FRANKLIN, Tenn., April 6, 2011 /PRNewswire/ -- MedQuist Holdings
Inc. (NASDAQ: MEDH), a leading provider of integrated clinical
documentation solutions for the U.S. healthcare industry, announced
it has begun the implementation of the previously disclosed
integration plan of MedQuist Holdings Inc. (formerly known as CBay
Systems Holdings Ltd.) and MedQuist Inc. The plan is expected
to eliminate duplicate costs and inefficiencies attributed to
running two separate public companies and further strengthen
MedQuist Holdings as the leader in the clinical documentation
industry.
The Company previously announced on March
15, 2011, that its public exchange offer for shares of
MedQuist Inc. common stock has resulted in the Company now holding
approximately 97% of the issued and outstanding shares of MedQuist
Inc. In accordance with the terms of a Stipulation of Settlement
entered into in connection with the settlement of MedQuist Inc.
shareholder litigation and subject to final approval of the
settlement by the Court, the remaining issued and outstanding
shares of MedQuist Inc. are expected to be exchanged on the same
terms as the public exchange in a short-form merger by the end of
the third quarter of 2011. In connection with this expected
short-form merger and to immediately reduce duplicate costs of
being a public company, MedQuist Inc. gave formal written notice to
NASDAQ to delist its shares traded under the ticker symbol, MEDQ,
which is expected to become effective on or about April 14, 2011. In the interim, shares of
MedQuist Inc. common stock have ceased trading on NASDAQ and are
currently trading on the Pink Sheets (as reported by the Pink
Sheets LLC) under the symbol "MEDQ.PK".
Peter Masanotti, Chief Executive
Officer and President of MedQuist Holdings, said, "With the
MedQuist Holdings IPO, the public exchange offer and the capital
structure transactions now completed, we can begin immediately to
have MedQuist Inc. and MedQuist Holdings look, act and serve our
customers as one integrated company. Critical to the success of
this integration will be to organize in such a way that aligns the
management and functional organizations of both companies to
optimize our capacity and allow us to work together in the most
efficient and effective manner worldwide. I'm confident that these
actions will further strengthen MedQuist as the vendor of choice
among our current and prospective customers."
With this integration, the Board of Directors of MedQuist
Holdings has initiated a search to identify additional independent
directors with the goal of achieving a majority of independent
directors serving on the Board by year end, including replacing
Michael Seedman, the Company's former Chief Technology Officer, who
has resigned from the Board. In addition, Bob Aquilina, Executive Chairman of MedQuist
Holdings, has agreed to transition from the Executive Chairman to
Non-Executive Chairman of MedQuist Holdings, effective June 30, 2011.
"As Executive Chairman, Bob has been instrumental in setting
strategy, implementing our best practice programs and ensuring that
seamless client service was not disrupted by the distractions of
the conflicting shareholder issues of both companies," said Mr.
Masanotti. "As he transitions to the role of Non-Executive
Chairman, Bob will continue to be focused on the appropriate
stewardship of shareholders' interests in MedQuist Holdings. I
would also like to thank Michael Seedman for laying out a long-term
technology vision for the Company, which we are continuing to
execute."
Consistent with plans outlined during its initial public
offering, MedQuist Holdings announced that it has completed the
integration of its acquired Spheris operations into MedQuist Inc.
as of March 31, 2011. This
integration will result in termination costs of approximately
$1.0 million in the first quarter of
2011 from a related reduction in workforce and a charge of
$1.5 million in the first quarter of
2011 representing future lease payments on the Company's former
corporate headquarters in Mt. Laurel, New
Jersey and former data center in Sterling, Virginia, offset by expected
sublease rentals. The future minimum lease payments on the
Mt. Laurel facility total
$2.5 million. Mr. Masanotti noted,
"MedQuist Holdings is now headquartered in the Nashville area which is close to several of
our key hospital clients who are integral to the ongoing
initiatives underway in the healthcare industry."
In line with the Company's performance goals for 2011 issued on
March 15, 2011, the Company announced
termination costs of approximately $2.3
million (compared with a projected range of $2.5 million to $5.0 million) associated with
initiating the integration of MedQuist Inc. and MedQuist Holdings.
These charges, which will also be reflected in the Company's first
quarter 2011 results, include non-cash stock compensation costs of
approximately $700,000 associated
with the acceleration of stock option vesting and the extension of
the stock option exercise period for terminated employees. As
previously announced, the restructuring plan will be implemented
throughout 2011 and will result in additional charges incurred
later in the year that fall within the projected range noted above,
with the full benefit from all integration efforts experienced by
early 2012.
Separately, the Company announced that with the conclusion of
the litigation matters related to the billing practices of its
MedQuist Inc. subsidiary, the Company has terminated its customer
accommodation program and reversed previous accruals of
$9.7 million, resulting in a
reduction of expenses of approximately $9.7
million in the first quarter of 2011.
About MedQuist Holdings
MedQuist Holdings is a leading provider of integrated clinical
documentation solutions for the U.S. healthcare system, and the
largest provider by revenue of clinical documentation based on
physicians' dictation of patient interaction, or the physician
narrative, in the United States.
MedQuist Holdings serves more than 2,400 hospitals, clinics, and
physician practices throughout the United
States, including 40% of hospitals with more than 500
licensed beds.
MedQuist Holdings' solutions convert the physician narrative
into a high quality and customized electronic record, and enable
hospitals, clinics, and physician practices to improve the quality
of clinical data as well as accelerate and automate the
documentation process. We believe our solutions improve physician
productivity and satisfaction, enhance revenue cycle performance,
and facilitate the adoption and use of electronic
health records. For more information, please visit our website
at www.medquistholdings.com.
Forward-Looking Statements
Information provided and statements contained in this press
release that are not purely historical, such as statements
regarding our 2011 financial and operating performance, are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934 and the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements only speak as of the date of this
press release and MedQuist Holdings Inc. assumes no obligation to
update the information included in this press release. Statements
made in this press release that are forward-looking in nature may
involve risks and uncertainties. Accordingly, readers are cautioned
that any such forward-looking statements are not guarantees of
future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict, including, without
limitation, specific factors discussed herein and in other releases
and public filings made by MedQuist Holdings Inc. (including
filings by MedQuist Holdings Inc. with the SEC). Although MedQuist
Holdings believes that the expectations reflected in such
forward-looking statements are reasonable as of the date made,
expectations may prove to have been materially different from the
results expressed or implied by such forward-looking statements.
Unless otherwise required by law, MedQuist Holdings also disclaims
any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made in this press release.
SOURCE MedQuist Holdings Inc.