BOSTON, Nov. 3 /PRNewswire-FirstCall/ -- AMICAS, Inc. , a leader in image and information management solutions, today reported unaudited financial results for the third quarter ended September 30, 2009.

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Q3 Financial Highlights

Revenue: Total revenue for the third quarter of 2009 was $27.2 million, compared to total revenue of $12.3 million for the third quarter of 2008. The Company's non-GAAP revenue for the third quarter of 2009 was approximately $28.3 million, which includes $1.1 million in revenue that was not recognized under GAAP due to purchase accounting treatment related to the Company's acquisition of Emageon Inc in the second quarter of 2009.

Operating Income/Loss: Operating income for the third quarter of 2009 was $0.4 million, compared to an operating loss of $(1.2) million for the third quarter of 2008. Non-GAAP operating income for the third quarter of 2009 was $2.6 million.

Adjusted EBITDA: The Company's adjusted EBITDA for the third quarter of 2009 was $4.9 million, compared to adjusted EBITDA of $87,000 for the third quarter of 2008.

Net Income/Loss: The Company's net income for the third quarter of 2009 was $1.7 million, or $0.05 per share, compared to a net loss of $(809,000), or $(0.02) per share, for the third quarter of 2008.

Cash and Cash Flow: AMICAS ended the third quarter of 2009 with a cash, cash equivalents, and marketable securities balance of $40.2 million and working capital of $26.0 million. AMICAS generated $4.4 million of cash from operations in the third quarter of 2009, and, year-to-date, has generated $5.0 million of cash from operations.

Business Perspective

"We are very pleased with our performance in the third quarter of 2009. We demonstrated excellent progress on a number of important fronts - including record bookings and revenue, accelerated progress on our business integration, and continued focus on customer success, while at the same time pursuing strategic growth opportunities," said Stephen Kahane MD, president, chief executive officer, and chairman of AMICAS. "Whether you measure by customers, revenue, or facilities served, AMICAS is a major player in the market for image and information management - an area critical for improving the effectiveness and efficiency of healthcare in the United States and beyond and very important in our move towards broad adoption of electronic medical records."

Dr. Kahane also said, "We continue to maintain focus on our core markets - including radiology and cardiology departmental image and information management solutions for hospitals and integrated delivery healthcare networks as well as comprehensive, end-to-end solutions that automate the entire workflow of a radiology practice or imaging center business. In parallel, we are committed to capitalizing on a number of opportunities that we believe provide excellent prospects for growth, including the need for the imaging component of the EMR and related enterprise content management, the market for teleradiology infrastructure and application solutions, and a growing trend in replacement opportunities where customers value interoperability, modern technology, and opportunities for high returns on investment."

Dr. Kahane continued, "We are honored to be the recent recipient of the exclusive 2009 Frost & Sullivan North American Growth Leadership of the Year Award in Imaging Informatics. We believe this award reflects the convergence of our organic growth, our solution competitiveness, our combination with Emageon, and our prospects for future growth and success."

Looking Forward

Fourth Quarter of 2009: The Company is increasing guidance for the fourth quarter of 2009 as follows:

    --  Non-GAAP revenue for the fourth quarter is expected to be approximately
        $28.7 million. For 2009, non-GAAP revenue is now expected to be
        approximately $95.8 million, an increase of $1.0 million from prior
        guidance.
    --  Adjusted EBITDA for the fourth quarter of 2009 is expected to be
        approximately $4.6 million. For 2009, adjusted EBITDA is now expected to
        be approximately $13.3 million, an increase of $1.0 million from prior
        guidance.

Fiscal Year 2010: In addition to guidance for the fourth quarter of fiscal year 2009, the Company now expects 2010 to come in at the high end of the previously provided guidance. As a result, the Company's revised 2010 guidance is as follows:

    --  Fiscal year 2010 revenue (GAAP) is expected to be approximately $120.0
        million.
    --  Fiscal year 2010 adjusted EBITDA is expected to be approximately $20.7
        million.

A reconciliation of the Company's financial results determined in accordance with U.S. Generally Accepted Accounting Principles (GAAP) to certain non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Explanation of Non-GAAP Financial Measures."

Conference Call

AMICAS will host a conference call on Wednesday, November 4, at 8:30 a.m. Eastern Time to discuss the Company's 2009 third fiscal quarter results. Investors and other interested parties may dial in to the call using the toll free number 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 800.688.7945 or 402.220.1370 until December 4, 2009.

AMICAS(R) is a registered trademark and service mark of AMICAS, Inc.

About AMICAS, Inc.

AMICAS, Inc. (www.amicas.com) is a leading independent provider of imaging IT solutions. AMICAS offers the industry's most comprehensive suite of image and information management solutions - from radiology PACS to cardiology PACS, from radiology information systems to cardiovascular information systems, from revenue cycle management solutions to enterprise content management tools designed to power the imaging component of the electronic medical record (EMR). AMICAS provides a complete, end-to-end solution for radiology practices, imaging centers, and ambulatory care facilities. Hospitals and integrated delivery networks are provided with a comprehensive image management solution for cardiology and radiology that supports EMR strategies to enhance clinical, operational, and administrative functions.

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. In particular, the forward-looking statements contained in this release include statements about our anticipated financial and operating results for the remainder of fiscal year 2009 and for fiscal year 2010. When used in this press release, the words: "believes," "expects," "estimates," "guidance," 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 Company's sales and implementation cycles are relatively long and sometimes unpredictable; 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; difficulties in the integration of Emageon business operations; the ability of AMICAS to comply with government laws, rules, and regulations; risks to our business presented by potential and pending changes in such 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, 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, September 30, 2009, contained in this press release are subject to review by the Company's independent registered public accounting firm.

Explanation of Non-GAAP Financial Measures

Management believes that in order to properly understand the Company's short-term and long-term financial trends, investors may wish to consider the impact of certain non-cash or non-recurring items, when used as a supplement to financial performance measures prepared in accordance with GAAP. These items result from facts and circumstances that vary in frequency and/or impact on continuing operations. In addition, management uses results of operations before such items to evaluate the operational performance of the Company and as a basis for strategic planning and operational management. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, financial performance measures prepared in accordance with GAAP. In addition to the description provided below, reconciliations of GAAP to non-GAAP results are provided in the financial statement tables included in this press release.

In this press release, the Company defines "non-GAAP revenue" as total revenue before the purchase accounting impact to revenue, arising as a result of the Company's acquisition of Emageon Inc.

The Company defines "non-GAAP operating income/loss" as net income (loss) before income taxes and interest, restructuring, acquisition-related transition and integration costs, and includes revenue and cost of revenue related to acquisitions that would otherwise be recognized but for the accounting treatment related to the Company's acquisition of Emageon Inc.

The Company defines "non-GAAP net income/loss" as net income (loss) before restructuring, acquisition-related transition and integration costs, and includes revenue and cost of revenue related to acquisitions that would otherwise be recognized but for the accounting treatment related to the Company's acquisition of Emageon Inc.

The Company defines "adjusted EBITDA" as non-GAAP operating income/loss before depreciation, amortization, and stock-based compensation expense.

These non-GAAP financial measures, as the Company defines them, may not be similar to non-GAAP measures used by other companies.

Management believes that non-GAAP revenue, non-GAAP operating income/loss, non-GAAP net income/loss, and adjusted EBITDA provide useful information to investors in evaluating the overall performance of the Company's business operations and believes that these performance measures provide investors with additional tools for evaluating the Company's performance that are the same as management uses in its own evaluation of the Company's performance, as well as a baseline for assessing the future earnings potential of the Company. While GAAP results are more complete, the Company offers investors these supplemental metrics since, with reconciliations to GAAP, they may provide greater insight into the Company's financial results. Management does not intend the presentation of these non-GAAP financial measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP financial measures should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands, except share data) September December 30, 2009 31, 2008 Assets --------- -------- Current assets: Cash and cash equivalents $7,988 $7,366 Marketable securities 32,193 47,627 Accounts receivable, net of allowances of $663 and $158, respectively 21,582 10,224 Inventories, net 2,387 - Prepaid expenses and other current assets 6,751 2,261 ----- ----- Total current assets 70,901 67,478 ------ ------ Property and equipment, less accumulated depreciation and amortization of $6,962 and $7,495, respectively 8,771 965 Goodwill 1,138 - Acquired/developed software, less accumulated amortization of $12,267 and $10,195, respectively 8,735 5,805 Other intangible assets, less accumulated amortization of $1,019 and $2,144, respectively 5,881 1,256 Other assets 3,373 1,594 ----- ----- Total assets $98,799 $77,098 ======= ======= Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $9,411 $4,156 Accrued employee compensation and benefits 4,783 1,611 Leases payable, current portion 20 - Deferred revenue 30,729 14,657 ------ ------ Total current liabilities 44,943 20,424 ------ ------ Deferred revenue, long term portion 1,299 - Other long term liabilities 469 - Unrecognized tax benefits 206 1,379 --- ----- 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, 52,266,867 and 51,473,965 issued, respectively 52 51 Additional paid-in capital 233,769 230,905 Accumulated other comprehensive income 40 100 Accumulated deficit (134,626) (128,549) Treasury stock, at cost, 16,357,854 and 16,270,088 shares, respectively (47,353) (47,212) Total stockholders' equity 51,882 55,295 ------ ------ Total liabilities and stockholders' equity $98,799 $77,098 ======= =======

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues Maintenance and services $21,174 $9,616 $50,454 $29,921 Software licenses and system sales 6,022 2,682 11,507 8,740 ----- ----- ------ ----- Total revenues 27,196 12,298 61,961 38,661 ------ ------ ------ ------ Costs and expenses Cost of revenues: Maintenance and services 9,101 4,634 22,716 13,707 Software licenses and system sales 4,191 1,067 7,696 3,948 Amortization of software 750 571 2,071 1,632 --- --- ----- ----- Total cost of revenues 14,042 6,272 32,483 19,287 ------ ----- ------ ------ Gross profit 13,154 6,025 29,478 19,374 Selling, general and administrative 7,198 4,971 19,478 15,426 Research and development 4,143 2,153 11,041 6,599 Acquisition-related and integration costs 806 - 2,451 - Restructuring costs 446 - 3,919 - Amortization of intangibles 172 107 375 320 --- --- --- --- Total operating expenses 12,765 7,231 37,264 22,345 ------ ----- ------ ------ Operating income (loss) 389 (1,206) (7,786) (2,972) Interest income 120 420 670 1,781 Other income (expense) (8) - (2) - Loss on sale of investments - - - (31) --- --- --- --- Income (loss) before provision for income taxes 501 (786) (7,118) (1,222) (Benefit from) provision for income taxes (1,174) 23 (1,041) 151 ------ --- ------ --- Net income (loss) $1,675 $(809) $(6,077) (1,373) ====== ===== ======= ====== Income (loss) per share Basic: $0.05 $(0.02) $(0.17) $(0.03) ===== ====== ====== ====== Diluted: $0.05 $(0.02) $(0.17) $(0.03) ===== ====== ====== ====== Weighted average number of shares outstanding Basic 35,511 36,004 35,313 39,976 Diluted 37,166 36,004 35,313 39,976

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, ------------- 2009 2008 ---- ---- Operating activities Net loss $(6,077) $(1,373) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation and amortization 2,225 835 Provisions for (recoveries from) bad debts 153 70 Loss on disposal of fixed assets 752 6 Amortization of software 2,071 1,632 Non-cash stock compensation expense 1,465 1,057 Changes in operating assets and liabilities, net of affect of acquisition: Accounts receivable 370 40 Inventories, prepaid expenses and other (541) 103 Accounts payable, accrued expenses and accrued employee compensation and benefits (1,943) (119) Deferred revenue 7,200 852 Other long term liabilities 469 - Unrecognized tax benefits (1,173) 76 ------ -- Cash provided by operating activities 4,971 3,179 ----- ----- Investing activities Business acquisition, net of cash acquired (20,698) - Purchases of property and equipment (279) (589) Purchases of held-to-maturity securities (53,772) (220,708) Maturities of held-to-maturity securities 126,833 212,945 Purchases of available-for-sale securities (106,335) (17,590) Sales of available-for-sale securities 48,641 53,625 ------ ------ Cash (used in) provided by investing activities (5,610) 27,683 ------ ------ Financing activities Repurchases of common stock (141) (24,479) Exercise of stock options 1,435 325 ----- --- Cash provided by (used in) financing activities 1,294 (24,154) ----- ------- Increase in cash and cash equivalents 621 6,708 Cash and cash equivalents at beginning of period 7,366 8,536 ----- ----- Cash and cash equivalents at end of period $7,987 $15,244 ====== ======= Supplemental disclosure of cash paid during the period for: Income taxes, net of refunds $- $116 Non-cash investing activities: Unrealized gain (loss) on available-for-sale securities $66 $26

SUPPLEMENTAL FINANCIAL INFORMATION GAAP TO NON-GAAP RECONCILIATIONS (Unaudited) (in thousands) Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Total revenue $27,196 $12,298 $61,961 $38,661 Acquisition-related revenue adjustments: Maintenance and services 675 - 2,609 - Software licenses and system sales 439 - 2,512 - --- - ----- - Total non-GAAP revenue 28,310 12,298 67,082 38,661 ------ ------ ------ ------

Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- 2009 2008 2009 2008 ---- ---- ---- ---- Net income (loss) $1,675 $(809) $(6,077) $(1,373) (Benefit from) provision for income taxes (1,174) 23 (1,041) 151 Interest income (120) (420) (670) (1,781) Other (income) expense 8 - 2 31 Acquisition-related and integration costs 806 - 2,451 - Restructuring costs 446 - 3,919 - Acquisition-related revenue adjustments: Maintenance and services 675 - 2,609 - Software licenses and system sales 439 - 2,512 - Acquisition-related cost of revenue adjustments (147) - (758) - ---- - ---- - Non-GAAP operating income/ (loss) 2,608 (1,206) 2,947 (2,972) ----- ------ ----- ------ Non-cash stock compensation expense 527 438 1,465 1,057 Depreciation 831 283 1,849 835 Amortization 921 572 2,447 1,632 --- --- ----- ----- Adjusted EBITDA 4,887 87 8,708 552 ----- -- ----- ---

SUPPLEMENTAL FINANCIAL INFORMATION GAAP TO NON-GAAP RECONCILIATIONS Guidance: Fourth Quarter ("Q4 2009") and Fiscal Year ("FY 2009") (Unaudited) (in thousands) Q1 2009 Q2 2009 Q3 2009 Q4 2009 FY 2009 ------- ------- ------- ------- ------- Total revenue $11,272 $23,493 $27,196 $27,600 $89,561 Acquisition-related revenue adjustments - 4,007 1,114 1,100 6,221 - ----- ----- ----- ----- Total non-GAAP revenue 11,272 27,500 28,310 28,700 95,782 ------ ------ ------ ------ ------ Q1 2009 Q2 2009 Q3 2009 Q4 2009 FY 2009 ------- ------- ------- ------- ------- Net income (loss) $(1,168) $(6,585) $1,675 $1,000 $(5,077) (Benefit from) provision for income taxes 53 80 (1,174) (200) (1,241) Interest and other income (446) (110) (112) (100) (768) Restructuring, acquisition-related and integration costs 549 4,569 1,252 600 6,970 Acquisition-related revenue adjustments - 4,007 1,114 1,100 6,221 Acquisition-related cost of revenue adjustments - (611) (147) (200) (958) --- --- --- --- --- Non-GAAP operating income (1,012) 1,350 2,609 2,200 5,147 ----- --- --- ----- ----- Non-cash stock compensation expense 457 481 527 550 2,015 Depreciation and amortization 757 1,784 1,752 1,800 6,093 --- --- --- --- --- Adjusted EBITDA 202 3,615 4,888 4,550 13,255 --- --- --- --- ---

Guidance: Fiscal year 2010 ("FY 2010") (Unaudited) (in thousands) FY 2010 ------- Total revenue $120,000 FY 2010 ------- Net income $11,200 Provision for income taxes 550 Interest income (750) ---- Non-GAAP operating income 11,000 ------ Non-cash stock compensation expense 2,400 Depreciation and amortization 7,300 ----- Adjusted EBITDA 20,700 ------

CONTACT: Colleen McCormick, Investor Relations 617.779.7892 colleen.mccormick@amicas.com

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CONTACT: Colleen McCormick, Investor Relations, +1-617-779-7892,
colleen.mccormick@amicas.com