Navigation Links
MedQuist Reports Third Quarter 2008 Results
Date:11/4/2008

MOUNT LAUREL, N.J., Nov. 4 /PRNewswire-FirstCall/ -- MedQuist Inc. (Nasdaq: MEDQ), the largest Medical Transcription Service Organization (MTSO) in the world, today announced its results for the quarter ended September 30, 2008.

Net revenues for the third quarter of 2008 were $81.3 million compared with $82.5 million in the third quarter of 2007. The decrease in net revenues of $1.2 million or 1% from the prior year period was driven primarily by lower average pricing.

The operating loss for the quarter improved to a loss of $5.3 million compared to an operating loss of $10.3 million in the third quarter of 2007. The current period operating loss includes a charge of $5.9 million related to a tentative settlement of the Department of Justice's (DOJ) investigation of the company. The DOJ and the company have reached a tentative agreement to settle the DOJ's civil investigation for a payment of $6.8 million of which $0.9 million was previously recorded. Non-GAAP operating income (excluding the cost of investigation and legal proceedings, net) improved by $7.8 million to a profit of $1.9 million in the third quarter of 2008 compared to a non-GAAP operating loss of $5.9 million in the third quarter of 2007.

Cost of revenues were reduced by $7.1 million or 11% to $57.2 million in the third quarter of 2008 compared to $64.3 million in the third quarter of 2007. This resulted in a decrease in cost of revenues as a percentage of net revenues to 70% compared to 78% in the third quarter of 2007.

Selling general and administrative expenses declined $2.4 million or 15% to $13.1 million in the third quarter of 2008 compared to $15.5 million in the third quarter of 2007. This decline primarily reflects the benefits of the restructuring actions taken by the company in 2007.

Cost of investigation and legal proceedings, net, increased to $7.2 million in the third quarter of 2008 compared to $4.4 million in the third quarter of 2007. The third quarter of 2008 includes an estimated charge of $5.9 million to settle the DOJ investigation of the company. Excluding the impact of the DOJ settlement estimate, the costs of investigation and legal proceedings, net declined from $4.4 million in the third quarter of 2007 to $1.3 million in the third quarter of 2008.

For the nine months ended September 30, 2008, net revenues declined 5% to $247.5 million while the company's operating loss improved to a loss of $8.9 million compared to a loss of $9.5 million for the nine months ended September 30, 2007. On a non-GAAP basis (excluding the cost of investigation and legal proceedings, net), operating income for the nine months ended September 30, 2008 improved by $16.3 million. Non-GAAP operating income in the nine months ended September 30, 2008 was $6.4 million compared to a non-GAAP operating loss of $9.9 million in the nine months ended September 30, 2007.

As of September 30, 2008, the company had $47.3 million of cash and cash equivalents on hand and no debt.

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.

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 and Section 21E of the Securities Exchange Act of 1934. 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. 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)

Unaudited

Three months ended Nine months ended

September 30, September 30,

2008 2007 2008 2007

Net revenues $81,287 $82,518 $247,466 $260,276

Operating costs and expenses:

Cost of revenues 57,235 64,290 176,508 198,918

Selling, general and

administrative 13,148 15,548 39,047 48,158

Research and development 4,648 3,808 12,502 10,073

Depreciation 2,977 2,861 8,901 8,040

Amortization of intangible assets 1,411 1,361 4,145 4,065

Cost of investigation and legal

proceedings, net 7,181 4,441 15,307 (456)

Restructuring charges (37) 554 (82) 935

Total operating costs and

expenses 86,563 92,863 256,328 269,733

Operating loss (5,276) (10,345) (8,862) (9,457)

Equity in income of affiliated

company 159 124 200 447

Other income - - 438 -

Interest income, net 418 2,302 2,601 6,477

Loss before income taxes (4,699) (7,919) (5,623) (2,533)

Income tax provision 1,063 1,016 2,721 2,402

Net loss $(5,762) $(8,935) $(8,344) $(4,935)

Net loss per share:

Basic $(0.15) $(0.24) $(0.22) $(0.13)

Diluted $(0.15) $(0.24) $(0.22) $(0.13)

Weighted average shares outstanding:

Basic 37,554 37,484 37,547 37,484

Diluted 37,554 37,484 37,547 37,484

MedQuist Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands)

Unaudited

September 30, December 31,

2008 2007

Assets

Current assets:

Cash and cash equivalents $47,297 $ 161,582

Accounts receivable, net of allowance

of $4,565 and $4,359, respectively 47,815 48,725

Income tax receivable 631 815

Other current assets 9,349 7,920

Total current assets 105,092 219,042

Property and equipment, net 17,926 21,366

Goodwill 124,510 125,505

Other intangible assets, net 40,631 42,262

Deferred income taxes 2,225 2,712

Other assets 6,745 6,885

Total assets $297,129 $417,772

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable $8,684 $12,754

Accrued expenses 18,377 18,989

Accrued compensation 14,750 14,826

Customer accommodation and quantification 12,136 18,459

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

Deferred revenue 15,926 16,023

Total current liabilities 74,656 85,834

Deferred income taxes 17,248 15,151

Other non-current liabilities 2,079 2,143

Commitments and contingencies

Shareholders' equity:

Common stock - no par value; authorized

60,000 shares; 37,556 and 37,544 shares

issued and outstanding, respectively 237,842 236,412

Retained earnings (deficit) (38,746) 72,876

Accumulated other comprehensive income 4,050 5,356

Total shareholders' equity 203,146 314,644

Total liabilities and shareholders' equity $297,129 $417,772

MedQuist Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

Unaudited

Nine months ended

September 30,

2008 2007

Operating activities:

Net loss $(8,344) $(4,935)

Adjustments to reconcile net loss to cash

provided by (used in) operating activities:

Depreciation and amortization 13,046 12,105

Equity in income of affiliated company (200) (447)

Deferred income tax provision 2,425 1,848

Stock option expense 1,361 446

Provision for doubtful accounts 2,065 3,649

Loss on disposal of property and equipment 47 78

Changes in operating assets and liabilities:

Accounts receivable (1,917) (4,707)

Income tax receivable 184 (151)

Insurance receivable - 707

Other current assets (1,437) (954)

Other non-current assets 117 (219)

Accounts payable (4,393) 3,156

Accrued expenses (984) (9,341)

Accrued compensation (53) 929

Customer accommodation and quantification (5,651) (4,048)

Deferred revenue (57) (84)

Other non-current liabilities (92) 1,938

Net cash used in operating activities $(3,883) $(30)

Investing activities:

Purchase of property and equipment (5,015) (8,337)

Capitalized software (2,712) (1,218)

Proceeds from sale of investments 692 -

Net cash used in investing activities (7,035) (9,555)

Financing activities:

Dividends paid (103,279) -

Proceeds from exercise of stock options 68 -

Net cash used in financing activities (103,211) -

Effect of exchange rate changes (156) 115

Net decrease in cash and cash equivalents (114,285) (9,470)

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

Cash and cash equivalents - end of period $47,297 $ 165,942

Supplemental cash flow information:

Cash paid for income taxes $249 $167

Accommodation payments paid with credits $659 $1,961

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

measures

Operating Income (Loss), excluding cost of investigation and legal

proceedings, net

(In thousands)

Unaudited

Three months ended Nine months ended

September 30, September 30,

2008 2007 2008 2007

GAAP operating (loss) $(5,276) $(10,345) $(8,862) $(9,457)

Add: Cost of investigation and

legal proceedings, net 7,181 4,441 15,307 (456)

Non-GAAP operating income (loss),

excluding cost of investigation

and legal proceedings, net $1,905 $(5,904) $6,445 $(9,913)

MedQuist Inc. and Subsidiaries

Reconciliation of GAAP financial measures to the aforementioned non-

GAAP measures

Cost of investigation and legal proceedings, excluding DOJ settlement

expenses

(In thousands)

Unaudited

Three months ended Nine months ended

September 30, September 30,

2008 2007 2008 2007

GAAP Cost of investigation and

legal proceedings, net $7,181 $4,441 $15,307 $(456)

Less: DOJ settlement expenses (5,925) - (5,925) -

Non-GAAP Cost of investigation and

legal proceedings, excluding DOJ

settlement expenses $1,256 $4,441 $9,382 $(456)

Operating income (loss), excluding Cost of investigation and legal proceedings, net, and Cost of investigation and legal proceedings, excluding DOJ settlement expenses, are financial measures not computed in accordance with United States generally accepted accounting principles, or GAAP. The Company believes that these non-GAAP measures, when presented in conjunction with comparable GAAP measures, are 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 income (loss), excluding Cost of investigation and legal proceedings, net, and Cost of investigation and legal proceedings, excluding DOJ settlement expenses, are useful as supplemental measures of the Company's financial results because it removes costs not related to the Company's operating performance. Management believes that Operating income (loss), excluding Cost of investigation and legal proceedings, net, and Cost of investigation and legal proceedings, excluding DOJ settlement expenses 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 income (loss), excluding Cost of investigation and legal proceedings, net, to Operating income (loss) is provided above. A reconciliation of Cost of investigation and legal proceedings, excluding DOJ settlement expenses, to Cost of investigation and legal proceedings, net, is provided above.


'/>"/>
SOURCE MedQuist Inc.
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. MedQuist Reports Second Quarter 2008 Results
2. MedQuist Announces Changes to Board of Directors
3. MedQuist Announces Declaration of $2.75 per share Dividend on Common Stock
4. Award-Winning Massachusetts Hospital Selects MedQuist Enterprise Technology for Clinical Documentation and Speech Recognition
5. MedQuist Announces Dismissal of South Broward Litigation and Appointment of New Interim President & CEO
6. MedQuist to Get New Majority Stakeholder
7. MedQuist Technology Solutions to Power Documentation Workflow at New England Facility
8. MedQuist Announces Entry Into Settlement Term Sheet Resolving South Broward Litigation
9. Leading Arizona Radiological Group Selects MedQuist for Speech Recognition Solution
10. MedQuist Announces Appointment of Brian ODonoghue and Mark E. Schwarz to its Board of Directors
11. MedQuist Files Preliminary Proxy Statement and Applies for Listing on NASDAQ
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:4/28/2016)... ... 2016 , ... A first-time look at workers’ compensation claims in Kentucky found ... Compensation Research Institute (WCRI) announced, and that costs per claim were stable between ... Edition , found that indemnity costs per claim and benefit delivery expenses per claim ...
(Date:4/28/2016)... ... ... Metabolic Nutrition today announced the upcoming launch of its revolutionary ... Fit and Sports Expo in Orlando, Florida. Attended by pro athletes, fitness ... was selected as the perfect event to introduce the highly anticipated GlycoLoad. , ...
(Date:4/28/2016)... Louis, MO (PRWEB) , ... April 28, 2016 , ... Denise McCormick Baich had written ... in 2009 the poetry arrived again much like a tsunami and took on a more ... closest to her encouraged her to do more with it than just file it away. ...
(Date:4/28/2016)... ... ... North Hollywood dentist , Dr. Hamid Reza, now offers emergency dental ... to dental accidents or critical dental problems. These issues can threaten a person's dental ... teeth, chipped teeth, and many other issues can lead to emergency situations, and Dr. ...
(Date:4/28/2016)... ... ... The USDA recently released its updated Dietary Guidelines for Americans — advice that ... lot of information available in the report, older men should focus on four specific ... Men's Health Watch . , These include: , 1.    Vary food choices. “Mixing it ...
Breaking Medicine News(10 mins):
(Date:4/28/2016)... 28, 2016  The blood testing market in ... to Kalorama Information and The Freedonia Group in a ... acid testing.  The healthcare research firm said that ... blood collection stations and in improving testing at the ... report, Blood Testing Market in China ...
(Date:4/28/2016)... --  Acsis , a leading provider of supply chain ... and advisory firm IDC has named it a " ... Track and Trace Software 2016 Vendor Assessment (doc # ... the capabilities and business strategies of 10 vendors in ... Logo - http://photos.prnewswire.com/prnh/20160427/360791LOGO ...
(Date:4/27/2016)... , Schweiz, April 27, 2016 ... Sachs CEO Forums in Zürich gab Strekin ... führenden Wirkstoffkandidaten STR001 zur Erhaltung des Resthörvermögens ... wurde, bekannt. Für die umfassende Phase-II-Doppelblindstudie mit ... Frankreich angeworben. STR001 wird während der Operation ...
Breaking Medicine Technology: