LMS 2008 Financial Results - Q4 Revenue Increases 62% To $2.3 Million - YTD Revenue Increases 74% TO $5.0 Million

    MONTREAL, June 12 /CNW Telbec/ - LMS Medical Systems (TSX: LMZ), a
healthcare technology company and developer of the CALM(R)clinical information
system and risk management software tools for obstetrics, today reported its
audited financial results for the fiscal year ended March 31, 2008. All
amounts are in Canadian dollars.

    Q4 Results

    On the strength of new installations and growing recurring maintenance
and technical service revenues, our comparative quarterly revenues for Q4 2008
grew 62% to $2,324,000 from $1,438,000 in Q4 2007.
    Following the implementation of a program to streamline operations during
Q3 2008, operating expenses were reduced by $632,000 for the fourth quarter of
fiscal 2008, from $3,072,000 for Q4 2007 to $2,440,000 for Q4 2008. The
reduction for Q4 2008 is explained mainly by a decrease in research and
development expenses of $502,000 and lower selling marketing product
management expenses of $119,000, offset by smaller increases in other
    The combination of the increase in revenues in the fourth quarter of
fiscal 2008 of $886,000 and lower overall expenses of $632,000 reduced the
comparative operating loss by $1,570,000 or 84% from $1,877,000 ($0.09 per
share) in the fourth quarter of fiscal 2007 to $307,000 ($0.01 per share) in
the fourth quarter of fiscal 2008. The cash used in operating activities
before net changes in non-operating working capital items decreased by
$1,555,000 to $154,000 for Q4 2008 compared to $1,709,000 for Q4 2007.

    YTD Results

    For the year ended March 31, 2008, revenue increased by 74% from
$2,851,000 to $4,973,000. Included in total revenues of $4,973,000 for the
year ended March 31, 2008 are revenues of a recurring nature totaling
$1.69 million compared to $0.88 million for the year ended March 31, 2007.
    Total expenses for the year ended March 31, 2008 amounted to $9,819,000,
a decrease of $2,022,000 or 17% compared to the year ended March 31, 2007.
    The combination of the increase in revenues in 2008 of $2,122,000 and
lower overall expenses of $2,022,000 reduced the comparative operating loss by
$4,013,000 from $9,431,000 ($0.51 per share) in 2007 to $5,418,000 ($0.24 per
share) in 2008. The cash used in operating activities before net changes in
non-operating working capital items decreased by $3,770,000 to $4,183,000 for
the year ended March 31, 2008 compared to $7,953,000 for the year ended March
31, 2007.


    Cash, cash equivalents and short-term investments held to maturity, as at
March 31, 2008 totaled $1.86 million compared to $3.38 million as at March 31,
2007. In addition, under our contract with a distributor, LMS is entitled to
receive amounts for contracts contained in our backlog. As at March 31, 2008,
this amount, which does not qualify as a receivable under generally accepted
accounting principles, amounted to $0.6 million and will provide short term
additional liquidity. As such, the total cash, cash equivalents, short term
investments and accounts receivable, including this amount, amounted to
$3.6 million as at March 31, 2008.


    - We significantly increased the number of new client installations,
    bringing our client base from 53 in 2007 to 93 in 2008.
    - We increased the value of identified sales opportunities being pursued
    to $31 million.
    - Our backlog decreased to $3.9 million in 2008 from $4.4 million in 2007
    due primarily to the recognition in the fourth quarter of fiscal 2008
    of $1.2 million of signed contracts that were previously in the backlog
    and accounted for as deferred revenue as a result of meeting the
    revenue recognition criteria.
    - We completed a private placement generating $2 million in gross cash
    - We received a score of 88.8 in the KLAS 2008 Labor and Delivery report,
    read by the healthcare IT industry. LMS met the criteria to be included
    in the early data section of the report.
    - We entered into agreements with several partners, including Best
    Practices Medical Partners, MD Advantage and Women's Regional Health
    for the use of CALM Shoulder Screen by its insured OB/GYNs.

    Business Outlook and Revenue Guidance

    LMS anticipates that revenue will continue to grow due to the following
    - LMS' increasing presence in the marketplace is the result of sales
    efforts with several hospital groups, the continued success of which is
    expected to drive further additional revenue opportunities.
    - As a result of increased system sales and our growing client base,
    revenues from maintenance and technical support service agreements are
    also expected to increase commensurate with the growth of our installed

    Based on the foregoing, the Company anticipates doubling its customer
base and its revenue compared to fiscal 2008, assuming a constant US exchange
rate. As per the trend established in past years, the Company expects to
record between 30% and 35% of its annual revenue during the first six months
of the 2009 fiscal year. At this level of revenue, the Company anticipates
reaching a break-even point in fiscal 2009.
    LMS complete results for the year ended March 31, 2008 along with an
expanded Management's Discussion and Analysis will be released in normal
course on or about June 12th and will be available at www.sedar.com and at


    LMS is a leader in the application of advanced mathematical modeling and
neural networks for medical use. The LMS CALM(TM) Suite provides physicians,
nursing staff, risk managers and hospital administrators with clinical
information systems and risk management tools designed to improve outcomes and
patient care for mothers and their infants during childbirth.

    Except for historical information contained herein, the matters discussed
in this news release are forward-looking statements. Because these
forward-looking statements involve risks and uncertainties, there are
important factors that could cause actual results to differ materially from
those expressed implied by the forward-looking statements including, but
without limitation, economic conditions in general and in the healthcare
market, the demand for and market for our products in domestic and
international markets, our current dependence on the CALM product suite, the
challenges associated with developing new products and obtaining regulatory
approvals if necessary, research and development activities, the uncertainty
of acceptance of our products by the medical community, the lengthy sales
cycle for our products, third party reimbursement, competition in our markets,
including the potential introduction of competitive products by others, our
dependence on our distributors, physician training, enforceability and the
costs of enforcement of our patents, potential infringements of our patents
and the other factors set forth from time to time in the Company's filings
with the Canadian Securities Commissions. The Company has no intention of or
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

For further information:

For further information: Yves Grou, Chief Financial Officer, LMS Medical
Systems Inc., (514) 488-3461 Ext. 238, Fax: (514) 488-1880,
yves.grou@lmsmedical.com; www.lmsmedical.com

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