MediSolution Ltd.
TSX : MSH

MediSolution Ltd.

June 10, 2008 18:43 ET

MediSolution Announces Annual Results for Year Ended March 31, 2008

Reports Net Earnings of $0.6 million and EBITDA(1) of $4.9 million

MONTREAL, QUEBEC--(Marketwire - June 10, 2008) - MediSolution Ltd. (TSX:MSH), a Brookfield Asset Management company and a leading healthcare and service sector information technology company, today announced its results for the fourth quarter and year-ended March 31, 2008.

Full Year Results

In fiscal 2008, MediSolution achieved a 4% increase in total revenue to $47.6 million from $45.6 million in fiscal 2007. These results are attributed to a 24% increase in new system revenue to $17.6 million from $14.2 million in the prior year. EBITDA1 was $4.9 million in fiscal 2008, which represented a 16% increase over the $4.2 million achieved in the same period in the prior year. Additionally, the Corporation achieved an 8% reduction in indirect costs totaling $1.3 million. Indirect costs include Sales & Marketing, General & Administrative, Software Development, and restructuring charges.




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Years ended March 31 (in millions $) 2008 2007
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System sales $17.60 $14.18
Support and processing 30.02 31.46
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Total Revenues 47.62 45.64

Cost of revenues 27.74 25.13
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Gross profit 19.88 20.51

Sales and marketing expenses 7.26 7.66
Software development expenses 1.62 2.03
General and administrative expenses 6.12 6.61

EBITDA 4.88 4.21

Depreciation of property and equipment 0.53 0.62
Amortization of intangible assets 3.33 3.17
Interest expense 0.23 0.30
Loss on foreign exchange 0.10 0.03
Loss on settlement of lawsuit 0.11 -
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Earnings before income taxes $0.58 $0.09
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Income taxes recovered - (0.09)
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Net earnings $0.58 $0.18
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The Corporation also delivered strong results across its two major segments in fiscal 2008 as compared to the same period in the prior year:

"Total Healthcare Information Systems revenue increased by $1.7 million or 7% in fiscal 2008 with an increase of 16% in new system revenue to $10.7 million;

"Total Resource Management revenue remained flat, however efficiency improved significantly with a 12% increase in gross margins, a 40% increase in new system revenue to $6.9 million, and a 225% increase in EBITDA1 to $3.0 million ($0.9 million in fiscal 2007).





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Years ended March 31 (in millions $) 2008 2007
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Total Revenue
Healthcare Information Systems $26.54 $ 24.87
Resource Management Systems 21.08 20.77
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47.62 45.64

Gross Profit
Healthcare Information Systems 10.33 11.99
Resource Management Systems 9.55 8.52
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19.88 20.51

Earnings before the undernoted items
Healthcare Information Systems 1.91 3.29
Resource Management Systems 2.97 0.92
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EBITDA 4.88 4.21

Depreciation of property and equipment 0.53 0.62
Amortization of intangible assets 3.33 3.17
Interest expense 0.23 0.30
Loss on foreign exchange 0.10 0.03
Loss on settlement of lawsuit 0.11 -
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Earnings before income taxes $0.58 $0.09
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Income taxes recovered - (0.09)
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Net earnings $0.58 $0.18
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"I'm proud of our achievements in fiscal 2008 having delivered on our commitments to improve the fundamentals of our business", said Paul Lepage, President and Chief Executive Officer. "We recognize that there is still work to do, and we will continue to focus on driving shareholder value through our strategic decisions, and focus on execution".

Fourth Quarter Highlights

For the quarter ended March 31, 2008, the Corporation reported net earnings of $0.9 million, compared to net earnings of $1.9 million in the same period in fiscal 2007.

Overall, new systems revenue in the fourth quarter of fiscal 2008 remained flat as compared to the same quarter in the prior year, totaling $5.0 million ($5.0 million, Q4 fiscal year 2007). Consolidated revenue in the fourth quarter of fiscal 2008 decreased by 9% as compared to the same quarter in the prior year, totaling $13.4 million ($14.7 million, Q4 fiscal year 2007), primarily due to a decrease in payroll revenue as fiscal 2007 benefitted from a $1.7 million one-time gain on retroactive payroll processing for our Quebec healthcare customers.

The Corporation's EBITDA1 decreased by $1.0 million to $1.9 million before interest, taxes, depreciation, amortization and gain on foreign exchange, reported in the same quarter in the prior year.




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Three months ended March 31 (in millions $) 2008 2007
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System sales $5.04 $5.01
Support and processing 8.34 9.68
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Total Revenues 13.38 14.69

Cost of revenues 7.01 7.18
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Gross profit 6.37 7.51

Sales and marketing expenses 1.98 2.04
Software development expenses 0.18 0.53
General and administrative expenses 2.31 2.08

EBITDA 1.90 2.86

Depreciation of property and equipment 0.12 0.16
Amortization of intangible assets 0.86 0.78
Interest expense 0.11 0.13
Loss (gain) on foreign exchange (0.04) 0.02
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Earnings before income taxes $0.85 $1.77
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Income taxes recovered - (0.09)
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Net earnings $0.85 $1.86
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About MediSolution

MediSolution (TSX:MSH), a Brookfield Asset Management company, is a leading healthcare and public sector information technology company, providing software, solutions and services to customers across North America. More than 500 hospitals and other healthcare facilities and close to 200 public sector and related organizations rely on MediSolution's systems to maximize their operational efficiencies, lower their costs, and improve the delivery of services. MediSolution has two operating segments. The Resource Management Systems segment is comprised of Financial Management software such as accounts receivable, budgeting and materials management as well as Human Capital Management tools including human resource management, staff scheduling and payroll processing. The Healthcare Information Systems segment is comprised of clinical solutions such as patient tracking, electronic patient health records, pharmacy, radiology and laboratory software for healthcare organizations.

For more information, visit www.medisolution.com.

This press release contains "forward-looking statements" regarding MediSolution. The words "believe", "expect", "anticipate", "intend", "estimate" and other expressions which are predictions of or indicate future events and trends and which do not relate to historical matters identify forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements because they involve known an unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.

(1) "EBITDA" (earnings before interest expense, income taxes, depreciation of property and equipment, amortization of intangible assets, loss(gain) on foreign exchange and loss on settlement of lawsuit) does not have a standardized meaning prescribed by Canadian Generally Accepted Accounting Principles (GAAP) and may not be comparable to similar measures presented by other publicly traded companies. We use EBITDA amongst other measures, to assess the operating performance of our business.




MediSolution Ltd.
Consolidated Balance Sheets (unaudited)

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As at March 31 (in thousands of dollars) 2008 2007
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ASSETS

Current Assets
Cash $1,404 $856
Accounts receivable and accrued revenue 20,127 21,178
Tax credit receivable 660 640
Inventory 452 507
Sundry deposits and prepaid expenses 1,351 1,071
Deferred expenses 234 91
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24,228 24,343

Property and equipment 890 1,151
Intangible assets 8,937 8,808
Goodwill 8,340 8,340
Deferred expenses 3,566 3,537
Other long-term asset 162 -
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$46,123 $46,179
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LIABILITIES

Current Liabilities
Short-term loans $- $2,323
Accounts payable and accrued liabilities 10,739 10,694
Deferred revenue 19,478 18,899
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30,217 31,916

Deferred revenue 6,069 6,267
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36,286 38,183
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Contingencies and commitments

SHAREHOLDERS' EQUITY 9,837 7,996

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$46,123 $46,179
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MediSolution Ltd.
Consolidated Statements of Operations and Comprehensive Income (unaudited)

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Years ended March 31
(in thousands of dollars except share amounts) 2008 2007
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REVENUE
System sales $17,601 $14,182
Support and processing 30,016 31,455
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47,617 45,637
Cost of revenue 27,735 25,123
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Gross profit 19,882 20,514

Sales and marketing expenses 7,265 7,660
Software development expenses 1,618 2,034
General and administrative expenses 6,237 6,290
Restructuring charges (116) 324
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Earnings before the undernoted items 4,878 4,206

Depreciation of property and equipment 532 618
Amortization of intangible assets 3,332 3,166
Interest expense 228 299
Loss on foreign exchange 95 35
Loss on settlement of lawsuit 112 -
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Earnings before income tax $579 $88
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Income tax recovered (3) (94)
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Net earnings and comprehensive income $582 $182
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Net earning per share -- basic and fully
diluted 0.00 0.00
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Weighted average number of common shares
outstanding 158,185,133 157,513,506
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MediSolution Ltd.
Consolidated Statements of Deficit (unaudited)

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Years ended March 31 (in thousands of dollars) 2008 2007
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Deficit, beginning of year $(1,850) $(2,080)
Net earnings 582 182
Interest on share purchase financing 9 48
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Deficit, end of year $(1,259) $(1,850)
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MediSolution Ltd.
Consolidated Statements of Cash Flows (unaudited)

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Years ended March 31 (in thousands of dollars) 2008 2007
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INFLOW (OUTFLOW) RELATED TO THE FOLLOWING ACTIVITIES

Operating
Net earnings $582 $182
Items not affecting cash:
Depreciation of property and equipment 532 618
Amortization of intangible assets 3,332 3,166
Stock-based compensation 314 335
Loss on disposal of property and equipment 7 -
Non-cash portion of restructuring charges (116) 311
Changes in non-cash operating working capital items 805 (36)
Change in deferred revenue 381 783
Change in deferred expenses (172) (1,462)
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5,665 3,897
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Investing
Additions to property and equipment (278) (604)
Additions to intangible assets, net of tax credits (3,461) (3,363)
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(3,739) (3,967)
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Financing
Decrease of short-term loans Trilon (1,999) (305)
Increase (decrease) of short-term loans (324) 165
Share purchase plan loan 800 -
Issuance of common shares 136 52
Interest on share purchase financing 9 48
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(1,378) (40)
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Increase (decrease) in cash and cash equivalents 548 (110)
Cash, beginning of year 856 966
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Cash, end of year $1,404 $856
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Supplemental cash flow information

Interest paid $228 $299
Income taxes received $3 $-
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