Operating income was $398,000 for the three months ended March 31, 2002, compared with an operating loss of $8.0 million for the three months ended March 31, 2001. The net results were positively impacted by the new accounting rules for goodwill. Goodwill amortization during the three months ended March 31, 2001 totaled $4.7 million. Financial Review
Revenue - For the three months ended March 31, 2002, total revenue was $19.0 million, recurring revenue was $13.2 million and non-recurring revenue was $5.8 million as compared to total revenue of $11.8 million, recurring revenue of $8.2 million and non-recurring revenue of $3.6 million, respectively, for the three months ended March 31, 2001. Recurring revenue includes maintenance and support services, subscriptions and e-services (electronic data interchange, “EDI” transactions, and royalties and other revenues from e-commerce and other Internet-based services). Non-recurring revenue includes one-time sales of licenses and systems and fees for training and implementation services. Revenue increased primarily as a result of increased e-services, subscription and maintenance revenue, which represent the core elements of our business model. Revenues also increased as a result of acquisitions completed during 2001 and 2002, principally the InfoSoft acquisition completed in March 2001.
Operating income – For the three months ended March 31, 2002, operating income was $398,000 compared with an operating loss of $8.0 million for the three months ended March 31, 2001. The operating loss for the three months ended March 31, 2001 included restructuring and other non-recurring charges of $2.1 million compared to $81,000 of such charges for the comparable period of 2002.
EBITDA, as adjusted - EBITDA, as adjusted, was $2.1 million for the three months ended March 31, 2002 compared with $(568,000) for the three months ended March 31, 2001. EBITDA, as adjusted, is defined as earnings before interest, taxes, depreciation and amortization and also excludes restructuring and non-recurring charges, gain or loss on disposal of fixed assets and preferred stock dividends. The EBITDA, as adjusted, results for the three months ended March 31, 2002 compare favorably with $1.5 million for the three months ended December 31, 2001, $905,000 for the three months ended September 30, 2001, and $517,000 for the three months ended June 30, 2001, reflecting the continuing positive effects of the Company’s business model including cost savings from the consolidation plan implemented in October 2001.
Net loss/loss per share available to common stockholders - PracticeWorks reported a net loss of $(1.7) million for the three months ended March 31, 2002, or $(0.15) per share, compared with a loss of $(9.0) million, or $(1.03) per share, for the three months ended March 31, 2001. On a pro forma basis, excluding the effects of restructuring and other non-recurring charges, the net loss would have been $(1.6) million, or $(0.14) per share, and $(6.8) million, or $(0.79) per share, for the three months ended March 31, 2002 and 2001, respectively.
The Company’s operating results for the three months ended March 31, 2002 benefited from the adoption of the new accounting standards regarding goodwill amortization. Under these new standards, effective January 1, 2002 for acquisitions completed prior to June 30, 2001, goodwill is no longer amortized but is subject to an annual test of impairment.
Jim Price, PracticeWorks’ President and CEO, said, “These results are the payoff for all the investments we made last year. I could not be happier as we continue to excel in a generally soft business environment. We are confident that this momentum will allow us to meet our revenue and profit goals for the remainder of this year.”
Certain statements in this release, and other written or oral statements made by or on behalf of us, are “forward-looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and our future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. These forward-looking statements are subject to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, the following: uncertainties concerning our future capital needs and the ability to obtain such capital; possible deferral, delay or cancellation by customers of computer system purchase decisions; variations in the volume and timing of systems sales and installations; possible delays in product development; changing economic, political and regulatory influences on the healthcare industry; changes in product pricing policies; general economic conditions; and the risk factors detailed from time to time in PracticeWorks' periodic reports and registration statements filed with the Securities and Exchange Commission, which important factors are incorporated herein by reference. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. These statements are based on current expectations and speak only as of the date of such statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise.
About PracticeWorks, Inc.
PracticeWorks, Inc. is an information management technology provider for dentists, orthodontists and oral and maxillofacial surgeons. PracticeWorks' product offerings include practice management applications, business-to-business e-commerce services, electronic data interchange (EDI) services, and ongoing maintenance, support and training related to all products. Visit PracticeWorks at www.practiceworks.com.
PracticeWorks will be hosting a conference call to discuss its first quarter results on Tuesday, April 23, 2002, at 8:30 a.m. EDT. This conference call will be available at www.videonewswire.com/event.asp?id=4199.