Neoforma (NASDAQ:NEOF)
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Neoforma Reports Third Quarter 2004 Financial Results
SAN JOSE, Calif., Oct. 25 /PRNewswire-FirstCall/ -- Neoforma, Inc.
(NASDAQ:NEOF), a leading provider of supply chain management solutions to the
healthcare industry, generated total revenue of $3.0 million on a generally
accepted accounting principles (GAAP) basis in the quarter ended September 30,
2004. Excluding the impact of Emerging Issues Task Force Abstract No. 01-9
(EITF No. 01-9), Neoforma generated total adjusted revenue of $18.4 million in
the third quarter of 2004.
(Logo: http://www.newscom.com/cgi-bin/prnh/20030226/NEOFORMALOGO )
In accordance with GAAP, Neoforma's net loss and net loss per share were $14.5
million and $0.75, respectively, during the third quarter of 2004. These
results represent an improvement over the $15.6 million and $0.85 net loss and
net loss per share, respectively, reported in the third quarter of 2003. On an
adjusted basis, net income and net income per share for the third quarter of
2004 were $5.1 million and $0.27, respectively, decreasing from the $5.6
million and $0.30, respectively, in the same quarter in the prior year. This
decrease was primarily due to the scheduled reduction in the Company's
quarterly maximum payment from Novation in 2004, as compared to 2003, and the
resulting $2.1 million decrease in adjusted related party revenue.
Neoforma's adjusted financial information, which is not in accordance with
GAAP, excludes the application of EITF No. 01-9 and certain expenses, gains and
losses. Adjusted financial information serves as a measure of the performance
of Neoforma's ongoing core operations. A description of the adjusted financial
information for the periods presented and a reconciliation of these results to
GAAP financial information are included in the attached financial statements
and are available in the investor relations section of Neoforma's Web site at
http://investor.neoforma.com/ .
"Neoforma made good operational progress during the third quarter, increasing
our connectivity rate and documenting significant value for our customers,"
says Bob Zollars, chairman and chief executive officer of Neoforma. "We also
continued to strengthen our balance sheet as a result of strong cash flow. We
did not meet our revenue expectations in the quarter, which was disappointing.
However, based on the increasing value we are delivering to our hospital
customers, we believe we are on the right track."
Third Quarter 2004 Highlights
During the third quarter, Neoforma made progress in several key areas,
including:
-- Documented $26.7 million in customer value, which brings Neoforma's
year-to-date documented customer value to $46.5 million as of September 30,
2004;
-- Implemented 715 connections, more than double the average quarterly
connection rate in 2003, and exited the quarter at a rate in excess of 800
connections per quarter;
-- Delivered upgrades to Marketplace@Novation(R), including enhancements to
order management and contract management capabilities;
-- Generated market intelligence reports for pharmaceutical manufacturers; and
-- Supported $2.8 billion in volume, an increase of 27% from the same period
in the prior year, comprised of $1.0 billion in gross transaction volume and
$1.8 billion in supply chain data.
Third Quarter 2004 Financial Results
On a GAAP basis, for the quarter ended September 30, 2004, Neoforma generated
$3.0 million in total revenue, comprised entirely of non-related party revenue,
and representing a slight increase from the $2.9 million in both total revenue
and non-related party revenue recorded in the same period in the prior year.
In both the third quarter of 2004 and the same period in the prior year,
related party revenue was zero as a result of the application of EITF No. 01-9.
On an adjusted basis, excluding the impact of EITF No. 01-9, Neoforma generated
total revenue of $18.4 million in the third quarter, consisting of $15.4
million in related party revenue and $3.0 million in non-related party revenue.
Neoforma's related party revenue for the quarter represents a decrease from the
$17.5 million generated in the same quarter in 2003, due to a $2.1 million
decline in the Company's revenue from Novation in the third quarter of 2004, as
compared to the same quarter in the prior year. The decline in revenue was
based on a scheduled reduction in the quarterly maximum payment from Novation
under the terms of Neoforma's outsourcing agreement with Novation. Beginning
in 2004, the quarterly maximum payment from Novation is fixed at $15.25
million.
On both a GAAP basis and an adjusted basis, the $42,000 increase in non-related
party revenue in the third quarter as compared to the same period in the prior
year was primarily the result of increases in revenue from the Company's HPIS
market intelligence and pharmaceutical market intelligence services for
suppliers, which more than offset decreases related to data cleansing and
categorization services for hospitals and the expiration during the third
quarter of the ratable revenue being recognized related to a license sale made
in 2001.
Neoforma classifies non-cash amortization of partnership costs as an offset
against related party revenue under EITF No. 01-9. This accounting treatment
has no impact on Neoforma's loss from operations, net loss, net loss per share
or total cash flow, as the reductions to operating expenses and revenue are
equal.
In the third quarter of 2004, Neoforma's total GAAP operating expenses were
$17.6 million, lower than the $18.3 million recorded in the same period in the
prior year. As compared to the third quarter of 2003, this variance was
primarily the result of a $2.0 million increase in capitalized software
development costs, a $1.9 million decrease in depreciation and amortization of
property and equipment, most of which was allocated to the operations group,
and reductions in selling and marketing expenses. These changes were partially
offset by increases in amortization of partnership costs and expenses related
to product development and cost of services.
Adjusted operating expenses equaled $13.3 million in the third quarter of 2004,
lower than the $14.7 million result in the same quarter of the prior year. The
variance in total adjusted operating expenses was primarily due to the $2.0
million increase in capitalized software development costs and a $1.2 million
reduction in selling and marketing expenses. These reductions were partially
offset by increases in product development and cost of services expenses.
In the third quarter, on a GAAP basis, Neoforma recorded a $14.7 million loss
from operations, representing an improvement from the $15.4 million loss in the
same period in 2003. The improvement in the Company's loss from operations was
due to the decrease in total operating expenses.
Neoforma generated $5.0 million in EBITDA during the third quarter,
representing a decrease from the $5.8 million generated in the third quarter of
2003. This decrease was due to the decline in related party revenue as a
result of the scheduled $2.1 million reduction in the quarterly maximum payment
from Novation, and was partially offset by a decrease in Neoforma's adjusted
operating expenses.
As of September 30, 2004, Neoforma's cash, cash equivalents and short-term
investments totaled $23.6 million, an increase from the $22.5 million balance
as of the end of the prior quarter. In addition, the Company had $2.0 million
in long-term marketable investments as of September 30, 2004, as a result of
investments it made during the quarter. Neoforma remains debt-free.
Neoforma's free cash flow equaled $2.5 million during the third quarter. Free
cash flow is calculated as net cash used in operating activities, plus
amortization of partnership costs offset against related party revenue, minus
purchases of property and equipment and capitalization of software development
costs.
"Neoforma continues to generate strong cash flow, and our balance sheet remains
very solid," says Andrew Guggenhime, chief financial officer of Neoforma. "We
were not pleased with our revenue results for the quarter, however, and we are
updating our guidance primarily to reflect our revised revenue outlook, as well
as to update our current expectations in other areas for which we had
previously issued guidance."
Updated 2004 Financial Outlook
Based on the Company's 2004 financial performance through the third quarter of
2004 and its expectations for the fourth quarter, Neoforma is updating its
guidance for the year. Neoforma's 2004 Financial Outlook (in millions, except
per share data):
FY 2004
Previous Updated
GAAP Basis
Related Party Revenue -- --
Non-related Party Revenue $13.3 $11.8 - $13.3
Total Revenue $13.3 $11.8 - $13.3
Total Operating Expenses $76.2 $75.5
Loss from Operations ($62.9) ($63.7) - ($62.2)
Net Loss per Share ($3.23) ($3.27) - ($3.19)
Adjusted Basis
Related Party Revenue(a) $61.7 $61.7
Non-related Party Revenue $13.3 $11.8 - $13.3
Total Revenue(a) $75.0 $73.5 - $75.0
Operating Expenses(b) $55.6 $54.3
EBITDA(c) $19.4 $19.2 - $20.7
Net Income per Share(d) $0.99 $1.01 - $1.08
Free Cash Flow(e) $9.0 $9.0
Purchases of Property
and Equipment $6.0 $5.0
Capitalization of
Software Development Costs $4.4 $6.2
Weighted Average Shares Outstanding 19.5 19.4
(a) Adjusted related party revenue and adjusted total revenue exclude
the offset of amortization of partnership costs against related
party revenue resulting from the application of EITF No. 01-9.
(b) Adjusted operating expenses exclude depreciation and amortization,
as well as certain expenses, gains and losses, which, in 2004,
consist of a $4.1 million write-off of stockholder notes receivable
in the second quarter. In 2004, the Company expects depreciation
and total amortization expenses, including amortization offset
against related party revenue, to equal approximately $78.7 million.
(c) The Company defines EBITDA as earnings before interest, taxes,
depreciation and amortization (including amortization offset against
related party revenue) as well as certain expenses, gains and
losses.
(d) The Company defines adjusted net income per share as EBITDA plus the
impact of interest expense, interest income and other income and
expense divided by the weighted average shares outstanding.
(e) The Company defines free cash flow as net cash used in operating
activities, plus amortization of partnership costs offset against
related party revenue, minus purchases of property and equipment and
capitalization of software development costs.
About Neoforma
Neoforma is a leading supply chain management solutions provider for the
healthcare industry. Through a unique combination of technology, information
and services, Neoforma provides innovative solutions to over 1,500 hospitals
and suppliers, supporting more than $10 billion in annualized transaction
volume. By bringing together contract information and order data, Neoforma's
integrated solution set delivers a comprehensive view of an organization's
supply chain, driving significant cost savings and better decision-making for
both hospitals and suppliers. For more information, point your browser to
http://www.neoforma.com/ .
This news release contains forward-looking information within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include but are not limited to all statements made under the caption "Updated
2004 Financial Outlook" and statements related to Neoforma's business and
financial outlook for 2004, as well as statements related to the continued
value realized by our customers. There are a number of risks that could cause
actual results to differ materially from those anticipated by these
forward-looking statements. These risks include the willingness of customers
to accept Neoforma's business model of providing supply chain management
solutions for the healthcare industry and the ability of Neoforma to manage its
anticipated growth and related technological challenges. These risks and other
risks are described in Neoforma's periodic reports filed with the SEC,
including its Form 10-Q for the quarter ended June 30, 2004. These statements
are current as of the date of this release and Neoforma assumes no obligation
to update the forward-looking information contained in this news release.
NOTE: Neoforma is a trademark of Neoforma, Inc. Other Neoforma logos, product
names and service names are also trademarks of Neoforma, Inc., which may be
registered in other countries. Other product and brand names are trademarks of
their respective owners.
NEOFORMA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2004 2003 2004
REVENUE:
Related party, net of amortization
of partnership costs of $17,539,
$15,423, $52,070 and $46,360 for
the three months ended Spetember
30, 2003 and 2004, and for the
nine months ended September 30,
2003 and 2004, respectively $-- $-- $539 $--
Non-related party 2,912 2,954 7,494 9,222
Total revenue 2,912 2,954 8,033 9,222
OPERATING EXPENSES:
Cost of services 1,895 2,758 4,754 7,501
Operations 4,947 2,834 14,888 8,643
Product development 4,451 4,261 13,377 12,302
Selling and marketing 4,648 3,488 14,258 10,657
General and administrative 2,242 2,465 8,339 7,171
Amortization of intangibles 147 147 441 441
Amortization of partnership costs 14 1,651 847 4,792
Write-off of stockholder notes
receivable -- -- -- 4,115
Total operating expenses 18,344 17,604 56,904 55,622
Loss from operations (15,432) (14,650) (48,871) (46,400)
OTHER INCOME (EXPENSE) (202) 112 (762) 234
Net loss $(15,634) $(14,538) $(49,633) $(46,166)
NET LOSS PER SHARE:
Basic and diluted $(0.85) $(0.75) $(2.76) $(2.40)
Weighted average shares -- basic
and diluted 18,445 19,361 17,990 19,263
In addition to our consolidated financial statements presented in
accordance with GAAP, Neoforma, Inc. uses non-GAAP, or adjusted, measures
of operating results, net income and net income per share, which are
adjusted from results based on GAAP to exclude the application of EITF
No. 01-9 and certain expenses, gains and losses. Neoforma management
believes that the non-GAAP adjusted results provide added insight into
the Company's performance by focusing on results generated by the
Company's ongoing core operations. Neoforma management uses the non-GAAP
adjusted results when assessing the performance of its ongoing core
operations, in making resource allocation decisions and for planning and
forecasting. Additionally, incentive compensation for the Company,
including management, is based on results on this basis. In addition,
because we historically have reported adjusted results, we believe the
inclusion of comparative numbers provides consistency in our financial
reporting. The non-GAAP financial measures should be considered in
addition to, not as a substitute for, or superior to, the measures of
financial performance prepared in accordance with GAAP. Investors are
encouraged to review the reconciliation of the non-GAAP financial
measures to their most directly comparable GAAP financial measures.
NEOFORMA, INC.
ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (1)
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2004 2003 2004
REVENUE:
Related party $17,539 $15,423 $52,609 $46,360
Non-related party 2,912 2,954 7,494 9,222
Total adjusted revenue 20,451 18,377 60,103 55,582
OPERATING EXPENSES:
Cost of services 1,744 2,372 4,301 5,955
Operations 2,638 2,250 7,199 7,003
Product development 4,068 3,703 12,066 11,054
Selling and marketing 4,244 3,038 12,930 9,589
General and administrative 1,999 1,980 6,852 6,061
Adjusted operating expenses 14,693 13,343 43,348 39,662
EBITDA 5,758 5,034 16,755 15,920
OTHER INCOME (EXPENSE) (202) 112 (762) 234
Adjusted net income $5,556 $5,146 $15,993 $16,154
ADJUSTED NET INCOME PER SHARE:
Basic $0.30 $0.27 $0.89 $0.84
Weighted average shares
-- basic 18,445 19,361 17,990 19,263
(1) These adjusted condensed consolidated statements of operations
exclude the impact of EITF No. 01-9 and certain expenses, gains and
losses. Under EITF No. 01-9, the Company offsets non-cash
amortization of partnership costs against related party revenue in an
amount equal to the lesser of the two in any period. Any
amortization of partnership costs in excess of related party revenue
in any period is classified as an operating expense. As a result of
the adoption of EITF No. 01-9, the Company offset $17,539, $15,423,
$52,070 and $46,360 of amortization of partnership costs against
related party revenue in its GAAP condensed consolidated statements
of operations for the three months ended September 30, 2003 and 2004,
and for the nine months ended September 30, 2003 and 2004,
respectively. As reclassifications, the application of EITF No. 01-9
had no impact on loss from operations, net loss or net loss per
share. The excluded expenses, gains and losses consisted of
depreciation and amortization of property and equipment, amortization
of intangibles, amortization of deferred compensation, amortization
of partnership costs and write-off of stockholder notes receivable.
NEOFORMA, INC.
RECONCILIATION OF ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
TO GAAP
(in thousands, except per share amounts)
(unaudited)
Three Months Ended September 30, 2004
Excluded Application
Expenses, of
Adjusted Gains EITF
Results and Losses No. 01-9
REVENUE:
Related party $15,423 $-- $(15,423)
Non-related party 2,954 -- --
Total revenue 18,377 -- (15,423)
OPERATING EXPENSES:
Cost of services 2,372 -- --
Operations 2,250 -- --
Product development 3,703 -- --
Selling and marketing 3,038 -- --
General and administrative 1,980 -- --
Adjusted operating
expenses 13,343
EBITDA 5,034
Depreciation and
amortization
of property and
equipment -- 1,328 --
Amortization of
intangibles -- 147 --
Amortization of
deferred
compensation -- 1,135 --
Amortization
of partnership
costs -- 17,074 (15,423)
Write-off of stockholder
notes receivable -- -- --
Total operating
expenses 19,684 (15,423)
Loss from
operations (19,684) --
OTHER INCOME (EXPENSE) 112 -- --
Net income (loss) $5,146 $(19,684) $--
NET INCOME (LOSS)
PER SHARE:
Basic $0.27
Weighted average
shares - basic 19,361
Three Months Ended September 30, 2004
GAAP Allocations
Depreciation Amortization
and of GAAP
Amortization
of Deferred Results
Property and
Equipment Compensation As Reported
REVENUE:
Related party $-- $-- $--
Non-related party -- -- 2,954
Total revenue -- -- 2,954
OPERATING EXPENSES:
Cost of services 200 186 2,758
Operations 498 86 2,834
Product development 291 267 4,261
Selling and marketing 175 275 3,488
General and administrative 164 321 2,465
Adjusted operating
expenses
EBITDA
Depreciation and
amortization
of property
and equipment (1,328) -- --
Amortization
of intangibles -- -- 147
Amortization
of deferred
compensation -- (1,135) --
Amortization of
partnership
costs -- -- 1,651
Write-off of
stockholder notes
receivable -- -- --
Total operating
expenses -- -- 17,604
Loss from
operations -- -- (14,650)
OTHER INCOME (EXPENSE) -- -- 112
-- --
Net income (loss) $-- $-- $(14,538)
NET INCOME (LOSS) PER SHARE:
Basic $(0.75)
Weighted average shares -
basic 19,361
Three Months Ended September 30, 2003
Excluded Application
Expenses, of
Adjusted Gains EITF
Results and Losses No. 01-9
REVENUE:
Related party $17,539 $-- $(17,539)
Non-related party 2,912 -- --
Total revenue 20,451 -- (17,539)
OPERATING EXPENSES:
Cost of services 1,744 -- --
Operations 2,638 -- --
Product development 4,068 -- --
Selling and marketing 4,244 -- --
General and
administrative 1,999 -- --
Adjusted operating
expenses 14,693
EBITDA 5,758
Depreciation and
amortization
of property and
equipment -- 3,246 --
Amortization
of intangibles -- 147 --
Amortization
of deferred
compensation -- 244 --
Amortization of
partnership
costs -- 17,553 (17,539)
Total operating
expenses 21,190 (17,539)
Loss from
operations (21,190) --
OTHER INCOME (EXPENSE) (202) -- --
Net income (loss) $5,556 $(21,190) $--
NET INCOME (LOSS)
PER SHARE:
Basic $0.30
Weighted average
shares -
basic 18,445
Three Months Ended September 30, 2003
Depreciation Amortization
and of GAAP
Amortization
of Deferred Results
Property and
Equipment Compensation As Reported
REVENUE:
Related party $-- $-- $--
Non-related party -- -- 2,912
Total revenue -- -- 2,912
OPERATING EXPENSES:
Cost of services 126 25 1,895
Operations 2,299 10 4,947
Product development 324 59 4,451
Selling and marketing 312 92 4,648
General and administrative 185 58 2,242
Adjusted operating
expenses
EBITDA
Depreciation and
amortization
of property
and equipment (3,246) -- --
Amortization
of intangibles -- -- 147
Amortization
of deferred
compensation -- (244) --
Amortization of
partnership
costs -- -- 14
Total operating
expenses -- -- 18,344
Loss from
operations -- -- (15,432)
OTHER INCOME (EXPENSE) -- -- (202)
Net income (loss) $-- $-- $(15,634)
NET INCOME (LOSS) PER SHARE:
Basic $(0.85)
Weighted average
shares - basic 18,445
NEOFORMA, INC.
RECONCILIATION OF ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
TO GAAP
(in thousands, except per share amounts)
(unaudited)
Nine Months Ended September 30, 2004
Excluded Application
Expenses, of
Adjusted Gains EITF
Results and Losses No. 01-9
REVENUE:
Related party $46,360 $-- $(46,360)
Non-related party 9,222 -- --
Total revenue 55,582 -- (46,360)
OPERATING EXPENSES:
Cost of services 5,955 -- --
Operations 7,003 -- --
Product development 11,054 -- --
Selling and marketing 9,589 -- --
General and administrative 6,061 -- --
Adjusted operating
expenses 39,662
EBITDA 15,920
Depreciation and amortization
of property and equipment -- 3,811 --
Amortization of intangibles -- 441 --
Amortization of deferred
compensation -- 2,801 --
Amortization of partnership
costs -- 51,152 (46,360)
Write-off of stockholder notes
receivable -- 4,115 --
Total operating
expenses 62,320 (46,360)
Loss from
operations (62,320) --
OTHER INCOME (EXPENSE) 234 -- --
--
Net income (loss) $16,154 $(62,320) $--
NET INCOME (LOSS) PER SHARE:
Basic $0.84
Weighted average shares -
basic 19,263
Nine Months Ended September 30, 2004
GAAP Allocations
Depreciation Amortization
and of
Amortization
of Deferred GAAP Results
Property and
Equipment Compensation As Reported
REVENUE:
Related party $-- $-- $--
Non-related party -- -- 9,222
Total revenue -- -- 9,222
OPERATING EXPENSES:
Cost of services 1,113 433 7,501
Operations 1,371 269 8,643
Product development 607 641 12,302
Selling and marketing 380 688 10,657
General and administrative 340 770 7,171
Adjusted operating
expenses
EBITDA
Depreciation and amortization
of property and equipment (3,811) -- --
Amortization of intangibles -- -- 441
Amortization of deferred
compensation -- (2,801) --
Amortization of partnership
costs -- -- 4,792
Write-off of stockholder notes
receivable -- -- 4,115
Total operating
expenses -- -- 55,622
Loss from
operations -- -- (46,400)
OTHER INCOME (EXPENSE) -- -- 234
-- --
Net income (loss) $-- $-- $(46,166)
NET INCOME (LOSS) PER SHARE:
Basic $(2.40)
Weighted average shares -
basic 19,263
Nine Months Ended September 30, 2003
Excluded Application
Adjusted Expenses, Gains of EITF
Results and Losses No. 01-9
REVENUE:
Related party $52,609 $-- $(52,070)
Non-related party 7,494 -- --
Total revenue 60,103 -- (52,070)
OPERATING EXPENSES:
Cost of services 4,301 -- --
Operations 7,199 -- --
Product development 12,066 -- --
Selling and marketing 12,930 -- --
General and
administrative 6,852 -- --
Adjusted
operating
expenses 43,348
EBITDA 16,755
Depreciation and
amortization of property
and equipment -- 10,307 --
Amortization of
intangibles -- 441 --
Amortization of deferred
compensation -- 1,961 --
Amortization of
partnership costs -- 52,917 (52,070)
Total operating
expenses 65,626 (52,070)
Loss from
operations (65,626) --
OTHER INCOME (EXPENSE) (762) -- --
--
Net income
(loss) $15,993 $(65,626) $--
NET INCOME (LOSS) PER SHARE:
Basic $0.89
Weighted average shares -
basic 17,990
Nine Months Ended September 30, 2003
GAAP Allocations
Depreciation Amortization
and of
Amortization
of Deferred GAAP Results
Property and
Equipment Compensation As Reported
REVENUE:
Related party $-- $-- $539
Non-related party -- -- 7,494
Total revenue -- -- 8,033
OPERATING EXPENSES:
Cost of services 336 117 4,754
Operations 7,540 149 14,888
Product development 995 316 13,377
Selling and marketing 896 432 14,258
General and administrative 540 947 8,339
Adjusted operating
expenses
EBITDA
Depreciation and amortization
of property and equipment (10,307) -- --
Amortization of intangibles -- -- 441
Amortization of deferred
compensation -- (1,961) --
Amortization of partnership
costs -- -- 847
Total operating
expenses -- -- 56,904
Loss from
operations -- -- (48,871)
OTHER INCOME (EXPENSE) -- -- (762)
-- --
Net income (loss) $-- $-- $(49,633)
NET INCOME (LOSS) PER SHARE:
Basic $(2.76)
Weighted average shares -
basic 17,990
NEOFORMA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)
ASSETS
December 31, September 30,
2003 2004
CURRENT ASSETS:
Cash and cash equivalents $13,481 $23,578
Short-term investments 3,138 --
Accounts receivable, net of allowance
for doubtful accounts 3,776 3,595
Related party accounts receivable 456 --
Prepaid expenses and other current
assets 2,775 2,611
Total current assets 23,626 29,784
PROPERTY AND EQUIPMENT, net 7,432 11,067
INTANGIBLES, net 2,022 1,581
GOODWILL 1,652 1,652
CAPITALIZED PARTNERSHIP COSTS, net 106,003 57,996
NON-MARKETABLE INVESTMENTS 83 83
RESTRICTED CASH 1,020 1,020
LONG-TERM INVESTMENTS -- 2,048
OTHER ASSETS 1,376 996
Total assets $143,214 $106,227
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $2,727 $1,591
Accrued payroll 4,199 3,648
Other accrued liabilities 3,183 3,193
Deferred revenue, current portion 2,651 1,897
Total current liabilities 12,760 10,329
DEFERRED RENT 657 414
DEFERRED REVENUE, less current portion 554 386
Total liabilities 13,971 11,129
STOCKHOLDERS' EQUITY:
Common Stock $0.001 par value:
Authorized -- 300,000 shares at
September 30, 2004
Issued and outstanding: 18,943 and
20,020 shares at December 31, 2003
and September 30, 2004, respectively 19 20
Additional paid-in capital 827,570 837,767
Notes receivable from stockholders (5,422) (213)
Deferred compensation (218) (3,604)
Unrealized gain on available-for-sale
securities 1 1
Accumulated deficit (692,707) (738,873)
Total stockholders' equity 129,243 95,098
Total liabilities and stockholders'
equity $143,214 $106,227
NEOFORMA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(all items unaudited)
Nine Months Ended
September 30,
2003 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(49,633) $(46,166)
Adjustments to reconcile net loss to
net cash used in operating activities:
Restricted common stock issued to
employees and officers 10 --
Provision for doubtful accounts 271 110
Accrued interest receivable on
stockholder notes receivable (19) (13)
Depreciation and amortization of
property and equipment 10,307 3,811
Amortization of intangibles 441 441
Amortization of partnership costs
classified as an operating expense 847 4,792
Amortization of deferred compensation 1,962 2,798
Write-off of stockholder notes
receivable -- 4,115
Change in assets and liabilities:
Accounts receivable (2,333) 527
Prepaid expenses and other current
assets 256 164
Other assets 5 380
Accounts payable (1,596) (1,136)
Accrued liabilities and accrued
payroll (4,246) (538)
Deferred revenue 1,319 (922)
Deferred rent 27 (243)
Accrued interest payable on related
party notes payable (2,271) --
Net cash used in operating activities (44,653) (31,880)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable investments (2,789) (4,941)
Proceeds from the sale or maturity of
marketable investments 2,659 6,031
Capitalization of software
development costs -- (5,221)
Purchases of property and equipment (3,286) (2,155)
Net cash used in investing
activities (3,416) (6,286)
CASH FLOWS FROM FINANCING ACTIVITIES:
Amortization of partnership costs
offset against related party revenue 52,070 46,360
Repayments of notes payable (3,713) --
Cash received related to options
exercised 805 716
Proceeds from the issuance of common
stock under the employee stock purchase plan 1,087 1,090
Common stock repurchased, net of
notes receivable issued to common stockholders (2) (177)
Collections of notes receivable from
stockholders 1,064 274
Net cash provided by financing
activities 51,311 48,263
Net increase in cash and cash
equivalents 3,242 10,097
Cash and cash equivalents, beginning
of period 23,277 13,481
Cash and cash equivalents, end of
period $26,519 $23,578
NEOFORMA, INC.
RECONCILIATION OF 2004 ADJUSTED GUIDANCE TO GAAP GUIDANCE
UPDATED OCTOBER 25, 2004
(in thousands, except per share amounts)
(unaudited)
Twelve Months Ended December 31, 2004
Adjusted Excluded
Guidance Expenses,
Range Gains
Low High and Losses
REVENUE:
Related party $61,700 $61,700 $--
Non-related party 11,800 13,300 --
Total revenue 73,500 75,000 --
OPERATING EXPENSES:
Adjusted operating
expenses 54,300 54,300 --
EBITDA 19,200 20,700
Depreciation and amortization
of property and equipment -- -- 5,700
Amortization of intangibles -- -- 588
Amortization of deferred
compensation -- -- 4,300
Amortization of partnership
costs -- -- 68,152
Write-off of stockholder notes
receivable -- -- 4,115
Total operating
expenses 82,855
Loss from
operations
OTHER INCOME (EXPENSE) 300 300
Net income (loss) $19,500 $21,000 $(82,855)
NET INCOME (LOSS) PER SHARE:
Basic $1.01 $1.08
Weighted average shares -
basic 19,400 19,400
Twelve Months Ended December 31, 2004
Application
of GAAP Guidance
EITF Range
No. 01-9 Low High
REVENUE:
Related party $(61,700) $-- $--
Non-related party -- 11,800 13,300
Total revenue (61,700) 11,800 13,300
OPERATING EXPENSES:
Adjusted operating
expenses -- 54,300 54,300
EBITDA
Depreciation and amortization
of property and equipment -- 5,700 5,700
Amortization of intangibles -- 588 588
Amortization of deferred
compensation -- 4,300 4,300
Amortization of partnership
costs (61,700) 6,452 6,452
Write-off of stockholder notes
receivable -- 4,115 4,115
Total operating
expenses (61,700) 75,455 75,455
Loss from
operations -- (63,655) (62,155)
OTHER INCOME (EXPENSE) 300 300
Net income (loss) $-- $(63,355) $(61,855)
NET INCOME (LOSS) PER SHARE:
Basic $(3.27) $(3.19)
Weighted average shares -
basic 19,400 19,400
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DATASOURCE: Neoforma, Inc.
CONTACT: media, Jen Reidy, +1-415-891-8300, or
; or investors, Amanda Mogin, +1-408-468-4251, or
, both for Neoforma
Web site: http://www.neoforma.com/