CTI Molecular Imaging, Inc. Reports Financial Results for the First
Quarter of Fiscal 2005 Net Revenues Grow 50% to $111 Million
Earnings per Share of $0.08, up from $0.02 Guidance raised for
fiscal 2005 KNOXVILLE, Tenn., Jan. 31 /PRNewswire-FirstCall/ -- CTI
Molecular Imaging, Inc. (NASDAQ:CTMI), a leading provider of
positron emission tomography (PET) equipment, molecular biomarkers
and related services, today announced financial results for its
first quarter ended December 31, 2004. Net revenues for the first
quarter were $111.5 million, a 50% increase over net revenues of
$74.1 million for the same period last year. Net income was $4.0
million, or $0.08 per share on a fully-diluted basis, compared to
$0.7 million, or $0.02 per share on a fully-diluted basis, in the
prior fiscal year's first quarter. Backlog at December 31, 2004
totaled $164 million, an increase of $25 million from $139 million
at September 30, 2004. "We are off to a strong start in 2005 with
revenue and earnings well ahead of our plan and guidance," said Ron
Nutt, Ph.D., President and Chief Executive Officer. "Our clinical
scanner business did particularly well, providing some early
confirmation that the market continues to improve. In addition, the
adoption rate of PET continues to increase as FDG dose volumes were
in line with expectations," continued Dr. Nutt. During the first
quarter of fiscal 2005 CTI shipped 40 scanners on a consolidated
basis compared with 26 units in fiscal 2004. FDG doses sold by
PETNET domestically increased 6.5% sequentially from the fourth
quarter of 2004 and 42% over the prior year's first quarter. These
increases were partially offset by a 3.2% sequential decline in
average dose price. Segment Information: "Over the past two years
our business model has evolved with the acquisition of three
companies -- Mirada, Concorde and Imtek -- and as we have begun the
process of positioning ourselves for the put/call event with our
partner Siemens Medical Systems. Effective October 1, 2004 we
restructured our organization into two business groupings -- the
Clinical Scanner Business, run by Greg Brophy, and Molecular
Biomarker Technologies, run by me," said Dr. Nutt. "Beginning this
quarter, we are presenting our financial results in six financial
reporting segments," added Dr. Nutt. The Clinical Scanner Business
grouping consists of three reporting segments -- CPS and Detector
Materials, which are unchanged from the past, as well as a new
segment entitled Service and Distribution, which includes the
service and distribution activities related to clinical scanners.
The Molecular Biomarker Technologies grouping also consists of
three reporting segments -- PETNET, Molecular Technologies Inc.
(biomarker development), and Molecular Imaging Products, which
includes Concorde's microPET and microCAT animal scanners, Mirada
medical image analysis applications and cyclotron sales and
service. These new reporting segments of Service and Distribution,
PETNET, Molecular Technologies and Molecular Imaging Products were
all previously a part of CTI Solutions. CTI Molecular Imaging, Inc
Segment Information Three Months Ended December 31, (in thousands)
2004 2003 Revenues, gross: CPS $67,033 $55,486 Detector Materials
7,687 12,089 Service and Distribution 17,154 13,857 Clinical
Scanner Business 91,874 81,432 PETNET 26,557 19,489 MTI 204 -
Molecular Imaging Products 13,746 7,211 Molecular Biomarker
Technologies 40,507 26,700 Total $132,381 $108,132 Revenue
eliminations: CPS $(5,353) $(17,987) Detector Materials (7,687)
(12,064) Service and Distribution (4,764) (1,588) Clinical Scanner
Business (17,804) (31,639) PETNET - (35) MTI (50) - Molecular
Imaging Products (3,060) (2,351) Molecular Biomarker Technologies
(3,110) (2,386) Total $(20,914) $(34,025) Revenues, net: CPS
$61,680 $37,499 Detector Materials - 25 Service and Distribution
12,390 12,269 Clinical Scanner Business 74,070 49,793 PETNET 26,557
19,454 MTI 154 - Molecular Imaging Products 10,686 4,860 Molecular
Biomarker Technologies 37,397 24,314 Total $111,467 $74,107 Income
(loss) from operations: CPS $14,087 $6,312 Detector Materials 2,714
6,711 Service and Distribution (778) (3,935) Eliminations 861
(3,497) Clinical Scanner Business 16,884 5,591 PETNET 822 475 MTI
(1,368) (758) Molecular Imaging Products (365) (1,053) Eliminations
(361) (1) Molecular Biomarker Technologies (1,272) (1,337)
Corporate and Eliminations (1,429) 157 Total $14,183 $4,411
Shipments, Orders and Backlog: The company sold 40 scanners during
the first quarter and booked 52 new orders. Backlog on a
consolidated basis at December 31, 2004 is $164.1 million. This
backlog includes orders for PET and PET/CT scanners, cyclotrons and
service and maintenance contracts, and excludes orders placed with
PETNET for FDG doses and customer orders to distributors where the
related scanners have not yet been ordered from CPS. Financial
Outlook: "Based on the strong performance in the first quarter and
our current scanner backlog, we believe that revenues this year
will be in the range of $440 - $450 million on the sale of
approximately 185 scanners. Earnings per share for the year should
be in the range of $0.54 to $0.56," said Dr. Nutt. "For the second
quarter, we are expecting a quarter very similar to the first
quarter. We expect revenue of $110 - $115 million and earnings per
share of $0.08 to $0.10," added Dr. Nutt. Conference Call
Information: The dial-in number for tomorrow's earnings call at
9:00 a.m. EST is (706) 643-3432. A replay of the call will be
available for one week until February 8, 2005. To hear this replay,
please dial (800) 642-1687 and enter the reservation number
3583738. A simultaneous webcast of the call will be accessible via
the internet at http://www.ctimi.com/ under the Investor Relations
section. A replay of the webcast will also be archived on this
site. About CTI Molecular Imaging: CTI Molecular Imaging, Inc. is a
leading supplier of products and services for positron emission
tomography (PET), a diagnostic imaging technology used in the
detection and treatment of cancer, neurological disorders and
cardiac disease. Additional information is available at:
http://www.ctimi.com/ . About PET and PET/CT: PET images the
biology of diseases at the molecular level, often before anatomic
changes are visible or, in some cases, before symptoms appear.
Diseases are biological processes and it is these processes that
PET examines. PET/CT is an imaging technology that combines the
biological examination of patients by PET with the CT images of the
body's structural detail. PET/CT technology improves the diagnostic
accuracy and treatment management of patients by providing
surgeons, radiation oncologists and other physicians with precise
anatomical landmarks associated with the disease condition as
determined by PET. PET's whole-body imaging capability helps
physicians improve their ability to detect and determine the
location, extent and stage of cancer, neurological disorders and
cardiac disease. By improving diagnosis, PET scans aid physicians
in selecting better courses of treatment, as well as assessing
whether treatment is effective or should be changed. Recent
published clinical trials have shown that in a wide array of
cancers, the use of PET has caused the treatment to be changed for
15 to 50% of patients, depending on the specific clinical question.
In addition, PET and PET/CT provide both the patient and their
physician with a degree of certainty that is often unavailable
through other imaging methods. Certain matters discussed in this
press release and the related conference call constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements, which may be identified by words such as "believe,"
"expect," "anticipate," "intend," "estimate" or similar
expressions, include statements regarding CTI's financial outlook
for 2005, anticipated market share data, growth in unit sales from
international markets, future demand for scanners and other
PET-related products, the impact of reduced reimbursement levels
for PET and PET-related radiopharmaceuticals, future pricing
trends, product mix and any other statements that necessarily
depend on future events. Forward-looking statements involve a
number of risks and uncertainties and there can be no assurance
that any forward-looking statements will prove to be accurate.
Important factors that could cause actual results to differ
materially from those anticipated in the forward-looking statements
include: competition; uncertainties and potential difficulties
regarding the implementation of the new agency agreement with
Siemens; the seasonality of capital equipment sales; the
availability and amount of third-party payor reimbursement for PET
procedures; Siemens' option to purchase a majority interest in CPS,
CTI's subsidiary that develops and manufactures PET scanners;
market adoption of and demand for PET products in general and CTI's
products and services in particular; the timing of orders from
distribution partners and customers; legislative and regulatory
developments; the timing of research and development and marketing
expenses; relationships with suppliers and distributors; pricing;
product mix; customer demand for financing services; and general
economic conditions, such as interest rates. CTI undertakes no
obligation to update or revise any forward-looking statements.
Further information regarding risks, uncertainties and other
factors that could adversely affect CTI or cause actual results to
differ materially from those anticipated in forward-looking
statements are included in CTI's Annual Report on Form 10-K for the
fiscal year ended September 30, 2004. CTI Molecular Imaging, Inc
Consolidated Balance Sheets December 31, September 30, (in
thousands) 2004 2004 (unaudited) ASSETS Current assets: Cash and
cash equivalents $24,853 $36,381 Accounts receivable -- trade, net
63,815 65,946 Accounts receivable -- related party, net (1) 56,077
34,231 Inventories 85,253 92,219 Deferred tax asset 13,839 13,474
Prepaid expenses and other current assets 7,674 8,345 Total current
assets 251,511 250,596 Property and equipment, net 137,211 133,074
Goodwill 48,096 46,629 Other assets 35,975 34,915 Total assets
$472,793 $465,214 LIABILITIES AND SHAREHOLDERS' EQUITY Current
liabilities: Trade accounts payable $30,213 $33,012 Current
maturities of long-term debt and capital lease obligations 4,003
4,289 Accrued liabilities 20,532 22,059 Customer advances 11,084
9,801 Income taxes payable 770 4,472 Total current liabilities
66,602 73,633 Deferred revenues 5,381 4,447 Deferred tax liability
4,815 5,013 Long-term debt and capital lease obligations 12,322
12,856 Total liabilities 89,120 95,949 Minority interest 67,638
62,213 Shareholders' equity 316,035 307,052 Total liabilities and
shareholders' equity $472,793 $465,214 (1) Represent receivables
from Siemens Medical Solutions USA, Inc. CTI Molecular Imaging,
Inc. Consolidated Statements of Operations Three Months Ended
December 31, 2004 2003 (In thousands, except share and per share
data) (unaudited) Revenues $111,467 $74,107 Cost of revenues 69,702
43,735 Gross margin 41,765 30,372 Operating expenses: Selling,
general and administrative expenses 16,850 15,260 Research and
development expenses 9,261 10,190 Stock-based compensation expense
1,471 511 Total operating expenses 27,582 25,961 Income from
operations 14,183 4,411 Interest expense, net 223 485 Other
(income) expense (15) (595) Income before income taxes and minority
interest 13,975 4,521 Provision for income taxes 5,272 1,699 Income
before minority interest 8,703 2,822 Amount applicable to minority
interest, net of taxes 4,743 2,105 Net income $3,960 $717 Earnings
per share Basic $0.09 $0.02 Diluted $0.08 $0.02 Weighted average
shares Basic 45,229,213 44,331,007 Diluted 48,060,300 46,321,070
DATASOURCE: CTI Molecular Imaging, Inc. CONTACT: David N. Gill of
CTI Molecular Imaging, Inc., +1-865-218-2000 Web site:
http://www.ctimi.com/
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