CTI profits fall short, exec departs

October 8, 2003

Fourth quarter and year-end financial results for PET equipment maker CTI Molecular Imaging will not meet expectations. The company issued a profit warning Oct. 2, noting that earnings per share will range from 11¢ to 13¢ for the fourth quarter and 44¢

Fourth quarter and year-end financial results for PET equipment maker CTI Molecular Imaging will not meet expectations. The company issued a profit warning Oct. 2, noting that earnings per share will range from 11¢ to 13¢ for the fourth quarter and 44¢ to 46¢ for the full fiscal year. These are substantially lower than analysts' expectations of 20¢ for the quarter and 53¢ for the year. Costs associated with the acquisition of Mirada Solutions and, particularly, a shortfall in the number of scanner shipments-60 rather than the expected 66-were the principal causes, according to company officials. The deficit in shipments was due in part to delays imposed by the bankruptcy of DVI, the financial services firm that had helped fund the acquisition of scanners by CTI customers. Softening prices for PET equipment, due to increasingly aggressive competition, also affected earnings negatively.

One day prior to the profit warning, Terry D. Douglass, Ph.D., stepped down as president and CEO of the company. He was replaced by Ronald Nutt, Ph.D., CTI cofounder and current president of CPS Innovations, a joint venture between CTI and Siemens. Nutt directed CTI's scanner research and development efforts during most of the company's 20-year history. Douglass will continue to set the strategic direction of the company as chairman of the board.

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