MRI sales pace Elscint revenue growth

March 19, 1997

Elscint's major investment in MRI has apparently begun to payoff. The Haifa, Israel, company this month reported that a 120%increase in MRI sales contributed to strong revenue growth in1996, although the vendor is experiencing profitability problemsthat

Elscint's major investment in MRI has apparently begun to payoff. The Haifa, Israel, company this month reported that a 120%increase in MRI sales contributed to strong revenue growth in1996, although the vendor is experiencing profitability problemsthat have required some cost-reduction measures.

For the year (end-December), Elscint reported revenues of $311.4million, up 10% compared with $281.9 million in 1995. The companyhad net income last year of $8.1 million, compared with $14.5million the year before.

In the past several years, Elscint has broadened its once-thinMRI product line and now offers scanners at five different fieldstrengths. Its most recent new magnet introduction was the 1-teslaPrima 1TG, which debuted at last year's Radiological Society ofNorth America meeting (SCAN 12/4/96).

In addition to its growth in MRI revenues, Elscint said that systemssales in the U.S. increased 25%, mostly due to the success ofits CT Twin Flash scanner, which gained market share in the modality.Fourth-quarter sales in Elscint's nuclear medicine division alsogrew, due to shipments of its VariCam variable-angle, dual-headcamera.

Despite the revenue growth, Elscint president and CEO JonathanAdereth said that the company was disappointed with its levelsof profitability. To cut costs, Elscint has reduced personnel,reorganized some of its regional operations, and instituted asalary freeze. Along with an effort to reduce manufacturing costs,the moves should improve operating profit through 1997, Aderethsaid.