Imatron Reports First Quarter Results; Implements New Marketing Initiatives in U.S. and European Markets
SO. SAN FRANCISCO--(BUSINESS WIRE)--May 15, 1998--Imatron Inc. (Nasdaq: IMAT) today announced first quarter results for the period ended March 31, 1998. The Company posted consolidated revenues of $4.6 million, with a net loss of $5.2 million, or $0.06 per share, compared with consolidated revenues of $10.6 million, with a net loss of $1.3 million, or $0.02 per share, a year ago.
The Company attributes the decline in its operating results to reduced scanner sales caused by the economic crisis in Asia and the March 31, 1998 transition of scanner distribution rights from Siemens Medical Systems, Inc. to Imatron. Because sales restrictions were imposed on Imatron by the Siemens distribution agreement, the Company was unable to sell its Ultrafast CT scanners in the United States and Europe, two-thirds of the world's market for high tech medical equipment.
S. Lewis Meyer, Imatron's President and Chief Executive Officer, stated, "Now that the Siemens agreement is behind us, we have begun to implement our new marketing program in which we are concentrating our attention primarily on the United States and Europe. Based upon the initial response that we have received to these new marketing initiatives, we are highly encouraged and believe that we should have considerable success in our efforts. We already have a number of sales in the final stages of negotiation, and are hopeful that they will close shortly."
Mr. Meyer said that during the quarter the Company achieved considerable success in terms of delivering the Imatron message to a national audience. "In January, Time Magazine reported that Russian President Boris Yeltsin was scanned on our equipment in Moscow. We were also featured in The Wall Street Journal, Investor's Business Daily, and most recently in Newsweek, which reported that Imatron's Ultrafast CT scan 'gauges heart-attack risk 10 times more reliably than a cholesterol test.'"
Imatron's HeartScan Imaging subsidiary reported improvement over the year-ago quarter with revenues of $1.0 million, up from $.5 million in the year-ago quarter, reflecting increased patient loads at each center. HeartScan's results improved with a net loss of $1.8 million, or $0.02 per share, versus a net loss of $2.0 million, or $0.03 per share a year ago. These results are included in Imatron's consolidated quarterly statement of operations.
The Company's operating expenses rose 25 percent during the quarter due to higher advertising expenses incurred by HeartScan and a non-cash charge of $0.6 million for warrants issued to TeraRecon in accordance with the terms of the Imatron/TeraRecon development agreement. Service revenues increased 69 percent compared to the year-earlier quarter due to an increase in the number of scanners under customer service contracts. As of March 31, 1998, the Company had $22.2 million in working capital and a current ratio of 3.1:1.0.
It is important to note that Imatron's non-operating results for first quarter 1997 have been restated as a result of the retroactive application of the Emerging Issues Task Force topic No. D-60, which applies to the issuance of HeartScan convertible preferred stock with a non-detachable conversion feature.
Mr. Meyer added, "There were also a number of medical research studies published in the quarter which continued to confirm the value of Ultrafast CT in assessing heart disease. Researchers from St. Francis Hospital in Roslyn, New York, presented data at the American College of Cardiology meeting which substantiated Imatron's technology 'as the most powerful predictor of cardiac problems.' Most recently, at the 13th World Congress of Cardiology held in Rio de Janeiro, Brazil, Imatron's technology was validated, by three studies, as a cost-effective technique in diagnosing coronary artery disease. These research presentations generated tremendous enthusiasm for Ultrafast CT among the fourteen thousand attending cardiologists and Brazilian press corps, which published a feature article on our technology in a leading national newspaper. Considering the attention Imatron received at this international meeting, I am confident that we can expect scanner orders from Latin America and Brazil specifically."
Imatron Inc. is primarily engaged in designing, manufacturing, marketing, and supporting high performance computed tomography (CT) scanners based on the Company's proprietary scanning electron beam technology. Ultrafast CT(R) is a registered trademark of Imatron. Imatron's Ultrafast CT scanner is now in use at major medical centers around the world, including The Mayo Clinic, University of Iowa, National Institutes of Health, UCLA, Stanford University, University of Illinois, The Royal Brompton Hospital in London, Tokyo University Hospital, Beijing Hospital and the National University Hospital of Singapore. Imatron's HeartScan Imaging Inc. subsidiary provides Coronary Artery Disease Risk Assessment diagnostic services in a nationwide network of clinics. -0-
Except for the historical information contained herein, the matters discussed in this news release may contain forward-looking statements that are based on current expectations and estimates about the industry in which Imatron operates, the estimated impact of certain technological advances, the estimated impact of published research studies on scanner sales and procedures, as well as management's beliefs and assumptions. It is important to note that the Company's actual results could differ materially from those projected in such forward-looking statements. The factors that could cause actual results to differ materially include, among others: failed clinical demonstration of certain asserted technological advantages and diagnostic capabilities; reliance on product distributors; competition in the diagnostic imaging market; failure to improve product reliability or introduce new product models and enhancements; delays in production and difficulty in obtaining components and sub-assemblies from limited sources of supply; inability to meet cash-on-delivery or prepayment terms from vendors; determinations by regulatory and administrative government authorities; patent expiration and denial of patent applications; the high cost of the scanner as compared to commercially available CT scanners; and the risk factors listed from time to time in the Company's Securities and Exchange Commission reports, including their reports on Form 10-K for their current fiscal year. -0- *T
IMATRON INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands) ASSETS March 31, December 31, 1998 1997
(Unaudited) (Restated) Current assets
Cash and cash equivalents $ 7,244 $ 14,425
Short-term investments 885 180
Accounts receivable (net of allowance
for doubtful accounts of $3,052
at March 31, 1998, and $2,758 at
December 31, 1997): Trade accounts receivable 5,983 8,215
Accounts receivable from affiliate 1,701 1,438
Inventories 16,588 12,926
Prepaid expenses 589 461 Total current assets 32,990 37,645
Property and equipment, net 9,915 10,359 Other assets 1,161 1,219
Total assets $ 44,066 $ 49,223
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 2,753 $ 2,962
Other accrued liabilities 6,084 7,055
Capital lease obligations - due within one year 1,656 1,578
Total current liabilities 10,493 11,595
Deferred income on sale leaseback transactions 1,251 1,376 Deferred income on service contract 390 420 Capital lease obligations 4,103 4,507
Total liabilities 16,237 17,898
Minority interest 14,692 14,255
Shareholders' equity
Common stock, no par value; authorized-100,000 shares; issued and outstanding - 79,038 shares in 1998 and
78,203 shares in 1997 91,167 90,728
Deferred compensation (211) (232) Additional paid-in capital 9,340 9,290
Accumulated deficit (87,159) (82,716)
Total shareholders' equity 13,137 17,070
Total liabilities and shareholders' equity $ 44,066 $ 49,223
IMATRON INC.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share amounts) (Unaudited)
Three Months Ended March 31, 1998 1997
(Restated) Revenues
Product sales $ 949 $ 7,791
Service 1,347 1,030
Development contracts 1,250 1,250
Clinics 1,021 506
Total revenues 4,567 10,577
Cost of revenues
Product sales 1,086 5,441
Service 1,360 705
Development contracts 1,250 1,250
Clinics 914 755
Total cost of revenues 4,610 8,151
Gross profit (43) 2,426
Operating expenses
Research and development 737 922
Marketing and sales 1,683 1,363
General and administrative 1,541 1,111
Total operating expenses 3,961 3,396
Operating loss (4,004) (970)
Other income, net 120 310 Interest expense (122) (174)
Loss before provision for income taxes (4,006) (834)
Provision for income taxes - -
Loss before minority interest expense (4,006) (834)
Non-cash return to minority interest (437) (436)
Net loss $ (4,443) $ (1,270)
Net loss per common share $ (0.06) $ (0.02)
Number of shares used in per share calculations 78,995 78,109 *T
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CONTACT:
Imatron Inc., So. San Francisco
S. Lewis Meyer, President/CEO
Gary Brooks, VP Finance/CFO
Lisa Kimberlin, Investor Relations
650/583-9964
or
Sitrick And Company, Los Angeles
Jeffrey Lloyd, 310/788-2850 |
