<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest Event reported): January 18, 2000
CITATION COMPUTER SYSTEMS, INC.(R)
(Exact name of registrant as specified in its charter)
MISSOURI 0-20284 43-1174397
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
424 S. WOODS MILL ROAD, SUITE 200, ST. LOUIS, MISSOURI 63017
(Address of principal executive offices, Zip Code)
Registrant's telephone number, including area code: (314) 579-7900
NOT APPLICABLE
(Former name or former address, if changed since last report.)
Form 8-K Page 1
CITATION Computer Systems, Inc.(R)
<PAGE> 2
ITEM 5. OTHER EVENTS
On January 18, 2000, Registrant issued a Press Release, a copy of which
is included herein as Exhibit 99(a), announcing CITATION Computer Systems'
financial results for the third quarter and nine months ended December 31, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL AND EXHIBITS
(C) Exhibits
99(a) Press release of the company, dated January 18, 2000
Form 8-K Page 2
CITATION Computer Systems, Inc.(R)
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITATION Computer Systems, Inc.(R)
By: /s/ Richard D. Neece
---------------------------------
Richard D. Neece, President
Date: January 18, 2000
Form 8-K Page 3
CITATION Computer Systems, Inc.(R)
<PAGE> 4
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99(a) Text of Press Release, dated January 18, 2000 issued by
CITATION Computer Systems, Inc.(R)
Form 8-K Page 4
CITATION Computer Systems, Inc.(R)
<PAGE> 1
Exhibit 99(a)
[CITATION LOGO]
NASDAQ: CITA
AT THE COMPANY: AT FRB:
Richard Neece Tony Ebersole (general) (312) 640-6728 [email protected]
President Leslie Loyet (analysts)(312) 640-6672 [email protected]
(314) 579-7900 Laura Kuhlmann (media) (312) 266-2239 [email protected]
FOR IMMEDIATE RELEASE
TUESDAY, JANUARY 18, 2000
CITATION COMPUTER SYSTEMS REPORTS
THIRD QUARTER RESULTS
CITATION COMPUTER SYSTEMS HIGHLIGHTS
- - Third quarter revenues of $3.7 million
- - Net income of $0.02 per share
- - Continued strong cash flow during quarter with ongoing debt reduction,
increasing R&D
- - First nine months net income up 30% from year-earlier
period
- - Strong anticipated fourth quarter expected to drive 10% to 12% fiscal year
revenue growth
ST. LOUIS, JANUARY 18, 2000--CITATION COMPUTER SYSTEMS, INC. (NASDAQ: CITA), a
provider of clinical and managed care information systems to the healthcare
industry, today reported its third quarter results. The company also reported
that with the resolution of Y2K uncertainties in the marketplace, it expects
accelerated fourth quarter revenues and earnings in its current fiscal year,
with annual revenue growth of between 10 and 12 percent.
For the third quarter ended December 31, 1999, the company reported net income
of $66,000, or $0.02 per share, on revenues of $3.7 million, compared to net
income of $194,000, or $0.05 per share, on revenues of almost $4.0 million
during the same period last year. For the nine-month period ending December 31,
the company reported net income of $311,000, or $0.08 per share, on revenues of
$12.4 million, compared to net income of $236,000, or $0.06 per share, on
revenues of $11.5 million. Cash flow from operations in the recent nine-month
period was approximately $1.6 million. For the third quarter, recurring service
revenues, representing ongoing service contracts with existing clients, were
$1.8 million, or 48 percent of total revenues.
MORE...
Form 8-K
CITATION Computer Systems, Inc.(R)
<PAGE> 2
Exhibit 99(a)
CITATION COMPUTER SYSTEMS, INC.
ADD 1
"While we continue to experience a strong pipeline of new business, the
anticipation of Y2K held down spending by potential customers in the recent
quarter. However, our revenues from existing clients, which included Y2K
upgrades, were very strong. Now that our clients and customers are freed from
these concerns, we expect sales to meet or exceed revenue and earnings targets
in the fourth quarter," said J. Robert Copper, chairman and chief executive
officer.
"As we look to increased sales, we expect our bottom line to improve
correspondingly, as we continue to hold the line on our fixed costs. Our gross
profit margin increased three percent in the quarter from the prior year's third
quarter, to 56 percent of revenues, due to a lower proportion of hardware
revenues and our disciplined approach to cost containment. Meanwhile, our cash
flow remains strong. This has allowed us to not only reduce our bank line by
more than half since the beginning of our fiscal year, but we have also
significantly reinvested in product upgrades, which will be key to driving
future growth," Copper added.
The company continued to increase its R&D spending during the quarter, to 19
percent of total revenue, up from 13 percent in the third quarter a year ago, as
it upgrades systems, most recently its Microbiology software system.
The company expects to maintain these higher R&D levels into the near future.
MULTIPLE PRODUCT SALES EXPECTED TO DRIVE FUTURE GROWTH
Driven by CITATION's unique C-COM(R) information system, which has the ability
to pull together and integrate existing hospital clinical systems into a unified
network, the company expects to increase revenue growth through its strategy of
multiple product sales to larger hospital systems and clinics. The company has
built momentum this fiscal year in both expanding sales to its existing customer
base while addressing the clinical information needs of interconnected
healthcare systems in a given region. CITATION's customers often look to C-COM's
unique ability to link multiple sites into existing systems. In addition,
CITATION anticipates continued sales gains through purchases by large hospitals,
hospital systems or large clinics of multiple systems, such as C-COM, C-LAB(R),
C-RIS(R), and Anatomical Pathology.
The company's C-COM software system provides doctors and nurses the ability to
communicate with clinical systems, order tests and receive test results, as well
as store and retrieve clinical and insurance information necessary for
reimbursement. In addition, C-COM's ability to enable other systems to do
business over the Internet is becoming a very attractive sales vehicle, as
healthcare enterprises look more and more to the Web to deliver both information
and services. C-LAB is a complete information management system, which enables
the collection of data for all laboratory sites and instruments, organizes the
data, and reports it back to healthcare professionals.
MORE...
Form 8-K
CITATION Computer Systems, Inc.(R)
<PAGE> 3
EXHIBIT 99 (a)
CITATION COMPUTER SYSTEMS, INC.
ADD 2
EXPANDING HIGHER-MARGIN SALES EFFORT INTO GROWING MARKETS
"For the remainder of this current fiscal year and into the next, we are
expanding our sales efforts into the full spectrum of hospitals, hospital
systems and clinics," said Copper. "This includes small, mid-size and large
hospitals, and clinics associated with hospitals and independent clinics tied to
various HMOs. Our recent contract wins give us a high level of confidence of
both the increasing demand for integrated systems and CITATION's unique ability
to deliver more efficiently to the clinical data repository market. This is a
market that is expected to grow by an estimated $54 million this coming year.
"As we look to complete this current fiscal year with as much as 10 to 12
percent revenue growth, we are looking to drive future revenues into the 20
percent range. With our established business model, which enables us to hold the
line on fixed costs, increase R&D investment, and generate strong cash flow, we
would expect to see additional improvement in our bottom line," Copper added.
CITATION Computer Systems, Inc. is a provider of client/server clinical and
managed care information systems for the healthcare enterprise. CITATION's
clinical and managed care systems are found in approximately 300 healthcare
facilities throughout the United States, Canada, the United Kingdom, Ireland,
Asia-Pacific, and other countries. CITATION is headquartered in St. Louis,
Missouri. C-COM, C-LAB, and C-RIS are registered trademarks of CITATION.
Certain forward-looking statements are included in this news release that
involve risks and uncertainties. The words "believes," "anticipates," "expects"
and similar expressions are intended to identify forward-looking statements.
Actual results could be materially different as a result of various
possibilities, including difficulties or delays in the introduction of new
products or the revision of existing products, significant changes in healthcare
regulation, economic downturns in any of the Company's markets, competitors, or
various other factors discussed in Company filings with the Securities and
Exchange Commission.
FOR MORE INFORMATION ON CITATION COMPUTER SYSTEMS, INC. VIA FACSIMILE AT NO
COST, SIMPLY DIAL 1-800-PRO-INFO AND ENTER THE COMPANY SYMBOL CITA,
OR VISIT CITATION'S WEB SITE AT WWW.CITA.COM
- FINANCIAL TABLES TO FOLLOW -
MORE...
Form 8-K
CITATION Computer Systems, Inc.(R)
<PAGE> 4
Exhibit 99(a)
CITATION COMPUTER SYSTEMS, INC.
ADD 3
CITATION COMPUTER SYSTEMS, INC.
CONDENSED SUMMARY OF OPERATIONS - UNAUDITED
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended NINE MONTHS ENDED
12/31/99 12/31/98 12/31/99 12/31/98
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net system sales and service revenues:
System sales $ 1,945 $ 2,177 $ 7,199 $ 5,864
Service revenue 1,764 1,798 5,160 5,632
------ ------ ------ ------
Total revenues 3,709 3,975 12,359 11,496
------ ------ ------ ------
Cost of products and services sold:
System costs 1,216 1,406 4,942 3,970
Service costs 403 424 1,203 1,390
------ ------ ------ ------
Total cost of products and services sold 1,619 1,830 6,145 5,360
------ ------ ------ ------
Gross profit 2,090 2,145 6,214 6,136
Research and development 697 506 1,847 1,777
Selling and administrative expense 1,269 1,301 3,781 3,900
Loss on sale of financial systems business - - - 70
------ ------ ------ ------
Operating income 124 338 586 389
Other income (expense), net (14) (20) (68) (2)
------ ------ ------ ------
Income before income taxes 110 318 518 387
Provision for income taxes 44 124 207 151
------ ------ ------ ------
Net income $ 66 $ 194 $ 311 $ 236
====== ====== ====== ======
Net income per share - basic and diluted $ 0.02 $ 0.05 $ 0.08 $ 0.06
------ ------ ------ ------
Weighted average shares outstanding
Basic 3,848 3,832 3,845 3,819
====== ====== ====== ======
Diluted 3,857 3,832 3,851 3,838
====== ====== ====== ======
</TABLE>
MORE...
Form 8-K
CITATION Computer Systems, Inc.(R)
<PAGE> 5
Exhibit 99(a)
CITATION COMPUTER SYSTEMS, INC.
ADD 4
CITATION COMPUTER SYSTEMS, INC.
CONDENSED BALANCE SHEET
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
(Unaudited) (Audited)
December 31, March 31,
1999 1999
---- ----
<S> <C> <C>
Assets:
Current Assets:
Cash and cash equivalents $ 254 $ 204
Accounts Receivable:
Trade, net 6,501 6,857
Other 453 445
Inventories 430 348
Prepaid expenses and other current assets 209 369
Deferred tax asset 142 142
------ ------
Total current assets 7,989 8,365
Software development costs, net 1,495 1,775
Property and equipment, net 499 699
Long-term accounts receivable 1,519 1,569
Long-term deferred tax assets 902 1,104
Other assets 274 366
------ ------
Total assets $ 12,678 $ 13,878
====== ======
Liabilities and shareholders' equity:
Current Liabilities:
Current portion of long-term debt $ 189 $ 239
Accounts payable 506 1,223
Customer deposits 183 236
Accrued bonuses and commissions 209 139
Other accrued liabilities 212 211
Deferred service revenue 2,416 2,521
------ ------
Total current liabilities 3,715 4,569
------ ------
Long-term debt 767 1,491
------ ------
Common stock 387 384
Paid-in capital 6,660 6,596
Retained earnings 1,149 838
------ ------
8,196 7,818
------ ------
Total liabilities and shareholders' equity $ 12,678 $ 13,878
====== ======
</TABLE>
-30-
Form 8-K
CITATION Computer Systems, Inc.(R)
