E-Z-EM has reported an increase in revenue for the second quarter 2008, which ended on Dec. 1, 2007.
The Lake Succes, N.Y.-based company booked a net sales of $43.6 million for the quarter, a 28 percent increase from $34.2 million for the same quarter last year. E-Z-EM attributes the increase in net sales to an increase of $5.8 million in RSDL sales, an increase of $1.7 million in CT injector system sales, favorable foreign currency exchange rate changes and price increases.
Gross profit for the current quarter increased to $18.8 million from $15.3 million for the prior-year quarter due to the increased sales.
Operating expenses for the current quarter were $15.5 million, compared with $13.0 million for the prior-year period. The increase was due primarily to $1.0 million in costs associated with a planned merger with Bracco Diagnostics, unfavorable foreign currency exchange rate changes, costs associated with the expansion of our North American sales force, legal fees incurred in the defense of a patent infringement lawsuit, and increased research and development costs, according to E-Z-EM.
Anthony A. Lombardo, president and CEO of E-Z-EM, said, “CT injector systems were the key driver of sales, growing nearly 25 percent over the prior-year period despite the continuing impact of the Deficit Reduction Act (DRA) of 2005 on the U.S. imaging equipment market. Growth in CT injector systems more than offset a 1 percent decline in CT contrast products, which we believe resulted from continued pressure on hospitals and imaging centers to reduce procedure costs as a result of the DRA.
"Contract manufacturing and virtual colonoscopy products also were important drivers of sales growth during the quarter, growing 81 percent and 28 percent, respectively, over prior-year levels… We believe that sales of virtual colonoscopy products benefited somewhat from the release of positive data from the American College of Radiology Imaging Network (ACRIN) trial, which found CT colonography (virtual colonoscopy) to be 'highly accurate for detection of intermediate and large polyps,' and that the accuracy is comparable to optical colonoscopy. We believe these results represent an important step toward obtaining federal government reimbursement for virtual colonoscopy as a screening modality, and that such reimbursement is critical to establishing the modality as a screening tool for colorectal cancer."
On Oct. 30, 2007, E-Z-EM entered into a merger agreement with Bracco Diagnostics, the U.S.-based subsidiary of Bracco Imaging S.p.A. and part of the Bracco Group. The company currently anticipates that the merger will close in the first or second calendar quarter of 2008.