UNITED STATES 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: September 3, 1998
MEDPLUS, INC.
(Exact name of registrant as specified in its charter)
Ohio Z - 24196 48-1094982
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation or
organization)
8805 Governor's Hill Drive, Suite 100
Cincinnati, OH 45249
(Address of principal executive offices)
(513) 583-0500
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events. On September 3, 1998, the registrant
issued the attached press release announcing (a) its plans to
further refine and promote its strategy of integrating the
capabilities of each of its individual business units to provide
process automation for its customers, (b) the proposed private
combination of 11 value-added design automation companies and (c)
operating results for the second quarter ended July 31, 1998.
Item 7. Exhibits
(c) Exhibits
99 Press release dated September 3, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
MEDPLUS, INC.
Date: September 3, 1998 By:/s/ Daniel A. Silber
Daniel A. Silber
Chief Financial Officer
Exhibit 99
FOR IMMEDIATE RELEASE CONTACT: Philip S. Present II
Chief Operating Officer
(513) 583-0500
MEDPLUS[R]ADDRESSES SALES STRATEGY AND ANNOUNCES
ACQUISITION PLAN FOR SYNERGIS TECHNOLOGIES[tm]
AND SECOND QUARTER OPERATING RESULTS
CINCINNATI, SEPTEMBER 3, 1998 -- MedPlus, Inc. (NASDAQ:MEDP)
MedPlus announced today its plans to further refine and promote
its strategy of integrating the capabilities of each of its
individual business units to provide process automation for its
customers. In addition, MedPlus announced the proposed private
combination of 11 value-added design automation companies and
operating results for the second quarter ended July 31, 1998.
Since its acquisition of Universal Document Management Systems,
Inc. (UDMS) in late 1995, MedPlus has been developing a corporate
structure that allows it to take advantage of growth in a broad
range of technology markets. With its subsequent acquisition of
FutureCORE[R], Inc. and its investment in DiaLogos[tm]
Incorporated, both in 1996, MedPlus has evolved into an entity
comprising individual divisions, each of which focuses on various
elements of process analysis and redesign, document management,
workflow, system integration and technology education. Because
the company believes its customers are seeking comprehensive
process solutions, rather than simply one new technology, its
strategy has been to capitalize on each of these various elements
by combining them as needed by individual customers. By
effectively promoting and marketing its products and services in
accordance with this strategy, the company believes it will be
able to tap into multiple vertical markets that have significant
potential for growth.
"We believe the integration of the capabilities of each of our
individual business units to provide process automation for our
customers has already proven successful," said Richard A. Mahoney,
president and CEO of MedPlus. "The new laboratory initiative
being provided for Quest Diagnostics Incorporated, one of the
nation's largest reference laboratories, combines process
engineering, imaging workflow and systems integration into one,
integrated solution." (The company announced its relationship
with Quest in a separate release today). Mahoney further noted
that "the company also combined its expertise in the areas of
process engineering, imaging and workflow for the specimen and
medication management solution provided for Becton Dickinson &
Company, a world-leading supplier of sample collection products.
The Quest and Becton Dickinson contracts represent the two largest
transactions in the company's history."
The company currently comprises four separate business units:
Data Management Division
DiaLogos Incorporated
UDMS
FutureCORE
The Data Management Division includes the ChartMaxx[tm]
Enterprise-wide Patient Record System ("ChartMaxx") and the
OptiMaxx[R] Document Management System ("OptiMaxx") and will
oversee the new, combined imaging and workflow solution developed
for Quest and other laboratories. ChartMaxx now has 20 customers
and its relationship with Quorum Health Resources, Inc. is
continuing to yield substantial ChartMaxx opportunities. ChartMaxx
has successfully integrated with a variety of hospital information
systems such as HBOC, MEDITECH and IDX. (Major ChartMaxx
contracts include Children's Hospital of Philadelphia, Catawba
Memorial Hospital in Hickory, North Carolina, Akron General
Hospital and Lourdes Hospital in Paducah, Kentucky). OptiMaxx has
been installed in more than 100 health care facilities nationwide.
DiaLogos is a software company with an emphasis on developing and
delivering distributed systems and distributed systems education.
It has quickly established itself as a leading independent CORBA
and Java educator. The company serves as the CORBA educator for
internal developers at Oracle Corporation and recently announced a
licensing agreement with Sun Microsystems, Inc. to develop
enterprise-wide legacy integration solutions built with Java
technologies.
UDMS is a developer and integrator of workflow products and has
commanded a strong presence in the workflow and document
management marketplace with its Step2000[R] product. Its Fortune
500 clients include Mercedes-Benz, Marathon Oil, Boeing North
American, Inc. (formerly Rockwell International Space Systems
Division), British Airways, PPG Industries, Abbott Laboratories
(Diagnostic Division) and many others.
FutureCORE is a consulting and integration services firm
specializing in process analysis and improvement. Clients include
University of Pennsylvania Health System in Philadelphia, Erlanger
Health System in Chattanooga, Tennessee and Utah Valley Regional
Medical Center in Provo, Utah.
The company plans to incorporate Synergis Technologies, Inc. into
its process automation strategy as a fifth business unit. Synergis
is a company that will be dedicated to the design automation
software and services business. Specifically, Synergis is a
wholly-owned subsidiary of MedPlus formed to acquire a number of
value-added resellers (VARs) in the design automation field.
Synergis plans to acquire the VARs that were initially to be
acquired by UDMS in anticipation of UDMS' initial public offering
(IPO) as previously announced by the company. Because the company
believes that UDMS will be more effective as an individual
component of its strategy to provide process automation to its
customers, the company created "Synergis Acquisition, Inc." (to be
renamed "Synergis Technologies, Inc.") to acquire the VARs and
conduct an initial public offering of its common stock.
In light of the current condition of the stock market, however,
the company has decided to postpone the IPO, which was to be
completed before the end of the year concurrently with Synergis'
acquisition of 11 VARs. MedPlus and Synergis are now actively
pursuing a number of private financing sources to enable Synergis
to acquire the VARs privately, prior to any IPO. The company
anticipates completing the acquisitions in the next two months.
When more favorable market conditions permit, Synergis intends to
resume the IPO process.
"We are excited about our involvement in establishing what we
believe will be the largest independent VAR of desktop design
automation and services in the United States," Mahoney said.
"Synergis has an exceptional management team led by Terry Theye
and Tom McLean, both of whom have extensive experience in the
computer and software industry with proven success in marketing
technology to the business sector. By consolidating resellers
under one organization, Synergis will be able to offer customers a
single, national source for a complete solution, including
software, software technical support and implementation services."
Revenues for the three months ended July 31, 1998 were $1,843,429
as compared to $3,049,527 for the three months ended July 31,
1997. The net loss for the period was $2,608,004 or $.42 per
share as compared to a loss of $203,066 or $.03 per share for the
three months ended July 31, 1997. The decrease in revenues
resulted from fewer systems sales offset by higher consulting and
service revenues in the three months ended July 31, 1998 as
compared to the comparable period of 1997. The increase in the
net loss for the three months ended July 31, 1998 arose from lower
revenues, lower than expected utilization of implementation and
service personnel, and increased investments in sales and
marketing and research and development for ChartMaxx and DiaLogos.
Also included in the 1998 second quarter results were $307,292 of
management costs and $139,143 of accounting and legal fees
associated with the acquisition and offering efforts of Synergis
and approximately $160,000 of severance costs. The financial
results for the current period include ChartMaxx, OptiMaxx,
FutureCORE, UDMS and DiaLogos in which a majority interest was
acquired on January 31, 1998.
Revenues for the six months ended July 31, 1998 were $3,776,780 as
compared to $4,462,646 for the comparable period of 1997. The net
loss for the period was $4,353,978 or $.71 per share as compared
to a loss of $1,631,454 or $.28 per share for the six months ended
July 31, 1997. Included in the 1998 results were $686,253 of
management costs and $139,143 of legal and accounting fees
associated with the acquisition and offering efforts of Synergis.
"As a result of recently executed contracts and agreements
currently being negotiated, we expect to see in the next two
quarters a substantial improvement over the most recent quarter in
our operating results," said Mahoney. "We believe our agreement
with Quest validates our current business strategy. We are
extremely excited about deploying our process automation strategy
in multiple vertical markets and believe we are gaining broad
acceptance in the areas of imaging, workflow, systems integration
and process design consulting. In addition, as previously
announced, the company continues to investigate ways to enhance
and maximize shareholder value."
MedPlus notes that many of the statements made herein are forward-
looking statements. As such, factors may occur which could cause
actual events to differ materially from those anticipated in these
statements. For example, although the company believes it is in
the best long-term interests of the company and its shareholders
to continue with its process automation strategy, there can be no
guarantee that such a strategy will result in increased revenue or
profits for the company. Specifically, if the company does not
allocate its resources effectively, it may not properly focus its
efforts where needed to take advantage of certain vertical
markets. Too, although the company has recently entered into
long-term relationships that the company anticipates will result
in significant revenue during the next two quarters, there can be
no guarantee as to the timing of the revenues that may result from
these relationships. In addition, the company is constantly
negotiating relationships with potential customers, however there
can be no assurance that such relationships will result in revenue
in the immediate future due to factors beyond the company's
control, such as each potential customer's financial condition
and/or the time frame in which it may receive contract approval.
It has been the company's experience that even those contracts on
the verge of execution may not be executed for months to come.
In addition, although the company plans to include Synergis as a
business unit, not all 11 VARs to be acquired have agreed to the
terms of private acquisitions without an immediate IPO. Moreover,
there can be no guarantee that more favorable market conditions
will present themselves in time to allow an IPO to provide
operational capital that may be needed by Synergis so that it
becomes and remains a successful entity. Furthermore, the company
is currently negotiating to obtain private financing but there can
be no assurance at this time that such financing will be obtained.
MedPlus is a publicly traded (NASDAQ:MEDP), Cincinnati-based
company that develops, sells and supports software and service
solutions to address the needs of a variety of organizations.
Offerings include electronic patient records systems, optical
document management systems, object-oriented workflow and document
management systems, distributed object computing technology and
training, design automation software and services, and hospital,
reference laboratory and physician office productivity consulting.
For more information, visit the company's Web site at
http://www.medplus.com.
###
<TABLE>
MedPlus, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
<CAPTION>
Three Months Three Months Six Months Six Months
Ended Ended Ended Ended
July 31, July 31, July 31, July 31,
1998 (a) 1997 (a) 1998 (a) 1997 (a)
_____________ _____________ ______________ _____________
<S> <C> <C> <C> <C>
Revenues (b) $ 1,843,429 3,049,527 3,776,780 4,462,646
Cost of revenues 1,645,542 1,765,872 3,028,454 2,839,362
_____________ _____________ ______________ _____________
Gross profit 197,887 1,283,655 748,326 1,623,284
Operating expenses:
Sales and marketing 1,484,266 1,161,988 3,116,572 2,333,594
Research and development 401,587 118,480 883,620 297,856
General and administrative 1,185,902 727,285 2,079,131 1,454,087
Synergis management expenses 307,292 -- 686,253 --
_____________ _____________ ______________ _____________
Total operating expenses 3,379,047 2,007,753 6,765,576 4,085,537
_____________ _____________ ______________ _____________
Operating loss (3,181,160) (724,098) (6,017,250) (2,462,253)
Other income (expense), net (100,064) (51,653) 25,750 (48,818)
_____________ _____________ ______________ _____________
Loss from continuing operations
before income taxes (3,281,224) (775,751) (5,991,500) (2,511,071)
Income taxes (504,364) (224,904) (1,460,223) (224,904)
_____________ _____________ ______________ _____________
Loss from continuing operations(b) (2,776,860) (550,847) (4,531,277) (2,286,167)
Discontinued operations, net of tax(c) 168,856 347,781 177,299 654,713
_____________ _____________ ______________ _____________
Net loss $ (2,608,004) (203,066) (4,353,978) (1,631,454)
_____________ _____________ ______________ _____________
_____________ _____________ ______________ _____________
Earnings (loss) per share -
basic and diluted:
Loss from continuing operations $ (0.45) (0.09) (0.74) (0.39)
Discontinued operations 0.03 0.06 0.03 0.11
_____________ _____________ ______________ _____________
Net loss $ (0.42) (0.03) (0.71) (0.28)
_____________ _____________ ______________ _____________
_____________ _____________ ______________ _____________
Weighted average number of shares of
common stock outstanding 6,170,726 5,913,413 6,165,529 5,917,412
_____________ _____________ ______________ _____________
_____________ _____________ ______________ _____________
</TABLE>
MedPlus, Inc. and Subsidiaries
Consolidated Statements of Operations
Footnotes to Consolidated Statements of Operations:
(a) In December 1997, MedPlus changed its fiscal year end from
December 31 to January 31. As a result, MedPlus' fiscal year
became February 1, 1997 to January 31, 1998. The new fiscal
second quarter begins on May 1 and ends on July 31. The results
of operations for the prior year fiscal second quarter have been
restated based on the new fiscal year.
(b) Results from continuing operations for both periods presented
include the results of MedPlus' ChartMaxx Enterprise-wide
Electronic Patient Record System, OptiMaxx Archival System and
its wholly-owned subsidiaries Universal Document Management
Systems, Inc. (UDMS) and FutureCORE, Inc. The current year also
includes the results of operations of MedPlus' majority-owned
subsidiary DiaLogos which was acquired on January 30, 1998.
(c) Discontinued operations include the results of operations of
MedPlus' IntelliCode division for the three and six month periods
ended July 31, 1997. The IntelliCode division was sold to Becton,
Dickinson and Company on January 28, 1998. For the three and six
month periods ended July 31, 1998, discontinued operations include
the reversal of reserves associated with the IntelliCode
disposition and the Step2000 segment of UDMS MedPlus has decided
to retain. As of January 31, 1998, MedPlus had accrued the
estimated operating losses of Step2000 through its anticipated
date of disposal.
3
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