PracticeWorks Reports First Quarter 2001 Results

Recurring Revenue Increases 52% Over First Quarter 2000,

EBITDA Improves 63% Over Fourth Quarter 2000.



Apr 17, 2001, 01:00 ET from PracticeWorks, Inc.

    ATLANTA, April 17 /PRNewswire/ -- PracticeWorks, Inc. (Amex:   PRW) reported
 financial results today for the first quarter of 2001.  On March 5, 2001, the
 Company was spun-off from InfoCure Corporation (d/b/a/ VitalWorks) and became
 a public company trading on the American Stock Exchange under the symbol
 "PRW."
 
     First Quarter Highlights
 
     *  Total revenue grew to $11.8 million in the first quarter 2001 from $9.8
        million in the first quarter of 2000, an increase of 20%.  First
        quarter 2001 recurring revenue also increased 52% over the same period
        last year.
 
     *  Total revenue grew to $11.8 million in the first quarter 2001 from
        $10.2 million in the fourth quarter of 2000, an increase of 16%.
 
     *  EBITDA, as adjusted, was ($568,000) in the first quarter of 2001,
        compared with ($1.5) million in the fourth quarter of 2000.
 
     *  Completion of the acquisition of InfoSoft, the practice management
        software division of Dentsply International, adding an additional
        22,000 dentists to the PracticeWorks customer base.
 
     Financial Review
     Revenue - For the three months ended March 31, 2001, total revenue was
 $11.8 million, recurring revenue was $8.2 million and non-recurring revenue
 was $3.6 million as compared to total revenue of $9.8 million, recurring
 revenue of $5.4 million and non-recurring revenue of $4.4 million,
 respectively, for the quarter ended March 31, 2000. Recurring revenue includes
 contractual arrangements for maintenance and support services, subscriptions
 and e-services (electronic data interchange "EDI" transactions and royalties
 and other revenues from e-commerce and other Internet-based services). Non-
 recurring revenue includes one-time sales of licenses and systems and fees for
 training and implementation services.  Declining non-recurring revenue is
 expected as the Company transitions to subscription pricing for substantially
 all its products and services.  Revenue increased primarily as a result of
 increased subscription and maintenance contracts and e-services and includes
 the effect of several small acquisitions completed in mid-2000 as well as the
 recently completed InfoSoft acquisition.
     EBITDA, as adjusted - EBITDA, as adjusted, was ($568,000) in the first
 quarter of 2001 compared with ($650,000) for the quarter ended March 31, 2000.
 EBITDA, as adjusted, means earnings before interest, taxes, depreciation and
 amortization and also excludes restructuring and non-recurring charges and
 preferred stock dividends.  The EBITDA, as adjusted, results for the quarter
 ended March 31, 2001 compare favorably with ($1.5) million in the fourth
 quarter of 2000 and ($3.0) million in the third quarter of 2000, reflecting
 the positive effects of cost savings from the restructuring implemented during
 August of 2000.
     Net loss/EPS available to common stockholders - PracticeWorks reported a
 net loss of ($9.0) million in the first quarter of 2001, or ($1.03) per share,
 compared with a loss of ($3.0) million or ($0.36) per share for the quarter
 ended March 31, 2000 and as compared to a loss of ($12.8) million or ($1.49)
 per share in the fourth quarter of 2000.  Results for the quarter ended March
 31, 2001, include non-recurring charges of approximately $2.4 million related
 primarily to professional fees, printing and similar costs in connection with
 completion of the spin-off from InfoCure offset by a $310,000 reduction in
 restructuring costs.  These restructuring and non-recurring charges aggregate
 approximately $0.24 per share and excluding them would yield a pro forma loss
 per share of ($0.79).
     Richard Perlman, PracticeWork's Chairman said, "We feel these results
 reflect the progress we are making in the implementation of our new business
 model. We are excited about the sequential growth over the fourth quarter as
 subscription and e-service revenue continue to exceed our expectations.
 Additionally, we continue to make considerable improvements in our back office
 operations which are reflected in the significant reduction in our receivable
 days outstanding to approximately 58 days and our improving cash flow."
     Jim Price, PracticeWork's President and CEO, said, "I would like to thank
 everyone within our company for their contribution to achieving these terrific
 results while, at the same time successfully closing our spin-off and the
 InfoSoft acquisition.  As we embark on this new path as an independent company
 I believe we have the market position, infrastructure, and resources in place
 to provide exceptional products and services to our customers and value to our
 shareholders."
     Certain statements in this release, and other written or oral statements
 made by or on behalf of us, are "forward-looking statements" within the
 meaning of the federal securities laws.  Statements regarding future events
 and developments and our future performance, as well as management's
 expectations, beliefs, plans, estimates or projections relating to the future,
 are forward- looking statements within the meaning of these laws.  These
 forward-looking statements are subject to a number of risks and uncertainties.
 Among the important factors that could cause actual results to differ
 materially from those indicated by such forward-looking statements are
 operating PracticeWorks as an independent public company following the spin-
 off from InfoCure Corporation; uncertainties concerning our future capital
 needs and the ability to obtain such capital; possible deferral, delay or
 cancellation by customers of computer system purchase decisions; variations in
 the volume and timing of systems sales and installations; possible delays in
 product development; changing economic, political and regulatory influences on
 the healthcare industry; changes in product pricing policies; general economic
 conditions; and the risk factors detailed from time to time in PracticeWorks'
 periodic reports and registration statements filed with the Securities and
 Exchange Commission, which important factors are incorporated herein by
 reference. Management believes that these forward-looking statements are
 reasonable; however, you should not place undue reliance on such statements.
 These statements are based on current expectations and speak only as of the
 date of such statements.  We undertake no obligation to publicly update or
 revise any forward-looking statement, whether as a result of future events,
 new information or otherwise.
 
     About PracticeWorks, Inc.
     PracticeWorks, Inc. is an information management technology provider for
 dentists, orthodontists and oral and maxillofacial surgeons.  PracticeWorks'
 product offerings include practice management applications, business-to-
 business e-commerce services, electronic data interchange (EDI) services, and
 ongoing maintenance, support and training related to all products.
     PracticeWorks will be hosting a conference call to discuss its first
 quarter results on Wednesday, April 18, 2001, at 8:30 a.m. EDT. This
 conference call will be available at www.vcall.com.
 
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                          (UNAUDITED AND IN THOUSANDS)
 
 
                                                   March 31,       December 31,
                                                      2001               2000
 
     ASSETS
     Current:
       Cash and cash equivalents                     $7,135             $3,979
       Accounts receivable-trade, net                 7,590              8,097
       Other receivables                              1,169                979
       Deferred tax assets                              987              1,147
       Prepaid expenses and other current
        assets                                        1,308              1,080
             Total current assets                    18,189             15,282
       Property and equipment, net                    6,289              4,120
       Goodwill and other intangibles,
        net                                          62,541             43,340
       Deferred tax assets                            4,370              4,029
       Advances to pending acquisition                1,650              1,550
       Other assets                                     320                201
                                                    $93,359            $68,522
 
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable and accrued
        expenses                                     $9,718             $5,807
       Accrued restructuring costs                    1,079              1,839
       Deferred revenue and customer
        deposits                                     10,636              9,753
       Current portion of long-term debt              2,126              1,055
             Total current liabilities               23,559             18,454
     Long-term debt, less current portion            20,031             20,239
             Total liabilities                       43,590             38,693
 
     Convertible redeemable preferred
      stock                                          26,333                ---
 
     Stockholders' equity                            23,436             29,829
 
                                                    $93,359            $68,522
 
 
 
                              PRACTICEWORKS, INC.
                             RESULTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
 
                                                        Three Months Ended
                                                    March 31,         March 31,
                                                      2001              2000
      Revenue:
          Recurring                                  $8,235            $5,427
          Non-recurring                               3,582             4,393
      Total revenue                                  11,817             9,820
 
      Operating costs and expenses:
         Hardware and other items
          purchased for resale                        1,447             1,296
         Selling, general and
          administrative                             10,212             8,520
         Research and development                       726               654
         Restructuring and other non-
          recurring charges                           2,120               778
         Depreciation and amortization                5,314             3,293
         Gain on disposal of fixed assets               ---              (640)
            Total operating costs and
             expenses                                19,819            13,901
 
      Loss from operations                           (8,002)           (4,081)
 
      Interest expense, net                             625               379
 
      Loss before income taxes                       (8,627)           (4,460)
 
      Benefit for income taxes                          ---            (1,502)
 
      Net loss                                       (8,627)           (2,958)
 
      Accrued and accretive dividends on
       preferred stock                                  333               ---
 
      Net loss available to common
       stockholders                                 $(8,960)          $(2,958)
 
      Loss per share available to common
         stockholders  --  basic and
          diluted                                    $(1.03)           $(0.36)
 
      Other financial data:
         EBITDA, as adjusted (a)                      $(568)            $(650)
         Pro forma net loss available to
          common
               stockholders (b)                     $(6,840)          $(2,445)
         Pro forma loss per share
          available to common
               stockholders (b)                      $(0.79)           $(0.30)
 
      Weighted average shares used in
       computing net loss
         and pro forma net loss per share
          available to common
         stockholders                                 8,685             8,193
 
 
     (a) EBITDA, as adjusted, is earnings before interest, taxes, depreciation
         and amortization and also excludes restructuring and other non-
         recurring charges and  preferred stock dividends
     (b) Pro forma net loss available to common stockholders excludes
         restructuring and other non-recurring items
 
 

SOURCE PracticeWorks, Inc.
    ATLANTA, April 17 /PRNewswire/ -- PracticeWorks, Inc. (Amex:   PRW) reported
 financial results today for the first quarter of 2001.  On March 5, 2001, the
 Company was spun-off from InfoCure Corporation (d/b/a/ VitalWorks) and became
 a public company trading on the American Stock Exchange under the symbol
 "PRW."
 
     First Quarter Highlights
 
     *  Total revenue grew to $11.8 million in the first quarter 2001 from $9.8
        million in the first quarter of 2000, an increase of 20%.  First
        quarter 2001 recurring revenue also increased 52% over the same period
        last year.
 
     *  Total revenue grew to $11.8 million in the first quarter 2001 from
        $10.2 million in the fourth quarter of 2000, an increase of 16%.
 
     *  EBITDA, as adjusted, was ($568,000) in the first quarter of 2001,
        compared with ($1.5) million in the fourth quarter of 2000.
 
     *  Completion of the acquisition of InfoSoft, the practice management
        software division of Dentsply International, adding an additional
        22,000 dentists to the PracticeWorks customer base.
 
     Financial Review
     Revenue - For the three months ended March 31, 2001, total revenue was
 $11.8 million, recurring revenue was $8.2 million and non-recurring revenue
 was $3.6 million as compared to total revenue of $9.8 million, recurring
 revenue of $5.4 million and non-recurring revenue of $4.4 million,
 respectively, for the quarter ended March 31, 2000. Recurring revenue includes
 contractual arrangements for maintenance and support services, subscriptions
 and e-services (electronic data interchange "EDI" transactions and royalties
 and other revenues from e-commerce and other Internet-based services). Non-
 recurring revenue includes one-time sales of licenses and systems and fees for
 training and implementation services.  Declining non-recurring revenue is
 expected as the Company transitions to subscription pricing for substantially
 all its products and services.  Revenue increased primarily as a result of
 increased subscription and maintenance contracts and e-services and includes
 the effect of several small acquisitions completed in mid-2000 as well as the
 recently completed InfoSoft acquisition.
     EBITDA, as adjusted - EBITDA, as adjusted, was ($568,000) in the first
 quarter of 2001 compared with ($650,000) for the quarter ended March 31, 2000.
 EBITDA, as adjusted, means earnings before interest, taxes, depreciation and
 amortization and also excludes restructuring and non-recurring charges and
 preferred stock dividends.  The EBITDA, as adjusted, results for the quarter
 ended March 31, 2001 compare favorably with ($1.5) million in the fourth
 quarter of 2000 and ($3.0) million in the third quarter of 2000, reflecting
 the positive effects of cost savings from the restructuring implemented during
 August of 2000.
     Net loss/EPS available to common stockholders - PracticeWorks reported a
 net loss of ($9.0) million in the first quarter of 2001, or ($1.03) per share,
 compared with a loss of ($3.0) million or ($0.36) per share for the quarter
 ended March 31, 2000 and as compared to a loss of ($12.8) million or ($1.49)
 per share in the fourth quarter of 2000.  Results for the quarter ended March
 31, 2001, include non-recurring charges of approximately $2.4 million related
 primarily to professional fees, printing and similar costs in connection with
 completion of the spin-off from InfoCure offset by a $310,000 reduction in
 restructuring costs.  These restructuring and non-recurring charges aggregate
 approximately $0.24 per share and excluding them would yield a pro forma loss
 per share of ($0.79).
     Richard Perlman, PracticeWork's Chairman said, "We feel these results
 reflect the progress we are making in the implementation of our new business
 model. We are excited about the sequential growth over the fourth quarter as
 subscription and e-service revenue continue to exceed our expectations.
 Additionally, we continue to make considerable improvements in our back office
 operations which are reflected in the significant reduction in our receivable
 days outstanding to approximately 58 days and our improving cash flow."
     Jim Price, PracticeWork's President and CEO, said, "I would like to thank
 everyone within our company for their contribution to achieving these terrific
 results while, at the same time successfully closing our spin-off and the
 InfoSoft acquisition.  As we embark on this new path as an independent company
 I believe we have the market position, infrastructure, and resources in place
 to provide exceptional products and services to our customers and value to our
 shareholders."
     Certain statements in this release, and other written or oral statements
 made by or on behalf of us, are "forward-looking statements" within the
 meaning of the federal securities laws.  Statements regarding future events
 and developments and our future performance, as well as management's
 expectations, beliefs, plans, estimates or projections relating to the future,
 are forward- looking statements within the meaning of these laws.  These
 forward-looking statements are subject to a number of risks and uncertainties.
 Among the important factors that could cause actual results to differ
 materially from those indicated by such forward-looking statements are
 operating PracticeWorks as an independent public company following the spin-
 off from InfoCure Corporation; uncertainties concerning our future capital
 needs and the ability to obtain such capital; possible deferral, delay or
 cancellation by customers of computer system purchase decisions; variations in
 the volume and timing of systems sales and installations; possible delays in
 product development; changing economic, political and regulatory influences on
 the healthcare industry; changes in product pricing policies; general economic
 conditions; and the risk factors detailed from time to time in PracticeWorks'
 periodic reports and registration statements filed with the Securities and
 Exchange Commission, which important factors are incorporated herein by
 reference. Management believes that these forward-looking statements are
 reasonable; however, you should not place undue reliance on such statements.
 These statements are based on current expectations and speak only as of the
 date of such statements.  We undertake no obligation to publicly update or
 revise any forward-looking statement, whether as a result of future events,
 new information or otherwise.
 
     About PracticeWorks, Inc.
     PracticeWorks, Inc. is an information management technology provider for
 dentists, orthodontists and oral and maxillofacial surgeons.  PracticeWorks'
 product offerings include practice management applications, business-to-
 business e-commerce services, electronic data interchange (EDI) services, and
 ongoing maintenance, support and training related to all products.
     PracticeWorks will be hosting a conference call to discuss its first
 quarter results on Wednesday, April 18, 2001, at 8:30 a.m. EDT. This
 conference call will be available at www.vcall.com.
 
 
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                          (UNAUDITED AND IN THOUSANDS)
 
 
                                                   March 31,       December 31,
                                                      2001               2000
 
     ASSETS
     Current:
       Cash and cash equivalents                     $7,135             $3,979
       Accounts receivable-trade, net                 7,590              8,097
       Other receivables                              1,169                979
       Deferred tax assets                              987              1,147
       Prepaid expenses and other current
        assets                                        1,308              1,080
             Total current assets                    18,189             15,282
       Property and equipment, net                    6,289              4,120
       Goodwill and other intangibles,
        net                                          62,541             43,340
       Deferred tax assets                            4,370              4,029
       Advances to pending acquisition                1,650              1,550
       Other assets                                     320                201
                                                    $93,359            $68,522
 
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
       Accounts payable and accrued
        expenses                                     $9,718             $5,807
       Accrued restructuring costs                    1,079              1,839
       Deferred revenue and customer
        deposits                                     10,636              9,753
       Current portion of long-term debt              2,126              1,055
             Total current liabilities               23,559             18,454
     Long-term debt, less current portion            20,031             20,239
             Total liabilities                       43,590             38,693
 
     Convertible redeemable preferred
      stock                                          26,333                ---
 
     Stockholders' equity                            23,436             29,829
 
                                                    $93,359            $68,522
 
 
 
                              PRACTICEWORKS, INC.
                             RESULTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
 
                                                        Three Months Ended
                                                    March 31,         March 31,
                                                      2001              2000
      Revenue:
          Recurring                                  $8,235            $5,427
          Non-recurring                               3,582             4,393
      Total revenue                                  11,817             9,820
 
      Operating costs and expenses:
         Hardware and other items
          purchased for resale                        1,447             1,296
         Selling, general and
          administrative                             10,212             8,520
         Research and development                       726               654
         Restructuring and other non-
          recurring charges                           2,120               778
         Depreciation and amortization                5,314             3,293
         Gain on disposal of fixed assets               ---              (640)
            Total operating costs and
             expenses                                19,819            13,901
 
      Loss from operations                           (8,002)           (4,081)
 
      Interest expense, net                             625               379
 
      Loss before income taxes                       (8,627)           (4,460)
 
      Benefit for income taxes                          ---            (1,502)
 
      Net loss                                       (8,627)           (2,958)
 
      Accrued and accretive dividends on
       preferred stock                                  333               ---
 
      Net loss available to common
       stockholders                                 $(8,960)          $(2,958)
 
      Loss per share available to common
         stockholders  --  basic and
          diluted                                    $(1.03)           $(0.36)
 
      Other financial data:
         EBITDA, as adjusted (a)                      $(568)            $(650)
         Pro forma net loss available to
          common
               stockholders (b)                     $(6,840)          $(2,445)
         Pro forma loss per share
          available to common
               stockholders (b)                      $(0.79)           $(0.30)
 
      Weighted average shares used in
       computing net loss
         and pro forma net loss per share
          available to common
         stockholders                                 8,685             8,193
 
 
     (a) EBITDA, as adjusted, is earnings before interest, taxes, depreciation
         and amortization and also excludes restructuring and other non-
         recurring charges and  preferred stock dividends
     (b) Pro forma net loss available to common stockholders excludes
         restructuring and other non-recurring items
 
 SOURCE  PracticeWorks, Inc.