Financial News: Merge has tough Q3, eliminating 150 jobs

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Merge Healthcare announced its Q3 2006 financial results with net sales of approximately $14.0 million, a decrease when compared to net sales of approximately $35.0 million for the same period in 2005. The company's Q3 2006 net loss was $10.8 million. Net income for Q3 2005 was $9.6 million. As for Merge’s year-to-date results, net sales totaled $61.9 million, up from $57.1 million reported for the first nine months of 2005. The company's net loss for the first nine months of 2006 was $231.4 million. The net loss for the same period in 2005 was $5.4 million.
In a related move, Merge today announced a reorganization and what it is calling a “rightsizing initiative” that will see the elimination of approximately 150 jobs — or 28 percent of its current workforce — with anticipated run-rate cost savings of $13 million to $16 million annually, the company said.
Not all of the reductions will happen right away, as some of the changes will come over the coming six months.
Merge also plans to do a full operational consolidate of its eMed and Cedara Software organizations, to encompass most administrative and operational functions, as well as engineering and product management, the company said.
Meanwhile, the company will shut down offices located in San Francisco and Tokyo as other offices in Burlington, Mass., Cleveland and Toronto will be reduced in size. The only office to see an increase due to the initiative will be its Milwaukee office, the company’s headquarters.     

Merge saw an 11 cent increase in its Nasdaq shares up to $6.66 earlier today following the announcement, the Houston Chronicle reports.