AMICAS Reports Financial Results for the Second Quarter Ended June 30, 2007

BOSTON, July 31 /PRNewswire-FirstCall/ -- AMICAS, Inc. , a leader in radiology and medical image and information management solutions, today reported unaudited financial results for the second quarter ended June 30, 2007.

(Logo: http://www.newscom.com/cgi-bin/prnh/20060202/AMICASLOGO ) Q2 Financial Highlights

Revenue: Total revenues for the second quarter of 2007 were $12.5 million, compared to $12.2 million for the second quarter of 2006.

Operating Income/Loss: Operating loss for the second quarter of 2007 was $1.4 million, compared to operating loss of $533,000 for the second quarter of 2006.

Net Income/Loss: The Company's net loss for the second quarter of 2007 was $480,000, or $(0.01) per share, compared to net income of $319,000, or $0.01 per share, for the second quarter of 2006.

In the second quarter of 2007, both operating loss and net loss included $510,000 of non-cash stock-based compensation expense and $740,000 of depreciation and amortization. In the second quarter of 2006, both operating income and net income included $455,000 of non-cash stock-based compensation expense and $804,000 of depreciation and amortization.

Cash and Cash Flow: AMICAS ended the second quarter of 2007 with a cash, cash equivalents, and marketable securities balance of $74.0 million, no long term debt, and working capital of $68.6 million. For the second quarter ended June 30, 2007, net cash provided by operations was $2.0 million.

Fiscal Year-to-Date Financial Highlights

Revenue: Total revenues for the first six months of 2007 were $24.9 million, compared to $26.2 million for the first six months of 2006.

Operating Loss: Operating loss for the first six months of 2007 was $2.1 million, compared to an operating loss of $1.6 million for the first six months of 2006.

Net Income/Loss: The Company's net loss from continuing operations for the first six months of 2007 was $334,000, or $(0.01) per share, compared to net income from continuing operations of $65,000, or $0.00 per share, for the first six months of 2006.

For the first six months of 2007, both operating loss and net loss included $1.0 million of non-cash stock-based compensation expense and $1.5 million of depreciation and amortization. For the first six months of 2006, both operating loss and net income from continuing operations included $0.5

million of non-recurring charges, $914,000 of non-cash stock-based compensation expense, and $1.6 million of depreciation and amortization.

Cash Flow: For the first six months of 2007, net cash provided by operations was $4.6 million.

Business Perspective

Dr. Stephen Kahane, CEO and chairman of AMICAS, said, "In Q2, we again had good cash flow from operations and continued to make a significant investment in new technology and go-to-market programs related to revenue cycle management. While our market remains somewhat challenged by a variety of reimbursement-related pressures, we are pleased with the sales traction we saw this quarter. Customer interest in our new revenue cycle management software is encouraging."

Peter McClennen, president and COO of AMICAS, said, "We are pleased with the positive response from customers to our radiology automation solutions -- our 44 percent increase in bookings attests to our focus on solving real world problems in the radiology marketplace."

Mr. McClennen continued, "DRA is having a real impact on all areas of the industry -- and we believe that AMICAS' solutions position our clients for success. Our investment in R&D is evidence of our focus on being the premier provider of radiology automation -- we believe that, over the intermediate and long term, this investment will be beneficial for both clients and investors."

Dr. Kahane added, "Our target market segments continue to have an intense need for automation support. We believe that, more so than others in the market, our solutions help practices and other imaging-related businesses grow and operate more efficiently. We intend to continue to stay close to our customers and prospects and to bring innovative and compelling automation solutions to bear on the challenges facing these practices and related businesses."

Looking Forward

AMICAS is reiterating guidance and continues to expect 2007 revenues to be between $51.0 million and $55.0 million, with a net loss for fiscal year 2007 between ($0.06) and ($0.01) per share. In addition, AMICAS expects 2007 bookings growth of about 30 percent. Bookings are defined as contractual commitments from customers for licenses, services, hardware, and maintenance/support.

Conference Call

AMICAS will host a conference call on Wednesday, August 1, at 8:30 a.m. Eastern Time to discuss the Company's 2007 second quarter and fiscal year-to- date results. Investors and other interested parties may dial into the call using the toll free number, 800-909-7113 (Conference ID: 7AMICAS). The conference call will also be available via Webcast at http://www.amicas.com/. Following the conclusion of the call, a replay will be available at 888-219- 1269 or 402-220-4945 until September 1, 2007.

AMICAS, Vision Series, Vision Reach, RadStream, and AMICAS Insight are trademarks or registered trademarks of AMICAS, Inc.

About AMICAS, Inc.

AMICAS, Inc. (http://www.amicas.com/) is a leader in radiology and medical image and information management solutions. The AMICAS(R) Vision Series(TM) products provide a complete, end-to-end solution for imaging centers, ambulatory care facilities, and radiology practices. Acute care and hospital clients are provided a fully-integrated, HIS/RIS-independent PACS, featuring advanced enterprise workflow support and scalable design. Complementing the Vision Series product family is AMICAS Insight(TM) Solutions, a set of client- centered professional and consulting services that assist our customers with a well-planned transition to a digital enterprise. HIS and RIS mean hospital information system and radiology information system, respectively.

Safe Harbor Statement

Except for the historical information herein, the matters discussed in this release include forward-looking statements. In particular, the forward- looking statements contained in this release include statements about our anticipated financial and operating results for the remainder of fiscal year 2007. When used in this press release, the words: believes, intends, plans, anticipates, expects, estimates, and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause actual results to differ materially which include, but are not limited to, the following: a significant portion of the Company's quarterly sales are concluded in the last month of the fiscal quarter; the length of sales and delivery cycles; the deferral and/or realization of deferred software license and system revenues according to contract terms; the timing, cost and success or failure of current and new product and service introductions and product upgrade releases; potential patent infringement claims against AMICAS and the related defense costs; the ability of AMICAS to comply with all government laws, rules and regulations; and other risks affecting AMICAS' businesses generally and as set forth in AMICAS' most recent filings with the Securities and Exchange Commission, including the section entitled "Risk Factors" of our most recent annual report on Form 10-K, and subsequent quarterly reports on Form 10-Q. All forward-looking statements in this release are qualified by these cautionary statements and are made only as of the date of this release. AMICAS is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise. The financial statements and information as of, and for the period ended, June 30, 2007, contained in this press release are subject to review by the Company's independent registered public accounting firm.

CONTACT: Reena Cash [e-mail] Consolidated Balance Sheets (Unaudited) (in thousands, except share data) June 30, December 31, 2007 2006 Assets Current assets: Cash and cash equivalents $10,823 $7,331 Marketable securities 63,168 64,436 Accounts receivable, net of allowances of $708 and $1,050, respectively 11,780 11,387 Prepaid expenses and other current assets 3,892 4,729 Total current assets 89,663 87,883 Property and equipment, less accumulated depreciation and amortization of $6,478 and $6,155, respectively 1,310 1,369 Goodwill 27,313 27,313 Acquired/developed software, less accumulated amortization of $7,013 and $6,035, respectively 8,987 7,665 Other intangible assets, less accumulated amortization of $1,529 and $1,316, respectively 1,871 2,084 Other assets 540 557 Total Assets $ 129,684 $ 126,871 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued expenses $7,708 $7,155 Accrued employee compensation and benefits 1,312 897 Deferred revenue, including unearned discounts of $328 and $336, respectively 12,022 10,867 Total current liabilities 21,042 18,919 Other liabilities, primarily unearned discounts re: outsourced printing services 235 397 Commitments and contingencies Stockholders' equity: Preferred stock $.001 par value; 2,000,000 shares authorized; none issued - - Common stock $.001 par value, 200,000,000 shares authorized, 51,183,887 and 51,066,966 issued, respectively 51 51 Additional paid-in capital 227,979 226,764 Accumulated other comprehensive loss (33) (4) Accumulated deficit (97,950) (97,616) Treasury stock, at cost, 6,523,392 shares (21,640) (21,640) Total stockholders' equity 108,407 107,575 Total liabilities and stockholders' equity $ 129,684 $ 126,871 Condensed Consolidated Statements Of Operations (Unaudited) (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2007 2006 2007 2006 Revenues Maintenance and services $9,583 $9,226 $18,791 $18,167 Software licenses and system sales 2,919 2,994 6,144 8,024 Total revenues 12,502 12,220 24,935 26,191 Costs and expenses Cost of revenues: Maintenance and services (a) 4,194 3,702 8,186 7,278 Software licenses and system sales, including amortization of software costs of $476, $489, $979 and $979, respectively 1,670 1,389 3,189 4,205 Selling, general and administrative (b) 5,480 5,056 10,857 11,233 Research and development (c) 2,278 2,291 4,300 4,455 Depreciation and amortization 264 315 536 647 13,886 12,753 27,068 27,818 Operating loss (1,384) (533) (2,133) (1,627) Interest income 930 928 1,887 1,787 Gain (loss) from continuing operations, before income taxes (454) 395 (246) 160 Provision for income taxes 26 76 88 95 Gain (loss) from continuing operations (480) 319 (334) 65 (Loss) gain on sale of discontinued operations, net of taxes $0, $0, $0 and $248, respectively - - (248) Net income (loss) $(480) $319 $(334) $(183) Earnings (loss) per share Basic: Continuing operations $(0.01) $0.01 $(0.01) $0.00 Discontinued operations - - - (0.01) $(0.01) $0.01 $(0.01) $(0.00) Diluted: Continuing operations $(0.01) $0.01 $(0.01) $(0.00) Discontinued operations - - - (0.00) $(0.01) $0.01 $(0.01) $(0.00) Weighted average number of shares outstanding Basic 44,568 45,275 44,559 48,089 Diluted 44,568 46,538 44,559 49,666 (a) - includes $21,000, $8,000, $48,000 and $23,000 in stock-based compensation expense for the three and six months ended June 30, 2007 and June 30, 2006, respectively. (b) - includes $0.4 million, $0.4 million, $0.9 million and $0.8 million in stock-based compensation expense for the three and six months ended June 30, 2007 and June 30, 2006, respectively. (c) - includes $71,000, $42,000, $133,000 and $87,000 in stock-based compensation expense for the three and six months ended June 30, 2007 and June 30, 2006, respectively. CONDENSED Consolidated Statements Of Cash Flows (Unaudited) (in thousands) Six Months Ended March 31, 2007 2006 Operating activities Income (loss) from continuing operations $(334) $65 Gain from discontinued operations - (248) Net loss (334) (183) Adjustments to reconcile net loss to cash used in operating activities: Depreciation and amortization 537 647 Provisions for (recoveries from) bad debts (341) 68 Amortization of software development costs 979 979 Non-cash stock compensation expense 1,034 914 Changes in operating assets and liabilities: Accounts receivable (52) 1,557 Computer hardware held for resale, prepaid expenses and other 854 (685) Accounts payable and accrued expenses 969 (3,914) Deferred revenue including unearned discount 993 1,776 Tax benefit from change in valuation allowance and other - 57 Cash provided by operating activities 4,639 1,216 Investing activities Purchases of property and equipment (264) (384) Purchase of software (2,300) - Purchases of held-to-maturity securities (44,592) (17,163) Maturities of held-to-maturity securities 44,174 - Purchases of available-for-sale securities (13,587) (17,497) Sales of available-for-sale securities 15,240 2,997 Cash used in investing activities (1,329) (32,047) Financing activities Repurchase of Company Stock - (12,140) Exercise of stock options and warrants 182 1,051 Cash provided by (used in) financing activities 182 (11,089) Increase (decrease) in cash and cash equivalents 3,492 (41,920) Cash and cash equivalents at beginning of period 7,331 82,214 Cash and cash equivalents at end of period $10,823 $40,294 Supplemental disclosure of cash paid during the period for: Income taxes, net of refunds $ 60 $2,362 Non-Cash investing activity: Unrealized loss on available-for-sale securities 29 -
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