SUBJECT COMPANY: Imatron Inc.
FILING PERSON: GENERAL ELECTRIC COMPANY
COMMISSION FILE NO. 333-72566
Contact: S. Lewis Meyer, CEO
Robin Kelley, Investor Relations
(650) 583-9964
FOR IMMEDIATE RELEASE
IMATRON ANNOUNCES THIRD QUARTER
FINANCIAL RESULTS
ECONOMIC UNCERTAINTY CAUSES SHORTFALL IN SCANNER SHIPMENTS TO EIGHT
SALES FOR THE QUARTER
SO. SAN FRANCISCO, CALIF., NOVEMBER 16, 2001 -- IMATRON INC. (NASDAQ: IMAT),
manufacturer of Electron Beam Tomography (EBT) scanners, today announced
financial results for the third fiscal quarter of 2001. Revenues for the three
months ended September 30, 2001 were $16.9 million compared to revenues of $17.5
million for the same period in fiscal 2000, a decrease of approximately 3%. Net
income for the three months ended September 30, 2001 decreased to approximately
$47,000, or $0.00 per share, compared to $1.6 million, or $0.02 per share, for
the same period a year ago. The Company sold eight EBT scanners in the third
quarter of 2001 compared to nine scanners in last year's third fiscal quarter
and ten scanners in Imatron's second quarter ended June 30, 2001.
Revenues for the nine months ended September 30, 2001 increased approximately
24% to $54.7 million compared to revenues of $44.3 million for the same period
last year. Net income for the nine months ended September 30, 2001 was $3.1
million, or $0.03 per share, compared to $2.8 million, or $0.03 per share, for
the same period last year.
Third quarter revenues decreased approximately 9% and net income decreased 96%
from the Company's second quarter of this fiscal year ended June 30, 2001. As of
September 30, 2001, the Company reported cash and cash equivalents and
short-term investments of $7.8 million, working capital of $37.9 million and a
current ratio of 2.5 to 1. Shareholders' equity was $43.3 million.
S. Lewis Meyer, CEO of Imatron, commented, "As we previously stated, Imatron's
third quarter financial results represent a shortfall from prior projections due
to developments surrounding the September 11 terrorist attacks and the
associated economic uncertainty worldwide and in the United States specifically.
While we expect to report a profit for the fiscal year, we anticipate revenue
and net operating income projections to fall short of previous estimates. We now
project revenues for the 2001 fiscal year to be approximately $71 million, a 14%
increase over fiscal year 2000 revenues. The Company's prior guidance on revenue
expectations for the 2001 fiscal year was more than $80 million. Furthermore,
Imatron now expects the 2001 fiscal year to reflect an approximately 30%
decrease in net operating income from the prior year as compared to our previous
projected 50% increase in net operating income."
Meyer continued, "While the precise impact of the tragic events of early
September and subsequent economic uncertainty is impossible to quantify, there
has clearly been a negative impact on Imatron's projected sales for the
remainder of the 2001 fiscal year. A number of expected scanner sales have been
delayed or postponed because of concerns about the availability of private
investment capital, third party equipment financing capital and reduced
discretionary consumer spending. Imatron anticipates that the re-evaluation of
capital spending
and business expansion plans by our prospects and customers may also have an
adverse impact on sales growth in our 2002 fiscal year."
Meyer further continued, "As announced on September 24, 2001, we have signed a
definitive agreement whereby General Electric will acquire Imatron for $1.89 per
share payable in GE stock. We clearly support the proposed merger with GE and
look forward to the integration of Imatron's EBT technology into the GE offering
in computed tomography (CT). GE's resources in combination with Imatron's
proprietary EBT technology and know-how, will bring great value to our
customers, employees, suppliers and shareholders. The merger is subject to
Imatron shareholder approval and other customary conditions and is expected to
close before year-end 2001. Each Imatron shareholder will be sent a proxy
statement disclosing the specific terms and conditions of this transaction.
Imatron has selected December 19, 2001 as the date of the shareholders' meeting,
which will be held in South San Francisco, California. The value of this
transaction to Imatron's shareholders is approximately $200 million."
THIS NEWS RELEASE SHALL NOT CONSTITUTE AN OFFER OF ANY SECURITIES FOR SALE. GE
AND IMATRON INC. WILL PREPARE AND FILE A PROXY STATEMENT/PROSPECTUS. COPIES OF
THIS DOCUMENT WILL BE PROVIDED TO STOCKHOLDERS OF IMATRON INC. IN ADDITION, THIS
DOCUMENT AND OTHER RELEVANT DOCUMENTS CONCERNING THE TRANSACTION WILL BE FILED
WITH THE SECURITIES EXCHANGE COMMISSION AND COPIES WILL BE AVAILABLE FREE OF
CHARGE FROM THE COMMISSION'S WEBSITE (WWW.SEC.GOV) AND FROM GE AND IMATRON. THIS
PROXY STATEMENT/PROSPECTUS WILL CONTAIN IMPORTANT INFORMATION, AND INVESTORS ARE
URGED TO READ THIS DOCUMENT ONCE IT BECOMES AVAILABLE. INVESTORS SHOULD READ THE
JOINT PROXY/PROSPECTUS CAREFULLY WHEN IT BECOMES AVAILABLE BEFORE MAKING ANY
VOTING OR INVESTMENT DECISIONS.
Except for the historical information contained herein, the matters discussed in
this news release may contain forward-looking statements that are based on
current expectations and estimates about the industry in which Imatron operates,
the estimated impact of certain technological advances, the estimated impact of
published research studies on scanner sales and procedures, as well as
management's beliefs and assumptions. It is important to note that the Company's
actual results could differ materially from those projected in such
forward-looking statements. The factors that could cause actual results to
differ materially include, among others; failed clinical demonstration of
certain asserted technological advantages and diagnostic capabilities; reliance
on product distributors; competition in the diagnostic imaging market; failure
to improve product reliability or introduce new product models and enhancements;
delays in production and difficulty in obtaining components and sub-assemblies
from limited sources of supply; inability to meet cash-on-delivery or prepayment
terms from vendors; determinations by regulatory and administrative government
authorities; patent expiration and denial of patent applications; the high cost
of the scanner as compared to commercially available CT scanners; and the risk
factors listed from time to time in the Company's Securities and Exchange
Commission reports, including their reports on Form 10-K for the year ended
December 31, 2000.
--Financial Tables Follow--
IMATRON INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
September 30, December 31,
2001 2000
------------- ------------
(Restated)
ASSETS
Current assets
Cash and cash equivalents $ 7,768 $ 4,718
Short term investments -- 461
Accounts receivable, net:
Trade accounts receivable 26,780 19,300
Other receivables 3,614 2,184
Inventories 24,742 18,835
Prepaid expenses 637 905
--------- ---------
Total current assets 63,541 46,403
Property and equipment, net 4,514 3,567
Goodwill, net 996 1,101
Other assets 156 417
--------- ---------
Total assets $ 69,207 $ 51,488
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,975 $ 3,037
Deferred revenue 3,308 2,109
Other accrued liabilities 11,732 9,235
Line of credit 5,556 --
Capital lease obligations - due within one year 68 35
--------- ---------
Total current liabilities 25,639 14,416
Deferred revenue 176 293
Capital lease obligations 119 82
--------- ---------
Total liabilities 25,934 14,791
--------- ---------
Shareholders' equity
Common stock 128,330 128,108
Additional paid-in capital 9,720 9,614
Notes receivable from shareholders (113) (3,230)
Accumulated deficit (94,664) (97,795)
--------- ---------
Total shareholders' equity 43,273 36,697
--------- ---------
Total liabilities and shareholders' equity $ 69,207 $ 51,488
========= =========
IMATRON INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
Three Months ended Nine Months ended
September 30, September 30,
2001 2000 2001 2000
--------- --------- --------- ---------
(unaudited) (unaudited)
Revenues
Product sales $ 14,558 $ 15,227 $ 47,360 $ 38,316
Service 2,239 2,012 6,771 5,330
Other product sales 108 244 555 629
--------- --------- --------- ---------
Total revenue 16,905 17,483 54,686 44,275
--------- --------- --------- ---------
Cost of revenues
Product sales 7,848 8,546 25,163 20,985
Service 2,082 1,538 5,506 4,098
Other product sales 122 216 532 586
--------- --------- --------- ---------
Total cost of revenues 10,052 10,300 31,201 25,669
--------- --------- --------- ---------
Gross profit 6,853 7,183 23,485 18,606
--------- --------- --------- ---------
Operating expenses
Research and development 2,781 2,455 8,186 6,279
Marketing and sales 2,546 1,865 7,796 5,802
General and administrative 1,503 1,281 4,071 3,558
Goodwill amortization 34 36 105 107
--------- --------- --------- ---------
Total operating expenses 6,864 5,637 20,158 15,746
Operating income (loss) (11) 1,546 3,327 2,860
Interest income 23 84 142 372
Interest expense (82) (4) (196) (17)
Other income (expense) 117 (3) (71) 2
--------- --------- --------- ---------
Income from continuing operations before
provision for income taxes 47 1,623 3,202 3,217
Provision for income taxes -- -- (71) --
--------- --------- --------- ---------
Income from continuing operations 47 1,623 3,131 3,217
Loss from discontinued operations -- (58) -- (364)
--------- --------- --------- ---------
Income before cumulative effect of change
in accounting principle 47 1,565 3,131 2,853
Cumulative effect on period prior to
December 31, 1999 of changing to a
different revenue recognition method -- -- -- (29)
--------- --------- --------- ---------
Net income $ 47 $ 1,565 3,131 $ 2,824
========= ========= ===== =========
Net income per common share:
Income from continuing operations - basic and diluted $ 0.00 $ 0.02 0.03 $ 0.03
========= ========= ===== =========
Net income - basic and diluted $ 0.00 $ 0.02 0.03 $ 0.03
========= ========= ===== =========
Number of shares used in basic per share calculations 105,099 104,414 104,996 102,458
========= ========= ===== =========
Number of shares used in diluted per share calculations 105,883 107,178 106,094 107,183
========= ========= ===== =========