Zacks_Analysts' Blog : Merge Reports In-Line - Analyst Blog

Merge Healthcare Inc. (MRGE) recently reported fourth quarter and full fiscal 2009 results. For the fourth quarter, earnings per share were 2 cents, in-line with the Zacks Consensus Estimate but considerably lower than the year-ago earnings of 6 cents. For fiscal 2009, earnings per share were 18 cents, substantially higher than the year-ago loss per share of 18 cents.

Quarterly results

Total sales in the fourth quarter increased roughly 28% year over year to $19.3 million. Growth was led by strong Services and maintenance revenues that increased 62% year over year to $11.7 million. Software and other revenues declined 3% year over year to $7.6 million.

Merge registered a contraction in margins in the fourth quarter. Gross margin declined 370 basis points (bps) year over year to 65.9%. Operating margin declined 1,680 bps year over year to 7.6%.

Fiscal year results

Total sales in fiscal 2009 increased 18% year over year to $66.8 million. Growth was witnessed across all business segments. Services and maintenance revenues increased 16% year over year to $33.8 million. Software and other revenues increased 20% year over year to $33.0 million.

Merge ended fiscal 2009 with a cash balance of $19.6 million, a sequential increase of $2.7 million. Cash flow from operations declined by $5.4 million in the fourth quarter, mainly on account of $3.1 million of interest and early debt retirement costs.

Merge is a healthcare software and services company focused on integrating radiology workflow to improve productivity, profitability and patient care by fusing business and clinical workflow, and intelligently managing and distributing diagnostic images and information throughout the healthcare enterprise.

Merge’s main competitors include AllScripts-Misys Healthcare Solutions (MDRX) and Amicas, Inc. (AMCS).