IMGC Intermagnetics General

* High-Field Open MRI Magnets Commence Shipment LATHAM, N.Y., Sept. 28 /PRNewswire-FirstCall/ -- Intermagnetics General Corporation (NASDAQ:IMGC), today reported the first-quarter normalized net income from operations climbed to $6.1 million, or $0.21 per diluted share, from $4.3 million, or $0.16 per diluted share, a year earlier. Reported net income increased to $5.1 million, or $0.18 per diluted share, from $3.4 million or $0.13 per diluted share. Revenues for the quarter ended August 28, 2005, rose to just over $71 million from $51.5 million. "All operating segments delivered exceptionally strong revenues during the quarter," said Glenn H. Epstein, chairman and chief executive officer. "As previously forecast, gross margins declined slightly due to introductory batches of a key new MRI segment product line. Stronger than anticipated demand of OEM channel products at contract volume pricing within the Medical Devices Segment was also a factor. We continue to expect margins to strengthen in the second half of our fiscal year and reaffirm our forecast of sales growth in excess of 15 percent and earnings growth in excess of 20 percent for fiscal 2006 versus normalized continuing operations last year." Conference Call Tomorrow The company will discuss its first-quarter results, as well as other developments during a conference call Thursday, September 29, beginning at 11 a.m. EDT. The call will be broadcast live and archived over the Internet through the company's web site 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 September 29, 2005 at 2 p.m. EDT through midnight October 8, 2005, by dialing 201-612-7415, account number 249, and requesting conference 168334. Intermagnetics (http://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 more than 30-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; and 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. INTERMAGNETICS GENERAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended August 28, August 29, 2005 2004 Revenues $71,016 $51,524 Cost of revenues 39,870 28,408 Gross margin 31,146 23,116 Product research and development 7,336 4,959 Selling, general and administrative: Stock based compensation 2,076 1,127 Other selling, general and administrative 12,707 10,680 Amortization of intangible assets 1,397 1,384 23,516 18,150 Operating income 7,630 4,966 Interest and other income 154 201 Interest and other expense (646) (1,012) Gain on litigation settlement 600 Adjustment to gain on prior period sale of division 1,094 Income from continuing operations before income taxes 7,738 5,249 Provision for income taxes 2,654 1,822 INCOME FROM CONTINUING OPERATIONS 5,084 3,427 Discontinued operations: Income from operations of discontinued subsidiary 2,886 Provision for income taxes 1,001 INCOME FROM DISCONTINUED OPERATIONS - 1,885 NET INCOME $5,084 $5,312 Basic Net Income per Common Share: Continuing operations $0.18 $0.13 Discontinued operations 0.07 Basic Net Income per Common Share $0.18 $0.20 Diluted Net Income per Common Share: Continuing operations $0.18 $0.13 Discontinued operations 0.07 Diluted Net Income per Common Share $0.18 $0.20 Shares: Basic 28,143,685 26,689,907 Diluted 28,661,843 27,237,577 INTERMAGNETICS GENERAL CORPORATION RECONCILING STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended Normalized Operations without Acquisition, August 28, August 29, Integration, Sale and Non-cash items: 2005 2004 Revenues $71,016 $51,524 Cost of revenues 39,870 28,270 Gross margin 31,146 23,254 Product research and development 7,336 4,941 Selling, general and administrative 12,707 10,318 Amortization of intangible assets 1,397 1,384 21,440 16,643 Operating income 9,706 6,611 Interest and other income 154 201 Interest and other expense (646) (575) Adjustment to gain on prior period sale of division Income from continuing operations before income taxes 9,214 6,237 Provision for income taxes 3,160 1,894 INCOME FROM CONTINUING OPERATIONS $6,054 $4,343 Earnings per Common Share: Basic $0.22 $0.16 Diluted $0.21 $0.16 Shares: Basic 28,143,685 26,689,907 Diluted 28,661,843 27,237,577 Three Months Ended Reconciliation of Financial August 28, August 29, Statements to GAAP Equivalent: 2005 2004 Pro-forma net income $6,054 $4,343 Stock based compensation (2,076) (1,127) Gain on litigation settlement 600 Acquisition and integration related charges (518) Interest burden (437) Adjustment to gain on prior period sale of division 1,094 Provision for taxes relating to pro- forma adjustments 506 72 Income from discontinued operations 1,885 As Reported Net Income $5,084 $5,312 * This table is included to provide shareholders' and prospective shareholders' additional information to understand the Company's normalized quarterly and annual performance. INTERMAGNETICS GENERAL CORPORATION Condensed Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) August 28, May 29, 2005 2005 ASSETS CURRENT ASSETS Cash and short-term investments $5,014 $6,970 Trade accounts receivable 64,407 60,682 Costs and estimated earnings in excess of billings on uncompleted contracts 790 718 Inventories 50,648 40,265 Prepaid expenses and other 13,126 13,003 TOTAL CURRENT ASSETS 133,985 121,638 PROPERTY, PLANT AND EQUIPMENT, net 44,259 42,974 GOODWILL, INTANGIBLE AND OTHER ASSETS 224,055 225,036 $402,299 $389,648 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $22,611 $12,404 Accounts payable 21,101 22,136 Salaries, wages and related items 18,481 16,029 Customer advances and deposits 1,321 1,951 Product warranty reserve 3,973 4,073 Income tax payable 2,831 3,305 Other liabilities and accrued expenses 8,654 10,189 TOTAL CURRENT LIABILITIES 78,972 70,087 LONG-TERM DEBT, less current portion 18,596 19,885 NOTE PAYABLE 5,000 5,000 DEFERRED INCOME TAXES 19,782 19,618 DERIVATIVE LIABILITY 22 52 SHAREHOLDERS' EQUITY 279,927 275,006 $402,299 $389,648 INTERMAGNETICS GENERAL CORPORATION SUMMARY OF PERFORMANCE AGAINST GOALS Three Months Ended August 28, August 29, 2005 2004 Goal Gross Margin(1) 44% 45% 45% Operating Income: Percent of Sales(1) 14% 13% 15% Percent of Net Operating Assets(1)(2) 40% 49% 50% Return on Equity (1)(2) 9% 8% 15% Working Capital Efficiency (Working capital, less cash divided by net sales)(1)(2) 17% 14% 15% (1) Based on normalized data; (2) Based on annualized data SEGMENT DATA Three Months Ended August 28, 2005 Magnetic (Dollars in Thousands) Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $28,115 $28,115 Patient Monitors & RF Coils $39,866 39,866 Other $3,035 3,035 Total 28,115 39,866 3,035 71,016 Segment operating income (loss) 6,804 4,647 (1,745) 9,706 Total assets $131,007 $258,687 $12,605 $402,299 August 29, 2004 Magnetic Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $24,103 $24,103 Patient Monitors & RF Coils $25,871 25,871 Other $1,550 1,550 Total 24,103 25,871 1,550 51,524 Segment operating income (loss) 4,362 4,351 (2,102) 6,611 Total assets $135,318 $234,131 $10,099 $379,548 Three Months Ended August 28, 2005 August 29, 2004 Reconciliation of income before income taxes: Operating income from reportable segments $9,706 $6,611 Non-cash stock based compensation (2,076) (1,127) Acquisition and integration related items (518) Net Operating Profit 7,630 4,966 Interest and other income 154 201 Interest and other expense (646) (1,012) Gain on litigation settlement 600 Adjustment to gain on prior period sale of division 1,094 Income before income taxes $7,738 $5,249 Reconciliation of Metrics to GAAP Equivalent: Three Months Ended August 28, 2005 Operating Income as a Gross Percent of Return on Margin Sales Equity As Reported GAAP Equivalent 44% 11% 7% Effect of non-cash related charges and gain on litigation settlement 3% 1% Effect of averaging 1% Pro-forma metrics 44% 14% 9% Three Months Ended August 29, 2004 Operating Income as a Gross Percent of Return on Margin Sales Equity As Reported GAAP Equivalent 45% 10% 9% Impact of excluding Polycold (3%) Effect of acquisition, integration, non-cash related charges and gain on sale of securities 3% 2% Effect of averaging Pro-forma metrics 45% 13% 8% DATASOURCE: Intermagnetics General Corporation CONTACT: Michael Burke, Exec. VP & CFO, or Cathy Yudzevich, IR Manager, of Intermagnetics General Corporation, +1-518-782-1122 Web site: http://www.igc.com/

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