Friday, 16 February 2007

Q3 Results Released; Backlog increases to $2.75 million, Research Updated with $2.25 Target

Valentine's Day brought the release of LMS' third quarter results. LMS' total realized and signed Q3 contracts are up 30% to $1.3 million and its contract backlog has increased 75% to $3.5 million.

Revenues increased in Q3 2007 to $506,000 compared to $502,000 in Q3 2006. Net loss increased in this quarter, as expected, to $2.5 million ($0.14 per share) compared to $2.0 million ($0.12 per share) in '06. The increase in expenditures was the result of a ramp-up in sales, marketing and product management expenses in anticipation of the release of new products in '07.

Paradigm Analyst Claude Camire provided a research update on Feb. 15th, maintaining a BUY rating, but lowering the 12-month target on LMS to $2.25 from $3.00.

Some key excerpts from his report, titled "More Time Required To Achieve End-Results":
  • LMS recently completed the integration with the software platform and is expected to complete the Calm pattern software by April 2007.
  • LMS ended the quarter with $3 m in cash but will need to raise additional funds to bridge the current gap to profitability; estimated in at least another 2 years.

Clarus Securities was previously covering LMS with a most recent 12-month target of $3.00. Analyst Trevor Li has left Clarus and coverage has been discontinued.