Merge Reports Record First Quarter Sales

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CHICAGO, April 30, 2013 -- 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 first quarter of 2013.

"Our record first quarter results, combined with our successful debt refinancing, provides a solid start to the year, an immediate benefit to our bottom-line and confidence in our long-term financial health and stability," said Jeff Surges, CEO of Merge Healthcare. "As health systems look beyond their electronic health record (EHR) implementations and to their next set of strategic priorities, including Meaningful Use Stage Two, we expect to see continued momentum and adoption of our enterprise imaging and subscription-based offerings."

Financial Highlights:

  • Sales increased to $63.6 million ($64.0 million on a pro forma basis) in the quarter, from $61.0 million ($61.6 million on a pro forma basis) in the first quarter of 2012;
  • Adjusted EBITDA was $12.5 million, representing 19.5% of pro forma revenue in the quarter, compared to $12.5 million and 20.3% in the first quarter of 2012 (see table at end of this press release for reconciliation);
  • Subscription-based pricing arrangements generated 15% of total sales in the quarter and subscription backlog grew 16% in the quarter and 74% in the last year; and

Business Highlights:

  • Announced debt refinancing, which entailed replacing existing 11.75% Notes with a new senior secured credit facilities consisting of a six-year term loan of $255 million and a five-year revolving credit facility of up to $20 million at an initial rate of 6%;
  • Added 11 iConnect® contracts with leading healthcare systems including Johns Hopkins, Orion Health, St. Vincent's Healthcare and Southern Illinois Healthcare, among others;
  • Executed 7 contracts for Merge HoneycombTM solutions, with clients including Outpatient Imaging Affiliates, Southcoast Medical Imaging and Tri-Valley Orthopaedics, among others;
  • Extended and renewed strategic relationships with both Ascension Health, one of the largest health systems in the US, and Centers for Diagnostic Imaging (CDI), one of the largest imaging center chains in the country;
  • Backlog in the DNA segment grew from $34.9M to $40.9M and is 100% subscription revenue based.

For full results, click here.

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