Merge Reports Third Quarter Financial Results
October 30 2013 - 7:30AM
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 third
quarter of 2013.
"Even though overall third quarter sales were down compared to
the prior year, we made tangible progress. We realized a
record-breaking quarter in cash collections, voluntarily repaid a
portion of our debt, streamlined our business operations, grew our
subscription-based backlog and implemented a company-wide strategy
for ICD-10 across all applicable solutions. Add the launch of the
new iConnect® Network for MU Stage 2, our recent award for 'Best in
Interoperability' by Frost & Sullivan and our leadership
standings in MU for radiology and vendor neutral archiving (VNA)
and we're very well positioned for 2014." said Justin Dearborn, CEO
of Merge Healthcare. "Further, while the debt refinancing last
quarter resulted in $24 million of one-time expenses and $20
million of cash expenditures, we are seeing the positive impacts
this quarter with lower interest, which will continue to decrease
as we make voluntary repayments."
Financial Highlights:
- Sales decreased to $57.2 million ($57.7 million on a pro forma
basis) in the third quarter of 2013, from $60.4 million ($61.0
million on a pro forma basis) in the third quarter of 2012;
- Subscription backlog grew 73% since the third quarter of 2012,
with growth in both Merge Healthcare and DNA segments;
- Adjusted EBITDA for the third quarter of 2013 was $7.2 million,
representing 13% of pro forma revenue for the quarter, compared to
$12.5 million and 21% in the third quarter of 2012 with the change
primarily a result of an unusually high mix of hardware sales (with
lower margins) and $2.3 of non-cash charges in the third quarter of
2013;
- Strong cash collections in the quarter drove an increase in
cash generated from business operations to $15.3 million in the
third quarter of 2013 from $9.2 million in the third quarter of
2012; and
- Utilized excess cash to voluntarily repay $6 million of debt
principal that resulted in a leverage ratio of 5.1 : 1, well within
the 5.5 : 1 loan agreement limit.
Business Highlights:
- Increased Merge Hemo™ record station sales by 40% year-to-date
in 2013 compared to 2012;
- Targeted a new white-space market opportunity for advanced
interoperability with the iConnect Network executing 15 early
adopter agreements, including two beta site customers, Radiology
Ltd. (Tucson, AZ) and Long Island Radiology Associates;
- Saw eClinical backlog increase $29.5 million (127%) to $52.8
million in the third quarter of 2013, from $23.3 million in the
third quarter of 2012;
- Accepted the 2013 North America Frost & Sullivan Award for
Product Leadership in Interoperability Solutions for the iConnect
Enterprise Clinical Platform;
- Received recognition from IHS for the second year in a row that
Merge, through its iConnect Enterprise Archive, is the leading
provider for vendor-neutral archive (VNA) solutions in both the
world and in the Americas; and
- Was acknowledged, according to data compiled by the U.S.
Department of Health and Human Services (HHS), as being the
provider of the most widely used Certified Electronic Health Record
Technology (CEHRT) by radiologists.
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):
|
Q3 2013 |
Q3 2012 |
Net sales |
$57.2 |
$60.4 |
Operating income (loss) |
(0.5) |
6.0 |
Net loss |
(4.1) |
(3.8) |
Net loss per diluted share |
($0.04) |
($0.04) |
|
|
|
Cash balance at period end |
$20.3 |
$42.2 |
Cash from business operations* |
15.3 |
9.2 |
|
|
|
*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):
|
Q3 2013 |
Q3 2012 |
Pro forma results |
|
|
Net sales |
$57.7 |
$61.0 |
Adjusted net income |
1.7 |
0.9 |
Adjusted EBITDA |
7.2 |
12.5 |
|
|
|
Adjusted net income per diluted share |
$0.02 |
$0.01 |
Adjusted EBITDA per diluted share |
$0.07 |
$0.13 |
|
|
|
Non-GAAP and other
measures |
|
|
Subscription, maintenance & EDI revenue
as % of net sales |
64.1% |
61.0% |
Subscription and non-recurring backlog at
period end |
$91.9 |
$71.4 |
Days sales outstanding |
104 |
106 |
A 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 are as
follows:
|
Three Months
Ended September 30, 2013 |
|
Healthcare |
DNA |
Corporate/
Other |
Total |
Net sales: |
|
|
|
|
Software and other |
$ 11.5 |
$ 8.1 |
|
$ 19.6 |
Service |
6.5 |
4.1 |
|
10.6 |
Maintenance |
26.9 |
0.6 |
|
27.5 |
Total net sales |
44.9 |
12.8 |
|
57.7 |
Gross Margin |
25.4 |
5.6 |
|
31.0 |
Gross Margin % |
56.6% |
43.8% |
|
53.7% |
Expenses |
23.5 |
2.7 |
|
26.2 |
Segment income (loss) |
$ 1.9 |
$ 2.9 |
|
$ 4.8 |
Operating Margin % |
4% |
23% |
|
8% |
Net corporate/other expenses (1) |
|
|
9.0 |
9.0 |
Loss before income taxes |
|
|
|
(4.2) |
Adj. EBITDA reconciling adjustments |
5.1 |
1.2 |
5.1 |
11.4 |
Adjusted EBITDA |
$ 7.0 |
$ 4.1 |
$ (3.9) |
$ 7.2 |
Adjusted EBITDA % |
15.6% |
32.0% |
|
12.5% |
|
|
|
|
|
(1) 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 September 30, 2013 |
|
Backlog as of
September 30, 2013 |
|
|
Healthcare |
DNA |
|
Healthcare |
DNA |
|
Revenue Source |
$ |
% |
$ |
% |
Total |
$ |
% |
$ |
% |
Total |
Maintenance & EDI (1) |
$ 26.9 |
59.9% |
$ 0.6 |
4.7% |
47.6% |
|
|
|
|
|
Subscription |
1.5 |
3.3% |
8.0 |
62.5% |
16.5% |
$ 13.2 |
37.2% |
$ 56.4 |
100.0% |
75.7% |
Non-recurring |
16.5 |
36.8% |
4.2 |
32.8% |
35.9% |
22.3 |
62.8% |
-- |
0.0% |
24.3% |
Total |
$ 44.9 |
100.0% |
$ 12.8 |
100.0% |
100.0% |
$ 35.5 |
100.0% |
$ 56.4 |
100.0% |
100.0% |
|
77.8% |
|
22.2% |
|
|
38.6% |
|
61.4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 are 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 arrangements will
include monthly payments (including leases), long-term clinical
trials, renewable annual software agreements (with very high renew
rate), to specify a few contract 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) debt extinguishment costs, (c) restructuring and other
costs, (d) share-based compensation expense, (e)
acquisition-related amortization (f) acquisition-related sales
adjustments, and (g) acquisition-related cost of 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 and (c) 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 debt
issuance and retirement activities, 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:
- Debt extinguishment expense is comprised of both non-cash
expenses, such as the remaining unamortized balance of costs
associated with the issuance of the old debt and unamortized
balance of the discount when the old debt was issued, as well as
contractually owed cash charges to the holders of the old debt to
allow us to retire it early. Management excludes this expense
from non-GAAP net income because it believes such expense does not
directly correlate to the underlying performance of operations,
rather is an expense that is specific to a transaction that we
would expect to occur infrequently.
- 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.
- Share-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 at 8:30 AM ET on Wednesday,
October 30, 2013. The call will address third quarter results and
will provide a business update on the company's market outlook and
strategies for the remainder of 2013.
Participants may preregister for this teleconference at
http://emsp.intellor.com?p=413570&do=register&t=8. Upon
registration, a confirmation page will display dial-in numbers and
a unique PIN, and the participant will also receive an email
confirmation with 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
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.
Cautionary Notice Regarding Forward-Looking
Statements
The matters discussed in this press 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. The potential risks
and uncertainties include those risks and uncertainties included
under the captions "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in our
Annual Report on Form 10-K for the year ended December 31, 2012 and
our most recent Quarterly Report on Form 10-Q for the quarter ended
June 30, 2013 which are on file with the SEC and are available on
our investor relations website at merge.com and on the SEC website
at www.sec.gov. Additional information will also be set forth in
our Quarterly Report on Form 10-Q for the quarter ended September
30, 2013. Except as expressly required by the federal securities
laws, Merge 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) |
|
|
|
|
September 30, |
December 31, |
|
2013 |
2012 |
|
(Unaudited) |
|
Current assets: |
|
|
Cash (including restricted cash) |
$ 20,281 |
$ 35,875 |
Accounts receivable, net |
65,054 |
72,065 |
Inventory |
5,556 |
5,979 |
Prepaid expenses |
5,340 |
4,972 |
Deferred income taxes |
3,898 |
3,135 |
Other current assets |
19,017 |
21,621 |
Total current assets |
119,146 |
143,647 |
|
|
|
Property and equipment, net |
5,298 |
4,964 |
Purchased and developed software, net |
15,486 |
19,007 |
Other intangible assets, net |
28,393 |
35,628 |
Goodwill |
214,269 |
214,312 |
Deferred tax assets |
3,568 |
7,041 |
Other assets |
7,657 |
12,254 |
Total assets |
$ 393,817 |
$ 436,853 |
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 25,089 |
$ 24,438 |
Current maturities of long-term debt |
2,550 |
-- |
Interest payable |
-- |
4,944 |
Accrued wages |
5,657 |
5,881 |
Restructuring accrual |
2,014 |
222 |
Other current liabilities |
8,570 |
12,606 |
Deferred revenue |
55,471 |
52,355 |
Total current liabilities |
99,351 |
100,446 |
|
|
|
Long-term debt, less current maturities, net
of unamortized discount |
243,374 |
250,046 |
Deferred income taxes |
3,321 |
3,046 |
Deferred revenue |
627 |
894 |
Income taxes payable |
1,149 |
1,040 |
Other liabilities |
1,667 |
3,920 |
Total liabilities |
349,489 |
359,392 |
Total Merge shareholders' equity |
43,906 |
77,011 |
Noncontrolling interest |
422 |
450 |
Total shareholders' equity |
44,328 |
77,461 |
Total liabilities and shareholders'
equity |
$ 393,817 |
$ 436,853 |
|
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands, except
for share and per share data) |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2013 |
2012 |
2013 |
2012 |
Net sales |
|
|
|
|
Software and other |
$ 19,357 |
$ 21,232 |
$ 60,807 |
$ 69,251 |
Professional services |
10,447 |
11,277 |
34,122 |
30,573 |
Maintenance and EDI |
27,441 |
27,885 |
83,143 |
84,434 |
Total net sales |
57,245 |
60,394 |
178,072 |
184,258 |
Cost of sales |
|
|
|
|
Software and other |
11,702 |
9,006 |
33,107 |
29,003 |
Professional services |
6,248 |
6,524 |
19,175 |
18,522 |
Maintenance and EDI |
6,875 |
7,277 |
22,328 |
23,840 |
Depreciation and amortization |
1,804 |
2,049 |
5,425 |
5,829 |
Total cost of sales |
26,629 |
24,856 |
80,035 |
77,194 |
Gross margin |
30,616 |
35,538 |
98,037 |
107,064 |
Operating costs and expenses: |
|
|
|
|
Sales and marketing |
8,526 |
10,808 |
28,982 |
32,473 |
Product research and development |
8,017 |
8,266 |
24,988 |
24,251 |
General and administrative |
9,654 |
7,783 |
25,567 |
23,822 |
Acquisition-related expenses |
173 |
(762) |
600 |
2,444 |
Restructuring and other expenses |
2,054 |
830 |
3,856 |
830 |
Depreciation and amortization |
2,652 |
2,651 |
7,899 |
8,183 |
Total operating costs and expenses |
31,076 |
29,576 |
91,892 |
92,003 |
Operating income (loss) |
(460) |
5,962 |
6,145 |
15,061 |
Other expense, net |
(4,119) |
(8,104) |
(41,614) |
(23,219) |
Loss before income taxes |
(4,579) |
(2,142) |
(35,469) |
(8,158) |
Income tax expense (benefit) |
(478) |
1,684 |
3,249 |
3,410 |
Net loss |
(4,101) |
(3,826) |
(38,718) |
(11,568) |
Less: noncontrolling interest's
share |
4 |
(12) |
(28) |
(30) |
Net loss available to common
shareholders |
$ (4,105) |
$ (3,814) |
$ (38,690) |
$ (11,538) |
|
|
|
|
|
Net loss per share - basic |
$ (0.04) |
$ (0.04) |
$ (0.41) |
$ (0.13) |
Weighted average number of common shares
outstanding - basic |
93,707,856 |
92,177,703 |
93,502,456 |
91,800,824 |
|
|
|
|
|
Net loss per share - diluted |
$ (0.04) |
$ (0.04) |
$ (0.41) |
$ (0.13) |
Weighted average number of common shares
outstanding - diluted |
93,707,856 |
92,177,703 |
93,502,456 |
91,800,824 |
|
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(in
thousands) |
|
|
|
|
Nine Months
Ended |
|
September
30, |
|
2013 |
2012 |
|
(unaudited) |
(unaudited) |
Cash flows from operating
activities: |
|
|
Net loss |
$ (38,718) |
$ (11,568) |
Adjustments to reconcile net loss to net cash
provided by operating activities: |
|
|
Depreciation and amortization |
13,324 |
14,012 |
Share-based compensation |
4,192 |
4,245 |
Change in contingent consideration for
acquisitions |
-- |
1,250 |
Amortization of debt issuance costs &
discount |
1,243 |
2,010 |
Loss on extinguishment of debt |
23,822 |
-- |
Provision for doubtful accounts
receivable and allowances, net of recoveries |
(2,068) |
1,287 |
Deferred income taxes |
2,985 |
2,700 |
Realized and unrealized loss (gain) on
equity security |
645 |
(982) |
Loss on acquisition settlement |
1,345 |
-- |
Stock issued for lawsuit settlement |
885 |
-- |
Change in assets and liabilities, net of
effects of dispositions: |
|
|
Accounts receivable |
9,078 |
(193) |
Inventory |
423 |
263 |
Prepaid expenses |
(1,263) |
(4,507) |
Accounts payable |
774 |
(2,703) |
Accrued wages |
(223) |
(1,031) |
Restructuring accrual |
1,792 |
(650) |
Deferred revenue |
2,849 |
(4,402) |
Accrued interest and other
liabilities |
(10,022) |
9,694 |
Other |
(3,742) |
(4,280) |
Net change in assets and liabilities (net of
effects of acquisitions) |
(334) |
(7,809) |
Net cash provided by operating
activities |
7,321 |
5,145 |
Cash flows from investing
activities: |
|
|
Cash paid for acquisitions, net of cash
acquired |
-- |
(876) |
Purchases of property, equipment and
leasehold improvements |
(1,658) |
(1,976) |
Proceeds from sale of equity investment |
1,785 |
-- |
Change in restricted cash |
60 |
(38) |
Net cash provided by (used in) investing
activities |
187 |
(2,890) |
Cash flows from financing
activities: |
|
|
Proceeds from exercise of stock options and
employee stock purchase plan |
1,056 |
924 |
Proceeds from debt issuance |
252,450 |
-- |
Retirement of debt |
(252,000) |
-- |
Penalty for early extinguishment of debt |
(16,863) |
-- |
Principal payments on long-term debt |
(6,646) |
(35) |
Principal payments on capital leases |
(878) |
(267) |
Net cash provided by (used in) financing
activities |
(22,881) |
622 |
Effect of exchange rate changes on cash |
(161) |
24 |
Net increase (decrease) in cash and cash
equivalents |
(15,534) |
2,901 |
Cash and cash equivalents, beginning of
period (net of restricted cash) (1) |
35,062 |
38,566 |
Cash and cash equivalents, end of period (net
of restricted
cash)
(2) |
$ 19,528 |
$ 41,467 |
|
|
|
(1) Restricted cash of $813
and $707 as of December 31, 2012 and 2011, respectively. |
(2) Restricted cash of $753
and $745 as of September 30, 2013 and 2012, 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 |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2013 |
2012 |
2013 |
2012 |
Net loss available to common shareholders of
Merge |
$ (4,105) |
$ (3,814) |
$ (38,690) |
$ (11,538) |
Acquisition-related costs |
173 |
(762) |
600 |
2,444 |
Debt extinguishment costs |
-- |
-- |
23,822 |
-- |
Restructuring and other |
2,054 |
830 |
3,856 |
830 |
Share-based compensation expense |
697 |
1,429 |
3,998 |
4,245 |
Amortization of significant acquisition
intangibles |
2,506 |
2,727 |
7,519 |
8,179 |
Acquisition-related sales
adjustments |
412 |
563 |
1,155 |
1,620 |
Acquisition-related cost of sales
adjustments |
(38) |
(123) |
(154) |
(326) |
Adjusted net income |
$ 1,699 |
$ 850 |
$ 2,106 |
$ 5,454 |
Depreciation and amortization |
1,950 |
1,973 |
5,805 |
5,833 |
Net interest expense |
4,001 |
8,143 |
16,957 |
24,023 |
Income tax expense |
(478) |
1,684 |
3,249 |
3,410 |
Adjusted EBITDA |
$ 7,172 |
$ 12,650 |
$ 28,117 |
$ 38,720 |
|
|
|
|
|
Adjusted net income per share - diluted |
$ 0.02 |
$ 0.01 |
$ 0.02 |
$ 0.06 |
Adjusted EBITDA per share - diluted |
$ 0.07 |
$ 0.13 |
$ 0.29 |
$ 0.41 |
|
|
|
|
|
Fully diluted shares (if net income) |
95,730,488 |
94,178,002 |
95,345,059 |
94,419,712 |
|
|
|
|
|
|
Pro Forma Three
Months Ended September 30, |
Pro Forma Nine
Months Ended September 30, |
|
2013 |
2012 |
2013 |
2012 |
Net loss available to common shareholders of
Merge |
$ (3,731) |
$ (3,374) |
$ (37,689) |
$ (10,244) |
Acquisition-related costs |
173 |
(762) |
600 |
2,444 |
Debt extinguishment costs |
-- |
-- |
23,822 |
-- |
Restructuring and other |
2,054 |
830 |
3,856 |
830 |
Share-based compensation expense |
697 |
1,429 |
3,998 |
4,245 |
Amortization of significant acquisition
intangibles |
2,506 |
2,727 |
7,519 |
8,179 |
Adjusted net income |
$ 1,699 |
$ 850 |
$ 2,106 |
$ 5,454 |
Depreciation and amortization |
1,950 |
1,973 |
5,805 |
5,833 |
Net interest expense |
4,001 |
8,143 |
16,957 |
24,023 |
Income tax expense |
(478) |
1,684 |
3,249 |
3,410 |
Adjusted EBITDA |
$ 7,172 |
$ 12,650 |
$ 28,117 |
$ 38,720 |
|
|
|
|
|
Adjusted net income per share - diluted |
$ 0.02 |
$ 0.01 |
$ 0.02 |
$ 0.06 |
Adjusted EBITDA per share - diluted |
$ 0.07 |
$ 0.13 |
$ 0.29 |
$ 0.41 |
|
|
|
|
|
Fully diluted shares (if net income) |
95,730,488 |
94,178,002 |
95,345,059 |
94,419,712 |
|
|
|
MERGE HEALTHCARE
INCORPORATED AND SUBSIDIARIES |
CASH FROM BUSINESS
OPERATIONS |
(unaudited) |
|
|
|
|
|
|
Three Months
Ended September 30, |
Nine Months Ended
September 30, |
|
2013 |
2012 |
2013 |
2012 |
|
(amounts in millions) |
Cash received from (paid for): |
|
|
|
|
Issuance of debt, net of OID of $2.5 |
$ -- |
$ -- |
$ 252.5 |
$ -- |
Debt principal reduction |
(6.6) |
-- |
(6.6) |
-- |
Debt issuance costs |
(0.9) |
-- |
(4.8) |
-- |
Retirement of debt, including prepayment
penalty of $16.8 |
-- |
-- |
(268.9) |
-- |
Interest paid |
(4.0) |
-- |
(21.0) |
(14.8) |
Acquisitions |
-- |
-- |
-- |
(0.9) |
Restructuring initiatives |
(1.0) |
(0.7) |
(2.0) |
(1.2) |
Acquisition related costs |
(0.6) |
(0.3) |
(0.8) |
(0.8) |
Sale of investment |
1.8 |
-- |
1.8 |
-- |
Proceeds from stock option exercises |
0.3 |
-- |
0.9 |
0.7 |
Property and equipment purchases |
(0.8) |
0.3 |
(1.7) |
(2.0) |
Business operations |
15.3 |
9.2 |
35.0 |
21.9 |
Increase (decrease) in cash |
$ 3.5 |
$ 8.5 |
$ (15.6) |
$ 2.9 |
CONTACT: Media Contact:
Jennifer Jawor
Director, Corporate Marketing
312.565.6825 | jennifer.jawor@merge.com
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