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WARE Solutions Corporation (WSN) |
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CEOCFO Current
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This is a printer friendly page! WARE
Solutions is finding that they can compete in a mature industry with existing vendors and
do very well on profitability because they deliver over the Internet BIO: Mr. David: “WARE Solutions is a healthcare technology company. We provide clinical practice management and medical records solutions to care providers. We also provide payment and adjudication systems to government and private insurance companies.” CEOCFOinterviews: Will you tell us about the various products you offer, and about how much of the business they represent? Mr. David: “Right now our revenue split is about 50/50 in the payor and provider realm. The provider segment of our business is a very steady recurring revenue component where we are invoicing care providers using our billing, scheduling and medical record solutions in the range of fifty to two hundred dollars a month as a subscription base. In our payor segment, where we deal with government and insurance companies by delivering claims processing and adjudication systems, we have much larger revenue potential and the opportunity for growth is much more significant.” CEOCFOinterviews: In January you started a project with the workers comp in Alberta, will you tell us about that? Mr. David: “The Alberta workers compensation project accelerates our penetration into the provider segment. Many of the workers compensation solutions across North America are still heavily paper intensive and what WARE delivers is a solution that allows our care providers to use our product to send clinical reports and the service information electronically to the workers compensation board. As of right now, we are the only vendor in the market in this jurisdiction that has that system up and running electronically. That has allowed us to accelerate our penetration in the provider space.” CEOCFOinterviews: What are you doing with the Total Care Pharmacy Group? Mr. David: “Total Care Pharmacy, through their Cross Border Pharmacy web portal, provides American consumers drug products, typically for chronic illnesses whose prescriptions and refills can be very expensive. What Cross Border Pharmacy does is sell and distribute the prescription drugs overnight via courier from Canada, with pharmacists and physicians on staff, at a much lower price than they would receive at their American pharmacy location. Cross Border Pharmacy saves the U.S. consumer between 40 and 70% on their prescription drugs costs. What our technology allows Cross Border to do is record and manage the patient’s allergies, medical history, and drug to drug interactions, so that they can provide very comprehensive clinical care and drug management solution.” CEOCFOinterviews: It sounds like a growing area. Mr. David: “This Cross Border Pharmacy entity is growing at what I believe to be about 100% every two months. They are now serving several thousand U.S. patients and in a matter of sixteen months their revenues have gone from zero to about seven million dollars a month. It is phenomenal growth and one that needed technology like ours to help them deal with the huge influx of demand.” CEOCFOinterviews: What is it that you do at WARE Solutions that sets you apart? Mr. David: “I think what sets us apart is our technology. Our solutions are pure Internet based that we deliver in an ASP (Application Service Provider) environment. These solutions are based on our own proprietary development tool, TranzForm, where we build the host system and code the business intelligence into the host and the presentation layer, or the client component, is delivered as a by-product. What that means is when we have to make a change in the healthcare system, we make that change in one area of our solution, and it filters throughout our product. Our competitors on the other hand, must code their business intelligence into their host, network and client components making it very expensive for them to make those changes. From a productivity perspective, we are far more productive, and because we deploy almost exclusively over the Internet, we don’t have to go and touch our clients desktops to deploy our solutions, which makes us a more profitable company.” CEOCFOinterviews: How do you reach potential customers? Mr. David: “We have taken the initial approach in advertising by using the respective medical or trade journals. That method has had some success, but the thing that works best for us is satisfying the client so they then make all the referrals themselves. About 60% of our sales come from referrals from other care providers. Nobody sells our system better than our clients do.” CEOCFOinterviews: Are most of your customers people that don’t have anything in place or people looking to replace a system that is not functioning well? Mr. David: “It is a little of both. The majority of our clients are people that have an existing system, and are looking for something new. So many other vendors in the practice management space are based on older technology; a lot of it is still character based. When a doctor goes out and buys a computer at his local computer store, those other applications won’t even run on that anymore. We are finding that we can compete in a mature industry with existing vendors, and match or beat them on price, yet do very well on profitability because we deliver over the Internet.” CEOCFOinterviews: Can your clients choose various components or do you provide a standard offering? Mr. David: “They can select. A very simple system would be to run billing, and we can provide that. On a monthly subscription, they can add scheduling, electronic medical records, and interfaces to external systems like the Worker’s Compensation Board. We allow a component based system to be subscribed by our users and they are only paying for what they want to utilize.” CEOCFOinterviews: Is it typical of your customers to increase the amount of services? Mr. David: “Absolutely! When we initially started delivering our Internet practice management solutions, we focused on the things that everybody must have and that is to bill their claims to government or insurance companies. Once they are able to generate revenue, then they subscribe to other services such as optimizing their appointment scheduling or introducing electronic medical records. The medical record has a penetration level of about 5% across all care providers, so there is an enormous amount of growth potential there. What is going to accelerate that growth is our interfaces to online lab information and online prescription results. Once physicians start e-prescribing to get drug-to-drug interactions and electronic lab results, which eliminate a lot of the paper they are seeing right now, the whole electronic medical record concept will take off. We are positioned well because many of these clients are already using us for the billing and scheduling component.” CEOCFOinterviews: Are privacy issues still a big concern? Mr. David: “It is a very big issue. As we deliver our solutions, privacy and confidentiality is at the root of our software design and architecture. We run our host-based system in secure data centers, or bunker. This ‘bunker’ type environment is equipped with redundant servers, firewalls and power. As far as our data, when you are running our application, none of our data resides on the physicians desktop and it’s encrypted throughout the session from the client to the host, much like you do with Internet banking. It is very secure from that perspective.” CEOCFOinterviews: Are you primarily in Canada now, and do you see that changing? Mr. David: “We are primarily in Canada; 99% of our revenue is derived from Canada. We do have two clients in the United States, one in Tennessee and one in California. We are just starting to generate more of a marketing presence to start to look into that market in 2003 and 2004. The Cross Border Project is almost 100% U.S. customer driven so we can also leverage that as we go forward.” CEOCFOinterviews: I understand you say that pride of ownership is a visible strength setting you apart, will you tell us about that? Mr. David: “When we started this company five years ago, the founders had a long history. We had worked together for fifteen years, and had been acquired twice. Neither one of us had been stakeholders in those organizations, which caused us to start up our own business. One of the things we did when we moved forward, was we made sure that every one of our employees had some sort of stake in the organization so that as we grow there is pride in ownership and if indeed we were to be acquired by someone else, our assets aren’t going to ‘walk out the door.’ We dealt with that from the two perspectives and that is very important to us.” CEOCFOinterviews: Will you tell us what you see for the future? Where will your growth come from? Mr. David: “Our growth strategy is to grow both on an organic recurring basis, and to grow with new business. We are presently in the midst of our audit for 2002, and we are going o see growth around approximately 60%, which is very strong given the climate for business that we have seen these last few years. So far, in 2003, our sales and revenues have continued to increase and we predict we are going to see 60% growth again this year. Last year our revenues were coming in at approximately 1.6 million, and we believe we will exceed two million dollars this year. That is thanks to projects like Cross-Border and the Workers Compensation Board, and some other things that are in the pipeline right now.” CEOCFOinterviews: Are there products or services that you aren’t currently offering that you would like to make available? Mr. David: “Most of our products are in production right now. Where we are starting to see some significant increase in our pipeline is on the payor side. That is very good, because those are the systems, which are going to generate revenues of half-a-million dollars to a million dollars or more a year per client. That is where we are focusing a lot of our attention this year. We believe we are going to have some significant success the way things are looking so far. We are really pushing our claims adjudication and our payment systems to government and insurance companies. This is where the thrust of the organization is going to be in the next eighteen months.” CEOCFOinterviews: What will you need to do differently for those plans to succeed? Mr. David: “I don’t’ think we need to do a lot differently; I think what has been required is that the company needed to show stability, growth and presence in the marketplace. Last week we just celebrated our five-year birthday for the company, three years as a private company and two years as a public company. We are now starting to be recognized in some areas as a dominant player, while in other areas we are recognized as the emerging company to beat. We are beginning to reap some of the rewards of success. We are in the right position at the right time. With this business climate, there are not a lot of young start-ups in our space, mostly mature companies, or companies such as ours that got in prior to the tech collapse, survived, and are starting to show growth.” CEOCFOinterviews: What should shareholders and potential investors know about WARE Solutions? Mr. David: “I think they need to know that the company is growing strong. The last audited financial statement that we have for public view is 2001 and we had revenues of just under a million, with a loss of four hundred thousand dollars. 2002 is much stronger, where we are going to see a break-even or a profit, and 2003 is going to be even better. People that follow us or want to follow us need to be aware of all the great things that this company is doing right now and it is much better than what they may have see publicly from a disseminated annual report perspective.” CEOCFOinterviews: In closing, what are your biggest challenges going forward and how are you ready? Mr. David: “I think the biggest challenge right now is getting the message out. The investor sentiment now is still not that strong especially in the high-tech sector. We are not necessarily looking to raise capital right now, but it would be nice to be recognized and supported in the market. Right now we will just keep working hard putting the numbers up on the board; expecting eventually things will come around.”
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