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Media Contact:
Beth Frost-Johnson
Senior Vice President, Marketing
414.977.4254
bfrost@mergehealthcare.com |
NEWS RELEASE:
FOR IMMEDIATE RELEASE:
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MERGE HEALTHCARE ANNOUNCES FIRST QUARTER
2008 FINANCIAL RESULTS
Milwaukee , WI , May 12, 2008 - Merge Healthcare Incorporated (NASDAQ: MRGE; TSX: MRG), today announced financial results for the first quarter ended March 31, 2008. In addition, the Company announced that it has filed its quarterly report on Form 10-Q with the Securities and Exchange Commission.
First Quarter Results:
For the first quarter ended March 31, 2008, revenue totaled $13.7 million, compared to $15.9 million in the first quarter ended March 31, 2007 and $15.6 million in the fourth quarter ended December 31, 2007. Revenue by business unit for each quarter is as follows:
| (In Thousands) |
Q1 2008 |
Q1 2007 |
Q4 2007 |
| Merge Healthcare North America |
$7,083 |
$10,358 |
$8,021 |
| Cedara Software |
$5,959 |
$4,781 |
$6,934 |
| EMEA |
$701 |
$735 |
$653 |
| Total |
$13,743 |
$15,874 |
$15,608 |
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Operating loss for the first quarter ended March 31, 2008 was $8.4 million, compared to an operating loss of $10.2 million in the first quarter ended March 31, 2007 and $8.5 million in the fourth quarter ended December 31, 2007. Contributing to the operating loss for the first quarter of 2008 was a charge of $1.4 million for costs, primarily severance costs, incurred in connection with the reduction in force that was announced and implemented on February 14, 2008 and $0.3 million in additional severance costs for the former president of our EMEA business unit, partially offset by $1.1 million in reimbursement from our primary insurance carrier for legal fees incurred in connection with our class action litigation. Contributing to the operating loss for the first quarter of 2007 was a restructuring charge of $0.8 million in connection with the rightsizing initiative announced in November of 2006. The adjusted operating loss for the first quarter of 2008 was $4.0 million compared to adjusted operating losses of $4.2 million in the first quarter of 2007 and the fourth quarter of 2007.
The net loss for the first quarter of 2008 totaled $7.8 million, or $0.23 per share, compared to a net loss of $9.7 million, or $0.29 per share, in the first quarter of 2007 and a net loss of $9.6 million, or $0.28 per share, in the fourth quarter of 2007. The net loss in the fourth quarter of 2007 also includes a $1.2 million charge for the write-down to the estimated fair market value of an investment in the equity of a privately held customer of Cedara Software.
Bookings:
Bookings and contract information, excluding EMEA, for the first quarter ended March 31, 2008, the first quarter ended March 31, 2007 and the fourth quarter ended December 31, 2007 are as follows:
| |
Q1 2008 |
Q1 2007 |
Q4 2007 |
| Bookings |
$9 million |
$20 million |
$6 million |
| # of Contracts with new customers |
9 |
9 |
10 |
| # of Contracts in excess of $1 Million |
1 |
3 |
-- |
Bookings is defined by the Company as the total value of all contracts signed during a quarter and excludes any value attributed to related maintenance other than the first year of post-contract customer support (PCS).
Full Financial Tables: Q1 2008 (PDF)
Financial Results, Business Operations and Strategy Conference Call:
A conference call has been scheduled for Thursday, May 15, 2008 at 9:00 a.m. (Eastern Daylight Time) to review first quarter 2008 results and to 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 telephone or over the Internet. 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. For those who cannot listen to the live broadcast, a replay via the Internet or phone will also be available shortly after the call. Detailed call and web cast information is listed below.
To access the live call, dial 1.800.639.2197 or 706.634.2159. Reference Conference ID Number: 47566798. The call may also be accessed via web cast, either as the live event or as an archived event. For additional phone and webcast details, along with replay information, please visit our website at: http://www.merge.com/CORP/investorrelations/confcalllist.asp .
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GAAP versus Non- GAAP Presentation
Merge Healthcare provides in this press release adjusted operating income (loss) as additional information regarding the Company’s operating results. This measure is not in accordance with, or an alternative for, GAAP and may be different from non-GAAP operating income (loss) used by other companies. The Company believes that this presentation of adjusted operating income (loss) 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, 2008.
The non-GAAP adjusted operating income (loss) excludes the impact of stock option expense under SFAS 123(R), depreciation and amortization expense, non-recurring legal and accounting costs associated with our restatement, various lawsuits and the pursuit of strategic options, reduction in force and duplication of effort costs. 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 operating income (loss) to non-GAAP adjusted operating income (loss) is included in the supplemental attachment to this release.
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Merge Healthcare is a developer of medical imaging and clinical software applications and developmental tools that are on the forefront of medicine. We develop medical imaging software solutions that support end-to-end business and clinical workflow for radiology department and specialty practices, imaging centers and hospitals. Our software technologies accelerate market delivery for our OEM customers, while our end-user solutions improve our customers’ productivity and enhance the quality of the patient experience. For additional information, visit our website at www.mergehealthcare.com.
Cautionary Notice Regarding Forward-Looking Statements
This announcement may include forward-looking statements within the meaning and subject to the protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this announcement, the words "will," "anticipates," "expects" and similar expressions of the future are intended to assist you in identifying such forward-looking statements. Any number of factors could cause the actual results to differ from the results contemplated by such forward-looking statements, including, but not limited to: unexpected difficulties or costs associated with the rightsizing initiative; unanticipated issues associated with realizing the projected cost savings from the rightsizing initiative; costs and risks associated with executing alternative business plans and effecting strategic options; risks and effects of the past restatements of financial statements of the Company and other actions that may be taken or required as a result of such restatements; the Company’s ability to generate sufficient cash from operations to meet future operating, financing and capital requirements; 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; market acceptance of the Company’s delivery model and continuing product demand; and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made. We do not have, or undertake any obligation to, publicly update, revise or correct any of the forward-looking statements after the date of this announcement, or after the respective dates on which such statements otherwise are made, whether as a result of new information, future events or otherwise. This announcement should be read in conjunction with the risk factors, financial information and other information contained in the filings that the Company makes and previously has made with the Securities and Exchange Commission.
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Attn: Beth Frost-Johnson
Merge Healthcare
6737 West Washington St.
Suite 2250
Milwaukee, WI 53214
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