February 2003

Cardinal purchased the CMI facilities as part of its acquisition of Syncor International Corp. (Woodland Hills). The Cardinal-Syncor transaction closed on Jan. 1. (See page 10.)

Terms of the agreement to purchase 13 CMI medical imaging centers were not disclosed. InSight and Cardinal expect to complete their transaction in a series of closings from late January through early May.

Steven T. Plochocki, InSight president and CEO, said the 13 CMI facilities in the greater Los Angeles and southern California area will increase InSight’s medical imaging centers to 25.

“One of our goals is to keep building regional strength where we exist already,” Plochocki said. “Now that we have a 25-center presence in this area, we can service the geographic reach required by [managed care] groups.”

InSight’s pending acquisitions look to be the start of more expansion activity this year by the fixed-site and mobile medical imaging services provider.

Speaking with Medical Imaging at December’s annual meeting of the Radiological Society of North America (RSNA of Oak Brook, Ill.), Plochocki said that InSight’s new owners have established the financial foundation on which to build.

After J.W. Childs Associates L.P. (Boston) and The Halifax Group L.L.C. (Washington, D.C.) bought InSight in October 2001, the company raised a significant amount of money for acquisitions.

“We have a $75 million acquisition line [of credit] and we’re going for another $50 million,” Plochocki said. “We want to use the next 12- to 18-month period to acquire, assimilate and then, hopefully by this time next year, get a better feel for what’s going to happen with the economy.”

InSight’s services are available in 30 states, including California and Texas, as well as regions of the Southwest, Midwest, Northeast and Southeast United States.

“We want to keep rounding out existing regions, but if we can buy a company of significant enough size to create a new region, we would do that, too,” Plochocki added. “Most of the acquisitions we are looking at today — even the larger ones — would be rounding out existing regions.”

InSight’s medical imaging services portfolio still relies heavily on MRI, which accounts for approximately 80 percent of the company’s business. CT contributes 10 to 12 percent, while positron emission tomography (PET) is the third business unit.

The percentage of MR business “will probably continue to go up,” Plochocki said, as InSight looks for acquisitions “that are predominantly in MR and CT.”

With 103 mobile medical imaging trailers and 70 fixes sites, Plochocki estimated that the two business segments contribute equally to company revenues.

“We are into double-digit growth on a same-store basis and our mobile [business] is growing at a more significant double-digit rate than our fixed [site business],” he added.

While many industry analysts expect PET to help provide the next boom in the medical imaging market, InSight has taken a more conservative approach in investing in the modality.

“We have enough contacts with our 260 hospital contracts, so that when PET catches on, we will be able to expand it rapidly within our system,” Plochocki said.

The company currently operates eight mobile PET trailers and two fixed PET sites.

One accounting issue appears to be certain transactions the company said were recorded on the books. The transactions were reported as revenue in the second quarter and third quarter of 2002, but, Jomed added in a prepared statement, “were not subsequently executed.”

Also on Jan. 13, Tor Peters, CEO and head of the management board of the intravascular ultrasound (IVUS) company, resigned. J?rgen Peterson, former COO, has been named chairman of the management board and acting CEO. Peterson joined Jomed in 2001 after serving as sales and marketing manager at SKF Sverige A.B. (G?teborg, Sweden).

Jomed has begun a search for a new CEO.

Jomed also replaced acting CFO Willem Jansen with Vice President of Finance Lars-Johan Cederbrant. Cederbrant has served at Jomed since July 2001, beginning in the position of strategic project manager.

Jomed’s accounting review found several sale-and-lease-agreements listed as revenue in 2001 and 2002. One transaction for 60 IVUS systems in the United States in December 2001 was disclosed. The internal probe also noted that Jomed processed similar transactions for another 72 IVUS systems in 2001 in Europe.

In addition, the company said that it “appears that certain transactions were recorded that were not subsequently executed, which led to a reported revenue in Q2 and Q3 2002 that was higher than actual.”

Jomed estimates that revenues will be corrected from approximately $165 million to approximately $150 million or less. Revenues for the first three quarters of 2002 are expected to be reduced by approximately $20 million from the original total of $140 million.

Jomed added that the restatements could result in a loss of 2002.

The company’s supervisory board also hired an outside auditing firm to expand the investigation of the accounting irregularities. The board planned to have a final report on the auditing firm’s findings by the end of January.

The path for Cardinal and Syncor took many an unexpected turn over the six months since the deal’s announcement in June 2002. Most notable was Cardinal’s discovery during its due diligence of allegedly illegal payments made by top Syncor executives to foreign customers.

That revelation eventually led to the companies amending the terms of their original acquisition proposal. The final agreement reduced the conversion rate of each outstanding share of Syncor common stock from 0.52 to 0.47 of a Cardinal common share, with cash paid in lieu of fractional Cardinal Health common shares.

Syncor’s domestic operations will be integrated with Cardinal’s Central Pharmacy Services (CPSI), which will become the Nuclear Pharmacy Services business. The unit will compound and dispense radiopharmaceuticals to approximately 8,000 customers through an integrated network of more than 170 domestic nuclear pharmacies.

The payment probe focused on the business dealings of Syncor Chairman Monty Fu and his brother, Moses Fu, director of the Asia region for Syncor Overseas Ltd.

In December, Syncor reached agreements with the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) regarding payments made to state-owned and private healthcare facilities in several foreign countries.

Under its DOJ settlement, Syncor subsidiary Syncor Taiwan Inc. agreed to guilty to one count under the Foreign Corrupt Practices Act (FCPA) and pay a $2 million fine related to improper payments to employees of state-owned health care facilities in Taiwan.

The SEC required Syncor — without admitting or denying any findings — to agree to a cease-and-desist order prohibiting further violations of the FCPA and pay a civil penalty of $500,000 relating to certain activities of Syncor’s foreign subsidiaries.

The business unit will be known simply as Services and will be based in Genoa, Italy. The division is led by Marco Bucci, who most recently served as the general manager of Health Imaging’s service organization for Europe, the Middle East, Africa and Russia.

The Services organization will, among its duties, provide equipment service for Kodak products, including computed radiography (CR) and digital radiography (DR) systems, picture archiving and communications systems (PACS) and laser imagers. Services also will provide technical support for Kodak software products and systems, including remote and on-site support, software program updates and/or upgrades and remote application support.

Services also will feature:

• Application consulting, project management, integration services and networking services for the seamless integration of Kodak products and systems, as well as those of other companies;
• Asset management and financial services; and
• Training and education services, offering on-site and/or off-site courses about Kodak systems applications and information technology, digital science and diagnostic imaging fundamentals.

“Our new Services structure enables us to leverage service capabilities and expertise on a global basis and, concurrently, enables us to keep service teams in our regions close to our customers,” said Dan Kerpelman, president of the Health Imaging Group and Kodak senior vice president, in a prepared statement.

As general manager of the Service organization, Bucci will have 1,700 field engineers worldwide under his charge.

Kodak’s Services organization will include John Farrell as worldwide general manager of Growth Services and Worldwide Services Operation director.

Managing cash flow pressures and changes in Medicare and Medicaid reimbursement formulas, a need to increase capital and operating budgets, and a drive to reduce costs.

Those issues are the top three challenges cited in a poll of 500 healthcare CFOs in the United States, sponsored by General Electric Co. (GE of Fairfield, Conn.) and its healthcare financial services group.

“The survey findings reflect what we’ve seen in the marketplace,” said Rick Wolfert, president and CEO of GE Healthcare Financial Services (Stamford, Conn.), in a prepared statement. “Healthcare organizations understand the importance of managing cash flow and capital needs in facilitating growth and remaining competitive.”

Even with those issues nipping at the nation’s healthcare system, the survey found that 77 percent of the polled CFOs rate the financial state of their companies as good, very good or excellent. Twenty-eight percent report what the survey described as “significant improvements” in their financial health over the past few years.

Forty-one percent of the CFOs polled cited managing changes in Medicaid and Medicare reimbursement formulas as their greatest challenge, while 36 percent noted cash flow was their priority. Cash flow was the most common challenge — cited by 97 percent — while reimbursement formulas were a concern of 87 percent of respondents.

The degree to which these issues are affecting healthcare organizations varies by sector, according to the report. Forty-seven percent of hospitals cited managing reimbursement formulas as their greatest challenge, compared with 31 percent in the rest of the healthcare sector. Conversely, only 30 percent of hospitals rated cash flow as their most pressing issue, compared with 46 percent for the rest of the industry.

While healthcare providers have been keeping close watch on their pennies for much of the last decade, CFOs expect budgets to expand. Over the next three years, 53 percent of CFOs anticipate that their capital budgets for infrastructure will increase, while 84 percent expect to have more money available for operating budgets. Anticipated annual increases are 12 percent and 8 percent, respectively.

The primary reason for fattened budgets is advancing technology and a healthcare facility’s need to keep pace. CFOs cite necessary upgrades in new technology and medical equipment (39 percent) and building expansion and renovation (25 percent) for expanded budgets.

In other survey findings, capital resources continue to feel pressure from staffing shortages. Ninety-eight percent of the organizations surveyed indicated that staffing was an issue, while 36 percent expect rising labor costs to be the single largest contributor to expanding operating budgets. Increases in salaries (81 percent) and advertising (80 percent) were listed as the most common solutions to the problem.

Now at the helm of Philips Medical Systems as president and CEO is Jouko Karvinen. He joined the medical business last June, but did not take the company reins from former president and CEO Hans Barella until this past Oct. 1. On that day, Barella retired after serving as president and CEO for five years.

Under Barella’s watch, Philips embarked on a three-year acquisition and growth program that transformed the Medical Systems division into $4.4 billion company.

Key acquisitions included ATL Ultrasound (Bothell, Wash.) in October 1998, ADAC Laboratories Inc. (Milpitas, Calif.) in January 2001, Agilent Technologies Inc.’s Healthcare Solutions Group (HSG of Andover, Mass.) in August 2001 and Marconi Medical Systems Inc. (Highland Heights, Ohio) in October 2001.

With three large acquisitions in less than 12 months, Philips spent much of its time in 2002 bringing ADAC, HSG and Marconi all under one company banner.

“If you look at our strengths of all of the acquired companies, we bought best-of-breed,” Karvinen told Medical Imaging. “We made a very complementary set of acquisitions with very little overlap.”

With the assimilation essentially completed, Philips in 2003 focuses on structural integration in areas, such as its worldwide sales force, and maximizing its newly acquired assets.

“From a financial point of view, we are seeing savings now, but we have spent a lot of money [in 2002] also,” Karvinen added. “[In 2003], we will start building a future for us. We will focus on the outside.”

Karvinen comes to Philips Medical Systems after serving as an executive vice president at ABB Group (Zurich), where he headed the company’s Automation Technology Products (Zurich) division.

For eight years, Karvinen led several global businesses in ABB’s automation sector. During that time, he, among other responsibilities, helped orchestrate the consolidation of businesses and integrate acquisitions into ABB Group.

Karvinen comes from an industry that he described as being “on a very fast track, less consolidated than the healthcare industry.”

He spent the first four months of his tenure at Philips Medical Systems visiting more than 40 hospital customers and meeting with a few thousand Philips employees. He likes to use the term “accelerating success” when he speaks of his priorities.

Karvinen sees the greatest market potential in information management – particularly in clinical settings – and in molecular imaging and diagnostics. Growth, he added, will depend, in part, on companies and healthcare providers working together more closely.

“You cannot say anymore that we are going to create a solution that fits everybody,” Karvinen added. “I think partnering will become more important. I see us partnering long term with customers for their systems investments. If we try to get too smart, people will say ‘That’s a great solution, but that wasn’t my problem.’”

Although Philips Medical Systems has grown substantially in the last three years, Karvinen said growth by acquisition remains an option.

“Acquisition is one method [of growth], but I think there are a lot of opportunities in partnering,” he added. “Information technology is high on my agenda when I talk to the financial community. We will do it in a way where we can combine partners and solve customer problems better than anyone else.”

Philips Medical Systems now accounts for approximately 25 percent of Royal Philips Electronics’ (Amsterdam) worldwide revenues and contributes approximately 50 percent of Royal Philips’ revenues in the United States.

With its strategic plan in place and evolving, Philips Medical Systems could add to those percentages and become an even larger force in the global medical imaging market.

prototype digital mammo system at UCLA

The new system — which Siemens calls the Mammomat NovationDR in Europe and other countries — is based on the company’s Mammomat 3000 Nova. The prototype incorporates a flat detector based on amorphous selenium (aSe) detector technology, which enables a direct conversion of x-ray to digital information.

The UCLA clinical study with the Mammomat NovationDR will compare the diagnostic content and image quality of analog images and digital images taken at the same level of radiation exposure. The detector size of 25-by-29 centimeters is designed to image most breast sizes.

“The start of the first clinical study with our new Mammomat NovationDR is an extremely important milestone in our efforts to complete our product portfolio in digital mammography,” said Holger Schmidt, president of Siemens’ Special Systems division, in a prepared statement.

Siemens anticipates the release of its Mammomat NovationDR outside of the United States by the end of this year. The system awaits FDA clearance.

SourceOne also reorganized its sales force into two segments. One unit will handle capital equipment, while the other segment will be responsible for consumable products.

SourceOne named Ron Cronin the vice president of sales for the Consumable Products unit and Dennis Runyan as the vice president of sales for Imaging Equipment business. Cronin most recently served as vice president of sales for DI. Runyan comes to SourceOne after serving as vice president of sales for HCP.

SourceOne also added Alex Donofrio to the company as vice president of strategic accounts. Donofrio most recently served as HCP’s national accounts manager.

SourceOne is owned by global acquisition firm Platinum Equity LLC (Los Angeles). Platinum purchased DI from PSS World Medical Inc. (Jacksonville) and HCP from Royal Philips Electronics (Amsterdam) this past November.

Burdick operated as a cardiology business subsidiary of Instrumentarium’s Spacelabs Medical division.

Burdick specializes in ECG cardiographs, Holter monitors and cardiology information systems for physicians’ offices. Burdick has approximately 150 employees and had net sales of approximately $38.8 million in 2001.

Quinton’s product portfolio includes cardiac stress testing and cardiac rehabilitation monitoring, primarily serving the hospital market. Quinton notched sales of $42.9 million in 2001. The company has approximately 220 employees.

Quinton and Spacelabs Medical also entered into a cooperative sales and marketing agreement for other products.

Quinton funded the purchase with approximately $20 million in cash remaining from its May 2002 initial public offering, plus a partial draw down on a newly created $12 million bank credit facility.

The company added that it expects that the acquisition initially will add approximately $32 million to $34 million to its consolidated annual revenues. Quinton also expects that the acquisition will enhance earnings within the first year.

Precyse and QuadraMed expect to complete the transaction by the end of January.

QuadraMed’s HIM Services division specializes in coding compliance and education services, HIM consulting and interim management, compliance and regulatory services, and HIM departmental outsourcing.

The division has contracts with more than 240 healthcare organizations, primarily in the western part of the United States. Precyse has a market presence in 45 states, primarily in the eastern half of the U.S. Precyse services include medical transcription, coding, oncology data management, HIM consulting, interim management and departmental outsourcing special projects, such as backlog processing and clerical staffing.

With the addition of the HIM Services unit, Precyse will expand to approximately 585 employees, making Precyse one of the largest outsourced HIM providers in the country. The workforce will include more than 130 credentialed medical coders and 50 HIM professionals.

Varian Medical Systems Inc.’s (Palo Alto, Calif.) board of directors has elected President and CEO Richard M. Levy to be its next chairman, effective on Feb. 14. Levy will replace Richard W. Vieser, who will retire in February. Levy will continue as the company’s president and CEO. He has served as CEO of Varian Medical Systems since 1999.

Sonus Pharmaceuticals Inc. (Bothell, Wash.) named Michael B. Stewart, M.D., senior vice president of clinical and regulatory affairs and chief medical officer. Stewart most recently served for 10 years in senior management positions at Bristol-Myers Squibb Co. (New York City), where he participated in the development, registration and post-approval clinical programs for the cancer drug Taxol. Prior to Bristol-Myers Squibb, Stewart was a senior investigator at the National Cancer Institute (Bethesda, Md.) and an assistant professor of medicine and oncology at the University of Maryland School of Medicine (Baltimore).

Image Technology Laboratories Inc. (Kingston, N.Y.) has named Don Tetrault as its director of marketing and sales. Tetrault most recently served at Siemens Medical Solutions (Malvern, Pa.) in the company’s integrated RIS/PACS product area. Prior to Siemens, he served as an account executive in the New England region for Per-Se Technologies Inc. (Atlanta).

Del Global Technologies Inc. (Valhalla, N.Y.) has named Annamaria Oliva as managing director of its Villa Sistemi Medicali S.p.A. (Milan, Italy) subsidiary and Del Medical Systems business director for Europe, Africa and the Middle East. Oliva will lead the development and implementation of strategies to increase sales and business performance in Europe, Africa and the Middle East, and the development of engineering and design strategies for the business group on a worldwide basis. Prior to joining Del, Oliva served in a number of positions at ASIRobicon (Genoa, Italy).

Eastman Kodak Co. (Rochester, N.Y.) has promoted Michael L. Marsh to the position of general manager of digital output in the company’s Health Imaging Division. March succeeds John Farrell, who will become worldwide general manager for growth services, a new role in Health Imaging’s global services organization. Marsh will be responsible for the development and manufacturing of Kodak’s DryView laser imagers. He assumed the new position in January. Marsh previously served as general manager of the capture business within Kodak’s Commercial Imaging Group.

Epix Medical Inc. (Cambridge, Mass.) has named Peyton Marshall, Ph.D., as senior vice president of finance and administration and CFO. Most recently, Marshall served as CFO of biopharmaceutical company The Medicines Co. (Parsippany, N.J.). Marshall replaces Pamela Carey, who now will work directly with Epix’s internal project teams and partners in managing the financial activities of the company’s operations.

The Society of Interventional Radiology (SIR of Fairfax, Va.) named Peter B. Lauer its new executive director, effective Jan. 1, 2003. Lauer previously served in several positions at the American Medical Association (AMA of Chicago), including vice presidencies of the House of Delegates, professional relations, and memberships and federation relations.

EVS, founded in 1997, specializes in MicroCT imaging systems for in vivo and in vitro studies as a non-invasive way to evaluate the short-term and long-term impact of a new drug or therapy. EVS estimates that MicroCT is involved in more than 200 pharmaceutical and research studies in osteoporosis, arthritis, cancer and stroke.

GEMS said the acquisition of EVS adds state-of-the-art MicroCT imaging for pre-clinical research applications, such as pharmaceutical drug development, to GEMS’ clinical imaging technologies of MRI and positron emission tomography (PET).

Terms of the agreement were not disclosed.

The EVS transaction follows GEMS’ announcement in December of its strategic alliance with ART Advanced Research Technologies Inc. (ART) to develop new optical molecular imaging applications and help market, manufacture and distribute ART’s SoftScan breast imaging system. GEMS also will make an undisclosed minority equity investment in ART.

The SoftScan system is designed to produce a functional image through optical imaging technology to depict blood volumes and blood oxygenation simultaneously. ART said that with this technology, healthcare providers could identify anomalies in a breast that could go undetected. SoftScan also would help determine whether a tumor is malignant or benign.

ART is involved in the research, design, development and marketing of optical technologies used in the detection of disease.

The so-called SCREEN Trial (Soft-Copy REading ENvironment) is designed to develop a soft-copy reading environment that can replace film-based reading in screening mammography programs. Seven university hospitals in France, Germany, Holland, Italy, Norway and Sweden will participate in the project.

R2 Technology’s Image Checker CAD system will be the exclusive device for the SCREEN trial.

Nico Karssemeijer, Ph.D., in the department of radiology at the University Medical Center (Nijmegen, Netherlands) and principal investigator and co-director of the SCREEN Trial, said the lack of an adequate soft-copy review environment is a major technological obstacle hindering the transition from film-based to digital mammography screening programs.

R2 developed and markets the ImageChecker CAD system, which assists radiologists in the detection of breast cancer in the review of mammograms. R2 will provide the ability for sites to digitize prior mammograms and convert them to DICOM images.

Suspicious areas of an imaged breast will be captured and archived to a test version of the softcopy reading software system from MeVis BreastCare GmbH&Co. KG (Bremen, Germany) — an affiliate of Siemens AG (Munich) — through a DICOM standard.

The trial is designed to demonstrate the medical, technical and economic feasibility of soft-copy reading with digital mammograms during screening. The seven facilities will provide technological and scientific guidance to other facilities to help in the transition process from film-based mammography to digital mammography with soft-copy reading.

Participating sites include the University of Northern Norway (Tromso, Norway), Preventicon (Utrecht, Netherlands) and Bremen Breast Cancer Screening Program (Bremen, Germany).

Several full-field digital mammography and computed radiography (CR) systems will be used in the trail. The digital systems will come from Siemens Medical Solutions (Erlangen, Germany), Hologic Inc. (Bedford, Mass.), Fujifilm Medical Systems Inc. (Tokyo) and GE Medical Systems (Waukesha, Wis.).

BodyScan companies own, operate and are developing medical imaging centers using electron beam tomography (EBT) scanners from GE Medical Systems (GEMS of Waukesha, Wis.).

BodyScan has imaging centers located in Kansas City, Mo.; Scottsdale, Ariz.; Las Vegas, Nev.; Tampa, Fla.; San Antonio, Texas; and Philadelphia.

The companies plan to have one or more BodyScan Imaging Centers in at least 40 major metropolitan areas by the first quarter of 2004 and are pursuing other acquisitions of imaging centers and imaging technology.

Camtronics acquired VMI Medical Inc. (Ottawa, Ontario, Canada), a medical information software company specializing in clinical database, workflow automation and business improvement products for children’s heart centers. Terms of the transaction were not disclosed.

Camtronics — which develops and markets cardiovascular image and information management technology — plans to integrate VMI’s technology with its Vericis for Cardiology Image and Information Management system.

Camtronics will market the combined product to both pediatric and adult cardiology departments.

VMI Medical was founded in 1996 to develop products for the detection, evaluation, treatment and ongoing assessment of congenital and acquired heart disease in fetal, neonatal, pediatric and adolescent care settings.

VMI Medical will remain at its Ottawa headquarters.

RPI will become a division of MedAssets HSCA’s GPO segment. Terms of the transaction were not disclosed.

MedAssets HSCA sees the RPI acquisition as a way to strengthen its presence in the imaging and radiology care segment by adding RPI’s non-acute care membership and bolster MedAssets HSCA’s medical imaging and radiology portfolio.

RPI has more than 1,800 members and specializes entirely in radiology and non-acute care imaging centers. Among the products available from RPI are medical imaging film from Eastman Kodak Co. (Rochester, N.Y.) and contrast imaging agents from Bracco Diagnostics Inc. (Princeton, N.J.) and Bristol-Myers Squibb Medical Imaging Inc. (North Billerica, Mass.). Also on the supply list are x-ray tubes, MRI surface coils, as well as products from GE Medical Systems (Waukesha, Wis.) and Hologic Inc. (Bedford, Mass.).

Tonia Kraus, formerly RPI vice president, has been appointed as director and general manager of RPI.

MedAssets HSCA serves more than 16,000 healthcare providers nationwide.

The medical imaging services provider’s revenues from PET scans increased from $1.2 million in 2000 to $10.5 million in 2001. The company expects to announce PET revenues of approximately $30 million for 2002 in its year-end financial report.

“Obviously, our outlook on PET continues to be very bullish,” Chairman and CEO Richard Zehner told analysts in December. “We anticipate PET revenues to exceed $50 million in 2003.”

Alliance Imaging had approximately 30 PET systems in operation at the end of 2002, about a half dozen more units than the company projected in late 2001. Alliance Imaging plans to purchase an additional 10 to 15 PET units in 2003. While PET remains less than 10 percent of Alliance Imaging’s total revenues, the medical imaging modality has surpassed CT in terms of the company’s business.

Zehner said the company expects PET reimbursement and pricing in general “to stay steady for the next 12 months or so.”

In its update to analysts, Alliance Imaging anticipated revenues between $412 million and $413 million for 2002. The company also projected revenues between $440 million and $450 million this year. Approximately 80 percent of Alliance Imaging’s business comes from its mobile operations, with the remainder derived from fixed sites.

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.

E-Z-Em Inc. (Lake Success, N.Y.) credits increased sales of its radiology imaging products for the CT market for growth and a profit in the company’s second fiscal quarter of FY03, ending Nov. 30, 2002. Net sales climbed to $32.9 million, compared with $30.6 million in the second quarter of FY02. E-Z-Em also posted net income of $988,000, compared with a net loss of $1.2 million in the year-ago quarter. For the six-month period, net sales rose to $63.2 million, up from $58.3 million in the same period of FY02. Net income totaled $247,000, compared with a net loss of $1.3 million in the year-ago period. The net loss in FY02 was due primarily to a restructuring charge of $1.5 million from the December 2001 closure of E-Z-Em’s liquid contrast manufacturing facility in Japan.

Reductions in its marketing and development activities helped Magna-Lab Inc. (Syosset, N.Y.) decrease its net loss in the company’s third fiscal quarter, ending Nov. 30, 2002. The net loss declined to $803,000, compared with a net loss of $1.4 million in the year-ago quarter. The third-quarter FY03 net loss includes a one-time non-cash charge of approximately $228,000 in connection with the closing of the company’s Lynnfield, Mass. executive offices. For the nine-month period, Magna-Lab’s net loss totaled $3 million, compared with a net loss of $3.1 million in the same period of FY02. The company reported no revenues. Magna-Lab is developing the Illuminator Probe, a transesophageal receiving coil designed to operate with an MRI system to produce high-resolution MR images of the aortic arch, descending aorta and coronary vessels of the heart.

RIS and PACS provider Image Technology Laboratories Inc. (ITL of Kingston, N.Y.) posted revenues of $143,000 in the quarter ending Sept. 30, 2002. In addition, ITL recorded net deferred revenue of $128,000 for fiscal year 2002. ITL also noted that it has contracts for three installations “in various stages of negotiations.” The company said that it expects at least one installation will occur in the first quarter of 2003.

General Electric Co. (Stamford, Conn.) on Jan. 14 commenced its tender offer for shares of Instrumentarium Corp. (Helsinki) for approximately $2 billion, or approximately $41 per share. The tender offer initially will expire on April 11. In the United States, Instrumentarium trades on the Nasdaq under the ticker symbol INMRY. The companies expect to complete the transaction after shareholder and regulatory approvals and other customary conditions are met. Instrumentarium — which specializes in anesthesiology, critical care, monitors and mammography products — would become part of GE Medical Systems (GEMS of Waukesha, Wis.).

Intermagnetics General Corp. (Latham, N.Y.) is crediting cost controls for a 15 percent gain in net operating profit performance in the company’s second fiscal quarter of FY03, ending Nov. 24, 2002. In the quarter, net sales slipped to $36.7 million, compared with $39 million in the second quarter of FY02. Year-ago quarterly revenues included approximately $4 million in sales from businesses that were divested in FY02. Second-quarter net income decreased to $2.7 million, compared with $10.4 million in the year-ago quarter. For the six-month period, net sales declined to $71.8 million, compared with $79.1 million in the same period of FY02. Year-ago revenues include approximately $9 million in sales from businesses that were divested in FY02. Net income totaled $6.3 million, compared with $14 million in the year-ago period. Second-quarter net income was hampered by a one-time, non-cash charge in connection with the sale of the company’s remaining common stock in Ultralife Batteries Inc. (Newark, N.Y.), offset by a gain from the favorable settlement of litigation, for a net charge of approximately $1 million. MRI segment sales increased in the second quarter to $31.3 million, compared with $29.7 million in the year-ago quarter for ongoing operations.

Relying on its core electrocardiogram (ECG) business, CompuMed Inc. (Los Angeles) reported slightly higher revenues in its FY02, ending Sept. 30. Revenues increased to $1.96 million, compared with $1.93 million in FY01. The company’s net loss improved to $494,000, compared with a net loss of $897,000 in the previous fiscal year. The bulk of CompuMed’s revenues came from its electrocardiogram (ECG) core products, supplies and services, which totaled $1.7 million in FY02.