MediSolution Ltd.
TSX : MSH

MediSolution Ltd.

November 13, 2008 17:47 ET

MediSolution Announces Results for the Second Quarter

Gain on sale results in net earnings and comprehensive income of $36.1 million

MONTREAL, QUEBEC--(Marketwire - Nov. 13, 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 second quarter ended September 30, 2008.

Second Quarter Highlights

For the quarter ended September 30, 2008, the Corporation reported net earnings and comprehensive income of $36.1 million, comprised of a net loss of $0.9 million from continuing operations before income taxes ($(1.2) million, Q2 fiscal year 2008), and net earnings from discontinued operations before income taxes of $37.0 million from the sale of its HIS business unit.

Improvements in the second quarter of fiscal 2009 as compared to the same period in the prior year include reductions of $0.73 million for Sales & Marketing and General and administrative expenses as well as the successful transition and close of the HIS business unit to Healthvision.

"We have had a very productive 3 months, working hard to communicate our new company focus and value proposition to our customers, shareholders, and employees, said Paul Lepage, President and Chief Executive Officer. "With four focused product suites serving over 300 clients and a strong balance sheet and cash position, we believe that the company is well positioned to provide high value products and services that will help our clients increase operational efficiencies, reduce costs and improve the delivery of services to their customers."

Sale of HIS Business Unit

On August 28th, the Corporation successfully closed the sale of the HIS business unit, including assignment of existing customer and key supplier contracts, transfer of platforms, servers and facilities, and the transition of employees.

About MediSolution

MediSolution (TSX:MSH), a Brookfield Asset Management company, is a leading information technology company, providing enterprise resource planning (ERP) and specialized blood bank software, solutions and services to healthcare and service sector customers across North America. More than 300 healthcare, public and service sector organizations rely on MediSolution's systems to maximize their operational efficiencies, lower their costs and improve the delivery of services. The company's product portfolio is comprised of Financial Management software such as accounts receivable, budgeting and materials management, Business Intelligence solutions as well as Human Capital Management tools and services including human resources management, staff scheduling and payroll processing. The company also provides speciality hemovigilance solutions that improve patient safety, reduce waste and increase efficiency for blood transfusion services.

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



MediSolution Ltd.
Consolidated Statements of Operations and
Comprehensive Income (loss) (unaudited)
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(in thousands of dollars Three months ended Six months ended
except per share data) September 30 September 30
2008 2007 2008 2007
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REVENUE

System sales $940 $1,747 $2,714 $3,558
Support and
processing 3,504 3,439 6,945 6,930
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4,444 5,186 9,659 10,488
Cost of revenue 2,784 2,984 6,284 6,489
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1,660 2,202 3,375 3,999
Sales and
marketing
expenses 633 1,138 1,439 2,249
Software
development
expenses 464 301 859 786
General and
administrative
expenses 915 1,137 1,731 2,300
Restructuring
charges (9) 1 (9) (121)
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Loss before the
undernoted
items: (343) (375) (645) (1,215)

Depreciation of
property and
equipment 75 112 155 234
Amortization of
intangible assets 548 515 1,123 1,034
Interest expense - 19 1 50
Interest income (95) - (95) -
(Gain) loss on
foreign exchange (5) 30 5 103
Loss on settlement
of lawsuit - 112 - 112
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Loss from
continuing
operations
before
income taxes (866) (1,163) (1,834) (2,748)
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Income taxes
recovered (7,113) (3) (7,113) (3)
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Net earning
(loss) from
continuing
operations 6,247 (1,160) 5,279 (2,745)
Net earnings from
discontinued
operations,
net of taxes 29,858 1,068 32,393 2,784
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Net earnings
(loss) and
comprehensive
income (loss) $36,105 $(92) $37,672 $39
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Net earnings
(loss) per
share - basic

From continuing
operations 0.04 (0.01) 0.03 (0.02)
From
discontinued
operations 0.19 0.01 0.21 0.02
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Net earnings
(loss) per
share - basic 0.23 (0.00) 0.24 0.00
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Net earnings (loss)
per share - diluted

From continuing
operations 0.04 (0.01) 0.03 (0.02)
From
discontinued
operations 0.19 0.01 0.21 0.02
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Net earnings
(loss) per
share -
diluted 0.23 (0.00) 0.24 0.00
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Weighted average
number of common
shares
outstanding -
basic 158,283,636 158,282,332 158,282,988 158,087,935
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Weighted average
number of common
shares
outstanding -
diluted 159,493,805 158,282,332 159,054,532 158,087,935
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MediSolution Ltd.
Consolidated Statements of Retained earnings(deficit)
(unaudited)
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Six months ended September 30 (in thousands of dollars) 2008 2007
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Deficit, beginning of period $(1,259) $(1,850)
Net earnings 37,672 39
Interest on share purchase financing - 9
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Retained earnings (deficit), end of period $36,413 $(1,802)
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MediSolution Ltd.
Consolidated Balance Sheets (unaudited)
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As at (in thousands of dollars) September 30, March 31,
2008 2008
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ASSETS

Current Assets
Cash $35,037 $1,404
Accounts receivable and accrued revenue 9,323 7,695
Tax credit receivable 961 660
Inventory 147 161
Sundry deposits and prepaid expenses 931 1,184
Deferred expenses 242 218
Current assets held for sale - 12,906
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46,641 24,228

Property and equipment 474 600
Intangible assets 5,934 6,056
Goodwill 5,022 5,022
Deferred expenses 913 1,373
Other long-term asset 137 162
Long-term assets held for sale - 8,682
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$59,121 $46,123
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LIABILITIES

Current Liabilities
Accounts payable and accrued liabilities 5,767 6,876
Deferred revenue 4,469 5,450
Current liabilities related to assets held for sale - 17,891
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10,236 30,217

Deferred revenue 1,235 2,068
Long-term liabilities related to assets held for sale - 4,001
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11,471 36,286
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SHAREHOLDERS' EQUITY 47,650 9,837
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$59,121 $46,123
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MediSolution Ltd.
Consolidated Statements of Cash Flows (unaudited)
--------------------------------------------------------------------------
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(in thousands of dollars) Three months ended Six months ended
September 30 September 30
2008 2007 2008 2007
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INFLOW (OUTFLOW) RELATED TO THE
FOLLOWING ACTIVITIES

Operating
Net earnings (loss) from
continuing operations $6,247 $(1,160) $ 5,279 $(2,745)
Items not affecting cash:
Depreciation of property and
equipment 75 112 155 234
Amortization of intangible
assets 548 515 1,123 1,034
Stock-based compensation 57 98 139 154
Non-cash portion of
restructuring charges (9) 1 (9) (121)
Changes in non-cash operating
working capital items (3,927) (609) (2,737) 2,164
Change in deferred revenue (491) (1,624) (1,815) (2,975)
Change in deferred expenses 1 264 436 520
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Cash flows from continuing
operations 2,501 (2,403) 2,571 (1,735)
Cash flows from discontinued
operations (3,721) (66) (2,929) 1,685
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(1,220) (2,469) (358) (50)
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Investing

Additions to property and
equipment (21) (119) (29) (178)
Additions to intangible assets,
net of tax credits (469) (559) (1,001) (1,064)
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Cash flows from continuing
operations (490) (678) (1,030) (1,242)
Cash flows from discontinued
operations 35,296 (270) 35,019 (545)
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34,806 (948) 33,989 (1,787)
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Financing

Repayment of share purchase plan
loan - - - 800
Issuance of common shares 2 - 2 136
Interest on share purchase
financing - - - 9
Decrease of short-term loans
Trilon Bancorp - - - (1,999)
Decrease of short-term loans - 2,701 - 2,377
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Cash flows from continuing
operations 2 2,701 2 1,323
Cash flows from discontinued
operations - - - -
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2 2,701 2 1,323
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Increase (decrease) in cash and
cash equivalents 33,588 (716) 33,633 (514)
Cash, beginning of period 1,449 1,058 1,404 856
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Cash, end of period $35,037 $342 $35,037 $342
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Supplemental cash flow
information

Interest paid $- $19 $1 $50
Interest received 94 - 94 -
Income taxes received - 3 - 3
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