Netsmart Reports Third Quarter 2006 Results

November 14th, 2006 | Computer Software , Technology | 0 Comments »

Quarterly Results Reflect 81 Percent Increase in Revenue and 171 Percent Increase in Net Income

Great River, New York (November 14, 2006) – Netsmart Technologies, Inc. (NASDAQ SC: NTST), a leading provider of enterprise-wide software for health and human services organizations, today reported record results for the third quarter ended September 30, 2006.

Revenue for the quarter was $15,392,000, an 81 percent increase from $8,517,000 for the quarter ended September 30, 2005. Net income for the third quarter was $1,026,000, an increase of 171 percent compared with net income of $379,000 for the same quarter in 2005. Net income per diluted share for the quarter was $0.15 compared with $0.07 for the same quarter last year. Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) for the three months ended September 30, 2006 were $2,918,000, compared to $1,151,000 for the same period last year. The third quarter of 2006 represents the company’s 33rd consecutive quarter of profitability.

Backlog of orders at September 30, 2006 was a record $54.7 million, compared to $28.6 million at September 30, 2005. The September 30, 2006 backlog includes $35.7 million for recurring revenue related to support, ASP and clearinghouse areas, as compared to $16.5 million for those categories at September 30, 2005. Recurring revenue for the quarter ended September 30, 2006 was $8,230,000, compared to $3,718,000 for the same quarter in 2005.

Revenue for the nine months ended September 30, 2006 was $43,535,000, an 84 percent increase from $23,705,000 for the nine months ended September 30, 2005. Net income for the nine months was
$2,270,000, an increase of 91 percent compared with net income of $1,191,000 for the same period in 2005.

Net income per diluted share for the nine months ended September 30, 2006 was $0.33 compared with $0.21 for the same period last year. EBITDA for the nine months ended September 30, 2006 was $7,262,000 compared to $3,138,000 for the same period last year. Recurring revenue for the nine months ended September 30, 2006 was $23,453,000, compared to $10,243,000 for the same period last year.

“We are pleased to report another record quarter, including a 171 percent increase in net income over the same quarter last year and a $4.1 million increase in EBITDA for the nine months ended September 30, 2006,” said James L. Conway, chairman and chief executive officer of Netsmart Technologies. “We enjoyed another strong quarter attributable to the integration of acquired companies, including QS Technologies, which deepens our public health product offerings and our ability to provide solutions to integrated public and behavioral health systems, as well as to organic growth.”

Reconciliation of Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) to Net Income

EBITDA is calculated for any period as the sum of net income, plus net interest expense, income tax expense, and depreciation and amortization expense. We consider EBITDA to be a widely accepted financial indicator of a company’s ability to service debt, fund capital expenditures and expand its business. EBITDA is not calculated in the same way by all companies and therefore may not be comparable to similarly titled measures reported by other companies. EBITDA is not a measure in accordance with accounting principles generally accepted in the United States.

EBITDA should not be considered as an alternative to net income, as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity. The funds depicted by this measure may not be available for management’s discretionary use due to legal or functional requirements, debt service, or other commitments and uncertainties.

Source: Netsmart