MRGE Mirage Energy Corporation (PK)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549-1004

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):  April 28, 2015 (April 22, 2015)

 

 

Merge Healthcare Incorporated

(Exact name of registrant as specified in its charter)

(312) 565-6868

 (Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

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Item 2.02

Results of Operations and Financial Condition.

 

On April 28, 2015, Merge Healthcare Incorporated (the “Company”) issued a News Release containing information about its financial condition and results of operations for the quarter ended March 31, 2015.

A copy of the Company’s News Release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

(b)

On April 22, 2015 and April 23, 2015, Dennis Brown and Nancy J. Koenig, respectively, informed the Company that they are resigning from the board of directors of the Company, effective as of the date of the Company’s next annual meeting of stockholders, and that they do not intend to seek reelection to the board of directors of the Company at such meeting.  Neither director resigned because of a disagreement with the Company.  Ms. Koenig has not resigned from her position as Chief Operating Officer of the Company.

(d)

Michael P. Cole was elected to the board of directors of the Company effective April 23, 2015.  Mr. Cole has been the president of MAEVA Group LLC, a turnaround–oriented merchant bank, since 2014.  From 1997 to 2014, he was employed by Madison Dearborn Partners, LLC (“MDP”), a Chicago–based private equity investment firm that manages approximately $20 billion in equity capital, where he focused on investments in the media, telecommunications and technology services sectors.  In 2007, Mr. Cole was named a Managing Director of MDP, which he remained until his departure in 2014.  At MDP, he led or worked on investments in companies such as MetroPCS (now T–Mobile), XM Satellite Radio Holdings, Intelsat Ltd. (NYSE: I), Univision Communications, Inc., Alaska Native Wireless (now AT&T), Telemundo Communications Group and Council Tree Hispanic Broadcasters (now Comcast NBCU), Reiman Publications, Cbeyond Communications, Sorenson Communications, The Topps Company, Inc., Wind Telecom SpA (now Vimpelcom) and Q9 Networks.  He was named a “Top 40 Global Dealmaker Under 40” by Dealmaker Magazine and a “Top 40 Under 40” leader by Crain’s Chicago Business.  Since 2007, Mr. Cole has been a director on the board of directors of Univision Communications Inc.  Previously, Mr. Cole served on the boards of directors of several other companies, including Wind Telecom SpA from 2008 to 2012, The Topps Company, Inc. from 2007 to 2014, and Sorenson Communications Holdings, LLC from 2006 to 2014.  Within the past two years, he has also served on the boards of directors of several 501(c)(3) charitable organizations, including the Big Shoulders Fund, the Chicago Entrepreneurial Center, and The Lyric Opera of Chicago where he is a member of the investment committee, as well as the Illinois Venture Capital Association.  Early in his career, Mr. Cole was a health care investment banker with Bear, Stearns & Co. Inc. and advised major health care companies on over $3 billion in mergers, acquisitions and financing activity.  Mr. Cole received his A.B. degree from Harvard College.

Mr. Cole will be entitled to receive the same compensation paid to non-employee directors as determined by the Nominating and Governance Committee.  Mr. Cole has not entered into or proposed to enter into any transactions required to be reported under Item 404(a) of Regulation S–K.

Item 9.01

Financial Statements and Exhibits.

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

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EXHIBIT INDEX

 

 

 

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Exhibit 99.1

 

 

Media Contact: Michael Klozotsky Vice President, Corporate Marketing 312.946.2535 Michael.Klozotsky@merge.com

		Q1 2015				Q1 2014
Net sales		$	54.4			$	50.9
Operating income			3.8				4.4
Net income			17.7				0.3
Net income per diluted share		$	0.11			$	0.00
Cash balance at period end		$	24.8			$	19.8

		Q1 2015				Q1 2014
Non-GAAP results
Adjusted net income		$	4.9			$	4.3
Adjusted EBITDA			10.5				10.2
Adjusted net income per diluted share		$	0.05			$	0.04
Other measures
Subscription, maintenance & EDI revenue as % of net sales			65.1	%			65.9	%
Days sales outstanding			79				90

		Three Months Ended March 31, 2015
		Healthcare				DNA			Corporate/ Other					Total
Net sales:
Software and other		$	13.1			$	3.7							$	16.8
Service			7.2				2.3								9.5
Maintenance			28.0				0.1								28.1
Total net sales			48.3				6.1								54.4
Gross Margin			28.2				4.0								32.2
Gross Margin %			58.4	%			65.6	%							59.2	%
Expenses			22.1				3.5								25.6
Segment income		$	6.1			$	0.5							$	6.6
Operating Margin %			13	%			8	%							12	%
Net corporate/other expenses (1)										$	7.3				7.3
Income (loss) before income taxes															(0.7	)
Adj. EBITDA reconciling adjustments			5.4				0.6				5.2				11.2
Adjusted EBITDA		$	11.5			$	1.1			$	(2.1	)		$	10.5
Adjusted EBITDA %			23.8	%			18.0	%							19.3	%

		March 31, 2015				December 31, 2014
Current assets:
Cash (including restricted cash)		$	24,784			$	42,531
Accounts receivable, net			47,877				51,300
Inventory			6,483				5,686
Prepaid expenses			5,551				3,690
Deferred income taxes			564				1,131
Other current assets			8,746				11,110
Total current assets			94,005				115,448
Property and equipment, net			5,193				4,079
Purchased and developed software, net			42,248				14,585
Other intangible assets, net			34,706				17,956
Goodwill			267,263				214,374
Deferred income taxes			5,211				5,396
Other assets			2,502				2,499
Total assets		$	451,128			$	374,337
Current liabilities:
Accounts payable		$	20,972			$	21,072
Current maturities of long-term debt			11,750				11,750
Accrued wages			6,795				11,169
Restructuring accrual			1,165				-
Other current liabilities			3,502				4,996
Deferred revenue			63,206				53,184
Total current liabilities			107,390				102,171
Long-term debt, less current maturities, net of unamortized discount			210,352				213,676
Deferred income taxes			3,769				4,025
Deferred revenue			503				1,091
Income taxes payable			1,114				1,109
Other liabilities			1,757				1,664
Total liabilities			324,885				323,736
Series A convertible preferred stock			50,000				-
Total Merge shareholders' equity			68,728				50,115
Noncontrolling interest			7,515				486
Total shareholders' equity			76,243				50,601
Total liabilities and shareholders' equity		$	451,128			$	374,337

		Three Months Ended
		March 31,
		2015				2014
Net sales
Software and other		$	16,802			$	15,083
Professional services			9,484				10,489
Maintenance and EDI			28,117				25,331
Total net sales			54,403				50,903
Cost of sales
Software and other			6,182				6,101
Professional services			6,764				6,347
Maintenance and EDI			7,800				6,963
Depreciation and amortization			1,481				1,595
Total cost of sales			22,227				21,006
Gross margin			32,176				29,897
Operating costs and expenses:
Sales and marketing			8,978				8,007
Product research and development			8,228				7,580
General and administrative			7,512				7,360
Acquisition-related expenses			351				26
Restructuring and other expenses			1,178				-
Depreciation and amortization			2,099				2,482
Total operating costs and expenses			28,346				25,455
Operating income			3,830				4,442
Other expense, net			(4,526	)			(4,136	)
Income (loss) before income taxes			(696	)			306
Income tax benefit			(18,391	)			(19	)
Net income			17,695				325
Less:  noncontrolling interest's share			(76	)			2
Net income attributable to Merge			17,771				323
Less: preferred stock dividends and dividend equivalents related to accretion			5,328				-
Net income available to common shareholders		$	12,443			$	323
Net income per share - basic		$	0.11			$	0.00
Weighted average number of common shares outstanding - basic			96,616,916				94,656,786
Net income per share - diluted		$	0.11			$	0.00
Weighted average number of common shares outstanding - diluted			96,616,916				95,996,566

		Three Months Ended March 31,
		2015				2014
Cash flows from operating activities:
Net income		$	17,695			$	325
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			3,580				4,077
Share-based compensation			1,265				1,530
Amortization of debt issuance costs & discount			222				492
Provision for doubtful accounts receivable and allowances, net of recoveries			290				525
Deferred income taxes			(18,320	)			279
Net change in assets and liabilities			(3,981	)			2,620
Net cash provided by operating activities			751				9,848
Cash flows from investing activities:
Cash paid for acquisitions, net of cash acquired			(63,059	)			-
Purchases of property, equipment and leasehold improvements			(1,248	)			(333	)
Purchased technology and capitalized software development			(393	)			(766	)
Change in restricted cash			23				160
Net cash used in investing activities			(64,677	)			(939	)
Cash flows from financing activities:
Proceeds from issuance of preferred stock			50,000				-
Stock issuance cost paid			(288	)			-
Preferred stock dividends			(413	)			-
Principal payments on term loans			(2,938	)			(8,592	)
Waiver and amendment costs paid			(573	)			-
Principal payments on capital leases			(140	)			(167	)
Proceeds from exercise of stock options and employee stock purchase plan			578				51
Net cash provided by (used in) financing activities			46,226				(8,708	)
Effect of exchange rate changes on cash			(24	)			-
Net (decrease) increase in cash and cash equivalents			(17,724	)			201
Cash and cash equivalents, beginning of period (net of restricted cash) (1)			42,322				19,337
Cash and cash equivalents, end of period (net of restricted cash) (2)		$	24,598			$	19,538

		Three Months Ended March 31,
		2015				2014
Net income available to common shareholders of Merge		$	12,443			$	323
Preferred stock dividend			413				-
Share-based compensation expense			1,265				1,530
Restructuring and other			1,178				-
Items associated with significant acquisitions:
Tax benefits			(18,393	)			-
Preferred stock accretion of dividend equivalents			4,915				-
Amortization of significant intangibles			2,185				2,247
Costs of acquisitions			351				26
Sales adjustments			632				162
Cost of sales adjustments			(120	)			(25	)
Adjusted net income			4,869				4,263
Depreciation and amortization			1,395				1,830
Net interest expense			4,258				4,161
Income tax expense (benefit)			2				(19	)
Adjusted EBITDA		$	10,524			$	10,235
Adjusted net income per share - diluted		$	0.05			$	0.04
Non-GAAP fully diluted share count (1)			104,083,899				95,996,566