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Steve Norton
Merge Healthcare
Chief Financial Officer
414.977.4000
ir@mergehealthcare.com |
NEWS RELEASE:
FOR IMMEDIATE RELEASE:
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MERGE HEALTHCARE ANNOUNCES FIRST QUARTER OF 2007
FINANCIAL RESULTS
Milwaukee , WI , May 9, 2007 - Merge Technologies Incorporated, d.b.a. Merge Healthcare (NASDAQ: MRGE; TSX: MRG), today announced financial results for the first quarter ended March 31, 2007.
First Quarter Results:
For the first quarter ended March 31, 2007, net sales totaled $15.7 million compared to $16.2 million in the first quarter ended March 31, 2006 and $13.2 million in the fourth quarter ended December 31, 2006, representing a 3.2% decrease and a 19.0% increase, respectively.
The net loss for the first quarter of 2007 totaled $10.1 million, or $0.30 per share, compared to a net loss of $4.9 million, or $0.15 per share, in the first quarter of 2006 and $27.0 million, or $0.80 per share, in the fourth quarter of 2006. Restructuring charges recorded during the first quarter of 2007 relating to our fourth quarter 2006 rightsizing initiative totaled $0.8 million, or $0.02 per share. During the fourth quarter of 2006, the Company recognized a goodwill impairment, trade name impairment and restructuring charge of $11.3 million, or $0.33 per share, primarily related to the right-sizing initiative announced in November of 2006.
F or the first quarter ended March 31, 2007 our non-GAAP adjusted net loss was $4.1 million, or $0.12 per share, compared to a non-GAAP adjusted net loss of $1.1 million, or $0.03 per share, in the first quarter ended March 31, 2006 and a non-GAAP adjusted net loss of $8.0 million, or $0.24 per share, in the fourth quarter ended December 31, 2006. Non-GAAP adjusted net income (loss) is defined as net income (loss) excluding stock option expense under SFAS 123(R), depreciation and amortization, legal and accounting costs associated with the restatement of our previously issued financial statements and various lawsuits, write-offs of intangible assets, restructuring costs associated with our reduction in force and costs for employees that were terminated during the right-sizing initiative whose transition periods have not yet ended.
Bookings for the first quarter ended March 31, 2007 aggregated approximately $25 million compared to approximately $15 million in the fourth quarter ended December 31, 2006. Bookings is defined as the total value of all contracts, including renewals and customer purchases in excess of prior contracted commitments, executed during the quarter and include software, hardware, service and support, installation, training, and professional services. Bookings for the first quarter ended March 31, 2007 included three contracts in excess of $1 million aggregating in excess of $9 million and bookings for the fourth quarter ended December 31, 2006 included one contract in excess of $1 million. All but one of these contracts are multi-year contracts.
Backlog at March 31, 2007 aggregated approximately $39 million compared to approximately $29 million at December 31, 2006. Backlog is defined as the aggregate amount of future revenue expected to be recognized from contracts signed with customers prior to the end of the period.
Analysis of Results:
Kenneth D. Rardin, President and Chief Executive Officer of Merge Healthcare, commented, "Since joining Merge last September, I have been focused on stabilizing operations, completing the integration of Merge and Cedara, restructuring the business into three operating units and rapidly building an onshore-offshore global delivery and support model. The transition of certain of our software development and service and support functions offshore continues to proceed with positive results and we believe the combination of these initiatives along with an increased focus on our OEM and direct sales organizations have set us on track to return to a profitable growth company in terms of non-GAAP adjusted net income by the fourth quarter of this year."
Mr. Rardin continued, "As noted previously, we are extremely focused on improving our systems infrastructure to improve efficiency and ensure that the proper financial controls are in place. Additionally, as you can see from our other press releases issued today, we continue to expand outside the radiology space marked by our new partnership with Varian Medical Systems in the oncology market. We also continue to gain momentum in France with our Fusion aXigate Electronic Patient Record (EPR) product as evidenced by our very competitive win during April of 2007 at the 1,300 plus bed Colmar General Hospital."
View PDF of Financial Tables
Conference Call Details:
The management of Merge Technologies Incorporated will conduct a conference call on Thursday, May 10, 2007 at 9:00 AM Central / 10:00 AM Eastern to review first quarter results and provide an update of the Company's business operations and strategy. Following the review, a question and answer session will be conducted.
Investors will have the opportunity to listen to the conference call via phone or over the Internet at http://www.videonewswire.com/event.asp?id=39208. To listen to the live call, investors should go to the web site at least fifteen minutes early to register, download, and install any necessary audio software. To access the live call, dial 800.639.2197 or 706.634.2159. Reference conference ID number: 6077447. For those who cannot listen to the live broadcast, a replay via the Internet will also be available shortly after the call. Detailed call and web cast information is also listed at: http://www.merge.com/CORP/investorrelations/confcalllist.asp.
GAAP versus Non- GAAP Presentation
Merge Healthcare provides adjusted operating income, adjusted net income and adjusted earnings per share in this press release as additional information regarding the Company’s operating results. The measures are not in accordance with, or an alternative for, GAAP and may be different from non-GAAP operating income, non-GAAP net income and non-GAAP earnings per share measures used by other companies. The Company believes that this presentation of adjusted operating income, adjusted net income and adjusted earnings per share provides useful information to investors regarding additional financial and business trends relating to the Company’s financial condition and results of operations. This release should be read in conjunction with our quarterly report on Form 10-Q filing for the quarter ended March 31, 2007.
First quarter 2007 results prepared in accordance with U.S. GAAP are reconciled with non-GAAP results excluding the impact of these adjustments. A full reconciliation of our GAAP financial measures to non-GAAP adjustments is included in the supplemental attachment to this release.
View PDF of Financial Tables
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Attn: Beth Frost-Johnson
Merge Healthcare
6737 West Washington St.
Suite 2250
Milwaukee, WI 53214
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| Except for the historical information herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. When used in this press release, the words “will,” “believes,” “intends,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or implied by, the forward-looking statements based on a number of factors, including, but not limited to, the uncertainty created by, the adverse impact on relationships with customers, potential customers, suppliers and investors potentially resulting from, and other risks associated with, the changes in the Company’s senior management; costs, risks and effects of the investigation by the Audit Committee of the Board of Directors; the impact of the restatement of financial statements of the Company and other actions that may be taken or required as a result of such restatement; the Company's inability to timely file reports with the Securities and Exchange Commission; risks associated with the Company's inability to meet the requirements of The NASDAQ Stock Market for continued listing, including possible delisting; costs, risks and effects of legal proceedings and investigations, including the informal, non-public inquiry being conducted by the Securities and Exchange Commission and class action, derivative, and other lawsuits; risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, ability to integrate acquisitions, changing economic conditions, credit and payment risks associated with end-user sales, dependence on major customers, dependence on key personnel, and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission. Except as expressly required by the federal securities laws, the Company undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason.
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