MILWAUKEE--(Business Wire)--
Merge Healthcare Incorporated (NASDAQ:MRGE) (TSX:MRG), a medical
imaging software and services company, today announced the
reorganization of its business operations and a change in executive
management. The details include:
Reorganization
-- In conjunction with the management changes described below,
the company is reorganizing and renaming its operating
divisions. Merge Healthcare North America (MHNA) has been
renamed Merge Fusion; and Cedara, its operating division
located in Toronto, Ontario, will be renamed Merge OEM.
-- Total worldwide headcount will be reduced by approximately 60
people, to approximately 300 employees. The Company
anticipates that these reductions will result in a charge of
at least $6 million in its financial statements for the second
quarter ending June 30, 2008. The charge is expected to
include at least $5 million in employee severance costs
related to these headcount reductions and the management
changes described below and at least $1 million in costs
related to the early termination of office leases. Most of the
severance costs will be payments to executives over the next
12 months pursuant to the terms of pre-existing employment
agreements.
-- The Company expects to also incur additional costs associated
with the early termination of certain vendor contracts, which
it cannot currently estimate.
-- The Company anticipates incurring additional non-cash charges
during the second quarter ending June 30, 2008 associated with
the reorganization. These non-cash charges include
approximately $1 million of trade name impairment costs and
approximately $2 million of stock-based compensation costs
associated with the accelerated vesting of certain restricted
stock and stock options of terminated employees.
Executive Team Changes
-- Today, the Company accepted the resignations of four Company
officers: Mr. Kenneth Rardin (CEO), Steven Norton (CFO), Gary
Bowers (President of the Company's Merge North America
division) and Loris Sartor (President of the Company's
Cedara/Merge OEM division). The Company's Board of Directors
has determined that, in light of the above-described
restructuring steps, these officers are entitled to full
severance benefits under their pre-existing employment
agreements.
Also today, the Company appointed the following four new Company
officers:
-- Justin C. Dearborn - the Company's new Chief Executive
Officer. Mr. Dearborn comes to Merge with diverse experience
in operational, financial and legal roles. Since September
2006, Mr. Dearborn has served as Managing Director and General
Counsel of Merrick Ventures, LLC ("Merrick"), an affiliate of
Merrick RIS, LLC. Prior to Merrick Ventures, Mr. Dearborn
spent over 9 years at Click Commerce, Inc. ("Click"), a
publicly-traded software and services company that was
acquired by Illinois Tool Works, Inc. ("ITW") in October of
2006. During the initial years of his tenure at Click, Mr.
Dearborn served as Vice President and General Counsel, and,
among other duties, was instrumental in its acquisition and
business integration efforts. From 2003 to 2006, Click
Commerce acquired and integrated eight software companies. Mr.
Dearborn's last role at Click was as the General Manager of a
Click software and services business unit. Mr. Dearborn has
resigned his position with Merrick Ventures effective
immediately.
-- Steven M. Oreskovich - the Company's new Chief Financial
Officer. Mr. Oreskovich has served in a progression of roles
at the Company, starting as its Vice President and Corporate
Controller, then becoming as its Chief Accounting Officer and
interim Treasurer and interim Secretary and most recently
serving as its Vice President of Internal Audit. Before
joining the Company, Mr. Oreskovich worked as an auditor at
PriceWaterhouseCoopers LLP. Mr. Oreskovich holds a B. S. in
Accounting from Marquette University.
-- Nancy J. Koenig - President of the Company's newly-renamed
Merge Fusion Division. Ms. Koenig comes to Merge from Merrick
Healthcare Solutions (a Merrick Ventures portfolio company),
where she served as its CEO. Prior to joining Merrick Ventures
in the fall of 2007, Ms. Koenig was the President of Click
during its integration as a subsidiary of ITW. Nancy joined
Click in 1999 as the Director of Business Consulting and held
various positions, including serving as the head of Click's
European Operations, its Vice President of Product Operations
and Marketing and its Executive Vice President - Operations.
She became Click's President in 2006. Ms. Koenig has resigned
her position with Merrick Healthcare effective immediately.
-- Antonia Wells - the new President of the Company's
newly-renamed Merge OEM Division. Ms. Wells has over 25 years
of business management experience, including leadership roles
in IT, enterprise system implementation, process
re-engineering and human resources. Since joining the Company
in 1999, Ms. Wells has been responsible for Merge OEM's
contract management, quality/regulatory affairs,
manufacturing, order management, professional services and
internal infrastructure. Since June of 2005, she has served as
Merge OEM's Vice President of Customer Operations.
The Company is a market leader in the development and delivery of
medical imaging and information management software and services. Our
innovative software solutions use leading-edge imaging software
technologies that accelerate market delivery for our OEM customers,
while our end-user solutions improve our customers' productivity and
enhance the quality of patient care they provide. For additional
information, visit our website at www.mergehealthcare.com.
Cautionary Notice Regarding Forward-Looking Statements
This announcement may include forward-looking statements within
the meaning and subject to the protections of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934, as amended. When used in this announcement, the words "will,"
"believes," "intends," "anticipates," "expects" and similar
expressions of the future are intended to assist you in identifying
such forward-looking statements. Such forward-looking statements
include, among others, statements regarding: our sale of the term note
and common stock in the financing and the use of proceeds there from,
our future business prospects, our ability to execute on our
strategies to grow our business and our ability to settle the class
action on the terms described herein. Although the Company presently
believes that the expectations reflected in such forward-looking
statements are based on reasonable assumptions, the Company does not
give, and cannot give, any assurance that those expectations will be
achieved.
Any number of factors could cause the actual results to differ
from the results contemplated by such forward-looking statements,
including, but not limited to: unexpected difficulties or additional
costs associated with the business reorganization; unanticipated
issues associated with realizing the projected growth and the
projected cost savings from the business reorganization; the
uncertainty created by and the adverse impact on relationships with
customers, potential customers, suppliers and investors potentially
resulting from, and other risks associated with, the changes in the
Company's senior management and capital structure; the dilution
resulting from the Company's financing; risks associated with the
Company's inability to meet the requirements of The Nasdaq Stock
Market for continued listing, including possible delisting; costs,
risks and effects of legal proceedings and investigations, including
the formal investigation being conducted by the Securities and
Exchange Commission and class action, derivative, and other lawsuits;
risks and effects of the past restatement of financial statements of
the Company and other actions that may be taken or required as a
result of such restatement; the court in the Company's class action
settlement failing to approve the proposed settlement; the plaintiff,
the codefendants or the insurance carriers failing to settle the case
on the terms agreed to in the agreement in principle; risks in product
and technology development, market acceptance of new products and
continuing product demand; the impact of competitive products and
pricing; continued negative effects of the Deficit Reduction Act;
limited acceptance of digital modalities and RIS-PACS and workflow
technologies; changing economic conditions; credit and payment risks
associated with end-user sales, the Company's dependence on major
customers; the Company's dependence on key personnel; and other risk
factors detailed in the Company's filings with the Securities and
Exchange Commission.
You should not place undue reliance on forward-looking statements,
since the statements speak only as of the date that they are made. We
do not have, or undertake any obligation to, publicly update, revise
or correct any of the forward-looking statements after the date of
this announcement, or after the respective dates on which such
statements otherwise are made, whether as a result of new information,
future events or otherwise. This announcement should be read in
conjunction with the risk factors, financial information and other
information contained in the filings that the Company makes and
previously has made with the Securities and Exchange Commission.
Merge Healthcare
Melanie Gretzon, 414-977-4000
Director, Corporate Services
ir@mergehealthcare.com
Copyright Business Wire 2008
