ATL found itself swimming strongly against an ebbing tide in theultrasound market this quarter. The Bothell, WA-based dedicatedultrasound vendor reported third-quarter increases in revenueand income while the financial results of competitors
ATL found itself swimming strongly against an ebbing tide in theultrasound market this quarter. The Bothell, WA-based dedicatedultrasound vendor reported third-quarter increases in revenueand income while the financial results of competitors remainedflat.
In its first quarter operating as an independent company sincesplitting from SpaceLabs Medical this summer, ATL reported revenuesincreasing 10%, to $78.2 million in the third quarter (end-September)of fiscal 1992, compared to $70.8 million in the same period lastyear. Net income for the period, excluding extraordinary credits,rose to $1.3 million, compared to $700,000 the previous year.Last year's figures do not include the results of SpaceLabs.
ATL president and COO David M. Perozek attributed much of theimprovement to the vendor's recently released Ultramark 9 HDIsystem, which he said is gaining market share. Sales of ATL'snon-color-flow Ultramark 4 system have also been strong, he said.
"We're exceptionally pleased with our progress,"Perozek said. "Our business is definitely on an upward rampof increasing earnings, increasing revenues, increasing grossmargins."
Competitor Acuson of Mountain View, CA, reported revenues downslightly for the third quarter (end-September), with sales of$84.5 million compared to $85.6 million in the same period lastyear. Net income fell sharply, from $15.2 million in the thirdquarter last year to $7.1 million this year.
Acuson CFO Robert J. Gallagher cautioned against making toomuch of the numbers, pointing out that ATL's strong growth isin contrast to modest results the company reported last year,while Acuson's growth last year was 19%, surpassing much of themarket.
"The inevitable catch-up of our rate of growth with theslower growth in the market is occurring," Gallagher said.
Acuson's decline in income also reflects large investmentsthe company has made in product development and sales and marketing.Operating expenses were $10.3 million higher this quarter thanlast, with product development expenses up by over $4 million.
A decline in hospital equipment purchasing is the major factorbehind market sluggishness. The general economic slowdown, aswell as uncertainty over the health-care regulatory environmentand changes in reimbursement, have also contributed to sloweractivity.
Both Gallagher and Perozek said companies are discounting scannerprices as they compete for pieces of a pie that is growing lessquickly.
"Price competitiveness is higher than earlier in the year,"Perozek said. "Many deals are decided upon with a heavy emphasison cost of ownership."
The two executives expressed optimism that the market wouldbegin to pull out of its doldrums soon, with Perozek pointingout that the fourth quarter is traditionally strong for the industry.
Acuson, however, is hedging its bets in case the downturn continues.The company announced last month that it would extend the holidayvacation period for its employees in an effort to trim costs.
"We felt there were some steps we could take to moderatethe rate of expenditures of the company," Gallagher said."The most effective way to do that without reducing the emphasison our engineering and sales programs would be to close the facilityaround a number of holidays coming up."
Acuson would not disclose the number of days the company willbe shut down. Customer support sections will continue to functionduring those periods, Gallagher said.
Diasonics reported a net loss of $600,000 for the third quarter(end-September). The Milpitas, CA-based company had net incomeof $4.4 million in the same period last year. Revenues for thequarter were up, from $66.9 million last year to $75 million thisyear.
While it did not break out numbers for its ultrasound division,Diasonics claimed an increase in market share for the unit, accordingto Stewart Carrell, chairman and CEO.
"Company results were in line with expectations in thethird quarter and reflect improvement in our business despitethe continuing soft worldwide market for diagnostic imaging equipment,"Carrell said.