News | February 14, 2008

Merge Healthcare Announces Rightsizing Initiative

February 15, 2008 - Merge Technologies Inc. announced a rightsizing initiative and the planned timing of the issuance of its third quarter 2007 financial results and business operations and strategy conference call.

The details of the rightsizing include:

- Total worldwide headcount at Sept. 30, 2007 was
approximately 600 persons and the Company anticipates total
headcount at March 31, 2008 to be approximately 440 persons, a
reduction of 160 personnel, including consultants, with a
further estimated reduction from anticipated attrition during
2008 of approximately 20 people, net, for a total reduction
from Sept. 30, 2007 of 180 persons.

- Reduction of approximately 45 jobs in North America and Canada and approximately 115 positions offshore, including
consultants, or 28% of its current workforce. Most of the
reductions are effective immediately, with a small number to
be completed prior to March 31, 2008. The Company will
recognize a charge in its financial statements for the first
quarter ending March 31, 2008 of approximately $2.0 million,
consisting of approximately $1.3 million in severance costs
and approximately $0.7 million in other costs including,
primarily, legal fees and future lease payments on its
Burlington, MA office, which it has completely
vacated. The estimated annual cost savings of these actions is
approximately $7.0 million.

- Additional terminations prior to today's rightsizing
announcement that have occurred since Sept. 30, 2007 aggregate approximately $3.0 million in annual cost savings.

- Based on the company's historical attrition run-rate, it
anticipates additional voluntary terminations during the
remainder of 2008 with annual cost savings of between $1.0 and $2.0 million.

- The aggregate estimated net reduction in the company's annual
recurring operating costs, including compensation, software
development and customer support costs, and office lease costs
is approximately $10.0 million per year plus an additional
$1.0 to $2.0 million of anticipated savings based on
historical attrition.

For more information:

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