LMS YTD revenue increases 80% to $2.85 million realized contracts for 2007 increase 134% to $5.85 million from $2.50 million in 2006

    MONTREAL, June 12 /CNW Telbec/ - LMS Medical Systems (TSX: LMZ, AMEX:  
LMZ), a healthcare technology company and developer of the CALM(TM) clinical
information system and risk management software tools for obstetrics, today
reported its audited financial results for the fiscal year ended March 31,
2007. All amounts are in Canadian dollars.
    Annual revenues increased 80% to $2.85 million from $1.58 million in
2006. Comparative quarterly revenue for Q4 2007 increased to $1.44 million
from $262,000. In addition, orders signed though not completed due to client
availability or timely recognition of revenue represented an additional
$0.9 million or total realized contracts of $2.34 million for Q4. The backlog
of signed and recurring contracts in Q4 2007 increased by 26% to $4.40 million
from $3.50 million reported in Q3. The continued increase in revenues is a
reflection of new hospital installations completed during Q4, as well as
related recurring maintenance and technical revenues, which continue to grow
as a result of an increasing client base.
    The net loss for the year was in line with expectations at $9.31 million
($0.50 per share) compared to $9.41 million ($0.57 per share) in 2006. Revenue
growth of $1.27 million was offset somewhat by higher direct costs of
0.2 million. In addition, in anticipation of new revenue opportunities, sales
and marketing expenses were increased by $0.54 million. Other net increases in
expenses and a reduction in investment tax credits of $0.2 million accounted
for the balance of the change.
    Cash, cash equivalents and short-term investments held to maturity, as at
March 31, 2007 totaled $3.46 million compared to $5.58 million as at March 31,
2006. The decrease of $2.12 million is explained by our loss of $9.31 million
reduced by non-cash items of $1.43 million, inflows from financing activities
of $6.06 million, and outflows from capital spending and debt repayment of
$0.25 million. In addition, at March 31, 2007 LMS had additional $1.95 million
of liquidities consisting of contractual backlog receivables and deferred
revenues, which are not recognized under generally accepted principles in the
March 31, 2007 financial statements, but represent additional liquidity for
LMS, as the deferred revenue liability related to these items is a non-cash
item, which will be settled by delivery of LMS software products and services,
in the normal course of operations.
    With a robust pipeline of products, LMS has been focusing its efforts in
2007 on the expansion of its sales and distribution network and growth of its
revenues. During the past year, LMS has achieved the following

    - Attained record revenues of $2.85 million, an increase of 80% over
    - Tripled the order backlog to $4.40 million from $1.40 million at the
      end of 2006.
    - Realized a 134% increase in total new contracts of $5.85 million,
      including recorded revenues and new backlog, compared to $2.50 million
      in 2006.
    - Sustained the value of identified sales opportunities at $25 million,
      while increasing the order backlog.
    - Completed private placements generating $6.05 million in net cash
    - Tripled the number of new client installations to 27 from 9 in 2006,
      bringing the total installed base to 56 client sites.
    - Completed its first hospital group win, having been selected by IASIS
      Healthcare LLC, to install CALM CIS at 12 facilities providing
      obstetrical services in five US states.
    - Fulfilled the programming phase of the interoperability components for
      the private label OB solution under development with McKesson.
      Completion of the software bridge enables a seamless flow of
      administrative and clinical information between the LMS system and
      hospital information management systems. Quality assurance on the
      application is currently being carried out, early field implementation
      being followed immediately by release to the marketplace.

    Business Outlook and Guidance

    As previously announced, LMS anticipates that revenue and backlog growth
will continue due to following factors:

    - LMS' growing presence in the marketplace is the result of sales efforts
      with several hospital groups, the continued success of which should
      drive further additional revenue opportunities.
    - Increases in revenues related to the CALM Clinical Information System
      and our risk management tools are anticipated pending the release of
      interoperability components for a private branded product developed in
      conjunction with McKesson where commercial availability of this product
      is scheduled for this summer.
    - 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
    - Additional revenues are expected from the commercial release of CALM
      Patterns this year.
    - New products and business alliances are being pursued to develop
      additional market opportunities thereby extending the reach of LMS'
      existing line of software and risk management tools.

    An expanded Management's Discussion and Analysis for 2007, and previous
periods, is accessible on the LMS website at www.lmsmedical.com and with
Company's regulatory filings in Canada at www.sedar.com and in the United
States at www.sec.gov.


    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 United States Securities and Exchange Commission and 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: about LMS Medical Systems please contact: Yves
Grou, Chief Financial Officer, LMS Medical Systems Inc., (514) 488-3461 Ext.
238, Fax: (514) 488-1880, yves@lmsmedical.com; www.lmsmedical.com; David
Gordon/Grant Howard, The Howard Group Inc., Toll Free: 1-888-221-0915,
info@howardgroupinc.com; www.howardgroupinc.com

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