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Greenway Reports Record Fourth Quarter And Fiscal 2012 Results

Stocks in this article: GWAY

Greenway, the Greenway logo and PrimeSUITE are registered trademarks and the phrase “smarter solutions for smarter healthcare” are trademarks of Greenway Medical Technologies, Inc. Other product and company names may be the trademarks of respective owners.

Greenway Medical Technologies, Inc.
 
Condensed Balance Sheets – Unaudited
(In Thousands)
     
 
June 30, June 30,
  2012     2011  
 
Assets
Current assets:
Cash and cash equivalents $ 5,585 $ 5,722
Short-term investments 29,350 10,446
Accounts receivable, net of $720 and $585 allowance for doubtful
accounts at June 30, 2012 and 2011, respectively 28,875 18,113
Inventory 281 460
Prepaids and other current assets 3,001 1,705
Deferred tax assets   1,699     476  
Total current assets 68,791 36,922
Property and equipment, net 20,340 9,632
Acquired intangibles, net 510 -
Software development cost, net 17,156 6,811
Deferred tax assets - noncurrent 25,846 28,751
Goodwill 440 -
Other assets   40     40  
Total assets $ 133,123   $ 82,156  
 
Liabilities and shareholders’ equity (deficit)
Current liabilities:
Accounts payable $ 12,436 $ 7,903
Accrued liabilities 9,533 5,900
Deferred revenue   12,192     8,672  
Total current liabilities   34,161       22,475  
 
Obligation for purchased technology   116     349  
Convertible preferred stock, at fair value   -     158,816  
Shareholders’ equity (deficit):
Common stock 3 11,498
Additional paid-in capital 237,558 59,038
Accumulated deficit   (138,715 )   (170,020 )
Total shareholders’ equity (deficit)   98,846     (99,484 )
Total liabilities, convertible preferred stock and shareholders’ equity (deficit) $ 133,123   $ 82,156  
 
 
Greenway Medical Technologies, Inc.
 
Condensed Statements of Operations – Unaudited
(In Thousands except Share and Per Share Data)
               
Three Months Ended Year Ended
June 30,       June 30, June 30, June 30,
  2012     2011     2012     2011  
 
Revenue:
System sales $ 13,175 $ 11,943 $ 39,300 $ 31,726
Training and consulting services 7,269 6,173 27,816 18,373
Support services 9,635 6,390 33,143 22,401
Electronic data interchange and business services   6,296     4,901     23,754     17,339  
Total revenue   36,375     29,407     124,013     89,839  
Cost of revenue (Note 1):
System sales 3,093 2,324 10,259 7,522
Training and consulting services 4,534 4,077 18,881 13,550
Support services 2,944 2,309 10,564 7,059
Electronic data interchange and business services   3,996     3,494     16,197     12,280  
Total cost of revenue   14,567     12,204     55,901     40,411  
Gross profit   21,808     17,203     68,112     49,428  
Operating expenses (Note 1):
Sales, general and administrative 13,603 10,254 47,565 37,399
Research and development   4,667     2,590     15,696     8,218  
Total operating expenses   18,270     12,844     63,261     45,617  
Operating income 3,538 4,359 4,851 3,811
Interest income (expense), net 12 (2 ) 54 31
Other (expense), net   (18 )   (23 )   (40 )   (77 )
Income before provision for income taxes 3,532 4,334 4,865 3,765
Provision (benefit) for income taxes   1,327     1,744     1,955     (29,200 )
Net income 2,205 2,590 2,910 32,965
Preferred stock dividends and accretion   -     (15,233 )   28,395     (54,961 )
Income (loss) available to common shareholders $ 2,205   $ (12,643 ) $ 31,305   $ (21,996 )
Per share data:
Net income (loss) per share available to common shareholders:
Basic $ 0.08   $ (1.09 ) $ 1.66   $ (1.90 )
Diluted $ 0.07   $ (1.09 ) $ 0.11   $ (1.90 )
Weighted average number of common shares outstanding:
Basic   29,096,917     11,628,758     18,808,086     11,578,559  
Diluted   30,514,275     11,628,758     25,369,352     11,578,559  
 
 
Note 1 - Includes stock-based compensation in the following amounts:
Cost of revenue:
System sales $ 2 $ - $ 11 $ 7
Training and consulting services 45 - 290 74
Software support services 15 - 112 37
Electronic data interchange and business services   6     -     55     9  
Total cost of revenue   68     -     468     127  
Operating expenses:
Sales, general and administrative 768 59 1,543 1,118
Research and development   88     -     744     154  
Total operating expenses   856     59     2,287     1,272  
Total stock-based compensation expense $ 924   $ 59   $ 2,755   $ 1,399  
 
 
Greenway Medical Technologies, Inc.
 
Condensed Statements of Cash Flows – Unaudited
(Amounts in Thousands)
         
 
Year Ended
June 30, June 30,
  2012     2011  
 
Cash flows from operating activities:
Net income $ 2,910 $ 32,965
Adjustments to reconcile net income to net cash provided by operating activities:
Net stock compensation expense 2,755 1,399
Deferred income tax provision 1,682 2,333
Reversal of deferred income tax valuation allowance - (31,560 )
Depreciation and amortization 4,372 1,252
Provision for bad debts 1,412 1,083
Reduction in obligation for acquired technology (100 ) -
Changes in current assets and liabilities:
Accounts receivable (12,176 ) (7,680 )
Inventory 179 (136 )
Prepaids and other current assets (1,296 ) (1,012 )
Accounts payable and accrued liabilities 5,028 3,247
Deferred revenue   3,520     4,352  
Net cash provided by operating activities   8,286     6,243  
Cash flows from investing activities:
Purchase of short-term investments - net (18,902 ) (10,446 )
Purchases of property and equipment (8,041 ) (4,129 )
Business combination to acquire technology and other assets (3,000 ) -
Capitalized software development cost   (12,193 )   (5,739 )
Net cash used in investing activities   (42,136 )   (20,314 )
Cash flows from financing activities:
Payments on capital leases - (12 )
Payments on obligation for acquired technology (137 ) (83 )
Proceeds from exercise of stock options and warrants 897 709
Payments in connection with preferred stock conversion (23,300 ) -
Sale of common stock, net of issue costs and expenses   56,253     -  
Net cash provided by financing activities   33,713     614  
Net decrease in cash and cash equivalents (137 ) (13,457 )
Cash and cash equivalents at beginning of period   5,722     19,179  
Cash and cash equivalents at end of period $ 5,585   $ 5,722  
Supplemental cash flow information:
Cash paid for interest $ 8   $ 27  
Cash paid for taxes $ 196   $ 333  
 
Non-cash investing and financing activities:
Conversion of preferred stock $ 135,517   $ -  
Common stock and obligations for future payments at fair value,
given in exchange for acquisition of technology $ 954   $ 974  
Reduction in obligation for acquired technology $ 100   $ -  
 
 

Reconciliation of Non-GAAP Financial Measures to Comparable GAAP Measures (Unaudited, in thousands, except share amounts)

The following is a reconciliation of the non-GAAP financial measures used by the Company in describing its financial performance in accordance with U.S. “generally accepted accounting principles” (GAAP). An explanation of these measures is also included below under the heading “Explanation of Non-GAAP Financial Measures”. While management believes these non-GAAP financial measures provide useful supplemental information to investors regarding the Company’s operations, investors are reminded to consider these non-GAAP measures in addition to, and not a substitute for, financial performance measures in accordance with GAAP. In addition, it should be noted that these non-GAAP financial measures may be different from non-GAAP measures used by other companies, and management may utilize other measures to illustrate performance in the future. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of the operations as determined in accordance with GAAP.

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