Company expects revenue of $13M and EBITDA of $6.7M excluding special items

The provider of health IT solutions Merge Healthcare (Nasdaq: MRGE) recently announced its unaudited results for the second quarter ended June 30, 2009.

The Milwaukee, Wis.-based company said in a news release the preliminary results for the quarter were made public for the benefit of its shareholders, other interested investors, and shareholders of etrials Worldwide Inc. (Nasdaq: ETWC) who are considering Merge’s tender offer to acquire all registered shares of etrails Worldwide.

In the announcement, Merge Healthcare included operating results for the quarter, as well as an estimated impact to its financial statement as a result of the sale of Merge’s equity interest in Eklin Medical Systems Inc., which is part of the Elkin’s acquisition by VCA Antech Inc. (Nasdaq: WOOF).

Merge Healthcare will receive approximately $1.4 million for its equity share in Eklin from VCA, the acquirer of Eklin, with the bulk of the proceeds to be received during the third quarter of 2009. The transaction will appear in the company’s second-quarter earnings results as a $3.6 million non-cash write down of its interest in Eklin.

The company will also report $2.2 million of non-recurring revenue for the second quarter as a result of a new value added reseller (VAR) agreement that was assigned to VCA by Eklin as part of VCA’s acquisition in June. The VAR may generate additional income in subsequent quarters, the company said.

Merge Healthcare said preliminary unaudited results is for revenue to reach between $15 million and 15.5 million, compared with $13.3 million posted last year during the same period.

Operating income will total from $3.7 million to $4.4 million, up substantially from an operating loss of $18.3 million for the second quarter of fiscal 2008.

Merge Healthcare expects a net profit range of $0.1 million and $0.8 million, up from last year’s second-quarter loss of $18.2 million. Earnings before interest, taxes, depreciation and amortization (EBITDA, which include the amortization of stock-based compensation) will reach from between $3.1 million to $2.4 million, up from a loss of $14.0 million for the same quarter last year. Excluding the non-cash equity impairment charge of $3.6 million, second-quarter EBITDA is expected to reach between $6.7 million and $6.0 million.

The company stated the results are preliminary and subject to change following review by its independent public accounting firm.

About Merge Healthcare

Merge Healthcare develops software solutions that automate healthcare data and diagnostic workflow to create a more comprehensive electronic record of the patient experience. Every Merge product, ranging from standards-based SDKs to fully integrated clinical applications, is built on decades of technology and expertise in medical software development, delivery and support.

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