Merge Healthcare reports $10.8M net loss in Q3

West Allis, Wis. - Merge Healthcare (Nasdaq: MRGE), a financially embattled medical imaging software company, reported a net loss of $10.8 million, or 32 cents per share, during the third quarter of 2006.

The company, which has seen several top executives resign and faced delisting from the NASDAQ Stock Market in the wake of financial improprieties, reported a net loss for the first nine months of 2006 of $231.4 million, or $6.88 per share. The loss included a write-down of goodwill of $219.4 million.

Merge's net loss for the same period in 2005 was $5.4 million, or 25 cents per share.

Total sales for the three months ending Sept. 30, 2006 were approximately $14.0 million, a substantial decrease from the net sales of approximately $35.0 million for the same period of 2005.

Year to date, sales totaled $61.9 million, up from the $57.1 million reported for the first nine months of 2005. The company recognized previously deferred revenue of approximately $18.3 million for the first nine months of 2006. As of Sept. 30, 2006, the company's cash balance was $52.2 million, a decrease from the $60.7 million reported at the end of the previous quarter. For more details, investors are invited to take part in a Nov. 17 conference call, or visit:

http://www.mergehealthcare.com/investorrelations/index.htm

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