Netsmart (NASDAQ:NTST)
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Netsmart Announces Third Quarter Results
Revenues Increase 8% from Third Quarter Fiscal 2003
GREAT RIVER, N.Y., Nov. 1 /PRNewswire-FirstCall/ -- Netsmart Technologies,
Inc. (NASDAQ:NTST), a leading supplier of enterprise-wide software solutions
for health and human services providers, today reported results for the third
quarter ended September 30, 2004.
James Conway, CEO of Netsmart Technologies, Inc. stated, "We are pleased to
announce our 25th consecutive quarter of profitability. Our income before taxes
was $827,000 for the quarter ended September 30, 2004 as compared to $738,000
for the comparable quarter last year. This represents a 12% increase over last
year, before any provision for taxes."
Revenue for the quarter ended September 30, 2004 was $7,421,000 as compared to
$7,108,000 for the quarter ended September 30, 2003, representing an increase
of 4%. Net income for the quarter ended September 30, 2004 was $633,000, or
$0.12 per share (basic) and $.11 per share (diluted), as compared to $1,546,000
or $0.34 per share (basic) and $.33 per share (diluted), for the same period
last year. The reduction in net income and earnings per share was attributable
to a provision for taxes in the quarter ended September 30, 2004 of $194,000 as
compared to a tax benefit of $808,000 for the same period last year. Although
we accrued taxes at an effective tax rate of 28% of pre-tax income for the nine
months ended September 30, 2004, we actually expect to pay taxes at a rate of
5% due to the deduction of prior years net operating losses on our tax returns.
In addition, there were approximately 840,000 additional shares outstanding for
the quarter ended September 30, 2004 as compared to the same period last year.
Revenue for the nine months ended September 30, 2004 was $21,433,000 as
compared to $19,816,000 for the nine months ended September 30, 2003,
representing an increase of 8%. Net income for the nine months ended September
30, 2004 was $1,451,000, or $.27 per share (basic) and $.26 per share
(diluted), as compared to $2,339,000, or $.56 per share (basic) and $.52 per
share (diluted) for the same period last year. The reduction in earnings per
share is associated with the increased tax provision together with the
increased outstanding shares.
Working capital increased to $16,829,000 at September 30, 2004 from $14,714,000
at December 31, 2003. Our cash balances increased to $16.5 million at September
30, 2004 from $15.9 million at December 30, 2003 after investing $707,000 into
our new Corporate Headquarters at Great River. Recurring revenue for the
quarter ended September 30, 2004 was $3,086,000, an increase of 19% from the
$2,598,000 for the comparable quarter last year.
The gross profit margin for the quarter was 53% as compared to 46% for the
comparable quarter in 2003. This increase was primarily due to the reallocation
of certain expenses from cost of revenues to research, development and
maintenance costs. Our firm order backlog at September 30, 2004 was $26.0
million as compared to $25.5 million at September 30, 2003. The recurring
revenue component of the September 30, 2004 backlog is equal to 56% of the
total backlog.
About Netsmart Technologies, Inc.
Netsmart Technologies, Inc. of Great River, N.Y., through Creative
Socio-Medics, is an established, leading supplier of enterprise-wide software
solutions for health and human services providers with over 580 clients,
including 25 systems with state agencies. Creative's clients include health and
human services organizations, public health agencies, mental health and
substance abuse clinics, psychiatric hospitals, and managed care organizations.
Avatar Practice Management and the Avatar Clinician Work Station, Creative's
core products, are full-featured information systems that operate on a variety
of operating systems, hardware platforms, and mobile devices and offer
unlimited scalability.
Statement on Behalf of Netsmart Technologies, Inc.
Statements in this press release may be "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar
expressions, as they relate to the company or its management, identify
forward-looking statements. These statements are based on current expectations,
estimates and projections about the company's business based, in part, on
assumptions made by management. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that are difficult
to predict. Therefore, actual outcomes and results may, and probably will,
differ materially from what is expressed or forecasted in such forward-looking
statements due to numerous factors, including those described above and those
risks discussed from time to time in Netsmart's filings with the Securities and
Exchange Commission. In addition, such statements could be affected by risks
and uncertainties related to product demand, market and customer acceptance,
competition, pricing and development difficulties, as well as general industry
and market conditions and growth rates, and general economic conditions. Any
forward-looking statements speak only as of the date on which they are made,
and the company does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date of this release.
Information on Netsmart's or Creative's website does not constitute a part of
this release.
NETSMART TECHNOLOGIES, INC.
Comparative Operating Results for the Three and
Nine Months Ended September 30,
Three Months Nine Months
2004 2003 2004 2003
Revenue $7,421,000 $7,108,000 $21,433,000 $19,816,000
Income Before
Income Tax
Expense (Benefit) $827,000 $738,000 $2,014,000 $1,549,000
Income Tax Expense
(Benefit)(1) $194,000 $(808,000) $563,000 $(790,000)
Net Income(1) $633,000 $1,546,000 $1,451,000 $2,339,000
Net Income
Per Share Basic $.12 $.34 $.27 $.56
Weighted
Average Shares of
Common Stock
Outstanding Basic 5,339,000 4,513,000 5,330,000 4,160,000
Net Income Per
Share Diluted $.11 $.33 $.26 $.52
Weighted
Average Shares of
Common Stock and
Common Stock
Equivalents
Outstanding Diluted 5,548,000 4,706,000 5,545,000 4,469,000
(1) The Company's tax provision for 2004 and 2003 has been reduced in
all periods as a result of available net operating loss
carry-forwards. In addition, the Company recognized a $800,000 tax
benefit during the September 2003 Quarter and a $900,000 tax benefit
during the nine months ended September 30, 2003, as a result of a
further reduction in its deferred tax asset valuation allowance.
DATASOURCE: Netsmart Technologies, Inc.
CONTACT: James Conway, CEO of Netsmart Technologies, Inc.,
1-800-451-7503, ; or Stuart Fine of Carpe DM, Inc.,
+1-908-490-0075, , for Netsmart Technologies, Inc.
Web site: http://www.netsmartech.com/