The integration — designed to eliminate duplicate costs and inefficiencies related to running two public companies — comes after MedQuist finished integrating the operations of acquired Spheris into its business, which it said will result in about $1 million in termination costs in Q1 from layoffs and a $1.5 million charge for future lease payments on the company's former Mt. Lauren, N.J., headquarters and data center in Virginia.
That's right, MedQuist is now officially part of the family tree and based in Cool Springs' Carothers Building:
Mr. Masanotti noted, "MedQuist Holdings is now headquartered in the Nashville area which is close to several of our key hospital clients who are integral to the ongoing initiatives underway in the healthcare industry."
For the full release, which includes some additional details about integration costs, click here.
MedQuist Holdings’ acquisition of Franklin-based Spheris last year helped the company post a 29 percent increase in revenue in the fourth quarter. The medical transcription company — which now calls Franklin home — said Spheris contributed $29.9 million in revenue during the fourth quarter, while its total revenues were up just $24.7 million, to $110.5 million.
The company (Ticker: MEDH) accounted for the revenue trend by explaining that it’s been lowering prices for customers and shifting production and speech recognition offshore to ensure “higher customer retention and margins.”
Adjusted net income was $14.4 million, or 28 cents per diluted share, compared to $11.9 million, or 23 cents per diluted share in the year-ago quarter. Income attributable to shareholders in Q4 was $1.4 million, or 4 cents per diluted share, compared to $275,000, or a penny per diluted share.
Robert Aquilina, Chairman of MedQuist Holdings, said, “Through our industry leading platform, we are giving our customers the features, customer service capabilities, and cost savings they desire. Our higher volumes have enabled us to leverage the scale of our platform while also realizing the benefits of offshore resources and post speech recognition editing. The acquisition and turnaround of two companies in the last two years speaks to the success of our strategy with a five-fold increase in Adjusted EBITDA during that period and, most recently, the $7 million of synergies gained in the fourth quarter, or $28 million annualized, from the integration of Spheris. We will look to continue this performance in 2011 as well as organic growth derived from a relentless focus on new business.”
Under Spheris’s plan, a trust is created to distribute the proceeds and any other remaining assets. Subordinated noteholders, owed about $133.6 million, and other unsecured creditors will share the trust. They are estimated to recover about 23 cents on the dollar. Lenders with claims of about $75.6 million were already paid in full from the sale, court papers show.Spheris is now officially known as SP Wind Down Inc., following the $116 million sale of its assets to New Jersey competitor MedQuist Inc.
Kaiser originally sought $7 million in compensatory damages as well as punitive damages, attorneys' fees and costs. The companies participated in private mediation but failed to come to terms. When the case was transferred to court, it was delayed because of allegations of ethical misconduct on the part of Kaiser's trial counsel.MedQuist paid $116 million to acquire Spheris. For more, read yesterday's NashvillePost.com story about MedQuist's local staffing, leadership changes.