Navigation Links
MedQuist Reports First Quarter 2008 Results

MOUNT LAUREL, N.J., May 12 /PRNewswire-FirstCall/ -- MedQuist Inc. (Pink Sheets: MEDQ), the largest Medical Transcription Service Organization (MTSO) in the world, on Friday, May 9th, filed its Form 10-Q quarterly report with the U.S. Securities and Exchange Commission for the quarter ended March 31, 2008.

Revenue for the first quarter of 2008 was $83.7M compared with $89.1M in the first quarter of 2007. The decrease in revenue of $5.4M or 6% from the prior year period was primarily due to customer losses experienced during the second half of 2007. The operating loss for the quarter increased to a loss of $5.4M compared to a loss of $3.3M in the first quarter of 2007. "Our first quarter results were negatively impacted by increased costs associated with governmental investigations and proceedings and the defense of civil litigation matters. Excluding the cost of the billing investigation and legal proceedings, net, which was $6.4M in the first quarter of 2008 and $1.7M in the first quarter of 2007, our operating profit improved to a profit of $1.0M in the first quarter of 2008 compared to an operating loss of $1.6M in the first quarter of 2007. This improvement reflects the savings from our restructuring efforts in late 2007, as well as, the benefits of our expanded use of speech recognition technology," said Howard Hoffmann, President and Chief Executive Officer.

Notable 1Q orders included the sale of our #1 rated SpeechQ for Radiology product to one of the largest multi-location hospital systems in the country and a new multi-year, multi-million dollar outsourcing services agreement with one of the country's largest IDNs.

Cost of revenue declined faster than revenue reflecting both the company's restructuring efforts and the expanded use of speech recognition technology. "At this point, we have over 40% of our volumes running through DocQspeech on our DocQment Enterprise Platform (DEP). We believe this important tool will help us continue to improve our margins over time," said Hoffmann.

Selling general and administrative expenses declined $1.6M or 11% to $13.1M in the first quarter of 2008 compared to $14.7M in the first quarter of 2007. This decline reflects the benefits of the restructuring actions taken by the company during the second half of 2007.

Research and development expense increased $.7M or 20% to $4.1M in the first quarter of 2008 compared to $3.4M in the first quarter of 2007. The R&D increase reflects additional cost related to investments in our industry- leading DEP technology.

Cost of Investigation and Legal Proceedings, net, increased to $6.4M in the first quarter of 2008 compared to $1.7M in the first quarter of 2007. In addition to legal expenses, the first quarter of 2008 included a charge of $1.5M related to the proposed settlement of all claims related to the consolidated medical transcriptionists' putative class action while the first quarter of 2007 included the benefit of $3.5M of insurance recoveries which were exhausted by the first quarter of 2008. These two items generated the increased cost of investigation and legal proceedings in the first quarter of 2008.

In addition to the United States generally accepting accounting principles, or GAAP, results provided throughout this document, MedQuist has provided non-GAAP financial measurements. Management believes that the non- GAAP financial measures used to manage the business may provide users additional useful information. The tables attached to this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a description of why the non- GAAP financial measures are useful to investors.

On or about April 21, 2008, MedQuist reached a tentative settlement of all claims related to the consolidated medical transcriptionists' putative class action lawsuit in exchange for payment by MedQuist of $1.5 million plus certain injunctive relief. The court has been notified of the tentative settlement and the lawsuit has been stayed while the parties continue to negotiate the settlement documentation. The tentative settlement contemplates notice to a settlement class consisting of all medical transcriptionists paid by the line for the period from November 29, 1998 through execution of the settlement agreement and is conditioned on final approval by the court.

Forward-Looking Statements

This report contains forward-looking statement that are based on current expectations, estimates, forecasts and projections about us, the industry in which we operate and other matters, as well as management's beliefs and assumptions and other statements regarding matters that are not historical facts. These statements include, in particular, statements about our plans, strategies and prospects. For example, when we use words such as "projects," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "should," "would," "could," "will," "opportunity," "potential" or "may," variations of such words or other words that convey uncertainty of future events or outcomes, we are making forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (Securities Act) and Section 21E of the Exchange Act. These statements are only predictions and, as such, are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict, including, without limitation, the risk that a settlement is not ever reached in the consolidated medical transcriptionists' putative class action lawsuit. For a discussion of these risks, uncertainties and assumptions, any of which could cause our actual results to differ from those contained in the forward-looking statement, see the section of MedQuist's Annual Report on Form 10-K for the year ended December 31, 2007, entitled "Risk Factors" and discussions of potential risks and uncertainties in MedQuist's subsequent filings with the Securities and Exchange Commission.

MedQuist Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)


Three months ended

March 31,

2008 2007

Net revenues $83,725 $89,066

Operating costs and expenses:

Cost of revenues 61,258 68,345

Selling, general and

administrative 13,095 14,693

Research and development 4,119 3,442

Depreciation 2,928 2,539

Amortization of intangible assets 1,361 1,346

Cost of investigation and legal

proceedings, net 6,398 1,741

Restructuring charges - 256

Total operating costs and expenses 89,159 92,362

Operating loss (5,434) (3,296)

Equity in income of affiliated company 16 260

Other income 438 -

Interest income, net 1,288 2,102

Loss before income taxes (3,692) (934)

Income tax provision 725 952

Net loss $(4,417) $(1,886)

Net loss per share:

Basic $(0.12) $(0.05)

Diluted $(0.12) $(0.05)

Weighted average shares outstanding:

Basic 37,544 37,484

Diluted 37,544 37,484

MedQuist Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)


March 31, December 31,

2008 2007


Current assets:

Cash and cash equivalents $152,711 $161,582

Accounts receivable, net of allowance of

$4,168 and $4,359, respectively 52,124 48,725

Income tax receivable 737 815

Other current assets 8,109 7,920

Total current assets 213,681 219,042

Property and equipment, net of accumulated

depreciation of $41,184 and $38,772,

respectively 20,197 21,366

Goodwill 125,365 125,505

Other intangible assets, net of accumulated

amortization of $43,234 and $45,209,

respectively 41,721 42,262

Deferred income taxes 2,714 2,712

Other assets 6,830 6,885

Total assets $410,508 $417,772

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $10,204 $12,754

Accrued expenses 18,492 18,989

Accrued compensation 13,815 14,826

Customer accommodation and quantification 17,596 18,459

Deferred income tax liability - current 4,783 4,783

Deferred revenue 17,486 16,023

Total current liabilities 82,376 85,834

Deferred income taxes 15,862 15,151

Other non-current liabilities 2,055 2,143

Shareholders' equity:

Common stock - no par value; authorized 60,000

shares; 37,544 and 37,544 shares issued and

outstanding, respectively 236,504 236,412

Retained earnings 68,459 72,876

Accumulated other comprehensive income 5,252 5,356

Total shareholders' equity 310,215 314,644

Total liabilities and shareholders' equity $410,508 $417,772

MedQuist Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)


Three months ended

March 31,

2008 2007

Operating activities:

Net loss $(4,417) $(1,886)

Adjustments to reconcile net loss to cash

provided by (used in) operating activities:

Depreciation and amortization 4,289 3,885

Equity in income of affiliated company (16) (260)

Deferred income tax provision 719 710

Stock option expense 92 83

Provision for doubtful accounts 263 1,418

Asset writeoff charges 26 51

Changes in operating assets and liabilities

excluding effects of acquisitions:

Accounts receivable (3,700) (347)

Income tax receivable 78 (91)

Insurance receivable - (2,619)

Other current assets (189) 58

Other non-current assets 70 (39)

Accounts payable (2,773) 805

Accrued expenses (746) (1,337)

Accrued compensation (999) 409

Customer accommodation and quantification (459) (2,046)

Deferred revenue 1,441 (628)

Other non-current liabilities (70) 1,930

Net cash (used in) provided by operating

activities $(6,391) $96

Investing activities:

Purchase of property and equipment (1,837) (1,889)

Capitalized software (611) (217)

Net cash used in investing activities (2,448) (2,106)

Financing activities:

Net cash provided financing activities - -

Effect of exchange rate changes (32) 7

Net decrease in cash and cash equivalents (8,871) (2,003)

Cash and cash equivalents - beginning of period 161,582 175,412

Cash and cash equivalents - end of period $152,711 $173,409

Supplemental cash flow information:

Cash paid for income taxes $95 $93

Accommodation payments paid with credits $404 $689

MedQuist Inc. and Subsidiaries Reconciliation of GAAP financial measures to the aforementioned non-GAAP

financial measures

(In thousands, except per share amounts)


Three months ended

March 31,

2008 2007

GAAP Operating (Loss) $(5,434) $(3,296)

Add: Cost of investigation and legal

proceedings, net 6,398 1,741

Non-GAAP Operating Profit (Loss), excluding

Cost of investigation and legal

proceedings, net $964 $(1,555)

Operating profit, excluding Cost of investigation and legal proceedings, is a financial measure not computed in accordance with United States generally accepted accounting principles, or GAAP. The Company believes that this non- GAAP measure, when presented in conjunction with comparable GAAP measures, is useful to both management and investors in analyzing the Company's ongoing business and operating performance. The Company believes that providing the non-GAAP information to investors, in addition to the GAAP presentation, allows investors to view the Company's financial results in the way that management views financial results. Management believes Operating profit, excluding Cost of investigation and legal proceedings is useful as a supplemental measure of the Company's financial results because it removes costs not related to the Company's operating performance. Management believes that Operating profit, excluding Cost of investigation and legal proceedings should be considered in addition to, but not as a substitute for items presented in accordance with GAAP that are presented in this press release. A reconciliation of Operating profit, excluding Cost of investigation and legal proceedings to Operating profit is provided above.

SOURCE MedQuist Inc.
Copyright©2008 PR Newswire.
All rights reserved

Related biology technology :

1. QLT reports initial proof of concept data for punctal plug delivery technology
2. Neurobiological Technologies Reports Third Quarter Financial Results
3. Bionovo Reports First Quarter 2008 Financial Results
4. WorldHeart Reports an Event of Default Under the Note Issued to Abiomed, Resignation of One of Its Board of Directors, and Results of Shareholder Vote at Its Annual Shareholders Meeting
5. Cardium Reports on First Quarter 2008 Highlights and Financial Results
6. Novavax Reports First Quarter 2008 Financial Results
7. Warner Chilcott Reports Operating Results for the Quarter ended March 31, 2008 and Updates 2008 Full Year Guidance
8. Biodel Inc. Reports Second Quarter Fiscal Year 2008 Financial Results
9. Pharmos Corporation Reports 2008 First Quarter Results
10. Halozyme Therapeutics Reports 2008 First Quarter Financial Results
11. Nuvelo Reports First Quarter 2008 Financial Results and Updated Outlook for 2008
Post Your Comments:
(Date:10/7/2015)... , Oct. 7, 2015  ChromaDex Corp. (OTCQX: ... nutritional ingredients that creates science-based solutions for dietary ... and pharmaceutical products, today announced that the October ... and Founder, is now available for on-demand viewing ... -->   --> ...
(Date:10/7/2015)... , Oct. 7, 2015   PDI , ... released an infographic that highlights key challenges across various ... appropriate disinfectant for the situation. This tool is part ... hospitals can take to create efficiencies and lower healthcare-associated ... The visual guide emphasizes examples of how to use ...
(Date:10/7/2015)...   VWR (NASDAQ: VWR ), ... services and solutions, announced today that it has ... company that performs high volume purification of selected ... growing laboratory and production chemical manufacturing portfolio to ... Manuel Brocke-Benz , President and CEO ...
(Date:10/7/2015)... ... 07, 2015 , ... Park Systems , world-leader in ... provide a comprehensive overview of the innovations in smart coatings using nanoparticle additives ... This webinar will be given by Professor Roberto Advincula, professor with the Department ...
Breaking Biology Technology:
... Green Mountain Energy Company to take the necessary steps in ... enabling them to operate as a "carbon neutral" analytical laboratory. ... ... Alkemists Pharmaceuticals today announced that it has partnered with Green Mountain ...
... 30 , - Shares Acquired From Biggar ... biotechnology company,focused on eye disease, vascular disease and ... based in Belgium have together acquired an 8%,stake ... Biggar Limited, a,charitable foundation that is ThromboGenics largest ...
... SAN DIEGO, July 29 Arena Pharmaceuticals,Inc. (Nasdaq: ... second quarter 2008,financial results after the NASDAQ Global ... afternoon, Jack Lief, Arena,s President and Chief,Executive Officer, ... Chief Financial Officer, will host a conference call ...
Cached Biology Technology:
(Date:9/29/2015)... 2015  iDAvatars is excited to be named one of ... market. The official announcement was recently made at an invite-only ... San Francisco , where iDAvatars presented a ... Watson. "It is both an honor and a ... bring to market the cognitive power of IBM Watson in ...
(Date:9/28/2015)... , Sept. 28, 2015 Synaptics Inc. (NASDAQ: ... solutions, today announced that Lenovo has selected Synaptics , ... FS4202, for its latest smartphone, the Vibe P1. The ... to unlock the device and provide swift access to ... The feature-rich Natural ID FS4202 sensor solution utilizes AES256-bit ...
(Date:9/10/2015)... , Sept. 10, 2015 Report ... New Study Reveals Selling Opportunities and Revenue Prospects ... the future of biologics, especially new drug classes? ... will stay ahead with exclusive market data and ... explore trends, developments, results, opportunities and sales predictions. ...
Breaking Biology News(10 mins):
... began a rapid period of change called the Cambrian ... life forms over many millions of years that ultimately ... help palaeontologists chronicle the evolution of life since then, ... billion years that preceded the Cambrian Period is challenging, ...
... turnover and remodelling of lipid membranes could help phytoplankton cope ... team led by Patrick Martin of the National Oceanography Centre ... rapidly change the chemical composition of its cell membranes in ... the process may be important for nutrient cycling and the ...
... University researchers focusing on rice genetics are providing a ... nutrients. Their research provides insight into ways of ... research. Frank White, professor of plant pathology, and ... in partnership with researchers at three other institutions, of ...
Cached Biology News: