FRANKLIN, Tenn., April 6, 2011 /PRNewswire/ -- MedQuist Holdings Inc. (NASDAQ: MEDH), a leading provider of integrated clinical documentation solutions for the U.S. healthcare industry, announced it has begun the implementation of the previously disclosed integration plan of MedQuist Holdings Inc. (formerly known as CBay Systems Holdings Ltd.) and MedQuist Inc. The plan is expected to eliminate duplicate costs and inefficiencies attributed to running two separate public companies and further strengthen MedQuist Holdings as the leader in the clinical documentation industry.
The Company previously announced on March 15, 2011, that its public exchange offer for shares of MedQuist Inc. common stock has resulted in the Company now holding approximately 97% of the issued and outstanding shares of MedQuist Inc. In accordance with the terms of a Stipulation of Settlement entered into in connection with the settlement of MedQuist Inc. shareholder litigation and subject to final approval of the settlement by the Court, the remaining issued and outstanding shares of MedQuist Inc. are expected to be exchanged on the same terms as the public exchange in a short-form merger by the end of the third quarter of 2011. In connection with this expected short-form merger and to immediately reduce duplicate costs of being a public company, MedQuist Inc. gave formal written notice to NASDAQ to delist its shares traded under the ticker symbol, MEDQ, which is expected to become effective on or about April 14, 2011. In the interim, shares of MedQuist Inc. common stock have ceased trading on NASDAQ and are currently trading on the Pink Sheets (as reported by the Pink Sheets LLC) under the symbol "MEDQ.PK".
Peter Masanotti, Chief Executive Officer and President of MedQuist Holdings, said, "With the MedQuist Holdings IPO, the public exchange offer and the capital structure transactions now completed, we can begin immediately to have MedQuist Inc. and MedQuist Holdings look, act and serve our customers as one integrated company. Critical to the success of this integration will be to organize in such a way that aligns the management and functional organizations of both companies to optimize our capacity and allow us to work together in the most efficient and effective manner worldwide. I'm confident that these actions will further strengthen MedQuist as the vendor of choice among our current and prospective customers."
With this integration, the Board of Directors of MedQuist Holdings has initiated a search to identify additional independent directors with the goal of achieving a majority of independent directors serving on the Board by year end, including replacing Michael Seedman, the Company's former Chief Technology Officer, who has resigned from the Board. In addition, Bob Aquilina, Executive Chairman of MedQuist Holdings, has agreed to transition from the Executive Chairman to Non-Executive Chairman of MedQuist Holdings, effective June 30, 2011.
"As Executive Chairman, Bob has been instrumental in setting strategy, implementing our best practice programs and ensuring that seamless client service was not disrupted by the distractions of the conflicting shareholder issues of both companies," said Mr. Masanotti. "As he transitions to the role of Non-Executive Chairman, Bob will continue to be focused on the appropriate stewardship of shareholders' interests in MedQuist Holdings. I would also like to thank Michael Seedman for laying out a long-term technology vision for the Company, which we are continuing to execute."
Consistent with plans outlined during its initial public offering, MedQuist Holdings announced that it has completed the integration of its acquired Spheris operations into MedQuist Inc. as of March 31, 2011. This integration will result in termination costs of approximately $1.0 million in the first quarter of 2011 from a related reduction in workforce and a charge of $1.5 million in the first quarter of 2011 representing future lease payments on the Company's former corporate headquarters in Mt. Laurel, New Jersey and former data center in Sterling, Virginia, offset by expected sublease rentals. The future minimum lease payments on the Mt. Laurel facility total $2.5 million. 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."
In line with the Company's performance goals for 2011 issued on March 15, 2011, the Company announced termination costs of approximately $2.3 million (compared with a projected range of $2.5 million to $5.0 million) associated with initiating the integration of MedQuist Inc. and MedQuist Holdings. These charges, which will also be reflected in the Company's first quarter 2011 results, include non-cash stock compensation costs of approximately $700,000 associated with the acceleration of stock option vesting and the extension of the stock option exercise period for terminated employees. As previously announced, the restructuring plan will be implemented throughout 2011 and will result in additional charges incurred later in the year that fall within the projected range noted above, with the full benefit from all integration efforts experienced by early 2012.
Separately, the Company announced that with the conclusion of the litigation matters related to the billing practices of its MedQuist Inc. subsidiary, the Company has terminated its customer accommodation program and reversed previous accruals of $9.7 million, resulting in a reduction of expenses of approximately $9.7 million in the first quarter of 2011.
About MedQuist Holdings
MedQuist Holdings is a leading provider of integrated clinical documentation solutions for the U.S. healthcare system, and the largest provider by revenue of clinical documentation based on physicians' dictation of patient interaction, or the physician narrative, in the United States. MedQuist Holdings serves more than 2,400 hospitals, clinics, and physician practices throughout the United States, including 40% of hospitals with more than 500 licensed beds.
MedQuist Holdings' solutions convert the physician narrative into a high quality and customized electronic record, and enable hospitals, clinics, and physician practices to improve the quality of clinical data as well as accelerate and automate the documentation process. We believe our solutions improve physician productivity and satisfaction, enhance revenue cycle performance, and facilitate the adoption and use of electronic health records. For more information, please visit our website at www.medquistholdings.com.
Information provided and statements contained in this press release that are not purely historical, such as statements regarding our 2011 financial and operating performance, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this press release and MedQuist Holdings Inc. assumes no obligation to update the information included in this press release. Statements made in this press release that are forward-looking in nature may involve risks and uncertainties. Accordingly, readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict, including, without limitation, specific factors discussed herein and in other releases and public filings made by MedQuist Holdings Inc. (including filings by MedQuist Holdings Inc. with the SEC). Although MedQuist Holdings believes that the expectations reflected in such forward-looking statements are reasonable as of the date made, expectations may prove to have been materially different from the results expressed or implied by such forward-looking statements. Unless otherwise required by law, MedQuist Holdings also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made in this press release.
SOURCE MedQuist Holdings Inc.