Apache Medical Systems Reports Third Quarter 1997 Results; Takes Restructuring Charge To Reflect Tightening Of Business Focus.MCLEAN, Va.--(BUSINESS WIRE)--October 29, 1997--APACHE Medical Systems, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AMSI AMSI Australian Mathematical Sciences Institute AMSI Ambient Surround Imaging AMSI Atlantic Merchant Shipping Instructions AMSI Ameritech Message Signal Interface ), a leading provider of decision support and disease management products and services, today reported results for the third quarter and nine months ended September 30, 1997. Gerald E. Bisbee, Jr., Ph.D., Chairman and Chief Executive Officer, said, "In response to what has been slow revenue growth, APACHE has been conducting a comprehensive and extensive review of its product line. This has resulted in a decision to narrow our product focus to high-cost, high-risk patients, APACHE's core strength, and to discontinue certain products that are not profitable or are in development. This narrowing of focus, combined with a headcount reduction, should result in closer alignment of revenues and expenses." Third quarter revenues were $1.7 million compared with $3.3 million for the third quarter of 1996. The Company reported a net loss for the quarter of $5.0 million, or $0.69 per share, compared with a net loss of $591,000, or $0.07 per share, in the prior year's quarter. Systems and related products revenue decreased 96% to $75,000 from $1.7 million in the prior year quarter, accounting for the major reason for the decline in total revenues. As planned, the Company is upgrading its Medical Cost Management Program (MCMP MCMP Musson Cattell Mackey Partnership MCMP Marine Corps Master Plan MCMP Modified Corrugated Morse Potential MCMP Materiel Change Management Program ) software to a new technical architecture with enhanced features, including Year 2000 compliance. The older version of MCMP is no longer being installed at new client sites and software license revenue recognition is being deferred until the new MCMP is fully installed which is expected to occur in early 1998. Consequently, the Company is deferring revenue recognition on contracts for nine new MCMP systems which will impact APACHE's systems and related products revenues for the remainder of 1997. The Company will not be supporting the older version of the MCMP beyond the year 1999, and it is offering existing clients the option to migrate to the new version during the next two years at a modest cost. Included in the loss for the quarter is a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $1.6 million related to the Company's decision to revise its business strategy for the remainder of 1997 and for 1998. As a part of this strategy, the Company has decided to discontinue or postpone the development of certain products, resulting in the reduction of 17 employees in the workforce. For the nine months ended September 30, 1997, revenues were $7.2 million, compared with $8.4 million in the first nine months of 1996. The Company reported a net loss for the period of $12.7 million, or $1.75 per share, compared with a net h a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. . Prior year results have been restated to reflect this acquisition. Bisbee concluded, "APACHE's proactive response to our business environment and our growing sales pipeline and backlog give us increased confidence as we address the future." Tal costs. APACHE patient management products and services give clients real-time, risk-adjusted clinical and financial information they need to manage care, espeand integrated delivery systems. Worldwide, ovies Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995, please see i tAPACHE MEDICAL SYSTEMS, INC. Conso September 30, September 30, 1997 1996 nd related products 520 479 1,758 1,586 Cost of support 170 137 481 415 Cost of professional -- Write-off of acquired in-process research and development costs -- -- 1,612 -- Total expenses 6,921 4t -- -- 10 75) $ (0.32) Weighted average number of thousands) ivable, net 2,737 3,595 Other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. 824 946 Property, plant and equipment, net 1,324 1,101 Other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. 710 683 $ 17,298 $ 29,970 Liabilities and Stockholders' Equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. 6,982 3,740 Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and capital leases 94 245 Deferred rent 129 167 Stockholders' equity 10,093 25,818 $ 17,298 $ 29,970 -0- CONTACT: Gerald E. Bisbee, Jr., Ph.D. Chairman and Chief Executive Officer 703-847-1400 |
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