ISG stabilizes Q3 sales in wake of proxy fight

ISG stabilizes Q3 salein wake of proxy fight

Medical imaging software developer ISG Technologies of Mississauga, Ontario, reported a recovery in sales revenue in its third quarter of fiscal 1997 (end-March), the first full quarter following the end of a proxy battle for control of the company.

For the third quarter, ISG reported revenues of $5.7 million ($7.8 million Canadian). The amount was equal to ISG's sales in the third quarter of 1996, but represented a 24% increase compared with the second quarter of 1997, when ISG sales plummeted, due to customer anxiety about the proxy fight. ISG in December defeated the proxy bid, which was launched by a dissident shareholder group (PNN 5/97).

ISG posted a loss for the most recent quarter of $256,000, an amount that included proxy costs of $106,000. In the third quarter of fiscal 1996, ISG posted net income of $74,000.

In a conference call with analysts, ISG chairman and CEO Dr. Michael Greenberg said the company saw its strongest growth in its PACS software line of products, which include the Viewing and Reading Stations (VRS) line of image-review workstations. VRS sales doubled in the quarter, Greenberg said.

ISG inked a licensing deal with Imnet in March, in which Imnet agreed to pay $7.8 million (U.S.) for rights to include VRS in its information systems products. ISG plans to recognize that revenue conservatively by spreading it out in several stages over the next few quarters.