Merge Reports Subscription Backlog Up 82%
February 18 2013 - 5:00PM
Merge Healthcare Incorporated (NASDAQ: MRGE), a leading provider of
clinical systems and innovations that seek to transform healthcare,
today announced its financial and business results for the fourth
quarter of 2012. Merge also confirmed the conclusion of its
previously announced evaluation of strategic alternatives.
"After careful evaluation, we have determined that the
alternatives evaluated did not offer more value than our own
strategic plan," said Jeff Surges, CEO of Merge Healthcare. "We
will continue to build upon the proven success over the last few
years and further leverage our portfolio of solutions into a more
present and ready marketplace than ever before. In addition, we are
reiterating annual guidance for 2013 on revenue, adjusted EBITDA
and subscription backlog growth."
Financial Highlights:
- Sales increased to $64.7 million ($65.1 million on a pro forma
basis) in the quarter, from $64.1 million ($65.1 million on a pro
forma basis) in the fourth quarter of 2011;
- Adjusted EBITDA, before consideration of one-time non-cash
charges, was $13.9 million, representing 21% of pro forma revenue
in the quarter, compared to $15.1 million and 23% in the fourth
quarter of 2011 (see table at end of this press release for
reconciliation);
- Subscription-based pricing arrangements generated 13.5% of
total sales in the quarter and subscription backlog grew 13% in the
quarter and 82% for the year; and
- Reiterating 2013 guidance of revenue in the range of $265 -
$275 million with an adjusted EBITDA range of 22-24% and expected
subscription backlog growth by the end of 2013 of at least $25
million.
Business Highlights for the Fourth Quarter of
2012:
- Added 12 iConnect® contracts with leading healthcare systems
including Northeast Georgia, Health Ventures, St. John Providence
Health System, Edward Hospital and Altru Health System;
- Executed 17 contracts for Merge Cardiology solutions with
clients including Borgess Medical Center, DuPage Medical Center,
Boca Raton Regional Hospital, St. Thomas and Palos Hospital among
others;
- Bookings growth in sales to end-user customers in the
Healthcare segment grew by 38% in 2012;
- Merge clients will be eligible to receive an estimated total of
$14 million in Meaningful Use incentive payments by utilizing
Merge's Meaningful Use solutions for Radiology and Orthopedics;
and
- eClinical signed over 190 contracts in the quarter driving
year-over-year bookings growth of 79%.
Quarter Results:
Results compared to the same quarter in the prior year on a GAAP
basis are as follows (in millions, except per share data):
|
Q4 2012 |
Q4 2011 |
Net sales |
$64.7 |
$64.1 |
Operating income |
(8.4) |
8.3 |
Net loss attributable to common
shareholders |
(17.3) |
(1.3) |
Net income (loss) per diluted share |
($0.19) |
($0.01) |
|
|
|
Cash balance at period end |
$35.9 |
$39.3 |
Cash from business operations* |
9.4 |
11.9 |
|
|
|
*See table at the back of this earnings
release. |
|
|
Pro forma results and other, non-GAAP measures compared to the
same quarter in the prior year are as follows (in millions, except
percentages and per share data):
|
Q4 2012 |
Q4 2011 |
Pro forma results |
|
|
Net sales |
$65.1 |
$65.1 |
Adjusted net income |
(11.6) |
4.2 |
Adjusted EBITDA |
0.9 |
15.1 |
|
|
|
Adjusted net income per diluted share |
($0.13) |
$0.04 |
Adjusted EBITDA per diluted share |
$0.01 |
$0.16 |
|
|
|
Non-GAAP and other
measures |
|
|
Subscription, maintenance & EDI revenue
as % of net sales** |
58.3% |
N/A |
Subscription and non-recurring backlog at
period end |
$76.9 |
$56.2 |
Days sales outstanding |
102 |
100 |
|
|
|
**Comparable information for
periods prior to 2012 is not available. |
Reconciliation of GAAP net income (loss) to adjusted net income
and adjusted EBITDA is included after the financial information
below.
Pro Forma Operating Group Results:
Results (in millions) for our operating groups, which we
commenced reporting in the second quarter of 2012, are as
follows:
|
Three Months
Ended December 31, 2012 |
|
Healthcare (1) |
DNA |
Corporate/
Other |
Total |
Net sales: |
|
|
|
|
Software and other |
$ 22.2 |
$ 3.2 |
|
$ 25.4 |
Service |
6.8 |
3.7 |
|
10.5 |
Maintenance |
28.4 |
0.8 |
|
29.2 |
Total net sales |
57.4 |
7.7 |
|
65.1 |
Gross Margin |
35.4 |
3.4 |
|
38.8 |
Gross Margin % |
61.7% |
44.2% |
|
59.6% |
Expenses |
(24.6) |
(3.2) |
|
(27.8) |
Segment income |
$ 10.8 |
$ 0.2 |
|
11.0 |
Operating Margin % |
18.8% |
2.6% |
|
16.9% |
Net corporate/other expenses (2) |
|
|
$ (12.9) |
(12.9) |
Loss before income taxes |
|
|
|
(1.9) |
Adj. EBITDA reconciling adjustments |
4.3 |
1.7 |
9.8 |
15.8 |
Adjusted EBITDA |
$ 15.1 |
$ 1.9 |
$ (3.1) |
$ 13.9 |
Adjusted EBITDA % |
26.3% |
24.7% |
|
21.4% |
|
|
|
|
|
(1) This data excludes the
one-time charges, all of which were recorded on the Healthcare
segment. Including the changes would equate to adjusted EBITDA
of $2.1 million, or 3.7% for the fourth quarter of 2012. |
(2) Net corporate/other expenses
include public company costs, corporate administration costs,
acquisition-related expenses and net interest expense. |
|
|
|
|
Net Sales in the
Three Months Ended December 31, 2012 |
|
Backlog as of
December 31, 2012 |
|
|
Healthcare |
DNA |
|
Healthcare |
DNA |
|
Revenue Source |
$ |
% |
$ |
% |
Total |
$ |
% |
$ |
% |
Total |
Maintenance & EDI (1) |
$ 28.4 |
49.5% |
$ 0.8 |
10.3% |
44.8% |
|
|
|
|
|
Subscription |
1.8 |
3.1% |
7.0 |
89.7% |
13.5% |
$ 10.7 |
25.5% |
$ 34.9 |
100.0% |
59.3% |
Non-recurring |
27.2 |
47.4% |
-- |
0.0% |
41.7% |
31.3 |
74.5% |
-- |
0.0% |
40.7% |
Total |
$ 57.4 |
100.0% |
$ 7.8 |
100.0% |
100.0% |
$ 42.0 |
100.0% |
$ 34.9 |
100.0% |
100.0% |
|
88.0% |
|
12.0% |
|
|
54.6% |
|
45.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Due to the variability
in timing and length of maintenance renewals, we do not believe
backlog for this revenue component is a meaningful disclosure. |
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with generally
accepted accounting principles or GAAP. This press release includes
certain non-GAAP financial measures to supplement its GAAP
information. Non-GAAP measures are not an alternative to GAAP and
may be different from non-GAAP measures used by other companies. A
quantitative reconciliation of GAAP net income available to common
shareholders to adjusted net income and adjusted EBITDA is included
after the financial information included in this press release.
Management believes that the presentation of non-GAAP results,
when shown in conjunction with corresponding GAAP measures,
provides useful information to it and investors regarding financial
and business trends related to results of operations, because
certain charges, costs and expenses reflect events that are not
essential to recurring business operations. In addition, management
believes these non-GAAP measures provide investors useful
information regarding the underlying performance of the
post-acquisition business operations when compared to the
pre-acquisition results of Merge and any significant acquired
company. Purchase accounting adjustments made in accordance
with GAAP can make it difficult to make meaningful comparisons of
the underlying operations of the business without considering the
non-GAAP adjustments that are provided and discussed herein.
Further, management believes that these non-GAAP measures improve
its and investors' ability to compare Merge's financial performance
with other companies in the technology industry. Management also
uses financial statements that exclude these charges, costs and
expenses for its internal budgets. While GAAP results are more
complete, these supplemental metrics are offered since, with
reconciliations to GAAP, they may provide greater insight into our
financial results. Management does not intend the presentation of
these non-GAAP financial measures to be considered in isolation or
as a substitute for results prepared in accordance with GAAP.
Additional information regarding the non-GAAP financial measures
presented is as follows:
- Pro forma revenue consists of GAAP revenue as reported,
adjusted to add back the acquisition related sales adjustments (for
all significant acquisitions) recorded for GAAP purposes.
- Subscription revenue and the related backlog is comprised of
software, hardware and professional services (including
installation, training, etc.) contracted with and payable by the
customer over a number of years. Generally, these contracts
will include a minimum volume / dollar commitment. As such,
the revenue from these transactions is recognized ratably over an
extended period of time. These types of contracts will
include monthly payments (including leases), long-term clinical
trials, renewable annual software arrangements (with very high
renew rate), to specify a few methods.
- Non-recurring revenue and related backlog represents revenue
that we anticipate recognizing in future periods from signed
customer contracts as of the end of the period
presented. Non-recurring revenue is comprised of perpetual
software license sales and includes licenses, hardware and
professional services (including installation, training and
consultative engineering services).
- Adjusted net income consists of GAAP net income available to
common stockholders, adjusted to exclude (a) acquisition-related
costs, (b) restructuring and other costs, (c) stock-based
compensation expense, (d) acquisition-related amortization (e)
acquisition-related cost of sales adjustments and add backs, and
(f) acquisition-related sales adjustments.
- Adjusted EBITDA adjusts GAAP net income available to common
stockholders for the items considered in adjusted net income as
well as (a) remaining depreciation and amortization, (b) net
interest expense, (c) non-cash preferred stock dividends and (d)
income tax expense (benefit).
- Cash from business operations reconciles the cash generated
from such operations to the change in GAAP cash balance for the
period by reflecting payments of liabilities associated with our
acquisitions, payments of acquisition related fees, interest
payments and other payments and receipts of cash not generated by
the business operations.
Management has excluded certain items from non-GAAP adjusted net
income because it believes (i) the amount of certain expenses in
any specific period may not directly correlate to the underlying
performance of business operations and (ii) the adjustment
facilitates comparisons of pre-acquisition results to
post-acquisition results. In addition, the following
adjustments are described in more detail below:
- Acquisition-related amortization expense is a non-cash expense
arising from the acquisition of intangible assets in connection
with significant acquisitions. Management excludes
acquisition-related amortization expense from non-GAAP net income
because it believes such expenses can vary significantly between
periods as a result of new acquisitions and full amortization of
previously acquired intangible assets.
- Stock-based compensation expense is a non-cash expense arising
from the grant of stock awards to employees and is excluded from
non-GAAP net income because management believes such expenses can
vary significantly between periods as a result of the timing of
grants of new stock-based awards, including grants to new employees
resulting from acquisitions.
- Acquisition-related sales and costs of sales adjustments
reflect the fair value adjustment to deferred revenues acquired in
connection with significant acquisitions. The fair value of
deferred revenue represents an amount equivalent to the estimated
cost plus an appropriate profit margin to perform services-related
software and product support, which assumes a legal obligation to
do so, based on the deferred revenue balances as of the date the
acquisition of a significant company was completed. Management adds
back this deferred revenue adjustment, net of related costs, for
non-GAAP revenue and non-GAAP net income because it believes the
inclusion of this amount directly correlates to the underlying
performance of operations and facilitates comparisons of
pre-acquisition to post-acquisition results.
Notice of Conference Call
Merge will host a conference call on Tuesday, February 19 at
8:30 am EST to discuss its financial results for the fourth quarter
of 2012. Jeff Surges, Justin Dearborn, and Steve Oreskovich
will lead the call.
Participants may preregister for this teleconference
at http://emsp.intellor.com?p=411943&do=register&t=8.
Once the participant registers, a confirmation page will display
dial-in numbers and a unique PIN, and the participant will also
receive an email confirmation of this information.A replay via the
Internet or phone will be available after the call
at http://www.merge.com/Company/Investors/Conference-Call-Info.aspx.
About Merge
Merge is a leading provider of clinical systems and innovations
that seek to transform healthcare. Merge's enterprise and
cloud-based solutions for image intensive specialties provide
access to any image, anywhere, any time. Merge also provides health
stations, clinical trials software and other health data and
analytics solutions that engage consumers in their personal health.
With solutions that are used by providers and consumers and include
more than 25 years of innovation, Merge is helping to reduce costs
and improve the quality of healthcare worldwide. For more
information, visit merge.com.
The Merge Healthcare logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=10757
Cautionary Notice Regarding Forward-Looking
Statements
The matters discussed in this news release may include
forward-looking statements, which could 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, such forward-looking statements. 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.
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in
thousands) |
|
|
|
|
December 31, |
December 31, |
|
2012 |
2011 |
|
(Unaudited) |
(Unaudited) |
Current assets: |
|
|
Cash and cash equivalents, including
restricted cash of $813 and $707 at December 31, 2012 and
2011, respectively |
$ 35,875 |
$ 39,272 |
Accounts receivable, net |
72,065 |
71,014 |
Inventory |
5,979 |
4,718 |
Prepaid expenses |
4,972 |
5,678 |
Deferred income taxes |
3,135 |
3,393 |
Other current assets |
21,621 |
20,199 |
Total current assets |
143,647 |
144,274 |
|
|
|
Property and equipment, net |
4,964 |
4,391 |
Purchased and developed software, net |
19,007 |
23,924 |
Other intangible assets, net |
35,628 |
45,152 |
Goodwill |
214,312 |
209,829 |
Deferred tax assets |
7,041 |
9,209 |
Other |
12,254 |
13,608 |
Total assets |
$ 436,853 |
$ 450,387 |
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 24,438 |
$ 22,114 |
Interest payable |
4,944 |
4,935 |
Accrued wages |
5,881 |
6,972 |
Restructuring accrual |
222 |
1,407 |
Deferred revenue |
52,355 |
51,246 |
Other accrued liabilities |
12,606 |
11,580 |
Total current liabilities |
100,446 |
98,254 |
|
|
|
Notes payable |
250,046 |
249,438 |
Deferred income taxes |
3,046 |
1,891 |
Deferred revenue |
894 |
1,679 |
Income taxes payable |
1,040 |
727 |
Other |
3,920 |
5,927 |
Total liabilities |
359,392 |
357,916 |
Total Merge shareholders' equity |
77,011 |
92,003 |
Noncontrolling interest |
450 |
468 |
Total shareholders' equity |
77,461 |
92,471 |
Total liabilities and shareholders'
equity |
$ 436,853 |
$ 450,387 |
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands, except
for share and per share data) |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
|
2012 |
2011 |
2012 |
2011 |
|
(unaudited) |
(unaudited) |
(unaudited) |
(unaudited) |
Net sales |
|
|
|
|
Software and other |
$ 25,215 |
$ 24,578 |
$ 94,466 |
$ 80,948 |
Professional services |
10,405 |
10,991 |
40,978 |
41,905 |
Maintenance and EDI |
29,026 |
28,518 |
113,460 |
109,575 |
Total net sales |
64,646 |
64,087 |
248,904 |
232,428 |
Cost of sales |
|
|
|
|
Software and other |
14,141 |
8,923 |
43,281 |
29,090 |
Professional services |
6,278 |
5,652 |
24,693 |
21,134 |
Maintenance and EDI |
7,204 |
7,030 |
31,090 |
29,090 |
Depreciation, amortization and
impairment |
3,295 |
2,266 |
8,987 |
9,340 |
Total cost of sales |
30,918 |
23,871 |
108,051 |
88,654 |
Gross margin |
33,728 |
40,216 |
140,853 |
143,774 |
Operating costs and expenses: |
|
|
|
|
Sales and marketing |
11,434 |
12,019 |
43,908 |
38,800 |
Product research and development |
8,109 |
6,578 |
32,419 |
27,542 |
General and administrative |
18,537 |
10,225 |
42,366 |
32,579 |
Acquisition-related expenses |
958 |
392 |
3,402 |
1,614 |
Restructuring and other expenses |
-- |
101 |
830 |
1,216 |
Depreciation, amortization and
impairment |
3,125 |
2,643 |
11,308 |
12,868 |
Total operating costs and expenses |
42,163 |
31,958 |
134,233 |
114,619 |
Operating income (loss) |
(8,435) |
8,258 |
6,620 |
29,155 |
Other income (expense) |
(8,136) |
(8,466) |
(31,349) |
(31,021) |
Income (loss) before income taxes |
(16,571) |
(208) |
(24,729) |
(1,866) |
Income tax expense (benefit) |
681 |
1,036 |
4,091 |
3,665 |
Net income (loss) |
(17,252) |
(1,244) |
(28,820) |
(5,531) |
Less: noncontrolling interest's
share |
12 |
8 |
(18) |
(10) |
Net income (loss) attributable to Merge |
(17,264) |
(1,252) |
(28,802) |
(5,521) |
Less: preferred stock dividends |
-- |
-- |
-- |
3,153 |
Net income (loss) available to common
shareholders |
$ (17,264) |
$ (1,252) |
$ (28,802) |
$ (8,674) |
|
|
|
|
|
Net income (loss) per share - basic |
$ (0.19) |
$ (0.01) |
$ (0.31) |
$ (0.10) |
Weighted average number of common shares
outstanding - basic |
93,057,636 |
90,281,375 |
92,134,191 |
86,647,097 |
|
|
|
|
|
Net income (loss) per share - diluted |
$ (0.19) |
$ (0.01) |
$ (0.31) |
$ (0.10) |
Weighted average number of common shares
outstanding - diluted |
93,057,636 |
90,281,375 |
92,134,191 |
86,647,097 |
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(in
thousands) |
|
|
|
Year
Ended |
|
|
December
31, |
|
|
2012 |
2011 |
|
|
(unaudited) |
(unaudited) |
Cash flows from operating
activities: |
|
|
|
Net loss |
|
$ (28,820) |
$ (5,531) |
Adjustments to reconcile net loss to net
cash provided by operating activities: |
|
|
|
Depreciation, amortization and
impairment |
|
20,295 |
22,208 |
Share-based compensation |
|
5,786 |
3,908 |
Amortization of note payable issuance
costs & discount |
|
2,724 |
2,393 |
Unrealized gain on equity security |
|
(486) |
-- |
Realized gain on investment |
|
-- |
(405) |
Change in contingent consideration for
acquisitions |
|
1,380 |
345 |
Provision for doubtful
accounts receivable and sales returns, net of recoveries |
9,993 |
2,766 |
Deferred income taxes |
|
3,581 |
8,108 |
Stock issued for charitable
contribution |
|
-- |
1,851 |
Net change in assets and liabilities (net of
effects of acquisitions) |
|
(15,333) |
(33,954) |
Net cash (used in) provided by operating
activities |
|
(880) |
1,689 |
Cash flows from investing
activities: |
|
|
|
Cash paid for acquisitions, net of cash
acquired |
|
(876) |
(1,277) |
Purchases of property, equipment and
leasehold improvements |
|
(2,174) |
(1,976) |
Change in restricted cash |
|
(106) |
940 |
Proceeds from sale of equity investment |
|
-- |
405 |
Net cash (used in) provided by investing
activities |
|
(3,156) |
(1,908) |
Cash flows from financing
activities: |
|
|
|
Proceeds from issuance of notes payable |
|
-- |
53,560 |
Note and stock issuance costs paid |
|
-- |
(1,528) |
Proceeds from exercise of stock options and
employee stock purchase plan |
|
1,039 |
1,166 |
Principal payments on notes |
|
(37) |
(4,591) |
Redemption and retirement of preferred
stock |
|
-- |
(41,750) |
Principal payments on capital leases |
|
(396) |
(4) |
Preferred stock dividends |
|
-- |
(7,328) |
Net cash (used in) provided by financing
activities |
|
606 |
(475) |
Effect of exchange rate changes on cash |
|
(73) |
(123) |
Net increase (decrease) in cash |
|
(3,503) |
(817) |
Cash and cash equivalents, beginning of
period (net of restricted cash) |
(1) |
38,565 |
39,382 |
Cash and cash equivalents, end of period (net
of restricted cash) |
(2) |
$ 35,062 |
$ 38,565 |
|
|
|
|
(1) Restricted cash of $707
and $1,647 as of December 31, 2011 and December 31, 2010,
respectively. |
(2) Restricted cash of $813
and $707 as of December 31, 2012 and December 31, 2011,
respectively. |
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
RECONCILIATION OF NET
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS TO ADJUSTED
EBITDA |
(in thousands, except
for share and per share data) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
|
2012 |
2011 |
2012 |
2011 |
Net income (loss) available to common
shareholders |
$ (17,264) |
$ (1,252) |
$ (28,802) |
$ (8,674) |
Acquisition-related costs |
958 |
392 |
3,402 |
1,614 |
Restructuring and other |
-- |
101 |
830 |
1,216 |
Stock-based compensation expense |
1,541 |
865 |
5,786 |
3,908 |
Amortization of significant acquisition
intangibles |
2,726 |
3,020 |
10,905 |
14,732 |
Acquisition-related sales
adjustments |
435 |
1,053 |
2,055 |
4,313 |
Acquisition-related cost of sales
adjustments |
(35) |
-- |
(361) |
(354) |
Adjusted net income |
$ (11,639) |
$ 4,179 |
$ (6,185) |
$ 16,755 |
Depreciation and amortization |
3,694 |
1,889 |
9,390 |
7,476 |
Net interest expense |
8,137 |
8,043 |
32,160 |
28,915 |
Preferred stock dividends |
-- |
-- |
-- |
3,153 |
Income tax expense |
681 |
1,036 |
4,091 |
3,665 |
Adjusted EBITDA |
$ 873 |
$ 15,147 |
$ 39,456 |
$ 59,964 |
|
|
|
|
|
Adjusted net income (loss) per share |
$ (0.13) |
$ 0.04 |
$ (0.07) |
$ 0.19 |
Adjusted EBITDA per share - diluted |
$ 0.01 |
$ 0.16 |
$ 0.42 |
$ 0.67 |
|
|
|
|
|
Fully diluted shares (if net income) |
94,984,813 |
93,424,406 |
94,545,728 |
89,522,935 |
|
|
|
|
|
|
Pro Forma Three Months
Ended |
Pro Forma Year
Ended |
|
December
31, |
December
31, |
|
2012 |
2011 |
2012 |
2011 |
Net income (loss) available to common
shareholders |
$ (16,864) |
$ (199) |
$ (27,108) |
$ (4,715) |
Acquisition-related costs |
958 |
392 |
3,402 |
1,614 |
Restructuring and other |
-- |
101 |
830 |
1,216 |
Stock-based compensation expense |
1,541 |
865 |
5,786 |
3,908 |
Amortization of significant acquisition
intangibles |
2,726 |
3,020 |
10,905 |
14,732 |
Adjusted net income |
$ (11,639) |
$ 4,179 |
$ (6,185) |
$ 16,755 |
Depreciation and amortization |
3,694 |
1,889 |
9,390 |
7,476 |
Net interest expense |
8,137 |
8,043 |
32,160 |
28,915 |
Preferred stock dividends |
-- |
-- |
-- |
3,153 |
Income tax expense |
681 |
1,036 |
4,091 |
3,665 |
Adjusted EBITDA |
$ 873 |
$ 15,147 |
$ 39,456 |
$ 59,964 |
|
|
|
|
|
Adjusted net income (loss) per share |
$ (0.13) |
$ 0.04 |
$ (0.07) |
$ 0.19 |
Adjusted EBITDA per share - diluted |
$ 0.01 |
$ 0.16 |
$ 0.42 |
$ 0.67 |
|
|
|
|
|
Fully diluted shares (if net income) |
94,984,813 |
93,424,406 |
94,545,728 |
89,522,935 |
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CASH FROM CORE BUSINESS
OPERATIONS |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Year
Ended |
|
December
31, |
December
31, |
|
2012 |
2011 |
2012 |
2011 |
|
(amounts in millions) |
Cash received from (paid for): |
|
|
|
|
Acquisitions |
$ -- |
$ (0.8) |
$ (0.9) |
$ (2.9) |
Restructuring initiatives |
(0.3) |
(0.3) |
(1.5) |
(1.9) |
Acquisition related costs |
(0.2) |
(0.9) |
(1.0) |
(1.8) |
Issuance of debt and equity |
-- |
-- |
-- |
53.6 |
Retirement of debt |
-- |
-- |
-- |
(4.6) |
Interest paid, net |
(14.9) |
(14.8) |
(29.7) |
(25.7) |
Debt and equity issuance costs |
-- |
(0.2) |
-- |
(3.2) |
Redemption of Preferred Stock |
-- |
-- |
-- |
(41.8) |
Payment of Preferred Stock dividends |
-- |
-- |
-- |
(7.3) |
Property and equipment purchases |
(0.2) |
(0.3) |
(2.2) |
(1.9) |
Settlements with former officers |
-- |
-- |
-- |
(0.9) |
Other non-operating cash flows |
-- |
-- |
-- |
0.4 |
Core business operations |
9.4 |
11.9 |
32.0 |
36.2 |
Increase (decrease) in cash |
$ (6.2) |
$ (5.4) |
$ (3.3) |
$ (1.8) |
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
PROFORMA CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except
for share and per share data) |
(unaudited) |
|
|
Pro Forma Three Months Ended
December 31, 2012 |
One-Time
Adjustments |
|
Adjusted Pro Forma Three
Months Ended December 31, 2012 |
|
|
|
|
|
Total net sales |
$ 65,081 |
$ -- |
|
$ 65,081 |
|
|
|
|
|
Software and other |
14,175 |
3,872 |
(1) |
10,303 |
Professional services |
6,279 |
-- |
|
6,279 |
Maintenance and EDI |
7,204 |
-- |
|
7,204 |
Depreciation, amortization and
impairment |
3,295 |
796 |
(2) |
2,500 |
Total cost of sales |
30,953 |
4,668 |
|
26,285 |
Gross margin |
34,128 |
(4,668) |
|
38,796 |
|
|
|
|
|
Sales and marketing |
11,433 |
-- |
|
11,433 |
Product research and development |
8,109 |
-- |
|
8,109 |
General and administrative |
18,538 |
9,163 |
(3) |
9,375 |
Acquisition-related expenses |
958 |
-- |
|
958 |
Depreciation, amortization and
impairment |
3,125 |
474 |
(2) |
2,651 |
Total operating costs and
expenses |
42,163 |
9,637 |
|
32,526 |
Operating income
(loss) |
(8,035) |
(14,304) |
|
6,269 |
Other expense (income) |
8,136 |
-- |
|
8,136 |
Loss before taxes |
(16,171) |
(14,304) |
|
(1,867) |
Income tax expense |
681 |
-- |
|
681 |
Net loss |
$ (16,852) |
$ (14,304) |
|
$ (2,548) |
Noncontrolling interest's share |
12 |
-- |
|
12 |
Net loss available to Merge common
shareholders |
$ (16,864) |
$ (14,304) |
|
$ (2,560) |
|
|
|
|
|
EPS - diluted |
$ (0.18) |
|
|
$ (0.03) |
Weighted average shares outstanding -
diluted |
93,058 |
|
|
93,058 |
|
|
|
|
|
|
|
|
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
RECONCILIATION OF NET
INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS TO ADJUSTED
EBITDA |
(in thousands, except
for share and per share data) |
(unaudited) |
|
|
Pro Forma Three Months Ended
December 31, 2012 |
One-Time
Adjustments |
|
Adjusted Pro Forma Three
Months Ended December 31, 2012 |
|
|
|
|
|
Net loss available to Merge common
shareholders |
$ (16,864) |
$ (14,304) |
|
$ (2,560) |
Acquisition-related costs |
958 |
-- |
|
958 |
Stock-based compensation expense |
1,541 |
-- |
|
1,541 |
Amortization of significant acquisition
intangibles |
2,726 |
-- |
|
2,726 |
Adjusted net income
(loss) |
$ (11,639) |
$ (14,304) |
|
$ 2,665 |
Depreciation and amortization |
3,694 |
1,269 |
(2) |
2,425 |
Net interest expense |
8,137 |
-- |
|
8,137 |
Income tax expense (benefit) |
681 |
-- |
|
681 |
Adjusted EBITDA |
$ 873 |
$ (13,035) |
|
$ 13,908 |
|
|
|
|
|
Adjusted net income per share |
$ (0.12) |
|
|
$ 0.03 |
Adjusted EBITDA per share - diluted |
$ 0.01 |
|
|
$ 0.15 |
Fully diluted shares (if net income) |
94,985 |
|
|
94,985 |
|
|
|
|
|
Adjusted EBITDA as a % of net sales |
1.3% |
|
|
21.4% |
|
|
|
|
|
Notes: |
|
|
|
|
|
|
|
|
|
(1) Charge primarily related
to third party licenses and technology considered unusable. |
(2) Write-off of acquired
intangibles. |
(3) Charge related primarily
to uncollectible billings from customer contracts obtained through
acquisitions in the past few years. |
CONTACT: Media Contact:
Lesley Weisenbacher
Vice President, Marketing
312.540.6623 | lesley.weisenbacher@merge.com
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