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AMICAS Reports Financial Results for the Fourth Fiscal Quarter and Year Ended December 31, 2008
Date:2/25/2009

Finishes 2008 with record bookings and continued positive cash flow from operations

BOSTON, Feb. 25 /PRNewswire-FirstCall/ -- AMICAS, Inc. (Nasdaq: AMCS), a leader in radiology and medical image and information management solutions, today reported unaudited financial results for the fourth quarter and year ended December 31, 2008.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060202/AMICASLOGO )

Q4 Financial Highlights

Revenue: Total revenue for the fourth quarter of 2008 was $11.7 million, compared to $11.7 million for the fourth quarter of 2007.

Non-GAAP Operating Loss: Operating loss, excluding impairment charges, for the fourth quarter of 2008 was $1.6 million, compared to an operating loss of $1.9 million for the fourth quarter of 2007.

Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, was a loss of $320,000 for the fourth quarter of 2008 as compared to a loss of $437,000 for the fourth quarter of 2007.

Non-GAAP Net Loss/Income: The Company's net loss, excluding impairment charges, for the fourth quarter of 2008 was $1.2 million as compared to a net loss of $902,000 for the fourth quarter of 2007.

Impairment: In the fourth quarter of 2008, the Company incurred a $27.5 million impairment charge of which $27.3 million relates to goodwill and $0.2 million relates to internal use purchased software. The goodwill charge was primarily due to the sustained decline in the market value of the Company's equity during the fourth quarter of 2008. The Company does not expect that the non-cash charge will have a material impact on its financial condition, cash flow, or liquidity.

Operating Loss: Operating loss for the fourth quarter of 2008 was $29.1 million as compared to an operating loss of $1.9 million for the fourth quarter of 2007.

Net Loss/Income: The Company's net loss for the fourth quarter of 2008 was $28.7 million, or $0.81 per share, including impairment charge of $27.5 million, or $0.78 per share, compared to a net loss of $902,000, or $0.02 per share, for the fourth quarter of 2007.

Cash and Cash Flow: AMICAS ended the fourth quarter of 2008 with a cash, cash equivalents, and marketable securities balance of $55.0 million, no long term debt, and working capital of $47.0 million. For the fourth quarter ended December 31, 2008, net cash provided by operations was $1.2 million.

Stock Repurchase: In the fourth quarter of 2008, the Board of Directors directed the Company to initiate a $5 million stock repurchase plan. The Company repurchased approximately 193,000 shares of its common stock for approximately $290,000 in the fourth quarter of 2008.

Fiscal Year-to-Date Financial Highlights

Revenue: Total revenue for the year ended December 31, 2008, was $50.4 million, compared to $49.9 million for the year ended December 31, 2007.

Non-GAAP Operating Loss: Operating loss, excluding impairment, for the year ended December 31, 2008, was $4.6 million, compared to a non-GAAP operating loss of $4.5 million for the year ended December 31, 2007.

Adjusted EBITDA: Adjusted EBITDA, a non-GAAP financial measure, was $233,000 for the year ended December 31, 2008, compared to $759,000 for the year ended December 31, 2007.

Non-GAAP Net Loss/Income: The Company's net loss, excluding impairment, for the year ended December 31, 2008, was $2.6 million compared to a non-GAAP net loss of $862,000 for the year ended December 31, 2007.

Impairment: As noted above, in the fourth quarter of 2008, the Company incurred a $27.5 million, or $0.78 per share, impairment charge of which $27.3 million relates to goodwill and $0.2 million relates to internal use purchased software. The goodwill charge was primarily due to the sustained decline in the market value of the Company's equity during the fourth quarter of 2008. The Company does not expect that the non-cash charge will have a material impact on its financial condition, cash flow, or liquidity.

Operating Loss: Operating loss for the year ended December 31, 2008, was $32.1 million, compared to an operating loss of $4.5 million for the year ended December 31, 2007.

Net Loss/Income: The Company's net loss for the year ended December 31, 2008, was $30.1 million, or $0.77 per share including impairment charges of $27.5 million or $0.71 per share, compared to a net loss of $862,000, or $0.02 per share, for the year ended December 31, 2007.

Cash Flow: For the year ended December 31, 2008, net cash provided by operations was $4.4 million as compared to $7.0 million for in the year ended 2007.

Stock Repurchase: During the fiscal year ended December 31, 2008, the Company repurchased 9.4 million shares of its common stock in accordance with the repurchase plans announced by the Company during the year. In aggregate, the Company has repurchased a total of 14.3 million shares for approximately $40.3 million since 2006.

Business Perspective

Dr. Stephen Kahane, president, chief executive officer, and chairman of AMICAS, said, "We had our best quarter of bookings in the history of AMICAS. This is the third consecutive quarter in which we delivered record bookings for the Company. Revenue growth was modest, mainly due to our signing more multi-year customer relationships. In addition, we now have record non-recurring backlog and deferred revenue as well as several commitments from customers that are not captured in these metrics."

Dr. Kahane went on to say, "We delivered positive cash flows from operations every quarter in 2008. We did this while building our business through significant investments in both innovative research and development programs and important distribution initiatives. In the fourth quarter, several additional large radiology groups made the decision to use AMICAS products as the basis for their automation infrastructure going forward. Over the past year, AMICAS has been able to sign a number of very sophisticated and informed radiology groups and imaging service providers. We will continue to work hard to help these new partners succeed and to make sure others follow in their footsteps. Our top flight solutions -- which include the latest in teleradiology technology, PACS, RIS, revenue cycle management, business intelligence, and zero client referring physician tools -- continue to be viewed as extremely attractive as a result of the potential return on investment that can be delivered. It is noteworthy that, despite obstacles such as DRA and other reimbursement-related pressures such as increasing requirements related to pre-authorizations for studies, and despite the condition of the economy overall, these groups made the decision to take their automation support to the next level with industry leading offerings from AMICAS."

Dr. Kahane continued, "We believe that, especially in this challenging economic and imaging reimbursement environment, the delivery of record bookings for three quarters in a row reflects the progress we have made in sales execution and general company operations. At the same time, we have been diligent in our assessment of acquisition opportunities and, until very recently, have been reluctant to make a big move in this area. Our signing of a definitive agreement to acquire Emageon is a big move and one that we are extremely excited about. Our high recurring revenue, strong cash position, and positive cash flow from operations combined with zero debt, record bookings and non-recurring backlog and deferred revenue give us confidence that we are in an excellent position to execute well on the integration of Emageon."

Dr. Kahane added, "We remain committed to continuing to build a strong company focused on providing excellent innovative image and information management solutions in healthcare. We have established a significant presence and a strong reputation in the radiology and imaging marketplace. We expect the Emageon acquisition to expand our position significantly, and to provide us with similar stature in the cardiology market, another important market with significant image and information management needs."

Conference Call

AMICAS will host a conference call on Thursday, February 26, at 8:30 a.m. Eastern Time to discuss the Company's 2008 fourth quarter and year end results. Investors and other interested parties may dial in to the call using the toll free number 1-800-862-9098. (conference ID: 7AMICAS). The conference call will also be available via Webcast at www.amicas.com. Following the conclusion of the call, a replay will be available at 1-800-374-1375 or 1-402-220-0682 until March 26, 2009.

AMICAS, AMICAS PACS, AMICAS RIS, AMICAS Financials, AMICAS Documents, AMICAS Dashboards, AMICAS Watch, AMICAS Reach, AMICAS RadStream, RealTime Worklist, Halo Viewer, and Cashfinder Worklist are trademarks, service marks or registered trademarks and service marks of AMICAS, Inc. All other trademarks and company names mentioned are the property of their respective owners.

About AMICAS, Inc.

AMICAS, Inc. (www.amicas.com) is a leader in radiology and medical image and information management solutions. The AMICAS One Suite(TM) of products provides a complete, end-to-end solution for imaging centers, ambulatory care facilities, and radiology practices. Acute care and hospital clients are provided with a fully integrated, hospital information system-independent PACS that features advanced enterprise workflow support and scalable design. Complementing the AMICAS solution suite is AMICAS Professional Services(TM), a set of client-centered professional and consulting services that assist our customers with a well-planned transition to a digital enterprise.

Safe Harbor Statement

Except for the historical information herein, the matters discussed in this release include forward-looking statements. In particular, the forward-looking statements contained in this release include statements about our anticipated financial and operating results. When used in this press release, the words: believes, intends, plans, anticipates, expects, estimates, and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions, and uncertainties that could cause actual results to differ materially which include, but are not limited to, the following: a significant portion of the Company's quarterly sales are concluded in the last month of the fiscal quarter; the length of sales and delivery cycles; the deferral and/or realization of deferred software license and system revenues according to contract terms; the timing, cost, and success or failure of current and new product and service introductions and product upgrade releases; potential patent infringement claims against AMICAS and the related defense costs; the ability of AMICAS to comply with all government laws, rules, and regulations; and other risks affecting AMICAS' businesses generally and as set forth in AMICAS' most recent filings with the Securities and Exchange Commission (SEC), including the section entitled "Risk Factors" of our most recent annual report on Form 10-K, and subsequent quarterly reports on Form 10-Q. All forward-looking statements in this release are qualified by these cautionary statements and are made only as of the date of this release. AMICAS is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events, or otherwise. The financial statements and information as of, and for the period ended, December 31, 2008, contained in this press release are subject to review by the Company's independent registered public accounting firm.

Non-GAAP financial measures

Adjusted EBITDA refers to net income, adjusted for amortization, depreciation, impairment, interest, taxes, severance, and stock compensation expense. A reconciliation of net loss/income as determined under GAAP to adjusted EBITDA is included below. Non-GAAP operating loss refers to operating loss less impairment charges. Non-GAAP net loss refers to net loss less impairment charges.

Management believes that its adjusted EBITDA measurement, non-GAAP operating loss, and non-GAAP net loss, 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. A reconciliation of net loss to adjusted EBITDA and net loss to non-GAAP loss and non-GAAP operating is included below.

Bookings are defined as contractual commitments from customers for licenses, services, hardware, and maintenance/support.

                      Condensed Consolidated Balance Sheets
                                   (Unaudited)
                         (in thousands, except share data)

                                                 December 31,   December 31,
                                                     2008           2007
    Assets
    Current assets:
       Cash and cash equivalents                     $7,366         $8,536
       Marketable securities                         47,627         67,071
       Accounts receivable, net of
        allowances of $158 and $231,
        respectively                                 10,224         10,483
       Prepaid expenses and other current
        assets                                        2,261          2,931
    Total current assets                             67,478         89,021

    Property and equipment, less
     accumulated depreciation and
     amortization of $7,495 and $6,848,
     respectively                                       965          1,186
    Goodwill                                              -         27,313
    Acquired/developed software, less
     accumulated amortization of $10,195
     and $7,992, respectively                         5,805          8,008
    Other intangible assets, less
     accumulated amortization of $2,144
     and $1,742, respectively                         1,256          1,658
    Other assets                                      1,594          1,255
    Total Assets                                    $77,098       $128,441

    Liabilities and stockholders' equity
       Current liabilities:
        Accounts payable and accrued expenses        $4,156         $7,094
        Accrued employee compensation and
         benefits                                     1,611          1,451
        Deferred revenue                             14,657         10,375
       Total current liabilities                     20,424         18,920

       Unrecognized tax benefits                      1,379          1,275

       Commitments and contingencies

       Stockholders' equity:
       Preferred stock $.001 par value;
        2,000,000 shares authorized; none
        issued                                            -              -
       Common stock $.001 par value,
        200,000,000 shares authorized,
        51,473,965 and 51,296,823 issued,
        respectively                                     51             51
       Additional paid-in capital                   230,905        229,056
       Accumulated other comprehensive
        income                                          100             60
       Accumulated deficit                         (128,549)       (98,478)
       Treasury stock, at cost, 16,270,088
        and 6,824,192 shares                        (47,212)       (22,443)
     Total stockholders' equity                      55,295        108,246
     Total Liabilities and Stockholders' Equity     $77,098       $128,441

                   Condensed Consolidated Statements Of Operations
                                    (Unaudited)
                 (in thousands, except per share data and footnotes)

                                  Three Months Ended    Twelve Months Ended
                                     December 31,           December 31,
                                   2008        2007       2008       2007
    Revenues
      Maintenance and services    $9,965      $9,645    $39,886    $38,175
      Software licenses and
       system sales                1,727       2,007     10,467     11,713
    Total revenues               $11,692      11,652     50,353     49,888

    Costs and expenses
    Cost of revenues:
      Maintenance and
       services (a)               $4,139       4,134     17,679     16,469
      Software licenses and
       system sales, including
       amortization of
       software costs of $572,
       $489, $2,204, and
       $1,957, respectively        1,420       1,326      7,000      6,486
    Selling, general, and
     administrative  (b)           5,348       5,662     20,512     21,810
    Research and development (c)   2,143       2,115      8,657      8,527
    Depreciation and
     amortization                    249         284      1,084      1,119
    Impairment charges            27,490           -     27,490          -
                                  40,789      13,521     82,422     54,411
    Operating loss               (29,097)     (1,869)   (32,069)    (4,523)
    Interest income                  406         991      2,187      3,870
    Loss on sale of
     investments                       -           -        (31)         -
    Loss before provision
     for income taxes            (28,691)       (878)   (29,913)      (653)
    Provision for income
     taxes                             7          24        158        209
    Net loss                    $(28,698)      $(902)  $(30,071)     $(862)


    (Loss) income per share
      Basic:                      $(0.81)     $(0.02)    $(0.77)    $(0.02)

      Diluted:                    $(0.81)     $(0.02)    $(0.77)    $(0.02)

    Weighted average number
     of shares outstanding
      Basic                       35,329      44,746     38,842     44,657
      Diluted                     35,329      44,746     38,842     44,657

    (a) - includes $31,000, $30,000, $138,000, and $107,000 in stock-based
        compensation expense for the three and twelve months ended December
        31, 2008, and December 31, 2007, respectively.
    (b) - includes $0.3 million, $0.2 million, $1.0 million, and $1.5 million
        in stock-based compensation expense for the three and twelve months
        ended December 31, 2008, and December 31, 2007, respectively.
    (c) - includes $93,000, $67,000, $413,000, and $267,000 in stock-based
        compensation expense for the three and twelve months ended December
        31, 2008, and December 31, 2007 respectively.

                    CONDENSED Consolidated Statements Of Cash Flows
                                      (Unaudited)
                                     (in thousands)

                                                           Twelve Months Ended
                                                                December 31,
                                                               2008     2007

    Operating activities
      Net loss                                             $(30,071)   $(862)

    Adjustments to reconcile net (loss) income to cash
     provided by operating activities:
       Amortization of software development costs             2,204    1,957
       Depreciation and amortization                          1,084    1,119
       Impairment charges                                    27,490        -
       Loss on disposal of fixed assets                           6        -
       Non-cash stock compensation expense                    1,524    1,878
       Provisions for (recoveries from) bad debts               115      185
       Changes in operating assets and liabilities:
         Accounts receivable                                    145      719
         Prepaid expenses and other                             330    1,100
         Accounts payable and accrued expenses               (2,777)     493
         Deferred revenue including unearned discount         4,282     (889)
         Unrecognized tax benefits                              103    1,275
          Cash provided by operating activities               4,435    6,975

    Investing activities
       Purchases of property and equipment                     (645)    (510)
       Purchase of software                                       -   (2,300)
       Purchases of held-to-maturity securities            (236,147) (94,898)
       Maturities of held-to-maturity securities            237,739  100,263
       Purchases of available-for-sale
        securities                                          (37,033) (45,275)
       Sales of available-for-sale securities                54,925   37,340
          Cash provided by (used in) investing activities    18,839   (5,380)

    Financing activities
       Repurchases of common stock                          (24,769)    (803)
       Exercise of stock options                                325      413
          Cash used in financing activities                 (24,444)    (390)

    (Decrease) increase in cash and cash equivalents         (1,170)   1,205
    Cash and cash equivalents at beginning of period          8,536    7,331
    Cash and cash equivalents at end of period               $7,366   $8,536

    Supplemental disclosure of cash paid during the
     period for:
       Income taxes, net of refunds                            $140      $91
    Non-cash investing activities:
       Unrealized gain on available-for-sale securities         $39      $64

                                 Three Months Ended    Twelve Months Ended
    Reconciliation of Net Loss       December 31,           December 31,
     to Non-GAAP Net loss         2008        2007       2008       2007

      Net loss                $(28,698)      $(902)  $(30,071)     $(862)
      Impairment charges        27,490           -     27,490          -
    Non-GAAP net loss          $(1,208)      $(902)   $(2,581)     $(862)


    Reconciliation of            Three Months Ended    Twelve Months Ended
     Net loss to                     December 31,          December 31,
     Non-GAAP Operating           2008        2007       2008       2007
     loss

      Net loss                $(28,698)      $(902)  $(30,071)     $(862)
      Provision for income
       taxes                         7          24        158        209
      Interest income              406         991      2,187      3,870
      Loss on sale of
       investments                   -           -        (31)         -
    Operating loss             (29,097)     (1,869)   (32,069)    (4,523)
      Impairment charges        27,490           -     27,490          -
    Non-GAAP operating loss    $(1,607)    $(1,869)   $(4,579)   $(4,523)

    Reconciliation of           Three Months Ended     Twelve Months Ended
     net loss to                    December 31,          December 31,
     adjusted EBITDA             2008        2007       2008       2007

      Net loss                $(28,698)      $(902)  $(30,071)     $(862)
      Provision for income
       taxes                         7          24        158        209
      Interest income              406         991      2,187      3,870
      Loss on sale of
       investments                   -           -        (31)         -
    Operating loss             (29,097)     (1,869)   (32,069)    (4,523)
      Non-cash stock
       compensation
       expense                     467         331      1,524      1,878
      Depreciation and
       amortization                249         284      1,084      1,119
      Amortization of
       software
       development costs           571         489      2,204      1,957
      Severance charges              -         328          -        328
      Impairment charges        27,490           -     27,490          -
    Adjusted EBITDA              $(320)      $(437)      $233       $759

Important additional information:

This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Emageon. The tender offer for shares of Emageon's stock described in this press release has not yet been commenced.

At the time the tender offer is commenced, a subsidiary of AMICAS intends to file with the SEC and mail to Emageon's stockholders a Tender Offer Statement on Schedule TO and related exhibits, including the offer to purchase, letter of transmittal and other related documents, and Emageon intends to file with the SEC and mail to its stockholders a Tender Offer Solicitation/Recommendation Statement on Schedule 14D-9 in connection with the transaction. These documents will contain important information about AMICAS, Emageon, the transaction, and other related matters. Investors and security holders are urged to read each of these documents carefully when they are available.

Investors and security holders will be able to obtain free copies of the Tender Offer Statement, the Tender Offer Solicitation/Recommendation Statement, and other documents filed with the SEC by AMICAS and Emageon through the Web site maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of these documents by contacting the Investor Relations departments of AMICAS or Emageon.

    CONTACT: 
    Colleen McCormick, Investor Relations
    617-779-7892
    cmccormick@amicas.com


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SOURCE AMICAS, Inc.
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