DMI seeks fresh equity for the PACS long haul

October 7, 1992

Business in the picture archiving and communications systems marketis tough all over, but the smaller PACS companies sometimes haveit the toughest. They must clear a higher hurdle when potentialcustomers show concern about their staying power in the

Business in the picture archiving and communications systems marketis tough all over, but the smaller PACS companies sometimes haveit the toughest. They must clear a higher hurdle when potentialcustomers show concern about their staying power in the industry.Few hospital administrators want to see their investment in anexpensive PAC system evaporate when their vendor succumbs to thewhims of a fickle market.

The bias against small companies has had a direct impact onsales of workstation firm Dimensional Medicine, according to DMIpresident and CEO David Littlefield.

"There's no question it's hurt sales," Littlefieldsaid. "You may have the best product in the world, but toooften another product is good enough in their mind, particularlyif it has a big-name brand on it. The sense of security is important."

DMI, of Minnetonka, MN, is trying to attract an investor withthe financial backing to provide that sense of security. The idealpartner would be another company also in the PACS market thatcould provide synergy to DMI's existing line of products.

DMI was founded five years ago and is a public company thatreported $6.1 million in revenue in 1991 (end-March), a 22% increaseover the previous year. The company also reported a loss of $400,000last year, $300,000 of which was due to an unfavorable court judgment.

DMI markets Maxifile, a radiology information system, and Maxiview,a line of image archiving and three-dimensional/ multiplanar reconstructionworkstations.

The company plans to introduce a new product at this year'sRadiological Society of North America meeting: a workstation runningon IBM's RS/6000 platform that integrates RIS data and imageson screen with a single user interface.

This product satisfies a need radiologists have for comprehensivepatient information and images on one screen, Littlefield said.The system uses Windows software and a Macintosh-like user interface.

"We're trying to bring it together on one desktop devicewhere radiologists can perform all of the functions necessaryfor them to do their job," he said.

The future of PACS in the short run can only be bright if firmsdetermine what needs facilities have and use the right amountof technology to address those needs, Littlefield said.

"Start small, start cost-effective, and make sure thefoundation pieces like the RIS have a good basis for the future,"he said.

One growth niche for PACS is in teleradiology used both toconnect radiologists with referring physicians and to link radiologistsin different areas of a single facility.

"Teleradiology has found its calling," he said.

DMI works with Advanced Video Products of Littleton, MA, toserve facilities interested in a full PAC system. AVP supplieslaser digitizers, frame grabbers and other PACS components.

Littlefield sees the PACS industry consolidating in the nearfuture, a trend DMI is determined not to miss. An ideal investor/partnerfor DMI would be a company with a strong distribution networkand the financial assets to dispel concerns about DMI's longevity.PACS experience would be an added plus, he said.

"There's going to be some consolidation, some other piecescoming together," Littlefield said. "We just want tomake sure that when the marrying is being done we're up near thefront of the list of those getting married."