Elscint returns to profitability thanks to cost-cutting program

September 3, 1997

Vendor gains clearances for new productsIsraeli medical imaging vendor Elscint reported that its ongoing effort to cut costs is showing results. Although the Haifa company's net income numbers for the second quarter were lower than those of the

Vendor gains clearances for new products

Israeli medical imaging vendor Elscint reported that its ongoing effort to cut costs is showing results. Although the Haifa company's net income numbers for the second quarter were lower than those of the same period last year, the firm finished the period in the black after posting a net loss in the first quarter of this year.

Elscint had revenues for the second quarter (end-June) of $77.1 million, up 2% compared with $75.4 million in the second quarter of 1996. Elscint's second-quarter net profit was $2.1 million, compared with a $4 million net profit in the second quarter of 1996. In the first quarter of 1997, Elscint had a net loss of $800,000.

One-time items recorded during the quarter included a gain of $2.3 million for the settlement of a patent dispute and the sale of certain technologies, and a $400,000 charge for the establishment of the ELGEMS nuclear medicine joint venture with GE Medical Systems. Elscint president and CEO Jonathan Adereth said that Elscint improved its gross and operating margins, although the ongoing weakness of European currencies relative to the U.S. dollar could result in decreased margins in the next several quarters.

On the regulatory side, Elscint has made progress in getting two new technologies cleared by the Food and Drug Administration. The FDA has issued 510(k) clearance to the vendor's Glory mammography system, introduced at the 1995 Radiological Society of North America meeting. At last year's conference, Elscint emphasized the system's Master Exposure Control feature, which can reduce retakes by automatically determining x-ray filtration, kVp, mAs, and exposure settings. Glory will also be compatible with Elscint's work-in-progress digital spot-mammography device when that becomes commercially available.

Elscint has also received 510(k) clearance for a cardiac scoring software option for its CT-Twin Flash scanner. The cardiac scoring option is one component of the vendor's CardiaCT software, which may offer a challenge to Imatron in the heart-scanning market. At last year's RSNA meeting, Elscint demonstrated panels of CT-Twin equipped with the CardiaCT option, which can quantify the presence of coronary calcium (SCAN Special Report 12/96).