DAOU Systems Announces Financial Results for Second Quarter ended June 30, 1997.SAN DIEGO--(BW HealthWire)--July 16, 1997--DAOU Systems (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 :DAOU) Wednesday reported record second-quarter revenue accompanied by increases in net income and earnings per share. The company posted second-quarter and year-to-date revenue of $6 million and $11.2 million respectively, increases over the previous year of 15 percent and 49 percent respectively. Net income for the second quarter was $58,000 with a net loss for the year to date of $174,000. That translates to second-quarter earnings per share of 1 cent, the same as for the second quarter of the previous year. The year-to-date earnings per share are a loss of 2 cents, which compares with a loss of 1 cent for the same period in 1996. The increase in revenue is primarily attributable to an increase in the number of network management and implementation contracts that the company has secured with such major health care organizations as Harris Methodist Health System, Centura Health and St. Mary's Health Network. These and other management contracts have boosted the company's recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue to 33 percent for the year to date. The company's net income continues to be impacted by increased expenses associated with the regionalization regionalization Managed care The subdivision of a broadly available service–eg, a blood bank, into quasi-autonomous regional centers, capable of making decisions and providing more cost-effective and/or faster service to hospitals and health care facilities, of the company's sales organization, the addition of sales personnel and the expansion of marketing programs. The company reported total sales and marketing expenses for the second quarter of $1.1 million, an increase of 186 percent over the $376,000 reported for the same period in 1996. "We are continuing to roll out our corporate strategy," said Georges Daou, chief executive officer of DAOU Systems. "All our planned regional offices have been established within the past 120 days and are productive. "In addition, we have established key alliances like the recently announced marketing agreement with VHA VHA Veterans Health Administration VHA Variable Housing Allowance VHA Villages Homeowners Association VHA Voluntary Hospitals Association VHA Virtual Home Agent VHA Very High Altitude VHA Vapor Hazard Area VHA Vermont Holstein-Friesian Association , a major health care purchasing group. Such alliances will help provide our company with entry and exposure to new and larger markets. In the case of VHA, DAOU will be the vendor of choice for more than 1,500 of VHA's community health care members. "The solidification so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. of our sales and marketing foundation also allows the company to offer a broader line of services that include our new desktop support, which is now being provided to Harris Methodist Health System." DAOU Systems also reported that its full network outsourcing contract with Candler Hospital will not continue past 1997 due to a recent acquisition of Candler Hospital by St. Joseph's hospital St. Joseph's Hospital may refer to: In the United States:
There will be no reduction in expected revenue for 1997, and the $600,000 contract-cancellation penalty will augment DAOU's net income for the year. The event also frees the company to focus on opportunities in desktop support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services which generally yield higher margins and are a good match with DAOU's core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
The desktop support contract with Harris Methodist Health System is representative of such opportunities and is expected to replace revenue lost from the cancellation of the Candler Hospital contract. Founded in 1987, DAOU Systems designs, implements and manages computer networks and desktop operations for the health care industry. The company also offers outsourcing, Internet and network monitoring The term network monitoring describes the use of a system that constantly monitors a computer network for slow or failing systems and that notifies the network administrator in case of outages via email, pager or other alarms. solutions. DAOU has provided network services to more than 450 hospitals and health care facilities nationwide. With headquarters in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. , the company has five regional offices and more than 230 employees. DAOU's clients include such organizations as Centura Health, Lutheran Health Systems, Mercy Health Services health services Managed care The benefits covered under a health contract , Harris Methodist Health System and Catholic Medical Center of Brooklyn and Queens. Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve numerous risks and uncertainties. The company's actual results could differ materially from those projected in such forward-looking statements and will depend upon a number of factors, including those discussed in the company's filings with the Securities Exchange Commission and other news releases of the company. CONTACT: DAOU Systems Inc., San Diego Fred McGee, 619/646-2996 fredmcgee@daou.com Craig K. Collins, 619/646-2857 craig.collins@daou.com |
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