Greenway fourth quarter revenue increases 24% to $36.4 million

Greenway Medical Technologies, Inc. (NYSE: GWAY), which delivers innovative software and business services solutions for ambulatory care providers through its PrimeSUITE® platform, today announced record financial results for the three and 12 months ended June 30, 2012.    

"We continue to make excellent progress in meeting increased demand for our clinically driven solutions across a rapidly changing and growing ambulatory market," said Tee Green, President and Chief Executive Officer of Greenway. "Our results for both the fourth quarter and 12 months of our fiscal year demonstrate the successful execution of our growth strategy as we achieve operating and financial efficiencies. We remain encouraged that our award-winning, easy-to-use solutions offered through our flexible PrimeSUITE platform continue to be met enthusiastically among providers who are caring for patients in increasingly diverse settings."

Highlights

• Revenue increased by 24% for the 2012 fourth quarter when compared with the year-ago period.
• Gross profit increased by 27% with gross margin improving by 145 basis points for the fourth quarter from the prior-year period.
• Adjusted EBITDA margin was 16% for the 2012 fourth quarter. Adjusted EBITDA is a non-GAAP measure that is described and reconciled to net income below and is not a substitute for the GAAP equivalent.

Operating Results

Greenway generated record quarterly revenue of $36.4 million for the three months ended June 30, 2012, up 24% from $29.4 million for the three months ended June 30, 2011. For the 12 months ended June 30, 2012, total revenue grew by 38% to an annual record $124.0 million, from $89.8 million for the year-ago period.

Gross profit for the three months ended June 30, 2012, was $21.8 million, which compares with $17.2 million for the three months ended June 30, 2011, a 27% increase. Gross profit margin of 60% for the 2012 fourth quarter was 145 basis points higher than the previous year, largely as a result of revenue growth as well as margin improvement efforts in training and consulting services, support services and electronic data interchange and business services, offset by a decline in system sales margins for the period. This improvement in gross margin included the absorption of increased amortization expense of approximately $1 million related to acquired technology and software development costs in the fourth quarter of 2012. Amortization commences as various projects become available for market. For the 12 months ended June 30, 2012, gross profit was $68.1 million, compared with $49.4 million for the prior-year period. Gross margin for fiscal year 2012 was essentially unchanged, at 55%, from the prior-year period. Gross profit for fiscal 2012 included the absorption of increased amortization expense of approximately $2.5 million.

Operating income was $3.5 million and $4.9 million for the three and 12 months ended June 30, 2012, respectively. This compares to operating income of $4.4 million and $3.8 million for the comparable periods of the prior year.

Greenway earned net income of $2.2 million for the three months ended June 30, 2012, or seven cents per diluted share for the fiscal 2012 fourth quarter. For the three months ended June 30, 2011, Greenway had net income of $2.6 million and a loss available to common shareholders of ($12.6 million), or ($1.09) per share. The Company's results for the 2011 fourth quarter and fiscal year include dividends and accretion related to preferred stock that was converted to common stock in February 2012.

Net income for the 12 months ended June 30, 2012, was $2.9 million, or 11 cents per diluted share. This compares with net income of $33.0 million, which includes a net tax benefit of $29.2 million for fiscal 2011. The Company reported a loss available to common shareholders of ($22.0 million), or ($1.90) per share for fiscal 2011 due to preferred stock accretion and dividends.

As of June 30, 2012, the Company had $34.9 million in cash and short-term investments and no outstanding indebtedness.