GE cutoff hurts Star's annual results

June 19, 1996

The termination of a CT component supply contract between StarTechnologies and GE Medical Systems has resulted in a major dropin revenues for Star. The Sterling, VA, company reported financialresults for fiscal 1996 (end-March) that indicated revenues

The termination of a CT component supply contract between StarTechnologies and GE Medical Systems has resulted in a major dropin revenues for Star. The Sterling, VA, company reported financialresults for fiscal 1996 (end-March) that indicated revenues of$4.3 million, compared with $21.6 million the year before, whenthe agreement was still in effect. Star posted a loss of $4 millionfor the year, compared with net income of $1.2 million in 1995.

Star had been supplying GE with CT image reconstruction processorsuntil early 1995, when GE terminated the relationship. A disputebetween the companies went to an arbitration panel, which awardedStar $9.1 million (SCAN 3/27/96). GE is trying to have the rulingoverturned.

Star CEO Robert Compton said that 1996 was a transitional yearfor the company. The firm downsized in June 1995 and has beenworking with an investment banking firm to examine strategic opportunities,including acquisitions. It is also working to bring a new lineof image management products to market.