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NEWS RELEASE:
FOR IMMEDIATE RELEASE:
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MERGE HEALTHCARE ANNOUNCES FOURTH QUARTER AND 2006
YEAR END FINANCIAL RESULTS
Milwaukee , WI , March 8, 2007 - Merge Technologies Incorporated, d.b.a. Merge Healthcare (NASDAQ: MRGE; TSX: MRG), today announced financial results for the quarter and year ended December 31, 2006.
Fourth Quarter Results:
For the fourth quarter ended December 31, 2006, revenue totaled $13.2 million compared to $25.5 million in the fourth quarter ended December 31, 2005. 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 2006. Including this charge, Merge’s GAAP loss was $27.0 million or $0.80 per diluted share versus earnings of $2.8 million or $0.08 per diluted share during the same period last year.
Additionally, Merge Healthcare recorded a full income tax valuation allowance during the fourth quarter, relating primarily to the uncertainty of our ability to utilize our tax net operating loss carry forwards in future years.
Fiscal 2006 Year-end Results:
For the year ended December 31, 2006, revenue totaled $75.0 million compared to $82.6 million in the prior year. The Company’s GAAP loss totaled $258.5 million or $7.67 per diluted share, which included a goodwill impairment, trade name impairment and restructuring charge of $230.8 million, or $6.85 per share, versus a net loss of $2.7 million or $0.11 per diluted share in fiscal 2005.
The Company’s cash balance as of December 31, 2006 was $45.9 million, a decrease from $52.2 million at September 30, 2006 and a decrease from $64.3 million at December 31, 2005. Deferred revenue totaled $21.4 million at December 31, 2006, an increase from $20.4 million at September 30, 2006 and a decrease from $34.7 million at December 31, 2005.
Analysis of Results:
"These last few months have witnessed tremendous change at Merge. While our financial results will continue to lag some of our strategic decisions, we have made great strides in repositioning the company to become a leading global supplier of medical imaging and clinical applications solutions in the future,” stated Ken Rardin, Chief Executive Officer of Merge Healthcare. “While our return to profitability will not happen overnight, we are working diligently on the integration of our Cedara and Merge Healthcare businesses, and are seeing the fruits of our labor as the new senior management team is beginning to work very effectively together." Mr. Rardin concluded, "We believe the worst is behind us and we are confident that the changes that we have made over the past several months will begin to pay off over the next several quarters. As I have stated previously, I still believe we are on track to return to a profitable growth company by the fourth quarter of this year."
Click here for a PDF of Financial Tables
Conference Call Details:
The management of Merge Technologies Incorporated will conduct a conference call on Friday, March 9, 2007 at 10:00 AM (Eastern) to review fourth 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=38336 . 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 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.
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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.merge.com.
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 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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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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