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Greenway Reports Fourth-Quarter And Fiscal 2013 Results

Greenway, the Greenway logo and PrimeSUITE are registered trademarks and the phrase “smarter solutions for smarter healthcare” is a trademark of Greenway Medical Technologies, Inc. Other product or company names are the property of their respective owners.

Greenway Medical Technologies, Inc.
Condensed Consolidated Balance Sheets — Unaudited
(In Thousands)
     
June 30,
  2013     2012  
Assets
Current assets:
Cash and cash equivalents $ 3,184 $ 5,585
Short-term investments 8,043 29,350
Accounts receivable, net of a $900 and $720 allowance for doubtful accounts in
2013 and 2012, respectively 21,151 28,875
Inventory 284 281
Prepaids and other current assets 3,772 3,001
Deferred tax assets   2,407     1,699  
Total current assets 38,841 68,791
Property and equipment, net 28,416 20,340
Acquired intangibles, net 1,819 510
Software development cost, net 28,142 17,156
Deferred tax assets - noncurrent 26,903 25,846
Goodwill 1,540 440
Other assets   468     40  
Total assets $ 126,129   $ 133,123  
 
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable $ 9,325 $ 12,436
Accrued liabilities 5,846 9,533
Deferred revenue   9,323     12,192  
Total current liabilities   24,494       34,161  
 
Obligation for purchased technology   -     116  
Shareholders’ equity:
Common stock 3 3
Additional paid-in capital 245,412 237,558
Accumulated deficit   (143,780 )   (138,715 )
Total shareholders’ equity   101,635     98,846  
Total liabilities and shareholders’ equity $ 126,129   $ 133,123  
 
 

Greenway Medical Technologies, Inc.
Condensed Consolidated Statements of Operations — Unaudited
(In Thousands except Per Share Data)
               
Three Months Ended June 30,   Year Ended June 30,
  2013     2012     2013     2012  
Revenue:
System sales $ 10,872 $ 13,176 $ 40,975 $ 39,300
Training and consulting services 4,207 7,269 19,420 27,816
Support services 11,827 9,636 44,553 33,143
Electronic data interchange and business services   8,620     6,295     29,896     23,754  
Total revenue   35,526     36,376     134,844     124,013  
Cost of revenue (Note 1):
System sales 5,777 3,093 18,420 10,259
Training and consulting services 2,487 4,535 13,682 18,881
Support services 3,438 2,944 13,092 10,564
Electronic data interchange and business services   5,542     3,997     19,265     16,197  
Total cost of revenue   17,244     14,569     64,459     55,901  
Gross profit   18,282     21,807     70,385     68,112  
Operating expenses (Note 1):
Sales, general and administrative 15,175 13,603 58,336 47,565
Research and development   5,192     4,666     18,959     15,696  
Total operating expenses   20,367     18,269     77,295     63,261  
Operating (loss) Income

 

(2,085

) 3,538

(6,910

) 4,851
Interest income (expense), net

(2

) 12 309 54
Other expense, net   2    

(18

)  

(55

)  

(40

)
(Loss) income before benefit for income taxes

(2,085

) 3,532

(6,656

) 4,865
(Benefit) provision for income taxes   1,395     1,327     ( 1,591 )   1,955  
Net (loss) income

(3,480

) 2,205

(5,065

) 2,910
Preferred stock dividends and accretion   -     -     -     28,395  
(Loss) income available to common shareholders $

(3,480

) $ 2,205   $

(5,065

) $ 31,305  
Per share data:
(Loss) income per share available to common shareholders:
Basic $ (0.12 ) $ 0.08   $ (0.17 ) $ 1.66  
Diluted $ (0.12 ) $ 0.07   $ (0.17 ) $ 0.11  
Weighted average number of common shares outstanding:
Basic   29,753     29,097     29,577     18,808  
Diluted   29,753     30,514     29,577     25,369  
 
 
Note 1 - Includes stock-based compensation in the following amounts:
Cost of revenue:
System sales $ 9 $ 2 $ 33 $ 11
Training and consulting services 51 45 192 290
Software support services 27 15 106 112
Electronic data interchange and business services   4     6     19     55  
Total cost of revenue   91     68     350     468  
Operating expenses:
Sales, general and administrative 969 768 3,394 1,543
Research and development   171     88     679     744  
Total operating expenses   1,140     856     4,073     2,287  
Total stock-compensation expense $ 1,231   $ 924   $ 4,423   $ 2,755  
 
 

  Greenway Medical Technologies, Inc.
Condensed Consolidated Statements of Cash Flows — Unaudited
(In Thousands)
     
Year Ended June 30,
  2013     2012  
Cash flows from operating activities:
Net (loss) income $ (5,065 ) $ 2,910
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net stock compensation expense 4,423 2,755
Provision (benefit) for deferred income taxes (1,765 ) 1,682
Depreciation and amortization 9,129 4,372
Provision for bad debts 2,741 1,412
Reduction in obligation for acquired technology - (100 )
Changes in current assets and liabilities:
Accounts receivable 5,052 (12,176 )
Inventory (3 ) 179
Prepaids and other current assets (1,199 ) (1,296 )
Accounts payable and accrued liabilities (5,798 ) 5,028
Deferred revenue   (2,869 )   3,520  
Net cash provided by operating activities   4,646     8,286  
Cash flows from investing activities:
Purchases of short-term investments (1,635 ) (29,609 )
Sales of short-term investments 22,942 10,707
Purchases of property and equipment (8,578 ) (8,041 )
Capitalized software development cost (15,341 ) (12,193 )
Acquisition of business and developed technology   (6,750 )   (3,000 )
Net cash used in investing activities   (9,362 )   (42,136 )
Cash flows from financing activities:
Payments on obligation for acquired technology (116 ) (137 )
Proceeds from exercise of stock options and warrants, net of issuance costs 3,431 897
Contingent consideration paid for prior acquisition (1,000 ) -
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   2,315     33,713  
Net decrease in cash and cash equivalents (2,401 ) (137 )
Cash and cash equivalents at beginning of year   5,585     5,722  
Cash and cash equivalents at end of year $ 3,184   $ 5,585  
Supplemental cash flow information:
Cash paid for interest $ 70   $ 8  
Cash paid for taxes $ 326   $ 196  
Non-cash investing and financing activities:
Conversion of Preferred Stock $ -   $ 130,421  
Future obligation for acquisition of business and developed technology $ -   $ -  
Common stock and obligations for future payments at fair value, given in exchange for acquisition of technology $ -   $ 954  
Reduction in obligation for acquired technology $ -   $ 100  
 
 

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

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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