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Merge Healthcare revises backlog totals after internal investigation

  • Merge Healthcare (MRGE) says it "recently learned through an internal review that a former sales employee in its eClinical business had falsified the existence or amount of certain customer contracts."
  • No restatement of previously reported financial statements is necessary.
  • MRGE is reducing non-GAAP subscription backlog totals for the Merge DNA unit.
  • Here are the revised figures (in thousands): June 30, 2012, $21,936; September 30, 2012, $29,004; December 31, 2012, $29,108; March 31, 2013, $32,270; June 30, 2013, $37,432; September 30, 2013, $41,219.
  • Ultimately, the employee falsified $5.8M worth of contracts in 2012 and $9.4M last year. The (apparent) rationale: "The individual [likely] falsified these contracts in order to achieve sales quotas and receive additional commissions totaling approximately $250K." (PR)
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