Camera orders cause Positron shortfall

PET camera developer Positron is experiencing a shortage of workingcapital as it moves to fill a surge of orders it has receivedthis year for its PET technology.

Positron received five orders for PET cameras this year, thehighest number in one year in the company's history. Positronattributes Medicare reimbursement for rubidium-82 studies as themajor factor driving its good fortune (SCAN 4/12/95).

Those orders are causing a financial strain on the company,however, because it must spend money on parts and inventory beforeit can recognize revenue from the sales, according to David Rodrigue,Positron CFO.

"We've had to spend cash to buy inventory to build machines,"Rodrigue said.

Positron last month announced that it had enough working capitalto last through the end of this year and has been unable to paysome of its financial obligations within their standard paymentterms. The company said it was working with financial institutionsto raise additional capital. The news prompted the company's stockto slump 48% on Nov. 15, to close at $2 a share. It regained someof that loss in subsequent trading but remained below $3 a sharelast week.

Positron believes its position will improve as it recognizesrevenue in its fourth quarter (end-December) for three of thecameras sold this year. Positron is also close to signing severalorders for new cameras, Rodrigue said. Positron is working toreassure its customers about the company's future and is confidentthat its prospects will not back down on the deals, Rodrigue said.