Intermagnetics General rides high on news of strong fourth quarter

July 16, 2004

In stark contrast to CTI's travails (see cover story), Intermagnetics General's future keeps getting brighter. The Latham, NY, company guided analysts to the high end of forecast expectations on July 12, following a very strong fourth quarter (FY2004),

In stark contrast to CTI's travails (see cover story), Intermagnetics General's future keeps getting brighter. The Latham, NY, company guided analysts to the high end of forecast expectations on July 12, following a very strong fourth quarter (FY2004), which ended May 30. The firm's stock skyrocketed on the day of the announcement, rising $1.51 to $34.42 and another $1.07 in after-market trading.

Based on preliminary results, execs predicted earnings for the year in the upper range of those forecast earlier, between 90¢ and 92¢ per share. The company also reiterated its earlier guidance that earnings in fiscal year 2005 will be even better: between $1.55 and $1.65 a share on sales of nearly $300 million. (Final results for the quarter and the fiscal year were due July 15.)

Driving this growth are flourishing medical equipment sales, particularly peripherals-MR coils and patient monitors. The first stage of the boom was set off by the acquisition of Invivo, a manufacturer of specialty monitors, whose sales and distribution channels enhanced the sale of Intermagnetics' MR coils. These coils are designed and manufactured by the company's Medical Advances business unit.

The second stage, and part of the reason for the optimism behind the fiscal 2005 guidance, is set to ignite with the acquisition of MRI Devices, a specialty maker of MR peripherals, particularly coils. Intermagnetics announced July 12 that it received regulatory clearance from the Department of Justice to complete the acquisition of privately held MRI Devices. The transaction, which should close "shortly," according to the company, is valued at $100 million in cash and stock.

Now that antitrust concerns are out of the way, Intermagnetics can more accurately estimate the charges associated with the acquisition of MRI Devices. Execs provided an initial estimate of the nonrecurring charges when they announced fourth-quarter and year-end results on July 15.

A nonrecurring charge of 5¢ per share associated with the acquisition of Invivo was not included in the company's fiscal 2004 preliminary estimates released July 12. Excluded from the fiscal 2005 estimates were charges of 4¢ per share associated with the Invivo deal and an estimated 15¢ per share noncash charge related to the anticipated vesting of performance-based restricted stock.