August 8, 2007 – Emageon Inc. reported financial results for its second quarter ended June 30, 2007, reflecting net positive operating cash flow of $3.7 million for the second quarter of 2007, an improvement of $7.7 million over net negative operating cash flow of $4.0 million in first quarter 2007. For the six months ended June 30, 2007, net cash used in operations was $0.3 million. At June 30, 2007, cash and marketable securities totaled $20.9 million, compared to $23.0 million at December 31, 2006.

“We are encouraged by our recent sales momentum, as our bookings improved substantially in the second quarter compared to first quarter”, said Chuck Jett, Chairman, CEO, and President of Emageon. “We are also pleased that our cash earnings and cash flow from operations were very positive in the second quarter.”

Revenue for the quarter was $25.6 million, a 14.8% decrease from second quarter 2006 revenue of $30.0 million. The net loss for the quarter was $0.3 million, or $0.01 per share, including $0.6 million, or $0.03 per share, in expenses related to the Company’s previously announced May 2007 reduction in workforce. In the second quarter of 2006, the Company had a net loss of $0.9 million, or $0.04 per share. The second quarter 2006 net loss included $1.1 million, or $0.05 per share, in expenses related to the integration of Camtronics Medical Systems, Ltd. (“Camtronics”) into the company’s operations. The Company acquired Camtronics November 1, 2005.

Revenue for the six months ended June 30, 2007 was $52.9 million, a decrease of 7.2% from first half 2006 revenue of $57.0 million. Net loss for the six months ended June 30, 2007 was $2.1 million, or $0.10 per share, including the second quarter restructuring charge described above. For the six months ended June 30, 2006, the Company’s net loss was $7.9 million, or $0.38 per share, including $2.3 million, or $0.11 per share, in expenses related to the integration of Camtronics.

The Company’s earnings excluding non-cash charges for depreciation, amortization of intangible assets and stock-based compensation (“cash earnings”) were $2.7 million, or $0.13 per share, in second quarter 2007 compared to $3.0 million, or $0.14 per share, in second quarter 2006. For the six months ended June 30, 2007, the Company’s cash earnings were $4.0 million, or $0.18 per diluted share, compared to a loss of $0.4 million, or $0.02 per share, for the six months ended June 30, 2006. These measures of earnings were not determined in accordance with generally accepted accounting principles (“GAAP”). A reconciliation of earnings determined under GAAP to earnings exclusive of non-cash charges is included below.

Emageon also announced today that the Company’s available secured line of credit from its commercial bank was increased in early August from $10 million to $15 million with no significant changes in terms. No amounts were outstanding under this line at June 30, 2007.

For more information: www.emageon.com


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