Merge Healthcare Inc. has laid out a game plan for economic survival, including debt or equity financing, the sale of selected assets and ongoing cost saving initiatives.
The Milwaukee-based developer of medical imaging and clinical software applications also announced that it has filed financial results with the Securities and Exchange Commssion and is now current with SEC filing requirements.
The company's third quarter statement reported an operating loss of $141.9 million for the third quarter ended September 30, 2007, compared with a loss of $10.9 million in the year-ago quarter. The operating loss for the third quarter of 2007 includes a charge of $131.6 million for impairment of its goodwill and other long-lived assets.
The charge, it said, was required and calculated in accordance with generally accepted accounting principles.
Revenues are shrinking for the company. For the nine months ended September 30, 2007, Merge Healthcare reported revenues of $44 million, compared with $61.5 million for the comparable nine months of 2006. Contract bookings reported in the first nine months of 2007 totaled $40 million, it said.
In noting its strategic direction, the company said senior management is focused on cash preservation and the infusion of additional capital and is considering all possible strategic options.
"The company plans to focus its future operations on its core strengths and to cultivate the significant opportunities available from the teleradiology initiative announced in November," a press release indicated.
In addition to considering a spinoff of European, Middle East and African business units to teams on those continents, it also is pursuing a "right-sizing" initiative it announced on February 14, which will trim its current workforce of 600 to about 440 by March 31. Cost saving efforts are expected to trim expenses by $11 million to $12 million on an annual basis.