,083,201 shares
     9,012,732 shares and 9,030,032
     shares issued, respectively           90,832       90,127       90,300
    Capital in excess of par value     35,000,974   34,902,476   34,928,047
    Accumulated (deficit)             (30,979,118) (30,939,034) (29,939,327)
      Total stockholders' equity        4,112,688    4,053,569    5,079,020
                                      $10,111,213  $13,261,896  $15,290,454


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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