MOUNT LAUREL, N.J., July 30 /PRNewswire-FirstCall/ -- MedQuist Inc., (Nasdaq: MEDQ) a leading provider of medical transcription services, and a leader in technology-enabled clinical documentation workflow, today announced its unaudited operating results for its second quarter ended June 30, 2009.
Net income for the second quarter of 2009 was $0.8 million, a decrease of $1.0 million compared to the second quarter of 2008. Earnings per share for the second quarter of 2009 were $0.02 per share compared to $0.05 per share in the second quarter of 2008.
Adjusted EBITDA (operating income (loss) excluding depreciation, amortization of intangible assets, and cost of legal proceedings, and settlements, net) increased 76.0% to $15.3 million for the second quarter of 2009 compared to $8.7 million reported for the second quarter of 2008.
Net revenues declined $5.0 million or 6.0% to $77.5 million for the three months ended June 30, 2009 compared with $82.5 million for the prior year comparable period. The decline was due primarily to lower medical transcription revenue of $2.7 million resulting from lower average prices for MedQuist's services.
Cost of revenues decreased $6.7 million or 11.5% to $51.4 million for the three months ended June 30, 2009 compared with $58.0 million for the three months ended June 30, 2008. This decrease was due to reduced medical transcription volume, lower payroll related to increased use of speech recognition technology, offshore outsourcing, and cost containment actions.
Selling, general and administrative costs decreased $3.6 million or 30.0% to $8.5 million for the three months ended June 30, 2009 compared to $12.1 million for the three months ended June 30, 2008. The decrease was due primarily to work force reductions and cost containment actions.
Research and development costs decreased $1.4 million or 36.3% to $2.4 million for the three months ended June 30, 2009 compared with $3.7 million for the three months ended June 30, 2008. The decrease was due to lower compensation expense as a result of workforce reductions and an increase in capitalized software development costs.
Cost of legal proceedings and settlements, net, increased $7.7 million to $10.2 million for the three months ended June 30, 2009 compared with $2.5 million for the three months ended June 30, 2008. The increase was due primarily to the settlement of the Anthurium lawsuit.
As of June 30, 2009 the company had $54.2 million in cash compared to $39.9 million at December 31, 2008. The increased cash was provided by operating activities in the amount of $18.4 million offset by cash used for investments of $4.3 million.
For the six months ended June 30, 2009, net revenues declined 5.9% to $156.4 million while the company's net income improved to $7.7 million compared to a net loss of $2.6 million for the six months ended June 30, 2008. On a non-GAAP basis (excluding the cost of legal proceedings and settlements, net), adjusted EBITDA for the six months ended June 30, 2009 improved by $14.4 million. Non-GAAP adjusted EBITDA in the six months ended June 30, 2009 was $28.5 million compared to a non-GAAP Adjusted EBITDA of $14.1 million in the six months ended June 30, 2008.
In addition to the United States generally accepted accounting principles, or GAAP, results provided throughout this document, MedQuist has provided a non-GAAP financial measurement. Management believes that the non-GAAP financial measures used to manage the business may provide users additional useful information. The table attached to this press release includes a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measure and a description of why the non-GAAP financial measures are useful to investors.
This report contains forward-looking statements 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, 2008, entitled "Risk Factors" and discussions of potential risks and uncertainties in MedQuist's subsequent filings with the Securities and Exchange Commission.
MedQuist Inc.
