Company Reaffirms Its Financial Guidance For 2008 BIRMINGHAM, Ala.,
May 12 /PRNewswire-FirstCall/ -- Emageon Inc. (NASDAQ: EMAG) today
reported financial results for its first quarter ended March 31,
2008. Revenue for the first quarter of 2008 was $19.3 million
compared to first quarter 2007 revenue of $27.4 million. Net loss
for the quarter was $4.6 million, or $0.21 per share, compared to a
net loss in the quarter ended March 31, 2007 of $1.8 million, or
$0.09 per share. The first quarter 2008 net loss included a charge
of $0.8 million, or $0.04 per share, for employee severance and
associated expenses. At March 31, 2008, the Company's cash totaled
$18.3 million compared to $17.0 million at December 31, 2007. Net
cash provided by operations in first quarter 2008 was $2.6 million
compared to a net usage of cash in operations of $4.0 million in
first quarter 2007. The Company has not drawn on its $15.0 million
line of credit and has total debt obligations of less than $0.1
million. The Company's net loss excluding employee severance
charges and non-cash charges for depreciation, amortization of
intangible assets, and stock-based compensation expenses was $0.9
million, or $0.04 per share, compared to first quarter 2007 net
income excluding these expenses of $1.3 million, or $0.06 per
share. These measures of earnings were not determined in accordance
with generally accepted accounting principles ("GAAP"). A
reconciliation of earnings determined under GAAP to earnings
exclusive of these expenses and non-cash charges is included below.
Management believes that earnings exclusive of these expenses, when
viewed in addition to the Company's reported GAAP results, provides
an additional meaningful measure of operating performance, enabling
investors to more thoroughly evaluate current performance in
comparison to past performance. This information will necessarily
differ from comparable information that may be provided by other
companies and should not be considered in isolation or as an
alternative to the Company's operating and other financial
information determined under GAAP. The Company also reaffirmed its
February 20, 2008 financial guidance for the full year 2008 and
provided guidance for the quarter ending June 30, 2008. For the
full year, the Company continues to expect sales order bookings in
the range of $65 to $70 million, revenue in the range of $87 to $89
million, a net loss per share exclusive of restructuring charges in
the range of $0.20 to $0.23 per share, and earnings per share
exclusive of depreciation, amortization, and stock-based
compensation ("non-cash charges") and restructuring charges in the
range of $0.23 to $0.27 per share. For the second quarter of 2008,
the Company expects revenue in the range of $17.5 to $18.5 million,
net loss per share exclusive of restructuring charges in the range
of $0.18 to $0.20 per share, and net loss per share exclusive of
non-cash charges and restructuring charges in the range of $0.06 to
$0.08 per share. "Our first quarter results are reflective of the
difficult environment in which we are currently operating," said
Chuck Jett, Chairman and CEO of Emageon. "High penetration rates
for our core radiology products in the large hospital sector and a
more constrained capital spending willingness by our existing and
prospective customers are realities that we must manage through. We
were pleased to generate positive cash flow from operations in the
first quarter. Our balance sheet is strong, and we are continuing
to invest in our software products and to position ourselves to win
market share in the next cycle." Conference Call. Emageon will host
a conference call for investors on May 12, 2008, at 10:00 A.M. EDT
to discuss its financial results for the quarter. The call will be
webcast by Thomson/CCBN and can be accessed at Emageon's web site
at http://investor.emageon.com/ . The dial-in telephone number for
the call is 888-679-8035 (internationally, at 617-213-4848),
passcode 55905402. Replay is available from 11:00 A.M. EDT, May 12,
2008, until 11:59 P.M. EDT, May 22, 2008, at 888-286-8010
(internationally, at 617-801-6888), passcode 44165855. The webcast
is also being distributed through the Thomson StreetEvents Network
to both institutional and individual investors. Individual
investors can listen to the call at http://www.fulldisclosure.com/
, Thomson/CCBN's individual investor portal, powered by
StreetEvents. Institutional investors can access the call via
Thomson's password-protected event management site, StreetEvents
(http://www.streetevents.com/). Forward Looking Statements. This
press release contains forward-looking statements about Emageon
that represent the Company's current views with respect to, among
other things, future events and financial performance. Any
forward-looking statements contained in this press release are
based on Emageon's historical performance and on current plans,
beliefs and expectations. Actual results may differ materially from
those expressed or implied by such forward-looking statements as a
result of various risks, uncertainties and other factors beyond its
control. These risks, uncertainties and other factors include,
among others, the risk that it may not compete successfully against
larger competitors, risks associated with the cyclical nature of
its industry and changes in economic conditions in general, risks
associated with its history of operating losses, risks associated
with changes in its primary market for PACS radiology systems and
the recent decline in PACS radiology system sales orders, risks
associated with fluctuations in its quarterly operating results,
risks associated with the recent decline in the market price of its
common stock, risks associated with the nomination of a competing
slate of directors for election at this year's annual meeting of
stockholders, the risk of loss of its senior executive management,
risk associated with expansion of its market and selling efforts
into new product segments, the risk that its target markets do not
develop as expected, the risk that its acquisitions could result in
integration difficulties, dilution or other adverse financial
consequences, the risk of failure to raise additional capital on
acceptable terms, risks associated with its reliance on continuing
relationships with large customers, the risk of significant product
errors or product failures, the risk of its reliance on reseller
arrangements for important components of its solution, the risk
that it may not respond effectively to changes in its industry, the
risk of its customers' reliance on third party reimbursements, and
the risk of the potential impact on its business of Food & Drug
Administration (FDA) regulations and other applicable health care
regulations. Additional information concerning these and other
factors that could affect Emageon's financial and operating results
may be found under the heading "Risk Factors" and elsewhere in the
Company's Form 10- K for the year ended December 31, 2007, which
was filed with the Securities and Exchange Commission on March 17,
2008. Emageon undertakes no obligation to update these
forward-looking statements or other information provided in this
press release except as may be required by law. About Emageon.
Emageon provides information technology systems for hospitals,
healthcare networks and imaging facilities. Its enterprise family
of solutions includes RadSuite(TM), HeartSuite(TM) and other
specialty suites. All Emageon solutions are built on a unified
Enterprise Content Management system offering advanced
visualization and infrastructure tools for the clinical analysis
and management of digital medical images, reports and associated
clinical content. Emageon's standards-based solutions are designed
to help customers enhance patient care, automate workflow, lower
costs, improve productivity, and provide better service to
physicians. For more information, please visit
http://www.emageon.com/ . On May 5, 2008, Emageon Inc. filed a
preliminary proxy statement with the Securities and Exchange
Commission in connection with its upcoming 2008 annual meeting of
stockholders, and prior to the annual meeting, Emageon will furnish
its stockholders with a definitive proxy statement, together with a
WHITE proxy card. Emageon stockholders are strongly advised to read
Emageon's proxy statement as it contains important information.
Stockholders may obtain the proxy statement, any amendments or
supplements to the proxy statement, and the annual, quarterly and
current reports and other information filed by Emageon with the
Securities and Exchange Commission for free at the Internet website
maintained by the Securities and Exchange Commission at
http://www.sec.gov/. Copies of the definitive proxy statement and
any amendments and supplements to the definitive proxy statement
will also be available for free at Emageon's Internet website at
http://www.emageon.com/ or by writing to Emageon Inc., 1200
Corporate Drive, Suite 200, Birmingham, Alabama 35242, Attn:
Corporate Secretary. In addition, copies of Emageon's proxy
materials may be requested by contacting our proxy solicitor,
Morrow & Co., LLC at (800) 662-5200. Emageon's directors and
certain of its officers may be deemed to be participants in the
solicitation of proxies from its stockholders in connection with
the annual meeting. Information identifying these participants and
describing their direct and indirect interests is available in
Emageon's preliminary proxy statement filed with the Securities and
Exchange Commission on May 5, 2008. Unaudited Statements of
Operations In Thousands, Except Per Share Amounts Three Months
Ended March 31, 2008 2007 (1) Revenue: System sales $5,820 $13,668
Support services 13,447 13,682 Total revenue 19,267 27,350 Cost of
revenue: System sales 4,272 8,722 Support services 6,676 7,681
Total cost of revenue 10,948 16,403 Gross profit 8,319 10,947
Operating expenses: Research and development 4,326 4,618 Sales and
marketing 3,785 4,392 General and administrative 3,775 3,623
Amortization of intangible assets 345 345 Employee severance and
related charges 819 - Total operating expenses 13,050 12,978
Operating loss (4,731) (2,031) Interest income 157 229 Interest
expense (16) (33) Net loss $(4,590) $(1,835) Net loss per share,
basic and diluted $(0.21) $(0.09) Weighted average shares
outstanding, basic and diluted 21,453 21,297 (1) Certain
reclassifications have been made to prior year amounts to conform
with the current year presentation. Summary Consolidated Balance
Sheets In Thousands (Unaudited) March 31, December 31, 2008 2007
ASSETS: Current assets: Cash and cash equivalents $18,283 $17,034
Trade accounts receivable, net 17,853 26,796 Inventories 6,869
6,249 Prepaid expenses and other current assets 4,454 3,398 Total
current assets 47,459 53,477 Property and equipment, net 14,932
15,143 Other noncurrent assets 3,522 3,070 Intangible assets, net
26,753 27,604 Total Assets $92,666 $99,294 LIABILITIES AND
STOCKHOLDER'S EQUITY: Current liabilities: Accounts payable and
accrued expenses $12,418 $15,755 Deferred revenue 16,919 16,382
Current portion of capital lease obligations 30 36 Total current
liabilities 29,367 32,173 Long-term deferred revenue 3,742 4,306
Other long-term liabilities 436 466 Long-term portion of capital
lease obligations 41 53 Total liabilities 33,586 36,998
Stockholders' Equity 59,080 62,296 Total Liabilities and
Stockholders' Equity $92,666 $99,294 Reconciliation of Non-GAAP
Measures of Earnings In Thousands, Except Per Share Amounts
(Unaudited) The following tables present the Company's net loss
adjusted for employee severance and related charges, and for
non-cash charges for depreciation, amortization of intangible
assets, and stock-based compensation for the three month periods
ended March 31, 2008 and 2007. Earnings determined in this manner
do not represent earnings in accordance with generally accepted
accounting principles ("GAAP"). The tables present the adjustments
made to actual net loss determined under GAAP to derive earnings
excluding the expenses described above for the periods presented.
Three Months Ended March 31, 2008 2007 Net loss as reported
$(4,590) $(1,835) Severance and related charges 819 - Net loss
excluding severance charges $(3,771) $(1,835) Net loss per share
excluding severance charges $(0.17) $(0.09) Net loss as reported
$(4,590) $(1,835) Add: Depreciation 1,075 1,717 Amortization 774
720 Stock-based compensation 1,487 (1) 687 Net (loss) income
excluding certain non-cash charges $(1,254) $1,289 Add--cash
portion of severance charges $392 $- Net (loss) income excluding
certain non-cash charges and severance charges $(862) $1,289 Net
(loss) income per share excluding certain non-cash charges and
severance charges $(0.04) $0.06 (1) Includes $427 of stock-based
compensation incurred in connection with severance activities,
which together with the $392 of cash severance charges form the
$819 "Employee severance and related charges" line item in the
Statement of Operations for the three months ended March 31, 2008.
DATASOURCE: Emageon Inc. CONTACT: John W. Wilhoite, CFO, Emageon,
+1-205-259-2831, Susan Noonan, The SAN Group, LLC, +1-212-966-3650,
Donna Kralowetz, Emageon, +1-205-913-5416 Web site:
http://www.emageon.com/
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