ADAC posts strong revenues

May 13, 1998

Driven by record performance in its software businesses, ADAC Laboratories reported a 10.6% increase in revenue during its 1998 fiscal second quarter. The Milpitas, CA-based firm credited strong contributions from the HealthCare Information Systems

Driven by record performance in its software businesses, ADAC Laboratories reported a 10.6% increase in revenue during its 1998 fiscal second quarter. The Milpitas, CA-based firm credited strong contributions from the HealthCare Information Systems (HCIS), radiation therapy planning (RTP), and multimodality service businesses as key factors in the results.

For the period (end-March 29), ADAC had revenues of $77.4 million, compared with $70 million in the same period in fiscal 1997. Net income was $7 million, compared with $5.6 million last year. The HCIS business grew 29% in the quarter, contributing $10.3 million in revenue and $1.3 million in operating income. During the period, the division received three major orders totaling $1.8 million from the military’s Digital Imaging Network—Picture Archiving and Communications Systems project (DIN-PACS) (SCAN 3/4/98). ADAC is part of the IBM consortium.

In other units, the RTP group realized a 71% increase in revenue, due to the success of the company’s Pinnacle3 radiation therapy planning software system, according to the firm. Multimodality service also provided a strong revenue stream during the period, thanks to the integration of CT Solutions and Southern Cats (SCAN 2/4/98).

Despite the announcement by the Health Care Financing Administration that it would provide Medicare reimbursement for PET (SCAN 1/14/98), sales of the company’s Molecular Coincidence Detection cameras were modest. Thirteen units were shipped during the period. Company officials believe that customers are choosing to wait until actual reimbursement amounts are established by HCFA, which is expected in the next several months. In other nuclear medicine developments, the company has shipped the first 10 beta units of MCD/AC, which adds attenuation correction capability to the MCD product line.

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