EX-5 4 ex5-2.txt EXHIBIT 5.2 Exhibit 5.2 ----------- News Release NASDAQ: MEDQ FOR IMMEDIATE RELEASE MEDQUIST REPORTS FINANCIAL RESULTS FOR FOURTH QUARTER AND FULL-YEAR 2002 MARLTON, NJ February 13, 2003 - MedQuist Inc. (NASDAQ:MEDQ) reported revenue of $128.8 million, EBITDA of $23.1 million and net income of $10.0 million or $0.27 per diluted share for the three months ended December 31, 2002. Net income for the three months ended December 31, 2002 included income of $576 thousand from the adjustment of restructure reserves established in 1998 and 2001. Excluding this adjustment, net income for the three months ended December 31, 2002 was $9.7 million or $0.26 per diluted share. For the twelve months ended December 31, 2002 revenue was $486.2 million, EBITDA was $96.7 million and net income was $43.9 million or $1.16 per share on a diluted basis. Net income for the twelve months ended December 31, 2002 included income of $576 thousand for the adjustment of restructure reserves established in 1998 and 2001. Excluding this adjustment, net income for the twelve months ended December 31, 2002 was $43.5 million or $1.15 per diluted share. David A. Cohen, Chairman and Chief Executive Officer, stated, "MedQuist's fourth quarter financial results were in line with previous company guidance issued during our third quarter investor conference call. Over the last year MedQuist achieved several important milestones including the acquisition of a strategically important business and the formal launch of our new technology platform." "In July 2002, MedQuist completed the acquisition of Lanier Healthcare, which added a well-established suite of products and services plus one of the most professional sales teams in healthcare services. The Lanier acquisition also provides MedQuist with a high quality research and development effort, a well developed client service capability plus an experienced and professional management team." "More recently, MedQuist announced the formal launch of our new transcription platform, called DocQment Enterprise Platform, which is a web-based document workflow management solution that integrates dictation, routing, speech recognition, transcription and document delivery. We believe that DocQment EP will become the application of choice among health information management professionals throughout the nation. We continue to believe that MedQuist remains extremely well positioned to extend our leadership position in medical document management." MedQuist is a leading provider of electronic medical transcription, health information and document management services. MedQuist provides document workflow management, digital dictation, speech recognition, mobile dictation devices, Web-based transcription, electronic signature, medical coding products and outsourcing services. MedQuist is a member of the Philips Group of Companies. Other than historical information set forth herein, this press release may contain forward-looking statements such as our anticipated future earnings growth, which involve risks and uncertainties. The Company's actual results may differ materially from those anticipated or implied in any such forward-looking statements as a result of various risks, including, without limitation, inability to predict future economic or market conditions, rapidly changing technology; inability to manage and maintain growth; inability to penetrate new markets; inability to make and successfully integrate acquisitions and transition our business strategy; decreased demand for existing products; lack of a market for new products; and failure to successfully negotiate agreements to take advantage of the opportunities facing MedQuist to broaden its service offering. Additional risks associated with the Company's business can be found in its December 31, 2001 Annual Report on Form 10-K and its other periodic filings with the SEC. Contact: Brian J. Kearns, Chief Financial Officer, MedQuist Inc., 856-810-8000 ext. 4418 Tables Follow MedQuist Inc. Financial Highlights (Unaudited) In thousands, except per share data and percentages
Three Months Ended December 31, ------------------------------- 2002 2001 --------- ----------- Revenues $128,811 $109,536 Gross profit 32,035 28,545 Gross margin 24.9% 26.1% Selling, general & administrative 8,180 3,510 % of revenues 6.4% 3.2% Research and development 1,310 -- % of revenues 1.0% n/a Restructure charges (credits) (576) 1,468 % of revenues (0.4%) 1.3% EBITDA 23,121 23,567 % of revenues 17.9% 21.5% Depreciation expense 5,132 4,736 Amortization expense 1,741 2,558 Operating income 16,248 16,273 Net interest income (252) (427) Equity in loss of investee 221 178 Pretax income 16,279 16,522 Tax provision 6,267 6,429 Net income 10,012 10,093 Net income per diluted share $0.27 $0.27 Fully diluted shares outstanding 37,684 37,776
MedQuist Inc. Financial Highlights (Unaudited) In thousands, except per share data and percentages
Twelve Months Ended December 31, -------------------------------- 2002 2001 --------- ---------- Revenues $486,166 $405,308 Gross profit 121,070 106,206 Gross margin 24.9% 26.2% Selling, general & administrative 22,253 13,117 % of revenues 4.6% 3.2% Research and development 2,736 -- % of revenues 0.6% n/a Restructure charges (credits) (576) 868 % of revenues (0.1%) 0.2% Other income -- (3,000) % of revenues n/a (0.7%) EBITDA 96,657 95,221 % of revenues 19.9% 23.5% Depreciation expense 18,829 17,001 Amortization expense 6,827 9,398 Operating income 71,001 68,822 Net interest income (1,202) (3,754) Equity in loss of investee 895 994 Pretax income 71,308 71,582 Tax provision 27,453 27,940 Net income 43,855 43,642 Earnings per diluted share $1.16 $1.16 Fully diluted shares outstanding 37,875 37,718
MedQuist Inc. Reconciliation to net income before special items Unaudited In thousands, except per share data and percentages
Three Months Twelve Months Ended December 31, Ended December 31, -------------------- -------------------- 2002 2001 2002 2001 ------- ------- -------- -------- Pre-tax income $16,279 $16,522 $71,308 $71,582 Adjustment for amortization of goodwill (1) -- 874 -- 3,369 Adjustment for special items (2) (3) (576) 1,468 (576) (2,132) ------- ------- ------- ------- Adjusted pre-tax income 15,703 18,864 70,732 72,819 Tax provision 6,045 7,331 27,231 28,416 ------- ------- ------- ------- Adjusted net income $9,658 $11,533 $43,501 $44,403 Adjusted net income per diluted share $0.26 $0.31 $1.15 $1.18
Notes: ------ (1) In accordance with FASB No. 142, goodwill is no longer amortized, beginning January 1, 2002. For the three months ended December 31, 2001, the pretax income includes $874 of such goodwill amortization with an after tax effect of $538. For the twelve months ended December 31, 2001, the pretax income includes $3,369 of such goodwill amortization with an after tax effect of $2,072. (2) Adjustment for special items for the three and twelve months ended December 31, 2002 relates to income of $576 from an adjustment of the restructure reserves established in 1998 and 2001. (3) Adjustment for special items for the three months ended December 31, 2001 includes a charge of $1,468 related to a restructure reserve. The twelve months ended December 31, 2001 includes the following items; $3,000 of income related to favorable settlement of a lawsuit and $600 of income related to the adjustment of the restructuring reserves established in 1997 and 1998, and $1,468 related to establishing a restructure reserve. MedQuist Inc. Financial Highlights In thousands
December 31, December 31, 2002 2001 ------------ ------------ (Unaudited) (Audited) Assets: Current assets: Cash and cash equivalents $ 103,392 $ 86,334 Accounts receivable (net) 86,465 78,429 Other current assets 14,474 7,892 --------- --------- Total current assets 204,331 172,655 Property and equipment (net) 37,804 34,167 Goodwill 136,127 110,584 Other intangible assets (net) 73,798 57,219 Other assets 22,811 27,489 --------- --------- Total assets $ 474,871 $ 402,114 ========= ========= Liabilities and Shareholder's Equity: Current liabilities: Current portion of long term debt $ 31 $ 1,067 Accounts payable 9,908 4,562 Deferred revenue 18,789 333 Accrued expenses 33,701 30,990 --------- --------- Total current liabilities 62,429 36,952 Long term debt 54 1,088 Other long term liabilities 1,427 1,187 Shareholder's equity 410,961 362,887 --------- --------- Total liabilities and Shareholder's $ 474,871 $ 402,114 ========= =========