Investor PresentationMay 2014

Forward Looking Statement

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The matters discussed in this presentation may include forward-looking statements, which

could involve a number of risks and uncertainties. When used in this presentation, the

words “will,” “believes,” “intends,” “anticipates,” “expects” and similar expressions are

intended to identify forward-looking statements. Actual results could differ materially from

those expressed in, or implied by, such forward looking statements. Except as expressly

required by the federal securities laws, the Company undertakes no obligation to update

such factors or to publicly announce the results of any of the forward-looking statements.

See the Company’s most recent earnings press release for explanation of non-GAAP

financial measures used in this presentation as well as reconciliation from GAAP to

non-GAAP metrics. Some of the products and/or product features discussed in this

presentation may be works in progress and not yet generally available for sale.

Why Merge Matters

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images are

growingyou need to do

more with less

regulationsare pervasive

consolidationis happening

{ ARCHIVE • ACCESS • DIAGNOSE }

{ EDUCATE • EXECUTE • ADAPT }

{ AUTOMATE • ADOPT • INTEGRATE }

{ CONNECT • CENTRALIZE • EVOLVE }

Expanded

radiology

offering

2009Confirma

Acquisition

Our History of Innovation

4

Expanded interoperability,

radiology and cardiology

offerings

2010AMICAS

Acquisition 2011OIS

Acquisition

2008Merrick

Invests In

Merge

2010Stryker

Acquisition

Entered specialty

orthopedics

marketplace

2011Launched

Rad MU

Solution

975 doctors

utilize Merge

MU solutions

2012Launched

Cloud Archive

Solution

2013Launched

iConnect

Network

Surescripts and

athenahealth

sign on as

partners

2010Launched

iConnect

100+

Clients

Entered eye

care market

2012Launched

eClinical OS

2 million+

active patients

since launch

For population

health and

advanced

interoperability

2014Will Launch

Retinal

Screening

Our Solutions Portfolio

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Imaging & Interoperability

Cardiology Clinical Trials

Radiology

Interoperability

Cloud Archive

Eye Care

Orthopedics

Cardiology

Hemodynamics

EDC

CTMS

Merge Cardiology Solutions are #1 in KLAS!

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Industry Leader!

Merge Named Top 10 Overall in KLAS

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KLAS Overall Software Vendor Rankings 2013

Merge KLAS Special Report

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Merge KLAS Report – Overall Performance

1. Customers Buying In• Enterprise imaging strategy

• Image enabling the EMR

• Focus and transparency

2. Footprint Expanding• Clients plan to expand imaging suite

• Clients plan to stay at rate above

market average

• Clients looking into adding

interoperability and cardiology

3. Cerner Integration Ready to Pay Off

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Customers are “Bullish” About Merge

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We Are the Leader in MU for Radiology

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We Are the Leader in Interoperability

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iConnectiConnectiConnectiConnectEnterprise Clinical Platform

iConnectiConnectiConnectiConnectEnterprise Archive

2013 Frost & Sullivan Product Leadership Award,

Medical Imaging Interoperability Solutions Market

2013 IHS VNA Global Market Leader

2013 IHS VNA Market Leader, Americas

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We’ve Made Enterprise Imaging Real

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Chicago, IL

{ iConnect Access & Enterprise Archive, Merge PACS,Merge Cardio & Hemo }

Findlay, OH

{ iConnect Access & Enterprise Archive, Merge PACS,Merge Cardio & Hemo }

San Diego, CA

{ iConnect Access, Enterprise Archive & Outpatient Radiology}

{ iConnect Access and/or Enterprise Archive, Radiology PACS, Merge Cardiology Solutions }

MI, WI, MO, TX, TN, AL, FL Ministries

Every Image, Every EHR,

Every Time

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Why iConnect Network?White Space Opportunity

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What Are the Key Drivers?

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Referral GrowthIncrease referring

physician loyalty and

expand business

Cost Savings Save time and money by

eliminating excess HL7

interfaces

Meaningful UseHelp community

physicians meet the imaging

requirement & attest

The Imaging Marketplace

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Each year in

the USA,

800M+ studies

are done;

372M are

outpatient

Meaningful Use

now makes

interoperability

mandatory

EHR adoption

among referring

physicians is

nearing 60%

12%of every visit

800Million studies

60%EHR Adoption

MU2Mandates

12% of every

PCP visit in the

USA results in an

imaging order

(44 Million)

Merge Can Help with Referral Leakage!

• Average employed physician group refers more

than 20% of potential revenue out-of-network

• While most organizations are (rightly focused) on

building stronger physician relationships to curb

leakage, they fail to realize that breakdowns in

referral coordination drive 40% of leakage

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$20M Average annual

revenue leaked,

300-bed hospital with

100 employed

physicians

Sources: The Advisory Board and referralMD

EDUCATE

in-network providers

about their referral

patterns

QUANTIFY & TRACK

patient retention

with web-based

solutions

IDENTIFY

the right markets &

providers to build

clinical networks

HOW TO IMPROVE REFERRAL LEAKAGE

Turn Referral Leakage into Referral “Keepage”

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Source: Data from Mission Point Health Systems

The Referral Challenge for Imaging

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Ph

ysic

ian

Imaging center

Hospital

imaging center

Reports

Orders

Images

More Referrals = More

How Do Providers Prevent Referral Leakage?!

Clients Work With Many Referring Physicians

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Imaging Center /

Hospital System

Allscripts

Cerner

Epic

eClinical

Works

athena

NexGen

And They Work with Many Different EHRsHow will providers connect all disparate EHRs to imaging data & studies?

Referring Physicians

Who Sends Referrals?

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clinicians & facilities

Sources: The Advisory Board and referralMD

$$$$

HL7 Interfaces Are Costly to Build & Maintain

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EMR

PACS Archive

Imaging Center

Report includes

link to see image

in PACS archive

Costs to Deploy and Maintain HL7 Interfaces

• $20K‒$30K implementation fees

• PER bi-directional interface PER

referring physician practice

• 3‒6 month wait time PER interface

Sample Client

• 20 community EHR interfaces

• 20 corresponding RIS interfaces

• 80,000 annual studies

TCO over five years = $2.7M

For a facility with…

20 community EHR interfaces

20 related RIS interfaces

80,000 annual studies

Local Geographic Market Reality

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Agfa

Siemens

McKesson

Philips

GE

Merge

Epic

Epic

Cerner

Greenway

Greenway

Allscripts

Allscripts

� Multiple Imaging Centers

Multiple Referring Practices �

� Multiple PACS Systems

Multiple EMR Vendors �

iConnect® Network

• Share imaging information between

referring physicians and imaging centers

on EHR networks

• Provide radiology reports as structured

data directly into the physicians’ EHR

• Currently partnered with Surescripts

Clinical Network Services (CNS) and

athenahealth

• Will continue to add more partners to

expand our reach

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Current Customers Include:

How iConnect Network Works

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With Universal Viewer via Web Browser

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Imaging Report

Hospital Feedback

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“We’ve worked with Merge for several years, so it was an easy

choice to implement Merge’s VNA and iConnect Network for a

comprehensive, enterprise-wide imaging strategy…

Despite having an HIE in place, we needed a single solution that

handles imaging as it becomes more important to healthcare as

a whole. With iConnect Network, we’ll meet MU2 requirements

for the exchange of images and, most importantly,

enable better access to imaging for physicians in order to

provide the best care for our patients.”

Dave Holland, CIO, Southern Illinois Healthcare

Referring Physician Feedback

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“iConnect Network gives us a competitive advantage for both our providers and patients. Since we are a part

of an ACO and are patient centered medical home certified,

iConnect Network is a true example of

a solution that integrates with our EHR, achieves

information exchange and helps our health center be more

efficient by automating time-consuming processes.

This ultimately enables us to improve treatment times,

reimbursements and patient care, as well as meet core

regulatory requirements.”

Luis Velasco, CIO, Marana Health Center

Five Elements of Service

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EHR Integration:

Result / Report

Delivery

E-Ordering/

Referrals

Pre-Certification:

Patient Pay / Clinical

Decision Support

Consumer

Engagement /

Scheduling

Data Mining &

Analytics

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iConnect Retinal ScreeningAdvanced Interoperability Solution

for Population Health

What Problems Will We Solve?

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diabetes, AMD, glaucoma, ALZ are

Increasing globally

institutions need

More Revenue with Volume

countries & socialized medicine need

Less Cost with More ServiceNo Complete Solutions

just band-aids

{ 382M DIABETICS WORLD WIDE – GROWS ~6% ANNUALLY }

{ DETECT DISEASE – TREAT EARLY – REDUCES COSTS }

{ DETECT DISEASE & INCREASE BILLABLE PROCEDURES }

{ NEED HARDWARE, SOFTWARE, CLOUD, ANALYTICS, ENGAGEMENT }

What is iConnect® Retinal Screening?

• An interoperable, end-to-end, subscription-

based offering for population health

• Will leverage existing Merge solutions to

simply process of screening patients and

deliver information back to physicians

• Providers will be able to capture images

through an automated camera, reducing the

need for specialty staff training

• Target is our large Eye Care customer base

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References:

• Economic Costs of Diabetes in the U.S. in 2012, American Diabetes Association,

http://www.diabetes.org/advocacy/news-events/cost-of-diabetes.html.

• 2013 International Diabetes Federation Diabetes Atlas, 6th Edition.

http://www.idf.org/sites/default/files/EN_6E_Atlas_Full_0.pdf.

How Will iConnect® Retinal Screening Work?

• Primary providers will capture images

and upload to iConnect Cloud Archive (formerly know as Merge Honeycomb®)

• Client owned reading center will

interpret images in Merge Eye

Care PACS™

• Image reports will route to

iConnect Network

• iConnect Network will deliver image

reports to disparate providers’ EHRs

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Disparate Sites

The Complete

iConnect

Retinal Screening

Solution

The Value of iConnect Retinal Screening

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Institutions & Governments

Linked sites

Disparate sites

• Every ACO and payer is focused

on diabetic care management

and this complements their

strategy

• Eye care has a real play in hospital

and government markets

• Another international / OEM

solution for partners

• Increase potential market & sales

• Increase revenue from iConnect

Cloud Archive

Patients

Patients

What Is the Total Market Opportunity?

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The U.S. is 10% of the global market opportunity$166M U.S. market opportunity**

* Estimate of fee over a five-year time horizon. / ** Includes additional revenue from iConnect Cloud Archive and iConnect Network. / *** 2013 International Diabetes Federation.

The market will continue to growdiabetes population increases each year and many regions will double by 2035***

Today, diabetes alone, is a $764M* global opportunity

What’s Next for iConnect Retinal Screening?

• Currently undergoing a pilot

program launch with Ontario

Telemedicine Network

• First phase will offer diabetic

retinopathy screening once available

in late Q2

• Future stages of solution will include

screenings for:• Glaucoma

• Age-related macular degeneration

• Other serious neurological diseases

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Why Merge?

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Where We’ve Been

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PACS for image intensive specialties

Clinical data and workflow tools

Firsts in enterprise imaging & interoperability

Our Client Base

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1/3 of all U.S.

imaging centers

37% of all

ortho groups

2,000 of all

ophthalmology

sites

75% of all

worldwide

modality vendors

Top

pharmaceutical

companies &

CRO’s have used

Merge to run

clinical trials

1,500hospitals

6,000clinics

250partners

9 of 10top pharma

Including

many

hospitals on

“America’s

Best Hospital

Honor Roll”

Financial Information

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Financial Improvements in Past Year

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• Excludes $14M of sales in

2013 from discontinued,

low-margin products

• Reorganized operations in late

2013 for annual savings of $6M

• Generated NET INCOME in

Q1 2014 for first time in 3 years

• Debt refinanced in April 2013

(at half the interest rate) &

again in April 2014 (to

significantly reduce covenants,

including none for 1 year)

• Total of $25M paid in first year

of new debt (compared to no

debt principal payments in

2012 and 2011)

Continued Innovations for Subscription

Offerings

• iConnect Network, iConnect

Cloud Archive (formerly Merge

Honeycomb) and Merge

eClinical OS

• Subscription backlog growth

of 40% in 2013, 23% YoY as of

Q1 2014

Aligned Costs

for Modest Topline

Growth in 2014

Improved Cash Flow by Significantly

Reducing Cash

Interest

• NOTE: See Q4 2013 and Q1 2014 earnings releases

for guidance details

Moving Beyond “Are You Financially Stable?”

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$12.5

$8.5

$7.2

$9.0

$10.2$9.2

$10.6

$15.3$14.2

$13.5

19.5%

14.8%

12.5%

16.7%

Adjusted

EBITDA %

20.0%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

$0

$5

$10

$15

$20

$25

$30

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

Adjusted EBITDA Cash from business ops Adjusted EBITDA %

28.0 27.9 27.5 26.1 25.5

9.4 9.7 9.5 8.5 8.2

26.6 20.0 20.7

19.3 17.4

$64.0

$57.6 $57.7

$53.9$51.1

58.5%

59.1%

56.6%

60.2%

61.9%

40.0%

45.0%

50.0%

55.0%

60.0%

65.0%

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

Maintenance Subscription

Non Recurring Gross Margin %

Gross Margin %

(net of D&A)

Annual Revenue and Adjusted EBITDA Trends

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$60.0$52.5

$37.225.3%25.3%25.3%25.3%

20.9%20.9%20.9%20.9%

16.0%16.0%16.0%16.0%

0.0%

10.0%

20.0%

30.0%

40.0%

$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

2011 2012 2013

Adjusted EBITDA % Margin

$236.7$251.1

$233.2

$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

2011 2012 2013

Pro Forma Total Revenue

Adjusted EBITDA Dollars & Margin

Fiscal Year End:

2011 – $236.7

2012 – $251.1

2013 – $233.2

Fiscal Year End:

2011 – $60.0

2012 – $52.5*

2013 – $37.2

* Adjusted EBITDA for 2012 excludes one-time charges recorded in the fourth quarter, which are outlined in the company’s earnings release issued in February 2013.

Questions?

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