Fidelity bids adieu to medical imaging

Call it a sad commentary on the state of the medical imaging market: Fidelity Medical hasexited the industry in favor of greener pastures in retail stationery.The Florham Park, NJ, company this month announced that it hassold its x-ray digitization business to Chester Holdings Ltd.in a transaction valued at $900,000.

Fidelity has had a rough time in the industry since 1992, whenthen-CEO Efraim Landa left the firm after revealing that the company'sbalance sheet had been inflated (SCAN 8/26/92).

Fidelity hired former Siemens executive Werner Haas in an effortto turn the company around. Red ink continued to flow from thefirm, however, and a shareholder lawsuit related to the bogusfinancial results dogged the company. Fidelity posted a net lossof $5 million in 1992, a net loss of $10.1 million in 1993 anda net loss of $1.9 million last year. Fidelity postponed the filingof its 1994 results for several months due to doubts about thecompany's future (SCAN 3/1/95 and 2/1/95).

Fidelity began divesting its businesses in 1993, when it soldan unprofitable Israeli subsidiary. It shifted its focus awayfrom medical imaging when it bought U.K. stationery retailer CornicheDistribution last month (SCAN 4/12/95).

Fidelity completed its exit from radiology this month whenit sold all of its stock in medical imaging products in exchangefor 2.2 million shares of Fidelity common stock acquired by Chesterin connection with the Corniche acquisition. Fidelity also receiveda 180-day promissory note for $200,000.

Fidelity's new chairman, Brian Baylis, said the company madethe move to exit a business where it had been generating yearsof losses.

"Fidelity's board of directors believes that Fidelity'sfuture lies outside (medical imaging)," Baylis said. "Thedisposition of the medical imaging products business will allowFidelity to focus its attention and resources on the developmentand expansion of its stationery operations."