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Merge eFilm
Announces First Quarter 2003 Results
Marketplace adoption of FUSION Server™
and eFilm Workstation™ generates
87% increase in net income and strong
overall financial performance; 2003 EPS
guidance increased
Milwaukee, WI, April 30, 2003 - Merge
Technologies Incorporated, d.b.a. Merge eFilm, (Nasdaq: MRGE), today announced
the financial results for the quarter
ended March 31, 2003. Net sales for the
quarter ended March 31, 2003, were $6,117,000,
an increase of 35% over net sales of $4,535,000
in the quarter ended March 31, 2002. In
the quarter ended March 31, 2003, net
income was $1,316,000, generating $0.11
diluted EPS compared to $704,000 net income
and $0.07 diluted EPS in the quarter ended
March 31, 2002. Gross margin in the quarter
ended March 31, 2003, was 66%, compared
to 61% in the quarter ended March 31,
2002. The Company's operating margin,
defined as operating income divided by
net sales, was 24% in the quarter ended
March 31, 2003, compared to 16% in the
quarter ended March 31, 2002.
At March 31, 2003, the Company had a
cash balance of $6,570,000 and no outstanding
draws on its $5 million bank line of credit.
This first quarter cash balance represents
an increase of 49% from December 31, 2002.
Analysis of Results:
"Our strong financial start to 2003
is a reflection of our continued focus
on targeting our FUSION Server products
and services to small and medium sized
hospitals and imaging centers, and leveraging
the global brand and installed base of
the historical Merge eFilm product lines,"
said Richard Linden, President and CEO.
"I’m pleased with the way Merge eFilm is responding to marketplace demand
for integrated healthcare image and information
management solutions, resulting in the
expansion of FUSION Server market presence.
"Our FUSION Server product line
continues to steadily evolve as we add
new functionality. In 2003, we anticipate
expanding the capabilities of FUSION Server
to include front-end RIS (Radiology Information
System) functionality, integrated dictation,
transcription and speech recognition.
These efforts are aligned with our long-term
strategy of developing a fully integrated
RIS-PACS solution for our target market.
"Additionally, we continue to develop
technologies that optimize our service
model. During the first quarter, we completed
the global deployment of ViewCheck™,
our FUSION Server on-line monitoring technology.
This electronic monitoring software continuously
captures performance statistics of our
deployed FUSION Servers and proactively
alerts our service department of technical
operations outside of established norms.
ViewCheck allows our service team to provide
ongoing maintenance from a remote location.
This capability ensures ongoing operational
consistency and workflow effectiveness
for our customers and their patients.
"We have increased our marketing
efforts to expand the healthcare market’s
understanding of our product offering
and the value proposition of our solutions.
Building on our momentum from the 2002
RSNA (Radiological Society of North America)
trade show, we attended two new trade
shows in the first quarter with plans
to attend additional trade shows throughout
the year. Additionally, our eFilm Workstation
e-commerce strategy generates steady software
licensing revenue, and as importantly,
direct sales leads for larger FUSION Server
sales. Over 5,600 trial versions of eFilm
Workstation were downloaded from our website
in the first quarter, bringing the total
to over 30,000 downloads worldwide, extending
brand awareness and building our market
leading position in desktop diagnostic
image viewing software. In summary, I
am pleased with the market’s reception
to our FUSION product platform, our focus
on software solutions and professional
services, and especially our commitment
to improve the patient’s experience
– the theme of our 2002 Annual Report.
"In light of our increasing profitability,
and following an analysis of anticipated
domestic and international tax obligations,
we have estimated our 2003 calendar year
effective tax rate to be 12%, which has
been applied to the first quarter.
"Furthermore, our continued growth
and strong financial performance has led
to a steady increase in investor relations
activities and financial market exposure.
The logical next step in expanding investor
interest is our listing on the NASDAQ
National Market. We have applied for National
Market listing and anticipate approval
in the next four to six weeks," said
Linden.
Guidance:
The Company anticipates market conditions
to remain supportive of its software-centric
product and service offerings, which are
focused primarily on small to medium sized
hospitals and imaging centers. Our strong
start in 2003 positions the Company to
reaffirm its guidance for 2003 revenues
in the range of $27 million to $28 million
with year-over-year growth of approximately
30% to 35%. Furthermore, the Company is
increasing its estimate for diluted EPS
on a pre-tax basis to $0.52 to $0.57,
and anticipates an after-tax diluted EPS
range of $0.47 to $0.52.
Click
Here for Q103 Financial Statements
# # #
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. Actual results may vary
significantly based on a number of factors,
including, but not limited to, risks in
product and technology development, market
acceptance of new products and continuing
product demand, the impact of competitive
products and pricing, changing economic
conditions and other risk factors detailed
in filings with the Securities and Exchange
Commission.
Merge eFilm provides integrated healthcare
image and information workflow solutions
that create a filmless workflow environment,
address the clinical imaging needs across
the healthcare enterprise, and enable
cost-effective, patient-centric care.
For more than fifteen years, Merge eFilm
has leveraged its healthcare IT, clinical
and engineering experience to create solutions
that improve the clinicians' productivity
and enhance the quality of the care they
provide. For additional information, go
to www.merge.com.
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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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