Quovadx Reports Third Quarter 2004 Financial Results; GAAP EPS Loss Narrows to $0.09.ENGLEWOOD, Colo. -- Quovadx, Inc. (Nasdaq: QVDX), a global software and services company, today announced financial results for the third quarter ended September 30, 2004. Total revenue for the quarter was $21.0 million, up 46% from $14.4 million from the same period last year. Quovadx recorded 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 of $11.7 million for the quarter, up 53% from $7.7 million from the third quarter of 2003. Acquisitions made by the company in 2003 contributed $11.3 million in total revenue and $4.1 million of recurring revenue to the third quarter 2004 results. Gross margin in the third quarter was 40.4% versus 27.5% in the third quarter of 2003 and 40.7% in the second quarter of 2004. Net loss, calculated in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), was $3.6 million or a loss of $0.09 per share for the quarter ended September 30, 2004. This compares with a GAAP loss of $6.2 million or a loss of $0.20 per share in the third quarter of 2003 and a GAAP loss of $5.9 million or a loss of $0.15 per share for the second quarter of 2004 . "I'm pleased with the progress we made during the third quarter," said Harvey A. Wagner, president and chief executive officer of Quovadx. "Our Rogue Wave rogue wave n. An unpredictable, abnormally large wave that occurs on a seemingly random basis in the oceans. Software and CareScience divisions registered sequential growth in revenue and the company as a whole did a good job of controlling costs. We recorded a 22% reduction in operating costs operating costs npl → gastos mpl operacionales versus the second quarter of 2004, allowing us to narrow our GAAP loss to $0.09 per share. The combination of expense control and working capital management allowed us to generate $1.6 million of cash from operations to end the quarter with $19.5 million in cash and cash equivalents, a $1.5 million increase since June 30." The Company's deferred revenue was $18.0 million on September 30, 2004, compared to $19.4 million on December 31, 2003, and $11.7 million on September 30, 2003. Days sales outstanding In accountancy, Days Sales Outstanding is a company's average collection period. A low figure indicates that the company collects its outstanding receivables quickly. Typically it is looked at either quarterly or yearly (90 or 365 days). (DSOs) were 68 on September 30, 2004, down from DSOs of 73 at June 30, 2004, and down from restated DSOs of 97 at December 31, 2003. The company remains debt-free. Revenue for the nine months ended September 30, 2004, increased 31% to $66.2 million, compared with $50.5 million in the first nine months of 2003. The 2004 nine months results include $31.7 million in total revenue from acquisitions made by the company in 2003. The Company recorded a loss of $22.3 million or a loss of $0.56 per share for the nine months ended September 30, 2004 on a GAAP basis. The 2004 results include certain one-time charges that increased the reported GAAP loss by $5.6 million or $0.14 per share. The company reported a loss of $10.4 million or a loss of $0.34 per share for the first nine months of 2003. "Our customers continue to be our top priority," stated Wagner. "Quovadx is a company with great potential, great products and great employees. We are committed to continuing to use these resources to provide our customers with innovative software, services and solutions that create value for their organizations." A summary of business activity for the third quarter of 2004 includes the following: --The Integration Solutions division strengthened its channel program with three significant announcements. HealthVision Inc., a leading healthcare Internet company, joined forces with Quovadx for a program offering a customized, user-friendly clinician clinician /cli·ni·cian/ (kli-nish´in) an expert clinical physician and teacher. cli·ni·cian n. portal and mobile solution that allows real-time data Real-time data denotes information that is delivered immediately after collection. There is no delay in the timeliness of the information provided. Some uses of this term confuse it with the term dynamic data. sharing for customers using Cloverleaf(R) Integration Services. NDCHealth, a leading provider of health information solutions, introduced NDC NDC National Drug Code NDC NATO Defense College NDC National Documentation Centre (National Hellenic Research Foundation, Athens, Greece) NDC National Dairy Council NDC National Democratic Congress ePREMIS(TM) verification management powered by Quovadx's QDX(TM) Cash Accelerator technology. CommerceWorks Group, specialists in the delivery of collaborative vertical market Web Service applications, will offer QDX Platform V components, including Cloverleaf Integration Services, to its customers in the United Kingdom as part of its integration and business process management solutions. --The CareScience division announced two new agreements for its Care Data Exchange(R) (CDE (1) (Computer Desktop Encyclopedia) What you are reading at this very moment. See About this product. (2) (Common Desktop Environment) A user interface for desktop computing from The Open Group. ) group. Community Healthcare Improvement Partnership (CHIP) in the Tri-City area of eastern Tennessee and western Virginia signed an agreement for the implementation of a Care Data Exchange(R) solution (CDE), currently in the first phase of deployment. An agreement was also signed with The Western North Carolina Western North Carolina (often abbreviated as WNC) is the region of North Carolina which includes the Appalachian Mountains, thus it is often known geographically as the state's Mountain Region. Health Network (The WNC WNC Western North Carolina WNC World News Connection (US government online news service) WNC Washington National Cathedral (Washington, DC) WNC Women's National Commission (UK) Network), a collaboration of hospitals, county health departments and healthcare providers in western North Carolina, to conduct assessment and implementation planning Operational planning associated with the conduct of a continuing operation, campaign, or war to attain defined objectives. At the national level, it includes the development of strategy and the assignment of strategic tasks to the combatant commanders. to electronically link the region's providers, leveraging CDE consultants. --The CareScience division signed agreements for the use of its Care Management System with several new or existing clients, including Fairfield Medical Center, Fairfield, OH; Maryland General Hospital, part of the University of Maryland University of Maryland can refer to:
Middle Tennessee is a distinct portion of the state of Tennessee, delineated according to law as well as custom. Medical Center; Providence Providence, city (1990 pop. 160,728), state capital and seat of Providence co., NE R.I., a port at the head of Providence Bay; founded by Roger Williams 1636, inc. as a city 1832. Health System; St. Vincent Hospital, Santa Fe, New Mexico Santa Fe, more properly Santa Fé, (pronounced [ˈsænə feɪ] by natives, [ˌsænə ˈfeɪ] ; Temple University Health System; and University of Tennessee The University of Tennessee (UT), sometimes called the University of Tennessee at Knoxville (UT Knoxville or UTK), is the flagship institution of the statewide land-grant University of Tennessee public university system in the American state of Tennessee. Medical Center. --The Rogue Wave Software division signed an agreement with Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. to add support for Sun Solaris x86 servers to its SourcePro(R) C++ Suite. Rogue Wave Software's industry-leading SourcePro(R) C++ and LEIF LEIF Leif Erikson International Foundation LEIF Lightweight Extensible Information Framework software support all versions of the Solaris platforms to help enterprises easily build, maintain, and evolve mission-critical applications, while realizing a significant reduction in total cost of ownership that the Solaris x86 provides. --Rogue Wave Software and Providence Software Solutions, Inc., the maker of XVT (EXtensible Virtual Toolkit) A C++ developer's toolkit for creating user interfaces across multiple environments from XVT Software, Inc., Cary, NC, a division of Providence Software (www.xvt.com). , the industry's leading cross-platform development environment, announced a new strategic alliance to enable Providence to embed em·bed also im·bed v. em·bed·ded, em·bed·ding, em·beds v.tr. 1. To fix firmly in a surrounding mass: embed a post in concrete; fossils embedded in shale. Rogue Wave(R) technology in its XVT Development Solution (DSP (1) (Digital Signal Processor) A special-purpose CPU used for digital signal processing applications (see definition #2 below). It provides ultra-fast instruction sequences, such as shift and add, and multiply and add, which are commonly used in math-intensive ) for C++. This will provide high-performance, cross-database reusable re·use tr.v. re·used, re·us·ing, re·us·es To use again, especially after salvaging or special treatment or processing. re·us components to Providence customers and facilitate support for multiple platforms Refers to two or more operating environments, which typically include the CPU family and operating system. For example, if versions of a program run on Windows and the Macintosh, the software is said to support multiple platforms. and databases. --Rogue Wave Software announced that SRD SRD Suriname Dollar (ISO currency code) SRD Sustainable Resource Development (Alberta, Canada) SRD Short Range Devices (wireless networking) SRD System Reference Document , the leader in identity recognition software, has embedded Inserted into. See embedded system. Rogue Wave SourcePro(R) Core and SourcePro(R) DB into its software to provide high-performance, cross-database reusable components to its customers and facilitate support for multiple platforms and databases. Conference Call Quovadx will host a conference call today, November 9, 2004, at 5:00 P.M. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. , which will broadcast live over the Internet. Please visit the "Investors" section of the Company's Website at http://www.quovadx.com. For those who cannot access the live broadcast, a replay will be available at http://www.quovadx.com, or by calling 888-203-1112 and entering code 800091. The replay will be available through November 15, 2004. About Quovadx, Inc. Quovadx, Inc. (Nasdaq: QVDX), a global software and services firm based in Englewood, Colorado Englewood is a city in Arapahoe County, Colorado, USA. As of 2005, the city is estimated to have a total population of 32,350.[5] It is part of the Denver-Aurora Metropolitan Area. , has helped more than 20,000 enterprise customers worldwide develop, extend and integrate applications based on open standards Specifications for hardware and software that are developed by a standards organization or a consortium involved in supporting a standard. Available to the public for developing compliant products, open standards imply "open systems;" that an existing component in a system can be replaced . Quovadx is comprised of three divisions, the Rogue Wave Software division, which provides reusable software components and services that facilitate application development, the Integration Solutions division, which offers vertically specific solutions to improve processes and leverage existing technology systems and the CareScience division, which provides care management services and analytical solutions to hospitals and health systems and is a pioneer in community-wide clinical data exchange. Quovadx serves companies in healthcare, financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and the public sector. Quovadx operates internationally with more than 450 employees. For more information, please visit http://www.quovadx.com. Cautionary Statement: Certain 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. are included in this release, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc goals and future business opportunities. These statements are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this release. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainties and other factors that could cause actual results to differ materially from those referred to in the forward-looking statements. Factors that may affect future results include market acceptance of and demand for our solutions, the success of our sales and marketing strategy, our ability to grow revenue, the need to maintain and enhance relationships with systems integrators An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. , channel partners and other parties, competition, the impact of the pending SEC investigation and class action 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. , economic and general business conditions, failure to meet financial and product expectations of analysts and investors and other risks described in the Company's annual and quarterly filings with the SEC, copies of which are available without charge from the Company. The filings are available electronically through a link from Quovadx's investor relations Investor relations The process by which the corporation communicates with its investors. web page or from the SEC Website at www.sec.gov under "Quovadx, Inc." If any of the events described in those filings were to occur, either alone or in combination, it is likely that our ability to reach the results described in the forward-looking statements could be impaired and our stock price could be adversely affected. We do not undertake any obligation to update or correct any forward-looking statements included in this release to reflect events or circumstances occurring after the date of this release. QUOVADX and QDX are trademarks of Quovadx, Inc. Rogue Wave, SourcePro and CLOVERLEAF are registered trademarks of Quovadx, Inc. Care Data Exchange(R) is a registered mark of the California Healthcare Foundation. All other company and product names mentioned may be trademarks of the companies with which they are associated.
Quovadx, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
September 30, December 31,
2004 2003
------------------------------------
(Unaudited)
ASSETS (Restated)
Current assets:
Cash, cash equivalents and
short-term investments $18,943 $23,688
Accounts receivable 14,805 17,593
Unbilled accounts receivable 1,166 3,465
Other current assets 2,763 4,304
------------------------------------
Total current assets 37,677 49,050
Property and equipment, net 4,442 6,291
Software, net 13,645 28,876
Other intangible assets 18,695 17,735
Goodwill 48,451 48,015
Restricted cash 550 -
Other assets 1,665 5,223
------------------------------------
Total assets $125,125 $155,190
====================================
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $3,845 $7,953
Accrued liabilities 11,680 15,881
Unearned revenue 17,976 19,066
------------------------------------
Total current liabilities 33,501 42,900
Deferred Revenue - 315
------------------------------------
Total liabilities 33,501 43,215
------------------------------------
Commitments and contingencies
Total stockholders' equity 91,624 111,975
------------------------------------
Total liabilities and
stockholders' equity $125,125 $155,190
====================================
End of the period common shares
outstanding 40,252 38,938
====================================
Quovadx, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
------------------- -------------------
(Restated) (Restated)
Revenue:
License $6,550 $2,309 $19,451 $14,232
Services 2,708 4,396 11,582 13,267
Recurring 11,729 7,662 35,198 22,986
------------------- -------------------
Total revenue 20,987 14,367 66,231 50,485
Cost of revenue:
License 2,752 1,877 9,771 6,929
Services 3,733 3,412 12,080 9,650
Recurring 6,027 5,128 18,160 15,181
Asset Impairment - - 6,765 -
------------------- -------------------
Total cost of revenue 12,512 10,417 46,776 31,760
------------------- -------------------
Gross Profit 8,475 3,950 19,455 18,725
------------------- -------------------
Operating Expenses:
Sales and marketing 4,177 4,260 15,541 12,154
General and administrative 4,456 3,001 14,887 9,177
Research and development 3,096 2,669 10,436 7,162
Amortization of acquired
intangibles 770 307 2,707 1,071
------------------- -------------------
Total operating expenses 12,499 10,237 43,571 29,564
------------------- -------------------
Loss from operations (4,024) (6,287) (24,116) (10,839)
Other Income (Expense)
Gain on sale of assets 360 - 1,535 -
Interest income, net 50 89 295 485
------------------- -------------------
Net loss $(3,614) $(6,198) $(22,286) $(10,354)
=================== ===================
Weighted average common shares
outstanding - basic 40,249 30,866 39,751 30,486
=================== ===================
Weighted average common shares
outstanding - diluted 40,249 30,866 39,751 30,486
=================== ===================
Net income (loss) per common
share - basic and diluted $(0.09) $(0.20) $(0.56) $(0.34)
=================== ===================
Quovadx, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -------------------
2004 2003 2004 2003
------------------ -------------------
Cash flows from operating (Restated) (Restated)
activities
Net loss $(3,614) $(6,198) $(22,286) $(10,354)
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Depreciation and amortization 2,690 2,268 8,764 6,680
Amortization of acquired
intangibles 755 307 2,350 1,071
Gain on sale of assets (360) - (1,535) -
Stock compensation expense 103 - 459 -
Asset impairment - - 7,116 -
Bad debt expense 80 - (214) 477
Change in assets and
liabilities:
Accounts receivable 651 3,652 3,317 5,993
Unbilled accounts receivable 732 518 2,300 (1,948)
Other assets 753 441 416 (779)
Accounts payable 200 1,100 (4,107) 1,260
Accrued liabilities 45 227 (2,854) (269)
Unearned and deferred
revenue (448) (930) (1,138) (4,569)
------------------ -------------------
Net cash provided by
(used in) operating
activities 1,587 1,385 (7,412) (2,438)
------------------ -------------------
Cash flows from investing
activities
Purchase of property and
equipment (121) (537) (656) (1,106)
Business Acquisition, net of
acquired cash - (7,514) 3,135 (7,514)
Capitalized software 1 (667) (914) (2,228)
------------------ -------------------
Net cash provided by
(used in) investing
activities (120) (8,718) 1,565 (10,848)
------------------ -------------------
Cash flows from financing
activities
Proceeds from issuance of
common stock 57 126 1,071 549
------------------ -------------------
Net cash provided by
financing activities 57 126 1,071 549
------------------ -------------------
Effect of foreign exchange rate
changes on cash (78) - 31 -
------------------ -------------------
Cash, cash equivalents and
short-term investments
Net increase (decrease) 1,446 (7,207) (4,745) (12,737)
Beginning of period 17,497 42,091 23,688 47,621
------------------ -------------------
End of period $18,943 $34,884 $18,943 $34,884
================== ===================
Reconciliation to GAAP Basis
Net cash provided by (used in)
investing activities (120) (8,718) 1,565 (10,848)
Sale of short-term investments - 4,777 - 19,831
Purchase of short-term
investments (575) (3,897) (6,025) (8,065)
------------------ -------------------
Net cash provided by (used in)
investing activities - GAAP
basis $(695) $(7,838) $(4,460) $918
================== ===================
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