Merge Healthcare Incorporated. (MRGE)

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Merge Healthcare Incorporated (MRGE)

Q3 2010 Earnings Call

November 09, 2010 08:30 am ET


Paul Merrild - SVP, Marketing & Corporate Strategy

Michael Ferro - Chairman

Jeff Surges - CEO

Justin Dearborn - President

Steve Oreskovich - CFO


Eric Martinuzzi - Craig-Hallum

Corey Tobin - William Blair

Chad Bennett - Northland Capital

Doug Dieter - Imperial Capital

Eric Coldwell - Robert W. Baird



Good morning my name is Bettina and I will your conference operator today. At this time I would like to welcome everyone to the Merge Healthcare quarter three 2010 earnings announcement. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer-session. (Operator Instructions). Thank you, I'll now turn the call over to Paul Merrild, Senior Vice President of Marketing. Sir, please go ahead.

Paul Merrild

Good morning and welcome to Merge Healthcare's third quarter 2010 earnings call. I am Paul Merrild Merge Healthcare's Senior Vice President of Marketing. Joining me on the phone today are Michael Ferro, our Chairman, Jeff Surges our newly appointed CEO, Justin Dearborn, our President; Steve Oreskovich, our Chief Financial Officer.

Before we get started, please consider that our comments today may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995 and not historical facts. Our actual results may differ. Various critical factors that could affect our future results are set forth in our recent SEC filings and press releases. The company undertakes no obligation to update or revise any forward-looking statements.

In addition, we may refer today to non-GAAP financial measures. These measures are supplemental to our GAAP financial measures and should not be viewed as an alternative to them. For greater information regarding these metrics, please see the related discussion in our earnings release.

With that, I will turn the call over to Michael Ferro for opening comments.

Michael Ferro

Thank you Paul. Good morning everyone, we've great news today on a number of fronts. I would like to begin by introducing Jeff Surges as the new CEO of Merge Healthcare. Many of you may know Jeff from his most recent role as President of sales at Allscripts Healthcare Solutions. Jeff brings 20 years of experience managing high growth technology companies in the healthcare and information services industries and in depth knowledge of the key trends in healthcare IT. Before we dive into the details of why Jeff is joining Merge Healthcare, I think it's important to remind everyone of what Merge Healthcare has become over the last few years.

Merge Healthcare is a company that has amassed nearly 70 patents in healthcare IT. Critical product such as vendor-neutral archiving and a customer base of over 22,000 imaging centers, 1500 hospitals, 800 orthopedic clinics, 1200 labs and 250 OEM partners. These assets uniquely position Merge Healthcare to transform the challenges facing today's healthcare providers to improve quality and reduce costs.

Providers, physicians, payers and patients all need access to healthcare information and the ability to share clinical data for our healthcare system to improve quality and reduced costs. At Merge, we have created an interoperability and connectivity platform, designed to make that vision a reality. Our new I-Connect platform offers IDNs, hospitals, imaging centers and health information exchanges the ability to create information exchanges with their environment and with other entities.

Having an electronic health record industry veteran such as Jeff join us is a testament to both the work we have done to date as well as the opportunity that lies in front of us. As electronic health record adoption is well underway, we believe the market for interoperability and connectivity is the next wave of growth in healthcare IT.

Concurrent with Jeff Surges' new role of CEO, Justin Dearborn has accepted the position of President of Merge Healthcare. Justin's leadership has been instrumental as we've grown from a $60 million annual revenue company to a $200 million annual revenue run rate company. Justin will continue to be a critical part of our strategy in operations as we scale our international business.

I believe we have the team to take Merge Healthcare to the next level. Please join me in welcoming Jeff to the Merge Healthcare team.

Jeff Surges

Thank you, Michael. I am honored to join Merge Healthcare. I left a growth company to join Merge Healthcare and the team because I believe the next phase of growth in healthcare IT lies in connectivity and interoperability. As providers adopt electronic health records, the need for solutions that connect the spare providers with other constituents in healthcare will become a multi-billion dollar opportunity.

I joined Merge Healthcare because I believe we are well positioned to become a billion dollar company addressing this unique market opportunity. As a Director of the Merge Healthcare Board since June of 2010, I've been fortunate to see the foundation Merge Healthcare has put in place to capitalize on the trends in healthcare IT. With a very strong customer base, an excellent portfolio a world class team, we are positioned to capitalize on the next phase of growth in healthcare IT.

This is all coming together at a time when investments in healthcare IT solutions are accelerating thanks to the American Reinvestment and Recovery Act. With the strength of the Merge assets in place and the availability of the federal stimulus funding, we will be investing in sales and marketing to transform Merge Healthcare into a growth company that can dominate our space over the next 36 months. The upcoming RSNA Trade Show in Chicago presents a unique opportunity for us to get in front of our clients, our customers, the market and our investors to share additional details about our business and our strategy.

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