To: E_K_S who wrote (121 ) 4/28/2015 10:28:07 PM From: Sultan Respond to Thanks.. In addition to being wins in their own right, we also displaced competitive imaging products with Merge solutions at the combination of more than 40 hospitals and health systems across the country. The quarter saw four seven figure deals, including three cardiology and one major radiology PACS We won a system-wide cardiology contract with one of the nation’s leading health systems, comprising a 1,000 integrated care sites and more than 7,000 beds. As a result of the transaction structure however, we do not record any revenue on this contract in the first quarter of 2015. We expect to recognize revenue for this multi-million dollar transaction ratably over multiple years. D.R. Systems had only one month of revenue contribution to the Healthcare segment and $2.6 million of the total $2.8 million was maintenance. In response to question re. D.R. Systems revenue run rate .. they have been fairly constant the last three to four years at roughly about $40 million of revenue and $10 million of margin off of that, as you bring it down the line. We recorded an $18.4 million non-cash income tax benefit related to the release of total Merge tax asset valuation allowances based on corresponding tax liabilities established in the acquisition, primarily from future tax rates associated with intangible assets acquired. By immediately unlocking this value and the consolidated Merge tax structure, it’s like saying the cost of D. R. Systems was closer to $52 million versus the net purchase price of $70 million. Said differently, the accretive nature of the transaction has risen significantly from the last time we discussed.
