-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UqNX1nU0CtMk5G8xi7/EzhybkuwnugDmK02F5MFDJUjPJW3X0iFLxUOxD+1hOu/S fFkGRXIcJ+oz6o/c4a+VHA== 0000950116-03-003280.txt : 20030725 0000950116-03-003280.hdr.sgml : 20030725 20030724175358 ACCESSION NUMBER: 0000950116-03-003280 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030724 ITEM INFORMATION: Other events FILED AS OF DATE: 20030725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDQUIST INC CENTRAL INDEX KEY: 0000884497 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 222531298 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19941 FILM NUMBER: 03801732 BUSINESS ADDRESS: STREET 1: FIVE GREENTREE CENTRE STE 311 STREET 2: STATE HIGHWAY 73 N CITY: MARLTON STATE: NJ ZIP: 08053 BUSINESS PHONE: 8568108000 MAIL ADDRESS: STREET 1: 5 GREENTREE CENTRE SUITE 311 STREET 2: ATTN BRUCE VAN FOSSEN CITY: MARLTON STATE: NJ ZIP: 08053 8-K 1 eightk.txt 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 24, 2003 MedQuist Inc. ------------- (Exact name of registrant as specified in its charter) New Jersey 0-19941 22-2531298 - --------------- ----------- ------------------ (State or other (Commission (I.R.S. Employer jurisdiction File Identification No.) of incorporation Number) or organization) Five Greentree Centre Suite 311 Marlton, NJ 08053 ---------------------------------------------------- (address of principal executive offices) (Zip Code) Registrants's telephone number, including area code: (856) 810-8000 Item 5. Other Events. - ---------------------- Pursuant to Regulation FD Rules 100-103: Attached as Exhibit 5.1 is the script for the Registrant's second quarter 2003 investor conference call held on July 24, 2003 at 11:00 a.m. (ET). Attached as Exhibit 5.2 is the Registrant's earnings release for the second quarter ended June 30, 2003. Pursuant to Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, attached as Exhibit 5.3 is a note concerning forward-looking statements and additional information regarding factors that could cause actual results to differ materially from those in such forward-looking statements. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MEDQUIST INC. Date: July 24, 2003 By: Brian J. Kearns -------------------------------------------- Name: Brian J. Kearns Title: Executive Vice President, Treasurer and Chief Financial Officer EX-5 3 ex5-1.txt EXHIBIT 5.1 Exhibit 5.1 - ----------- MedQuist Inc. - 2003 Second Quarter Conference Call: - ---------------------------------------------------- Good morning everyone. I would like to take this opportunity to thank you for participating in our conference call. My name is Brian Kearns and I am Executive Vice President and Chief Financial Officer of the Company. Also on the call today is John Quaintance, Executive Vice President and President of our Medical Transcription Division. By now everyone should have received a copy of our earnings release or have had the opportunity to review the information distributed by the wire services. Today we will start the call with a brief overview of our quarterly operations, follow it up with a summary of our financial results, and then open the call to your questions and comments. So to start off, I'd like to turn things over to John Quaintance, Executive Vice President and President of our Medical Transcriptions Division to say a few words and to discuss our quarterly operations. Thank you Brian. I would like to begin my comments by mentioning that the reason I am speaking to you today is due to the planned retirement of MedQuist's CEO, David Cohen. David retired from MedQuist, as expected, earlier this month. David has spent the last 30 years of his life working with many of us in building this business, and I would like to thank him on behalf of the management team and our 11,000 employees for his leadership and the great job he did in growing this business over the years. It is appropriate for me to let you know that we anticipate an announcement of David's successor in the near term. We are not prepared to discuss this in any more detail today, other than to say that an announcement can be expected over the next several weeks. And now I'd like to talk a little bit about our business and what's been going on over the last few months. While the economic environment remains difficult, and healthcare is no exception, we remain focused on the future and on all the things we can control. As you will see from our financial results, our second quarter performance was in line with analyst expectations, according to First Call consensus estimates. The roll out of our DocQment Enterprise Platform, DEP, has gained significant momentum. After adding roughly $4 million in annualized revenue on the DEP in April and $6 million in May, we gained significant traction and added over $17 million in annualized revenue in June. We believe this implementation run rate is sustainable, which is very exciting for us. The roll out of the DEP fundamentally changes and improves the way we run our business. Consistent with the conservative nature of our company, we wanted to make sure the roll out was done right the first time. There are huge training demands for both our staff and clients. While we could have added even more business onto the DEP, we wanted to make sure all our transcriptionists and clients were properly trained to ensure as seamless a transition as possible. Our dedicated and talented team of professionals is working hard to maintain this positive momentum. Our transcription business continues to come under pricing pressure, but we remain disciplined in our business practices. We will continue to work hard to differentiate our service offering and work just as hard to communicate our value added service offering to the healthcare market. We will weather these challenges and we'll be well positioned to capitalize on opportunities as the business climate improves. We continue to capitalize on the synergies identified when we acquired Lanier Healthcare. We are consolidating Lanier's field support into a centralized service and support organization that will result in an enhanced level of service for our clients and a reduction in duplication of overhead. For example, we are currently in the process of consolidating the Lanier and MedQuist call centers. We continue to focus our efforts on improving the Lanier sales team's ability to sell the full suite of MedQuist's services, including DEP, transcription and coding. We believe there is real upside to our growth potential once our distribution channel is properly fine-tuned. We continue to believe that our company's transition to a document management enterprise will allow us to demonstrate MedQuist's clear value to the marketplace. We have restructured our Coding Division to minimize that business unit's cash burn and streamline its customer service. We look forward to marketing CodeRunner, our innovative coding software, to the Emergency Department market, which will hopefully put us in the driver's seat to expand our coding initiative going forward. We continue to test and further develop Automated Speech Recognition with our committed technology partner, Philips Electronics. We see exciting applications for this technology to improve our transcriptionists' capacity and productivity in the future. Overall, in the second quarter MedQuist continued to provide a valuable service to the healthcare industry by helping hospitals to improve the capture and documentation of critical medical information. We plan to continue to offer this high level of service as well as add other complimentary products and services to provide an even more complete solution for our clients in the future. At this time I would like to turn it over to Brian Kearns for a review of our financial results. Thank you John. For the second quarter: MedQuist generated revenue of $123.4 million and Operating Income was $17.5 million or 14.1% of revenue. Earnings per share were $0.29, down compared to $0.33 in the second quarter of last year. At June 30, 2003, MedQuist had $167 million in working capital including $133 million in cash. Accounts receivable were $78 million and DSO dropped to the lowest level in our company's recent history, to 57 days, which is down from 61 days at year end 2002. The Company had essentially zero debt and shareholders equity was $434 million. At this time since our General Counsel is on a well-earned vacation, I will do the honor of reading the following legal statement before we open the call to questions. During the conference call management will make forward-looking statements within the meaning of the safe-harbor provisions of the U.S. federal securities laws, such as market estimates, growth and expansion plans and opportunities, potential revenue and cost synergies, revenue and earnings projections, expected growth rates, and the benefits of new technologies. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from these forward-looking statements is set forth in our periodic reports filed with the SEC, including our Form 10-Q's and Form 10-K for the year ended December 31, 2002 and our Form 8-K filed in relation to today's call. In addition, more detailed unaudited financial information can be found in the earnings release we issued this morning and in the Form 8-K filed in relation to today's call. At this time we would like to open up the call to your questions. Please announce your name before asking your question. Thank you. EX-5 4 ex5-2.txt EXHIBIT 5.2 Exhibit 5.2 ----------- News Release NASDAQ: MEDQ FOR IMMEDIATE RELEASE MEDQUIST REPORTS FINANCIAL RESULTS FOR SECOND QUARTER 2003 MARLTON, NJ July 24, 2003 - MedQuist Inc. (NASDAQ:MEDQ) reported revenue of $123.4 million, operating income of $17.5 million and net income of $10.8 million or $0.29 per diluted share for the three months ended June 30, 2003. For the six months ended June 30, 2003 revenue was $248.1 million, operating income was $34.5 million and net income was $21.3 million or $0.57 per diluted share. John Quaintance, President of MedQuist's Medical Transcription Division stated, "Despite the challenging operating environment in the U.S. healthcare market, MedQuist continues to provide our hospital clients with the highest level of service in the industry. As we have done in the past, we plan to continue to expand the suite of products and services we provide to our valued clients. One example of such a service offering is the DocQment Enterprise Platform (DEP), which was designed by MedQuist to bring information systems and decision-making tools to healthcare information management professionals. We have achieved a significant level of momentum in the roll-out of this technology, which is being well received by the hospital market". 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, 2002 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 June 30, 2003 2002 ---- ---- Revenues $123,444 $113,631 Gross profit 33,128 29,377 Gross margin 26.8% 25.9% Selling, general & administrative (7,551) (3,483) % of revenues 6.1% 3.1% Research and development (1,390) -- % of revenues 1.1% n/a Depreciation expense (4,745) (4,349) Amortization expense (1,985) (1,613) Operating income 17,457 19,932 Net interest income 254 376 Equity in loss of investee (132) (247) Pretax income 17,579 20,061 Tax provision (6,767) (7,723) Net income $10,812 $12,338 Net income per basic share $0.29 $0.33 Basic shares outstanding 37,120 36,976 Net income per diluted share $0.29 $0.33 Fully diluted shares outstanding 37,768 37,949
MedQuist Inc. Financial Highlights (Unaudited) In thousands, except per share data and percentages
Six Months Ended June 30, 2003 2002 ---- ---- Revenues $248,106 $227,605 Gross profit 64,988 58,341 Gross margin 26.2% 25.6% Selling, general & administrative (15,394) (7,183) % of revenues 6.2% 3.2% Research and development (2,747) -- % of revenues 1.1% n/a Depreciation expense (9,381) (8,583) Amortization expense (3,744) (3,314) Other income 814 -- Operating income 34,536 39,261 Net interest income 474 689 Equity in loss of investee (316) (431) Pretax income 34,694 39,519 Tax provision (13,357) (15,215) Net income $21,337 $24,304 Net income per basic share $0.58 $0.66 Basic shares outstanding 37,103 36,955 Net income per diluted share $0.57 $0.64 Fully diluted shares outstanding 37,699 37,954
MedQuist Inc. Financial Highlights In thousands
June 30, December 31, 2003 2002 ---- ---- (Unaudited) (Audited) Assets: Current assets: Cash and cash equivalents $ 132,730 $ 103,392 Accounts receivable (net) 77,505 86,465 Other current assets 14,621 14,474 --------- --------- Total current assets 224,856 204,331 Property and equipment (net) 37,150 37,804 Goodwill 136,376 136,127 Other intangible assets (net) 73,135 73,798 Other assets 22,076 22,811 --------- --------- Total assets $ 493,593 $ 474,871 ========= ========= Liabilities and Shareholders' Equity: Current liabilities: Current portion of long term debt $ 31 $ 31 Accounts payable 9,291 9,908 Deferred revenue 18,413 18,789 Accrued expenses 30,098 33,701 --------- --------- Total current liabilities 57,833 62,429 Long term debt 26 54 Other long term liabilities 1,904 1,427 Shareholders' equity 433,830 410,961 --------- --------- Total liabilities and shareholders' equity $ 493,593 $ 474,871 ========= =========
EX-5 5 ex5-3.txt EXHIBIT 5.3 Exhibit 5.3 - ----------- Risk Factors Concerning Forward Looking Statements - --------------------------------------------------- During our investor conference call held on the date of this filing we referred to, and during future oral disclosures or written statements we may refer to, certain risk factors concerning forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. These statements include forward-looking language such as "will likely result," "may," "are expected to," "is anticipated," "estimated," "projected," "intends to," or other similar words. Our actual results are likely to differ, and could differ materially, from the results expressed in, or implied by, these forward-looking statements. There are many factors that could cause these forward-looking statements to be incorrect, including but not limited to the following risks: risks associated with (1) our ability to recruit and retain qualified transcriptionists; (2) inability to complete and assimilate acquisitions of businesses; (3) dependence on our senior management team; (4) the impact of new services or products on the demand for our services; (5) our ability to develop and sell new products and services; (6) our ability to expand our customer base; (7) our ability to maintain our current growth rate in revenue and earnings; (8) the volatility of our stock price; (9) our ability to compete with others; (10) changes in law, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 (HIPAA); (11) infringement on the proprietary rights of others; (12) our failure to comply with confidentiality requirements, including, without limitation, those imposed under HIPAA; (13) changes in economic conditions; and (14) inherent uncertainties in general relating to predicting future financial results and events. When considering these forward-looking statements, you should keep in mind these risk factors and other cautionary statements, and should recognize that those forward-looking statements speak only as of the date made. MedQuist does not undertake any obligation to update any forward-looking statement included in this Form 8-K or made elsewhere. -----END PRIVACY-ENHANCED MESSAGE-----