EXHIBIT 99.1
INTERMAGNETICS
- --------------
FOR IMMEDIATE RELEASE CONTACT: MICHAEL BURKE
NASDAQ: IMGC EXEC. VP & CFO
CONTACT: CATHY YUDZEVICH
IR MANAGER
(518) 782-1122
INTERMAGNETICS REPORTS INCREASED Q3 SALES, NET INCOME
o MRI, MEDICAL DEVICES SALES REMAIN STRONG
o OUTLOOK WITHIN MR MARKET REMAINS ROBUST
o FULL FY2006 GUIDANCE UPDATED, FY2007 FORECAST OUTLINED
LATHAM, NY, APRIL 3, 2006--INTERMAGNETICS GENERAL CORPORATION (NASDAQ: IMGC)
today reported that third-quarter normalized net income from operations
increased 14 percent to $8.2 million, or $0.19 per diluted share, from $7.3
million, or $0.17 per diluted share, a year earlier. Reported income from
continuing operations increased to $5.5 million, or $0.13 per diluted share,
from $4.8 million or $0.11 per diluted share. Revenues for the quarter ended
February 26, 2006, climbed 12 percent to nearly $77 million from $69 million.
Per-share amounts have been adjusted to reflect the 3-2 stock split effective
February 21, 2006.
For the first nine months of fiscal 2006, normalized net income rose to $22.8
million, or $0.53 per diluted share, from $18.4 million, or $0.44 per diluted
share, a year earlier. Reported nine-month income from continuing operations was
$17.5 million, or $0.41 per diluted share, compared with $10.6 million, or $0.25
per diluted share. Revenue increased to $226 million from $186.7 million.
"Our overall performance during the third quarter was very much in line with our
expectations," said Glenn H. Epstein, chairman and chief executive officer.
"Revenue was solid, and we remain on target with our full-year objective of
delivering sales growth greater than 15 percent over the prior year, now
expected to reach about $308 million."
Epstein noted that the company expects to achieve its growth target while at the
same time selectively discontinuing some lower-margin products in its
non-MR-based patient monitoring lines.
"We believe that this limited rationalization to our product portfolio will
contribute to continued margin improvements throughout FY2007 and enable our
technology and product commercialization teams to focus on higher-growth
opportunities," Epstein said. "With these actions taken during the current
fiscal year, we believe we are well positioned to meet our ongoing objective of
achieving greater than 15 percent growth in both revenues and normalized
operating income in fiscal 2007, with a continued outlook for attractive growth
in following years. This forecast excludes the effect of any liquidity event
pertaining to the various alternatives being explored with our SuperPower
subsidiary during FY2007."
Epstein said the company expects to incur some nonrecurring charges during the
fourth quarter in order to rapidly implement certain product rationalizations.
-More-
"We expect those charges to total $0.04 to $0.05 per share," Epstein said.
"Excluding these specific items and remaining consistent with our representation
of stock-based compensation, we now forecast our normalized operating income to
be in the range of $0.22 to $0.24 for Q4 and $0.75 to $0.77 for FY2006."
OPERATING EPS RECONCILIATION INFORMATION
Operating EPS excludes non-cash performance-based stock compensation and other
charges or benefits.
The net benefit of a gain on litigation and favorable adjustment to gain on
prior period sale of division totaled nearly $0.02 for the six months,
recognized about evenly in the first and second quarters.
The total of cash and non-cash charges related to certain product line
discontinuations within the Medical Devices segment are expected to total $0.04
to $0.05 for FY2006 and anticipated to be recognized during Q4.
The estimated non-cash charge during Q4 for Intermagnetics' performance-based
restricted stock plan is expected to be about $0.7 million or $0.02 per fully
diluted share based on the closing stock price on April 3, 2006 ($6.1 million or
$0.14 per fully diluted share for all of FY2006).
CONFERENCE CALL TOMORROW
The company will discuss its third-quarter results, as well as other
developments during a conference call Tuesday, April 4, 2006, beginning at 11
a.m. EDT. The call will be broadcast live and archived over the Internet through
the company's website http://www.intermagnetics.com under the Investor Relations
section. The domestic dial-in number for the live call is 877-407-8037. The
international dial-in number is 201-689-8037. No conference code is required for
the live call. The company will also make available a digital replay beginning 2
p.m. EDT April 4, 2006, through 11:59 p.m. April 14, 2006, by dialing
201-612-7415--account number 249. Callers should select conference number
190632.
INTERMAGNETICS (www.intermagnetics.com) draws on the financial strength,
operational excellence and technical leadership in the market of Magnetic
Resonance Imaging (MRI), as well as its expanding businesses within Medical
Devices that encompass Invivo Diagnostic Imaging (focusing on MRI components &
imaging sub-systems) and Invivo Patient Care (focusing on monitoring & other
patient care devices). Intermagnetics is also a prominent participant in
superconducting applications for Energy Technology. The company has a 35-year
history as a successful developer, manufacturer and marketer of superconducting
materials, high-field magnets, medical systems & components and other
specialized high-value added devices.
SAFE HARBOR STATEMENT: The statements contained in this press release that are
not historical fact are "forward-looking statements" which involve various
important assumptions, risks, uncertainties and other factors. These
forward-looking statements are based on currently available competitive,
financial and economic data and management's views and assumptions regarding
future events. Such forward-looking statements are inherently uncertain and are
subject to risks, including but not limited to: the company's ability to meet
the performance, quality and price requirements of our customers, develop new
products and maintain gross margin levels through continued production cost
reductions and manufacturing efficiencies; the ability of the company's largest
customer to maintain and grow its share of the market for MRI systems; the
company's ability to invest sufficient resources in and obtain third-party
funding for its HTS development efforts and avoid the potential adverse impact
of competitive emerging patents; as well as other risks and uncertainties set
forth herein and in the company's Annual Report on Forms 10-K and 10-Q. The
company has provided supplemental non-GAAP financial tables to provide
shareholders and prospective shareholders additional information to understand
the company's normalized quarterly operations. These tables contain certain
estimated pro-forma calculations that we believe provide helpful information
regarding our operations. Except for the company's continuing obligation to
disclose material information under federal securities law, the company is not
obligated to update its forward-looking statements even though situations may
change in the future. The company qualifies all of its forward-looking
statements by these cautionary statements.
-Tables Follow-
INTERMAGNETICS GENERAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------------------ ------------------------------
FEBRUARY 26, FEBRUARY 27, FEBRUARY 26, FEBRUARY 27,
2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES $ 76,914 $ 68,974 $ 226,042 $ 186,673
COST OF REVENUES 41,638 36,535 124,460 99,889
---------- ---------- ---------- ----------
GROSS MARGIN 35,276 32,439 101,582 86,784
PRODUCT RESEARCH AND DEVELOPMENT 8,276 6,399 23,247 17,546
SELLING, GENERAL AND ADMINISTRATIVE:
STOCK BASED COMPENSATION 4,110 1,064 9,339 5,632
OTHER SELLING, GENERAL AND ADMINISTRATIVE 12,587 15,952 38,727 41,439
AMORTIZATION OF INTANGIBLE ASSETS 1,266 1,661 3,930 4,718
IMPAIRMENT OF INTANGIBLE ASSETS 913
---------- ---------- ---------- ----------
26,239 25,076 75,243 70,248
---------- ---------- ---------- ----------
OPERATING INCOME 9,037 7,363 26,339 16,536
INTEREST AND OTHER INCOME 237 74 1,424 486
INTEREST AND OTHER EXPENSE (842) (1,109) (2,433) (3,238)
GAIN ON LITIGATION SETTLEMENT 600
ADJUSTMENT TO GAIN ON PRIOR PERIOD SALE OF DIVISION 648 1,094
---------- ---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 8,432 6,328 26,578 14,878
PROVISION FOR INCOME TAXES 2,892 1,481 9,116 4,237
---------- ---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 5,540 4,847 17,462 10,641
DISCONTINUED OPERATIONS:
INCOME FROM OPERATIONS OF DISCONTINUED SUBSIDIARY 35,133 40,727
PROVISION FOR INCOME TAXES 15,245 17,187
---------- ---------- ---------- ----------
INCOME FROM DISCONTINUED OPERATIONS - 19,888 - 23,540
---------- ---------- ---------- ----------
NET INCOME $ 5,540 $ 24,735 $ 17,462 $ 34,181
========== ========== ========== ==========
BASIC NET INCOME PER COMMON SHARE:
CONTINUING OPERATIONS $ 0.13 $ 0.12 $ 0.41 $ 0.26
DISCONTINUED OPERATIONS 0.47 $ 0.57
---------- ---------- ---------- ----------
BASIC NET INCOME PER COMMON SHARE $ 0.13 $ 0.59 $ 0.41 $ 0.83
========== ========== ========== ==========
DILUTED NET INCOME PER COMMON SHARE:
CONTINUING OPERATIONS $ 0.13 $ 0.11 $ 0.41 $ 0.25
DISCONTINUED OPERATIONS 0.47 $ 0.56
---------- ---------- ---------- ----------
DILUTED NET INCOME PER COMMON SHARE $ 0.13 $ 0.58 $ 0.41 $ 0.81
========== ========== ========== ==========
SHARES:
BASIC 42,300,813 42,030,141 42,256,107 41,344,768
========== ========== ========== ==========
DILUTED 43,138,329 42,790,389 42,994,099 42,043,305
========== ========== ========== ==========
INTERMAGNETICS GENERAL CORPORATION
RECONCILING STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
NORMALIZED OPERATIONS WITHOUT ACQUISITION, FEBRUARY 26, FEBRUARY 27, FEBRUARY 26, FEBRUARY 27,
INTEGRATION, SALE AND NON-CASH ITEMS: 2006 2005 2006 2005
---------- ---------- ---------- ----------
REVENUES $ 76,914 $ 68,974 $ 226,042 $ 186,673
COST OF REVENUES 41,638 34,709 124,460 97,852
---------- ---------- ---------- ----------
GROSS MARGIN 35,276 34,265 101,582 88,821
PRODUCT RESEARCH AND DEVELOPMENT 8,276 6,399 23,247 17,528
SELLING, GENERAL AND ADMINISTRATIVE 12,587 14,687 38,727 38,205
AMORTIZATION OF INTANGIBLE ASSETS 1,266 1,661 3,930 4,718
---------- ---------- ---------- ----------
22,129 22,747 65,904 60,451
---------- ---------- ---------- ----------
OPERATING INCOME 13,147 11,518 35,678 28,370
INTEREST AND OTHER INCOME 237 74 1,424 486
INTEREST AND OTHER EXPENSE (842) (616) (2,433) (1,779)
---------- ---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 12,542 10,976 34,669 27,077
PROVISION FOR INCOME TAXES 4,302 3,725 11,891 8,667
---------- ---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS $ 8,240 $ 7,251 $ 22,778 $ 18,410
========== ========== ========== ==========
EARNINGS PER COMMON SHARE:
BASIC $ 0.19 $ 0.17 $ 0.54 $ 0.45
========== ========== ========== ==========
DILUTED $ 0.19 $ 0.17 $ 0.53 $ 0.44
========== ========== ========== ==========
SHARES:
BASIC 42,300,813 42,030,141 42,256,107 41,344,768
========== ========== ========== ==========
DILUTED 43,138,329 42,790,389 42,994,099 42,043,305
========== ========== ========== ==========
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
FEBRUARY 26, FEBRUARY 27, FEBRUARY 26, FEBRUARY 27,
RECONCILIATION OF FINANCIAL STATEMENTS TO GAAP EQUIVALENT: 2006 2005 2006 2005
---------- ---------- ---------- ----------
PRO-FORMA NET INCOME $ 8,240 $ 7,251 $ 22,778 $ 18,410
STOCK BASED COMPENSATION (4,110) (1,064) (9,339) (5,632)
GAIN ON LITIGATION SETTLEMENT 600
ACQUISITION AND INTEGRATION RELATED CHARGES (3,091) (5,289)
IMPAIRMENT OF INTANGIBLE ASSETS (913)
INTEREST BURDEN (493) (1,459)
ADJUSTMENT TO GAIN ON PRIOR PERIOD SALE OF DIVISION 648 1,094
PROVISION FOR TAXES RELATING TO PRO-FORMA ADJUSTMENTS 1,410 2,244 2,775 4,430
INCOME FROM DISCONTINUED OPERATIONS 19,888 23,540
---------- ---------- ---------- ----------
AS REPORTED NET INCOME $ 5,540 $ 24,735 $ 17,462 $ 34,181
========== ========== ========== ==========
This table is included to provide stockholders' and prospective stockholders'
additional information to understand the Company's normalized quarterly and
annual performance.
INTERMAGNETICS GENERAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
FEBRUARY 26, MAY 29,
2006 2005
------------ -----------
ASSETS
CURRENT ASSETS
CASH AND SHORT-TERM INVESTMENTS $ 19,281 $ 6,970
TRADE ACCOUNTS RECEIVABLE 67,778 60,682
COSTS AND ESTIMATED EARNINGS IN
EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS 299 718
INVENTORIES 54,837 40,265
PREPAID EXPENSES AND OTHER 10,279 8,665
-------- --------
TOTAL CURRENT ASSETS 152,474 117,300
PROPERTY, PLANT AND EQUIPMENT, NET 45,377 42,974
GOODWILL, INTANGIBLE AND OTHER ASSETS 227,603 229,374
-------- --------
$425,454 $389,648
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT PORTION OF LONG-TERM DEBT $ 268 $ 12,404
ACCOUNTS PAYABLE 11,356 22,136
SALARIES, WAGES AND RELATED ITEMS 10,862 11,691
CUSTOMER ADVANCES AND DEPOSITS 1,238 1,951
PRODUCT WARRANTY RESERVE 2,839 4,073
INCOME TAX PAYABLE 841 3,305
OTHER LIABILITIES AND ACCRUED EXPENSES 8,285 10,189
-------- --------
TOTAL CURRENT LIABILITIES 35,689 65,749
LONG-TERM DEBT, LESS CURRENT PORTION 58,436 19,885
NOTE PAYABLE 5,000 5,000
DEFERRED INCOME TAXES 20,282 19,618
DERIVATIVE LIABILITY 52
DEFERRED COMPENSATION OBLIGATION 4,445 4,338
STOCKHOLDERS' EQUITY 301,602 275,006
-------- --------
$425,454 $389,648
======== ========
INTERMAGNETICS GENERAL CORPORATION
SUMMARY OF PERFORMANCE AGAINST GOALS
NINE MONTHS ENDED
----------------------------------------------------
FEBRUARY 26, 2006 FEBRUARY 27, 2005 GOAL
----------------- ----------------- --------------
GROSS MARGIN (1) 45% 48% 45%
OPERATING INCOME:
PERCENT OF SALES (1) 16% 15% 15%
PERCENT OF NET OPERATING ASSETS (1) (2) 40% 49% 50%
RETURN ON EQUITY (1) (2) 11% 10% 15%
WORKING CAPITAL EFFICIENCY (WORKING
CAPITAL, LESS CASH DIVIDED BY NET SALES) (1) (2) 23% 14% 15%
(1) BASED ON NORMALIZED DATA; (2) BASED ON ANNUALIZED DATA
SEGMENT DATA
THREE MONTHS ENDED
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FEBRUARY 26, 2006
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(DOLLARS IN THOUSANDS) MAGNETIC RESONANCE MEDICAL ENERGY
IMAGING DEVICES TECHNOLOGY TOTAL
------------------ ---------- ---------- ----------
NET REVENUES TO EXTERNAL CUSTOMERS:
MAGNET SYSTEMS $ 32,077 $ 32,077
PATIENT MONITORS & RF COILS $ 42,706 42,706
OTHER $ 2,131 2,131
---------- ---------- ---------- ----------
TOTAL 32,077 42,706 2,131 76,914
SEGMENT OPERATING INCOME (LOSS) 8,505 6,555 (1,913) 13,147
TOTAL ASSETS $ 145,153 $ 269,131 $ 11,170 $ 425,454
FEBRUARY 27, 2005
------------------------------------------------------------------
(DOLLARS IN THOUSANDS) MAGNETIC RESONANCE MEDICAL ENERGY
IMAGING DEVICES TECHNOLOGY TOTAL
------------------ ---------- ---------- ----------
NET REVENUES TO EXTERNAL CUSTOMERS:
MAGNET SYSTEMS $ 30,128 $ 30,128
PATIENT MONITORS & RF COILS $ 35,290 35,290
OTHER $ 3,556 3,556
---------- ---------- ---------- ----------
TOTAL 30,128 35,290 3,556 68,974
SEGMENT OPERATING INCOME (LOSS) 7,937 4,908 (1,327) 11,518
TOTAL ASSETS $ 120,708 $ 249,895 $ 11,490 $ 382,093
NINE MONTHS ENDED
------------------------------------------------------------------
FEBRUARY 26, 2006
------------------------------------------------------------------
MAGNETIC RESONANCE MEDICAL ENERGY
IMAGING DEVICES TECHNOLOGY TOTAL
------------------ ---------- ---------- ----------
NET REVENUES TO EXTERNAL CUSTOMERS:
MAGNET SYSTEMS $ 94,741 $ 94,741
PATIENT MONITORS & RF COILS $ 123,299 123,299
OTHER $ 8,002 8,002
---------- ---------- ---------- ----------
TOTAL 94,741 123,299 8,002 226,042
SEGMENT OPERATING INCOME (LOSS) 24,462 16,349 (5,133) 35,678
TOTAL ASSETS $ 145,153 $ 269,131 $ 11,170 $ 425,454
FEBRUARY 27, 2005
------------------------------------------------------------------
MAGNETIC RESONANCE MEDICAL ENERGY
IMAGING DEVICES TECHNOLOGY TOTAL
------------------ ---------- ---------- ----------
NET REVENUES TO EXTERNAL CUSTOMERS:
MAGNET SYSTEMS $ 83,736 $ 83,736
PATIENT MONITORS & RF COILS $ 94,806 94,806
OTHER $ 8,131 8,131
---------- ---------- ---------- ----------
TOTAL 83,736 94,806 8,131 186,673
SEGMENT OPERATING INCOME (LOSS) 18,910 14,634 (5,174) 28,370
TOTAL ASSETS $ 120,708 $ 249,895 $ 11,490 $ 382,093
THREE MONTHS ENDED
-----------------------------------------
FEBRUARY 26, 2006 FEBRUARY 27, 2005
----------------- -----------------
RECONCILIATION OF INCOME BEFORE INCOME TAXES:
OPERATING INCOME FROM REPORTABLE SEGMENTS $ 13,147 $ 11,518
NON-CASH STOCK BASED COMPENSATION (4,110) (1,064)
ACQUISITION AND INTEGRATION RELATED ITEMS (3,091)
----------------- -----------------
NET OPERATING PROFIT 9,037 7,363
INTEREST AND OTHER INCOME 237 74
INTEREST AND OTHER EXPENSE (842) (1,109)
ADJUSTMENT TO GAIN ON PRIOR PERIOD SALE OF DIVISION ----------------- -----------------
INCOME BEFORE INCOME TAXES $ 8,432 $ 6,328
================= =================
NINE MONTHS ENDED
-----------------------------------------
FEBRUARY 26, 2006 FEBRUARY 27, 2005
----------------- -----------------
RECONCILIATION OF INCOME BEFORE INCOME TAXES:
OPERATING INCOME FROM REPORTABLE SEGMENTS $ 35,678 $ 28,370
NON-CASH STOCK BASED COMPENSATION (9,339) (5,632)
ACQUISITION AND INTEGRATION RELATED ITEMS (5,289)
IMPAIRMENT OF INTANGIBLE ASSETS (913)
----------------- -----------------
NET OPERATING PROFIT 26,339 16,536
INTEREST AND OTHER INCOME 1,424 486
INTEREST AND OTHER EXPENSE (2,433) (3,238)
GAIN ON LITIGATION SETTLEMENT 600
ADJUSTMENT TO GAIN ON PRIOR PERIOD SALE OF DIVISION 648 1,094
----------------- -----------------
INCOME BEFORE INCOME TAXES $ 26,578 $ 14,878
================= =================
RECONCILIATION OF METRICS TO GAAP EQUIVALENT:
NINE MONTHS ENDED
FEBRUARY 26, 2006
------------------------------------------------------------
OPERATING
INCOME AS A
GROSS PERCENT OF RETURN ON
MARGIN SALES EQUITY
------------------ ------------------- ----------------
AS REPORTED GAAP EQUIVALENT 45% 12% 8%
EFFECT OF NON-CASH RELATED CHARGES
AND NON-RECURRING GAINS 4% 2%
EFFECT OF AVERAGING 1%
------------------ ------------------- ----------------
PRO-FORMA METRICS 45% 16% 11%
NINE MONTHS ENDED
FEBRUARY 27, 2005
------------------------------------------------------------
OPERATING
INCOME AS A
GROSS PERCENT OF RETURN ON
MARGIN SALES EQUITY
------------------ ------------------- ----------------
AS REPORTED GAAP EQUIVALENT 46% 9% 17%
IMPACT OF EXCLUDING POLYCOLD (11%)
EFFECT OF ACQUISITION, INTEGRATION, NON-CASH RELATED CHARGES
AND OTHER NON-RECURRING CHARGES AND CREDITS 2% 6% 3%
EFFECT OF AVERAGING 1%
------------------ ------------------- ----------------
PRO-FORMA METRICS 48% 15% 10%
####