FOR FURTHER INFORMATION PLEASE CONTACT:
ISG Technologies Inc.
Nicole Filiatrault
Director, Communications
(905) 672-2100 ext 142
(905) 672-2307 (FAX)
nicole@isgtec.com (E-mail)
isgtec.com (URL)
or
ISG Technologies Inc.
Gerry McDonald
Chief Financial Officer
(905) 672-2100 ext. 290
(905) 672-0360 (FAX)
gerry@isgtec.com (E-mail)
isgtec.com (URL)
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: ISG TECHNOLOGIES INC.
TSE SYMBOL: ISO
NASDAQ SYMBOL: ISGTF
FEBRUARY 13, 1997
ISG Reports Second Quarter 1997 Results
MISSISSAUGA, ONTARIO--ISG Technologies Inc. (ISG) today reported
its financial results for the three months ended December 31, 1996
(fiscal year end June 30).
As ISG informed its shareholders as the company's Annual General
Meeting, ISG successfully fought a proxy battle with one of its
shareholders in December. As expected, the performance for the
quarter marked a temporary slow-down of the significant revenue
growth experienced during the first three months of the fiscal
year-28 percent over the first quarter of the previous year.
Revenues for the second quarter were $6.3 million, down 11 percent
from $7.2 million in the second quarter of the previous year. The
loss for the quarter was $1.8 million, after $1.5 million in
extraordinary expenses. This compares to a profit for the
corresponding period of fiscal 1996.
"The uncertainty generated during the fight seriously impaired our
ability to bring in revenue," said Michael M. Greenberg, M.D.,
Chairman and CEO of ISG. "The image-guided surgery business in
particular suffered, as the dissident shareholder publicly stated
its intention to divest the product line, if the shareholder were
to be successful in its take-over bid."
Outlook Remains Positive For Fiscal Year 1997
"Fortunately, the historic growth trend has already resumed,"
continues Mr. Greenberg. "Halfway through the third quarter, we
have clear indications that recovery is underway. We expect to
show significant improvement in the current quarter, and even more
in the next. Our target markets are expanding product shipments
and license revenues are accelerating."
ISG is the world's leading provider of software which presents,
manipulates, analyzes, and stores medical images created by CT
(computed tomography), MR (magnetic resonance), and nuclear
scanning devices. ISG's products and services included 4: Software
Platforms - standard software tools that accelerate the
development of medical imaging software applications; Image-Guided
Surgery Systems - enabling precise and less invasive neurosurgery
and spine surgery; Radiology Applications Software - used to
collect, report, and analyze diagnostic information for
radiologist; Contact R&D - software development which large
medical imaging companies outsource to ISG; and Services -
technical, application, clinical development, and marketing
service. ISG is a publicly traded company listed on the Toronto
Stock Exchange (ISO), and on New York's NASDAQ (ISGTF). The
company employs more than 220 people worldwide, and fiscal 1996
(June 30) revenue was $28.8 million.
/T/
ISG REPORTS Q2 FISCAL 1997 RESULTS
Consolidated Statements of Operations
for the three and six months ended December 31, 1996 and 1995
All numbers in thousands
Three months Six Months
------------ ----------
Ended Ended
----- -----
1996 1995 1996 1995
---- ---- ---- ----
Revenue
6,318 7,170 13,928 13,020
Total Revenue 6,318 7,170 13,928 13,020
Direct costs 1,884 2,349 5,105 4,516
-------------------------------
-------------------------------
Gross margin 4,434 4,821 8,823 8,504
Operating Expenses
Research and development 1,696 1,341 3,419 2,578
Selling, general and
administration (Note 1) 2,781 2,728 6,288 5,103
Depreciation 431 392 854 743
-------------------------------
-------------------------------
4,908 4,461 10,561 8,424
Interest income 147 278 305 595
-------------------------------
-------------------------------
Income before extraordinary
expenses (327) 638 (1,433) 675
Restructuring charge (Note 2) 875 550 875 550
Proxy costs 646 0 646 0
-------------------------------
-------------------------------
Loss for the period (1,848) 88 (2,954) 125
Loss per share -$0.15 $0.00 -$0.23 $0.00
---------------------------------------------------------------
Consolidated Statements of
Deficit
Deficit, beginning of
period (25,472) (23,428) (24,366) (23,465)
Loss for the period (1,848) 88 (2,954) 125
Deficit, end of period (27,320) (23,340) (27,320) (23,340)
NOTE:
(1) Includes severance costs provision incurred in the quarter
ending Sept. 30, 1996 of $700 relating to executive departures.
(2) In the quarter ending Dec. 31, 1996, the restructuring charge
represents the cost of writing off excess inventory of the Pulsus
product line. The restructuring charge in the quarter ending Dec.
31, 1995 represents severance and related costs associated with the
Company's sales, support, and marketing departments.
/T/
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