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Merge Technologies Announces
Second Quarter 2002 Results. Company delivers increased
operating income; completes strategic acquisitions;
expands distribution capabilities; and reiterates 2002
earnings guidance.
Milwaukee, WI, July 31, 2002
Merge Technologies Incorporated (Nasdaq:MRGE) today
announced financial results for the quarter and six
months ended June 30, 2002.
Revenues for the quarter ended June 30, 2002 were $4,183,000,
an increase of 11% over revenues of $3,763,000 for the
quarter ended June 30, 2001. Revenues were $8,718,000
for the six months ended June 30, 2002, an increase
of 23% over revenues of $7,107,000 for the six months
ended June 30, 2001.
Net income for the quarter ended June 30, 2002, including
an acquisition-related charge for in-process R&D,
was $598,000, an increase of 157% over net income of
$233,000 for the quarter ended June 30, 2001. Basic
EPS was $0.07 and diluted EPS was $0.06 for the quarter
ended June 30, 2002 compared to basic and diluted EPS
of $0.03 for the quarter ended June 30, 2001.
Net income for the six months ended June 30, 2002, including
an acquisition-related charge for in-process R&D,
was $1,303,000, an increase of 763% over net income
of $151,000 for the six months ended June 30, 2001.
Basic EPS was $0.16 and diluted EPS was $0.13 for the
six months ended June 30, 2002 compared to basic and
diluted EPS of $0.01 for the six months ended June 30,
2001.
Gross margins increased to 69.5% for the quarter ended
June 30, 2002 from 66.8% for the quarter ended June
30, 2001. Operating expenses for the quarter ended June
30, 2002 was $2,350,000 compared to $2,286,000 for the
quarter ended June 30, 2001. Exclusive of a $148,000
expense for in-process R&D, operating expenses were
$2,202,000 in the quarter ended June 30, 2002. While
ongoing operating expenses year-over-year decreased,
expenses for sales, marketing and professional services
increased to $1,252,000 for the quarter ended June 30,
2002 from $1,017,000 for the quarter ended June 30,
2001, highlighting the company's continued focus on
increasing investments in revenue generating activities.
The Company's current ratio at June 30, 2002 was 2.94
compared to a current ratio of 2.29 at March 31, 2002.
Cash at June 30, 2002 increased 184% to $3,993,000 from
$1,407,000 at March 31, 2002.
Analysis of Results:
"I am pleased to report that we successfully completed
several financial, operational and strategic objectives
during the second quarter," said Richard A. Linden,
President and CEO. "Our performance continues to
demonstrate a strong customer interest in our products
and services, an ability to effectively manage operating
expenses while simultaneously increasing our investment
in sales, and an ability to maintain strong gross margins
as the mix of our business shifts to software and professional
services.
"We have continued to make investments in growth
while at the same time focusing on profitability. We
have added three additional direct sales staff, added
several new value-added reseller relationships, and
increased our marketing activities. Integration plans
are underway for eFilm Medical Inc. and Aurora Technologies,
Inc., which have resulted in operating cost efficiencies
in the third quarter through the elimination of redundant
positions. The integration plans also include launching
an expanded branding and marketing strategy, combining
our customer service departments to form a global 24/7
service platform, and aggregating our product innovation
efforts to ensure a seamless presentation of our combined
solutions. We are leveraging the extensive customer
base across both Merge and eFilm to present the combined
strengths of the new organization and accelerate new
business development. I'm encouraged by the response
from our customers, the incremental growth of our sales
pipeline, and the speed with which we are becoming one
company.
"We have added several new executives to the management
team for the next phase of our growth. Scott Veech has
joined the Company as our new Chief Financial Officer;
Greg Couch, formerly the President and co-founder of
eFilm, has assumed the role of Chief Technology Officer;
and Catherine McCallum, formerly the COO of eFilm, now
serves as the Vice President of Professional Services.
Their leadership skills will add value to the combined
organization.
"I'm also encouraged by several healthcare IT market
and expenditure trends that suggest growing investment
in value-based image and information management solutions.
Increasingly, healthcare facilities and imaging centers
of all sizes are purchasing open architecture, modular
and software-centric solutions that deploy across the
healthcare enterprise. We are well positioned to meet
these needs and trends in the healthcare market,"
said Linden.
During the second quarter, the Company successfully
launched MergeReport™, the sixth in a series of
modular radiology workflow software applications. MergeReport
is a diagnostic workstation that optimizes radiologist
productivity by gathering all relevant information needed
to interpret radiology studies in a single application.
In addition, eFilm released eFilmWorkstation 1.8, which
incorporates several new features including multi-planar
reformatting (MPR) and orthopedic templates. "We
continue to meet our product innovation goal of releasing
new products or upgrades every three to four months
and accelerating the cycle time from new product design
to commercialization," said Linden.
Guidance:
The Company expects to achieve year-over-year revenue
growth of approximately 30% through continued expansion
of its investments in sales and marketing resources.
Including the revenue impact of the eFilm and Aurora
acquisitions, the Company reiterates its guidance of
$21 - $22 million in revenue, generating $0.31 - $0.34
diluted EPS for 2002, excluding charges associated with
the acquisitions. Additionally, the Company expects
the acquisitions to be accretive to earnings in 2003
and beyond.
Click
Here For Quarter 2, 2002 Statement of Operations and
Summary Balance Sheet Data
(84kb PDF)
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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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