April 2002

The McCue C.U.B.A. Clinical bone densitometry system is one of three units Norland is selling off to CooperSurgical Inc.

Norland’s bone measurement products would become part of CooperSurgical Inc. (Shelton, Conn.), Cooper’s wholly owned women’s healthcare product subsidiary. CooperSurgical also has been Norland’s exclusive distributor to U.S. physicians and group practices specializing in obstetrics and gynecology since November 2000.

Under the proposal, Norland would receive $5 million if and when the transaction closes, and could receive as much as $12 million based on net sales of certain products over a three-year period. CooperSurgical also would assume certain liabilities related to the purchased assets.

The companies say the transaction could close as soon as the end of this month.

In a prepared statement, Norland Chairman and CEO Reynald G. Bonmati said Norland’s bone measurement business would benefit from CooperSurgical’s “strong financial backing” and its “dominant position” in the ob/gyn market. The divestiture also would enable Norland “to focus on the development and sales of new products.”

Bonmati said Norland plans to use the proceeds from the sale to pay liabilities not assumed by CooperSurgical and to finance research and development of products for musculoskeletal diagnostic use, sports medicine, rehabilitative medicine and pain management.

“Our goal is to reposition our company in the attractive musculoskeletal market,” the statement added.

Norland’s bone densitometry products accounted for virtually all of the company’s revenues in 2001.

Norland’s revenues last year declined to $9.2 million, compared with $13.4 million in 2000. Bone densitometry sales contributed approximately $8.5 million to the 2001 revenue total. The company also posted a net loss of $1.6 million, compared with a net loss of $13.3 million in 2000.

Norland’s product portfolio includes the McCue C.U.B.A. Clinical (contact ultrasound bone analyzer) system, which is a portable, lightweight device used to determine the risk of fracture. The Apollo DXA performs dual x-ray absorptiometry scans of the heel to diagnose osteoporosis. The company also offers the Excell compact DXA system, which is designed to calculate bone mineral density of the spine and femur.

CooperSurgical has operations Shelton, Conn.; Hollywood, Fla.; Malmo, Sweden; Montreal; and Berlin. The company’s products include surgical instruments and accessories for the gynecological market.

That conclusion comes from researchers at the University of Texas Medical Center (Houston), who reported their findings in February at the 27th International Stroke Conference in San Antonio, Texas.

“We discovered the possibility of using ultrasound both diagnostically and therapeutically as an unexpected consequence of using low frequency transcranial Doppler (TCD) on patients with stroke symptoms who received tPA treatment,” said lead researcher Andrei Alexandrov, M.D., assistant professor of neurology at the university.

Low-frequency TCD devices often are used as diagnostic tools for stroke. TCD is applied during the administration of tPA to monitor the clearing of clots (recanalization.)

“Our emergency room nurses were the first to notice the connection,” added Alexandrov. “They told us that they were witnessing noticeable differences between improvements in patients receiving ultrasound with tPA and those who did not get ultrasound.”

Alexandrov and his colleagues decided to initiate a multicenter, blind, randomized clinical trial, which currently is underway.

He presented Phase I data from the study — which is called CLOTBUST (Combined Lysis of Thrombus in Brain Ischemia with Transcranial Ultrasound and Systemic tPA) — at the stroke conference.

Investigators in the pre-trial, non-randomized, Phase I study used ultrasound to evaluate rates of recanalization and recovery outcome in patients receiving a combination of intravenous tPA 0.9 mg/kg with 2MHz frequency ultrasound. The mean age of patients was 69 years.

Inclusion criteria were eligibility for standard tPA treatment by the National Institute of Neurological Disorders and Stroke (NINDS) rt-PA Stroke Study protocol, and presence of proximal intracranial occlusion pre-bolus with validated TCD criteria.

The researchers conducted TCD monitoring of the residual flow signals by using the thrombolysis in brain ischemia (TIBI) flow grading system. Treating physicians obtained National Institute of Health Stroke Scale (NIHSS) scores independently of TCD results.

Among 55 patients treated within two hours of having acute ischemic stroke, researchers found complete recanalization following tPA with TCD in 20 patients (or 36 percent). Dramatic recovery occurred in 27 percent of patients at two hours and in 31 percent at 24 hours. Improvements correlated to early recanalization. The intracerebral hemorrhage rate was 9 percent.

“Applying ultrasound at this level along with tPA can, it appears, enable patient recovery in the emergency room in about every about fourth patient,” Alexandrov said.

A new report from market research firm Frost & Sullivan (San Jose, Calif.) says single-slice CT faces “extinction” by 2006 in the U.S. market.

Total revenues in the U.S. CT market almost reached $1.3 billion last year — up 24 percent from 2000 — thanks in large part to multislice CT’s ascension. The report projects the domestic CT market will exceed $2.3 billion in revenues by 2008.

“Market activity in this sector has become increasingly complex as a result of the rapid evolution of CT,” noted Frost & Sullivan medical imaging analyst Monali Patel. “Dynamic growth of the multislice CT market is countered by the steep descent of single-slice CT, which is headed toward extinction.”

The report calculated single-slice CT revenues of $134 million in 2001, which is a sharp decline from single-slice’s peak of $600 million in 1998. Patel’s report blames the decline on market saturation, product maturity and the lack of product innovation “that prevents single-slice from competing with the overpowering presence of multislice scanners.”

Most recently, single-slice CT relied on replacement sales to generate revenues, but with the introduction of multislice CT scanners, single-slice “has not been able to successfully capture replacement sales, nor to make solid inroads into other new sales channels,” she added.

There is no denying healthcare providers’ burgeoning affinity for multislice CT, in part, because — according to the report — “multislice scanners bring technology one step closer to the ultimate screening pinnacle, which is volumetric scanning.”

Multislice CT has quickly advanced to represent 83 percent of total market sales since its introduction. Revenues topped $1 billion in 2001 and are expected to produce double-digit growth during the next four years. The Frost & Sullivan report projects multislice CT sales will peak at more than $2.4 billion in 2007, before slipping back to slightly below that high-water mark in 2008.

The reasons for multislice CT’s popularity include its ability to accommodate more clinical applications, moving beyond motionless organs to now include a constantly beating heart for cardiac imaging and CT angiography.

The third segment of the U.S. CT market includes cardiac/EBT scanners. Cardiac/EBT also is the most volatile sector, given its small installed base. Revenues last year were approximately $80 million, with Imatron Inc. (So. San Francisco) — which is now part of GE Medical Systems (GEMS of Waukesha, Wis.) — the only market participant.

The report projects cardiac/EBT scanners to contribute more than $350 million in revenues to the total U.S. CT market by 2008. The catalyst for growth will be cardiac and coronary screening performed in independent medical imaging facilities promoting preventive healthcare.

Under the proposal, ISSI would merge with and into a new subsidiary — Howtek Devices — which will be based in Boca Raton. Howtek’s existing film and photo digitizer operations — including engineering, manufacturing management, marketing and support — will be conducted through a wholly owned subsidiary based at Howtek’s current headquarters in Hudson.

ISSI’s operations will continue in Boca Raton and Clearwater, Fla. ISSI Chairman, President and CEO W. Kip Speyer will join Howtek as its chairman and CEO. W. Scott Parr will continue as Howtek’s president.

Howtek and ISSI expect to complete the merger by the end of June.

Analogic founder and Executive Chairman Bernard Gordon took over as the company’s chief executive until a successor is selected.

Analogic gave no reason for Miller’s departure.

Miller joined Analogic in October 1999 as president and COO, taking the reins from Bruce R. Rusch, who resigned, as of July 31, 1999.

It was just 15 months ago — Jan. 24, 2001 — that Analogic’s board of directors named Miller to the position of CEO, succeeding Gordon in that position

A report by First Consulting Group (Long Beach, Calif.) tallied responses from 1,092 U.S. hospitals from late August to early September 2001. The study found the mean vacancy rate for imaging technologists to be 15.3 percent. That percentage is the highest total among a group of specialists that includes registered nurses (13 percent), pharmacists (12.7 percent), licensed practical nurses (12.9 percent) and nursing assistants (12 percent).

Twenty-one percent of the hospitals that participated in the survey reported a vacancy rate of more than 20 percent for imaging technologists.

The report concluded that “hospitals are losing imaging technologists to stand-alone imaging centers that can offer better hours, higher pay, better retirement plans and, occasionally, stock options.”

The study was sponsored by the American Hospital Association (AHA of Chicago), Association of American Medical Colleges (AAMC of Washington, D.C.), Federation of American Hospitals (FAH of Washington, D.C.) and the National Association of Public Hospitals and Health Systems (NAPH of Washington, D.C.).

“There is no silver bullet answer to the workforce shortage problem. It’s going to take all of us — educators, government and community officials, hospital leaders, healthcare workers and the public — working together to meet these challenges,” said AHA President Dick Davidson in a prepared statement. “It is our hope that this new data provide the information we need to make helpful changes.”

The mean vacancy rate for imaging technologists was virtually identical in urban and rural settings. The shortage was acute on the West Coast, with a mean vacancy rate of approximately 17 percent.

Sixty-eight percent of the hospitals say it is more difficult to recruit imaging technologists today compared to 1999.

On Feb. 13, GEMS announced a definitive agreement to acquire Visualization Technology Inc. (VTI of Lawrence, Mass.). VTI specializes in electromagnetic (EM) based image-guided surgery (IGS) systems. Terms of the transaction were not disclosed.

VTI’s InstaTrak system allows physicians to perform minimally invasive surgery without the line-of-sight restrictions of traditional IGS systems. The patented EM technology is designed to allow continuous navigation during a surgery procedure, regardless of a patient’s position or the location of the surgical instruments.

GEMS and VTI collaborated in 2000 to develop the OEC FluoroTrak 9800, an integrated surgery imaging system which combines GEMS’ 1K-by-1K imaging technology with VTI’s orthopedic and spine fluoro navigation applications. FluoroTrak 9800 is expected to be available in the third quarter.

VTI estimates that it has approximately 500 systems installed globally, which cover IGS applications such as neuro, spine, orthopedics and ear nose and throat.

GEMS also closed on its acquisition of Surgical Insights Inc. (Evanston, Ill.), a developer of image-guided surgery (IGS) software applications for orthopedics in February.

Terms of the transaction were not disclosed.

Surgical Insights’ IGS orthopedic applications are designed to help surgeons perform orthopedic trauma and total joint surgery procedures.

Surgical Insights plans to work with GEMS to integrate its orthopedic applications into the IGS platform of VTI, if and when the acquisition is completed. GEMS and VTI expected to close on the transaction in March.

In its latest report, market research firm Frost & Sullivan (San Antonio, Texas) predicts slow, but sure growth for DR, basing its estimates on 2000 worldwide revenues of $95.6 million. That total is 44 percent greater than 1999 revenues and more than double 1998 numbers. 1998 was the first year significant numbers of DR systems were sold commercially.

High prices, underdeveloped PACS (picture archiving and communications system) networks and inefficient flat-panel production are contributing to slow market growth for DR in the short term. Yet, the promise that DR holds for containing X-ray costs, the increasing numbers of hospitals installing PACS and price maturation are expected to energize the market in the long term.

Industry analyst Antonio Garcia characterized global market penetration as “marginal at best,” considering the size of the combined conventional radiography installed base, which he estimated at more than 200,000 units.

“So far, DR is in a select group of major hospitals with adequate capital equipment budgets and developed PACS infrastructures,” he said.

The lower price of CR (computed radiography) poses the greatest challenge to the DR market, Garcia elaborated. Hospitals that are implementing PACS in stages, because they are unable to afford the $2 million to $6 million capital investment for an enterprisewide PACS, are opting for CR, believing that CR’s lower price offsets DR’s claims of productivity gains and improved image quality. Garcia believes that CR users will lose interest only when DR prices become more competitive.

The main DR driver is the overall need to contain X-ray costs, the report said. When used in conjunction with PACS, DR can reduce or eliminate many fixed and scalable expenses, such as film handling and processing. Those changes translate directly into increased patient throughput and lower operating costs.

As DR manufacturing processes become more efficient, prices will decrease “significantly,” the report predicted, thus making DR more accessible to end-users.

“Once DR prices fall and end-users see that the small differences between CR and DR can add up, it’s likely end-users will begin to favor DR over CR, reversing the current trend,” Garcia said.

The report also discussed the fact that the current, single-use DR systems — dedicated chest systems, for example — may not be market winners. Double-panel systems able to do multiple applications may be the only way end-users can justify spending the dollars for DR.

The report analyzed information from major DR manufacturers, but included only actual dollar amounts received for installations after FDA or CE approval.

The Centers for Medicare & Medicaid Services (CMS of Baltimore, Md.) announced on Feb. 20 that it will reimburse for tests that use PET to determine myocardial viability in patients who have ischemic heart disease and how well they may respond to revascularization.

One week later, CMS extended its coverage to the use of PET for patients with breast cancer.

Jeffrey Kang, M.D., chief clinical officer and director of the CMS Office of Clinical Standards and Quality, said in a prepared statement that the agency’s decision on myocardial viability “is another example of Medicare making emerging medical technology available to its beneficiaries. PET already is approved for a variety of other applications, and CMS continues to study its potential for improving health outcomes for Medicare patients.”

PET, when combined with the tracer fluorodeoxyglucose (FDG), can help a clinician study glucose metabolism in the heart and other organs and measure myocardial cell metabolism. If an area of the heart shows a lack of blood flow but can preserve FDG uptake, that patient is considered a viable candidate for revascularization.

Last October, the CMS received a strong endorsement on PET from the American College of Cardiology (ACC of Bethesda, Md.) and the American Society of Nuclear Cardiology (ASNC of Bethesda). In its Radionuclide Imaging Guidelines of 1995, the ACC and ASNC designated PET FDG imaging as a Class 1 recommendation for the assessment of myocardial viability in patients with left ventricular dysfunction. The two groups also described PET FDG as the “gold standard” in myocardial viability.

In making its decision, CMS said that both SPECT (single photon emission computed tomography) and PET “are reasonable and necessary as a primary or initial diagnostic study for determining myocardial viability prior to revascularization” and that PET “continues to be reasonable and necessary following an inconclusive SPECT.”

The CMS decision comes about one month after the agency declined to establish a Medicare reimbursement policy for PET FDG imaging for Alzheimer’s disease. CMS ruled that PET has yet to demonstrate to the agency’s satisfaction that there are clinical benefits in evaluating possible Alzheimer’s patients with PET.

On the breast cancer application, Medicare will approve reimbursement coverage for PET imaging as an adjunct to standard imaging modalities for staging patients with distant metastasis or restaging patients with locoregional recurrence or metastasis. The policy also will cover the monitoring of tumor response to treatment for women with locally advanced and metastatic breast cancer.

With the help of a subsidiary, SHL will begin a tender offer on Feb. 21 of $10.25 per share for Raytel’s outstanding shares. The transaction would be worth approximately $31.1 million.

When the tender offer is completed, the SHL subsidiary will merge into Raytel, which also owns and operates ambulatory medical imaging facilities for general and cardiac imaging.

Like Raytel, SHL develops and markets telemedicine devices and services. SHL provides remote monitoring systems in cardiology and pulmonology.

Raytel’s board of directors unanimously approved the acquisition proposal, which is contingent upon factors, such a majority of the outstanding shares of Raytel stock being tendered to SHL. Raytel directors and officers, who collectively own approximately 6.4 percent of Raytel’s outstanding common shares, have agreed to tender their shares.

Raytel will have to face an additional hurdle in the approval path in its proposed sale to SHL.

Raytel announced that “an alleged stockholder” filed a lawsuit opposing the merger. SHL is not included in the class action case. Both companies specialize in the development and marketing of telemedicine devices and services.

According to Raytel, the company received a copy of the shareholder complaint on Feb. 25. The company says the suit alleges that Raytel and its board of directors breached their fiduciary duties of loyalty, good faith and independence in connection with the proposed merger transaction by engaging in self-dealing.

Raytel said the complaint “lacks merit and intends to vigorously defend the lawsuit.”

Before the end of 2001, Masterplan added two new contracts to its roster. Group purchasing organization (GPO) AmeriNet Inc. (St. Louis) chose Masterplan to provide maintenance services to one of its shareholders, Intermountain Health Care (Salt Lake City).

Masterplan also inked an exclusive three-year service pact with 15 Catholic Healthcare West (CHW of Pasadena, Calif.) hospitals in southern California. Masterplan will service all clinical and medical imaging equipment in the facilities.

The service agreements capped a year in which Masterplan Chairman and CEO Bruce Cree says the company developed an infrastructure to enhance its service support for medical imaging equipment and strengthened its senior management staff with several additions. In March 2001, Masterplan named Adam Coffey as president, with Cree continuing as CEO and assuming the additional position as chairman. Before joining Masterplan, Coffey served as zone operations manager for GE Medical Systems’ (Waukesha, Wis.) Central Atlantic zone.

To help bolster its own force of medical imaging technicians, Masterplan in November 2001 signed an agreement with ReMedPar (Goodlettsville, Tenn.) to train Masterplan service personnel.

Masterplan currently has 229 technicians and plans to hire 67 additional service people by the end of its next fiscal year, which concludes March 31, 2003.

“We project in FY2005 to have 350 medical imaging technicians in the field,” Cree added. “We are finding some very qualified technicians; we are complementing them with people we have trained.”

Most of Masterplan’s revenues still come from its Maintenance Management Program (MMP) program, which is designed to cover all of a facility’s medical imaging and biomedical equipment in one agreement. A manager directs MMP’s services to maximize savings and maintain the program’s compliance with maintenance-related regulatory standards.

Masterplan estimates that it has approximately 750 total maintenance agreements.

Intermountain and CHW join a client list that includes Triad Hospitals Inc. (Dallas). Triad signed a four-year asset management and equipment service pact with Masterplan in February 2000. One month later, Tenet Healthcare Corp. (Santa Barbara, Calif.) selected Masterplan to handle CT and MRI maintenance services.

“Healthcare providers continue to be under cost pressures and we don’t see that changing,” Cree said.

He said Masterplan is not looking for one particular market niche, but will continue to pursue U.S. business across the domestic healthcare spectrum.

“We see ourselves working at that level, as well as freestanding medical imaging centers and surgery centers,” he added. “Our market is very broad. We tend not to operate in some states that are very rural. All acute-care hospitals are potential customers.”

Cree said that Masterplan hopes to announce other new service agreements very soon.

The medical glassware unit has operations in Arlington, Texas and Richmond, Va.

Philips’ purchase includes Richardson’s reloading and distribution of x-ray, computed tomography (CT) and image intensifier tubes. That product segment contributed approximately $20 million in sales to — or approximately half of total sales — to Richardson’s Medical Systems Group in FY2001, ending May 31, 2001.

Terms of the transaction were not disclosed.

Philips Medical Systems CEO Hans Barella said the medical glassware products will add to Philips’ Dunlee (Aurora, Ill.) tube business and complement the company’s portfolio.

Edward J. Richardson, Richardson’s chairman and CEO, said the divestiture will allow the company to focus more attention on its remaining four business units.

Philips plans to integrate its new business with its Dunlee division, which designs, manufactures and distributes x-ray and CT tubes for original equipment manufacturers and replacement applications. The addition of Richardson’s line expands Dunlee’s portfolio to image intensifier tubes and other related medical accessories.

The restructuring will result in Agfa HealthCare closing its manufacturing facility in Brevard, N.C., by the end of this year. The plant manufactures aqueous-coated, medical x-ray film and employs approximately 400 people.

“In order to match North American product demand — which is shifting from aqueous-coated medical screen film to solvent-coated hardcopy media — we would need to invest in solvent coating capability at Brevard, which is unattractive financially,” said Robert S. Pryor, president of Agfa HealthCare’s Americas unit, in a prepared statement.

In addition, Agfa will consolidate its U.S. x-ray film production activity in its Bushy Park, S.C. facility. Agfa will create a dedicated HealthCare operation at that facility to supply diagnostic x-ray film and other film and media products for North America.

Agfa says the actions at Brevard and Bushy Park are part of a larger, global efficiency initiative — which the company refers to as “Horizon” — across all of its business groups. Similar film facilities in Germany, Belgium, Spain and the United Kingdom also are affected by Agfa’s consolidations.

Agfa-Gevaert Group (Mortsel, Belgium) has named Douglas M. Tucker, Ph.D., as COO and vice president of product development for Mitra Inc. (Waterloo, Ontario, Canada). Agfa acquired Mitra in January. Tucker will be responsible for the operational aspects and full software development for Mitra, along with Agfa’s other recently acquired Informatics software partners. Tucker previously served as director of technical product management for Agfa’s IMPAX picture archiving and communications system (PACS) product.

Masterplan (Chatsworth, Calif.) has announced two appointments. Cy Siders has become senior vice president of sales and marketing. Siders’ career includes executive sales and management positions at GE Medical Systems (Waukesha, Wis.), Toshiba America Medical Systems Inc. (Tustin, Calif.) and the former InnoServ Technologies Inc. (Arlington, Texas). Al D’Andrea was named senior vice president of sales. Most recently, he served as director of sales and operations for Marconi Technology Management (Highland Heights, Ohio). He also held sales and marketing positions at Baxter Healthcare Corp. (Deerfield, Ill.).

SonoSite Inc. (Bothell, Wash.) has promoted Blake Little to vice president of engineering. Little will oversee engineering operations. He previously served as SonoSite’s director of engineering. Little has been with SonoSite since its spin-off from ATL Ultrasound in April 1998. Little began at SonoSite as director of ultrasound imaging development.

Analogic Corp. (Peabody, Mass.) has hired Lonnie J. Weaver as director of business development for computed tomography (CT) applications. Weaver most recently served as manager of worldwide CT business development for Philips Medical Systems (Bothell, Wash.).

LFC Capital Inc. (Chicago) has named William T. Mount as executive vice president of marketing. For the past two years, Mount has served as vice president of strategic business development in the vendor technology finance division of The CIT Group Inc. (Livingston, N.J.). In 1999, when CIT acquired Newcourt Credit Group Inc. (Toronto), Mount was vice president and general manager for Newcourt’s U.S. Healthcare Group.

For almost a year now, Cedara has been working diligently to reduce expenses and restructure to bring itself back into profitability. Reduced operating expenses and a smaller work force are two key reasons why the company is making gains in its strategic plan.

In February, Michael Greenberg, M.D., Cedara’s chairman and CEO, told analysts that the company “is on track with our basic plan. Our plan has been — and continues to be — that we will leave Q4 with a net operating profit.”

In the fourth fiscal quarter, Greenberg projected revenues will be “at least 10 percent higher than Q2,” while third fiscal quarter revenues will be “marginally higher” than the second fiscal quarter.

For the six-month period, revenues increased to approximately $14.1 million, compared with $11.8 million in the first half of FY2001. Cedara posted a net loss of approximately $116,000, compared with a net loss of approximately $11.8 million in the year-ago period. (All amounts are in U.S. dollars.)

As Cedara continues down its road toward profitability, reduced expenses from a year ago have been one of the primary drivers. Operating expenses decreased approximately $1.4 million, or 20 percent, while payroll costs declined by 37 percent compared to June 30, 2001, the end of Cedara’s FY2001. On June 30, 2001, Cedara had approximately 400 employees. As of Dec. 31, 2001, the company’s work force totaled 275 people. Cedara estimates that 75 percent of its current employees are engineers.

Compiled and analyzed by Health Care Markets Inc. (Hilton Head, S.C.), the stock indices above plot the performance of two market segments: Imaging Devices and Imaging Services. The indices are part of WDI’s healthcare database of more than 1,000 companies. For comparison we also plot the progress of the S&P 500. The indices began in January 1991 with a base of 100.

Radiologix Inc. (Dallas) achieved record service fee revenues in 2001. Revenues increased to $276.7 million, a gain of 12 percent over $246.7 million in 2000. Net income mushroomed to $13.8 million last year, compared with $4.3 million in the previous year. The radiology services provider was aided by performing more than 1.9 million procedures in its medical imaging centers last year. The average revenue per procedure increased to $112.65 in 2001, compared with $101.87 in 2000.

GE Medical Systems’ (GEMS of Waukesha, Wis.) Lunar division (Madison, Wis.) posted record sales of more than $115 million in 2001, an increase of 26 percent over 2000. The bone densitometry developer and manufacturer credited demand for new products and heightened awareness of osteoporosis.

Raytel Medical Corp. (San Mateo, Calif.) posted a gain in revenues and earnings for its first fiscal quarter, ending Dec. 31, 2001. Revenues increased to $18.1 million, compared with $17.2 million in the first quarter of FY2001. Raytel’s medical imaging services unit increased revenues to $6.8 million in the quarter, compared with $6 million in the year-ago quarter. Net income rose to $281,000, compared with $10,000 in the same quarter of FY2001.

Fonar Corp.’s (Melville, N.Y.) Stand-Up MRI scanner helped boost revenues in the company’s second fiscal quarter, ending Dec. 31, 2001. Revenues increased to $9.8 million, compared with $9.6 million in the second quarter of FY2001. The company posted a net loss of $4.7 million, compared with a net loss of $3 million in the year-ago quarter. For the six-month period, revenues were $19.9 million, up from $18.6 million in the same period of FY2001. The net loss was $8.6 million for the six-month period, compared with a net loss of $6.9 million in the year-ago period. The Stand-Up MRI scanner contributed $3.9 million in revenues during the first half of FY2002.

Computerized Thermal Imaging Inc. (CTI of Lake Oswego, Ore.) cited its expense management and cost containment programs for lowering its net loss midway through FY2002, ending Dec. 31, 2001. Revenues doubled in the second quarter to $236,000, compared with the second quarter of FY2001. CTI’s operating loss decreased $3.9 million, compared with a net loss of $6.4 million in the year-ago quarter. For the first six months of FY2002, revenues have risen 126 percent to $443,000, compared to the same period of FY2001. The company’s operating loss declined to $3.4 million, compared with a loss of $9.8 million in the year-ago period.

Growth in software license fees helped power Vital Images Inc. (Minneapolis) to record revenues in 2001. Revenues gained 43 percent to $15.2 million last year, compared with $10.6 million in 2000. The bulk of the company’s revenues — $10 million — came from software license fees in 2001. In 2000, software license fees contributed $7 million to total revenues. The company’s net loss improved last year to $1 million, compared with $2.6 million in 2000.

Overall cost reductions and the launch of its SenoScan full-field digital mammography system powered Fischer Imaging Corp. (Denver) to its second straight year of profitability in 2001. Revenues declined to $48.2 million, compared with $51 million in 2000. Net income increased 54 percent to $3.3 million, compared with $2.1 million in 2000. The company added that it has virtually no debt and $1.2 million in cash at year-end. “The decline in revenue in the [fourth] quarter was in our non-breast business, which was mostly offset by growth in our mammography product group,” Vice President and CFO Rodney B. Johnson told analysts. “Our focus on the mammography business during 2001 is reflected by an increase to approximately 70 percent of our total revenues for the year.” Going forward, Johnson said Fischer anticipates “an even greater portion of our revenues to come from the mammography product group, as we continue to focus on our core competency, breast health.” Fischer’s mammography business increased 12 percent in 2001, when compared with 2000. The company also believes that keeping pace with demand, particularly for its SenoScan, will not be an issue in 2002. Louis Rivelli, Fischer president and CEO, said the company has enough manufacturing capacity to have a product ship one to three weeks after receipt of an order.