Wednesday, 24 January 2007

AMEX & McKesson Updates

Jan. 16/07: LMS and the AMEX Exchange
On January 16th & 12th, LMS released information about its AMEX listing. Specifically, LMS currently does not fit some of the criteria of AMEX listed companies, such as:
  • Shareholder equity = less than $4 million & losses from continuing operations and/or net losses in three fo the four most recent fiscal years
  • Shareholder equity = less than $6 million & losses from continuing operations and/or net losses in its five most recent fiscal years.
LMS must now submit a plan of compliance to the AMEX exchange by February 8, 2007 demonstrating the Company's ability to regain compliance with these stipulations by July 8, 2008. If LMS does not submit a plan, or if the plan is not accepted by the AMEX, LMS will be subject to delisting procedures.

However, the Company plans on submitting the Plan on or before February 8, 2007.

Click here for the Jan. 12th release.
Click here for the Jan. 16th release

Jan. 8/07: LMS Completes Software Code Development
As previously discussed in Insight, LMS is involved in a major project with McKesson Provider Technologies (MCK: NYSE) to include its system as a private label obstetrics technology solution with McKesson's Horizon Clinical centralized patient record management and medication management solution. McKesson is a Fortune 16 company with approximately $90 billion in annual revenues.

LMS provided an update on January 8th that the development (programming) process for the interoperability components is complete. The interoperability component acts as a bridge to carry the flow of administrative and clinical information between the LMS system and the centralized system. What’s next? Quality assurance is now being carried out. Once that is complete, early field implementation will take place at a pilot site which is expected to commence in the coming weeks, after completion of which the product will be released to the marketplace.

Click here for the full release.

A Well-Positioned Business Partner

So what does this mean? In case you missed it back in September, McKesson dates back to the 1830’s, when it started off distributing pharmaceuticals by way of horse-drawn wagons. Despite the fact that it is the 16th largest company in the U.S., it is one of the least profitable for its size (in 2005 its overall gross margin was just 4.2% on $88 billion in sales).
That being said, one of McKesson’s most profitable divisions is healthcare information technology. In fact, gross margins in this area are more than ten times the margin of the traditional business. McKesson is now deploying resources into IT and investing heavily in technology applicable to the interaction between patients and doctors.
This includes interfacing LMS’ technology with its system. McKesson’s large sales and marketing force has not been wasting time and has been pushing this new technology initiative for several months to its client base of more than 900 U.S. hospitals.