Intermagnetics Reports Solid Increases in Q2 Revenue, Net Income

Share Name	Share Symbol	Market	Type
Intermagnetics General	NASDAQ:IMGC	NASDAQ	Common Stock

Intermagnetics General (NASDAQ:IMGC)
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- MRI Magnet, Medical Device Sales Remain Strong LATHAM, N.Y., Jan. 3 /PRNewswire-FirstCall/ -- Intermagnetics General Corporation (NASDAQ:IMGC) today reported that second-quarter normalized net income from operations increased 25 percent to $8.5 million, or $0.30 per diluted share, from $6.8 million, or $0.24 per diluted share, a year earlier. Reported net income increased to $6.8 million, or $0.24 per diluted share, from $4.1 million or $0.15 per diluted share. Revenues for the quarter ended November 27, 2005, climbed about 18 percent to $78.1 million from $66.2 million. For the first six months of fiscal 2006, normalized net income rose to $14.5 million, or $0.51 per diluted share, from the prior-year period's $11.2 million, or $0.40 per diluted share. Reported six-month net income was $11.9 million, or $0.42 per diluted share, compared with $9.4 million, or $0.34 per diluted share. Revenue increased to $149.1 million from $117.7 million. "Our operating segments continued to deliver strong performance during the second quarter," said Glenn H. Epstein, chairman and chief executive officer. "Our technology and product leadership within the overall MRI market remains the cornerstone of our ongoing business, and we believe we remain on target to meet our previously forecasted sales growth of greater than 15 percent, with earnings increasing more than 20 percent compared with normalized continuing operations last fiscal year." Conference Call Tomorrow The company will discuss its second-quarter results, as well as other developments during a conference call Wednesday, January 4, 2006, beginning at 11 a.m. EST. 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. EST January 4, 2006, through 11:59 p.m. January 16, 2006, by dialing 201-612-7415-account number 249. Callers should select conference number 181831. 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; 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 Six Months Ended November 27, November 28, November 27, November 28, 2005 2004 2005 2004 Revenues $78,112 $66,175 $149,128 $117,699 Cost of revenues 42,952 34,946 82,822 63,354 Gross margin 35,160 31,229 66,306 54,345 Product research and development 7,635 6,188 14,971 11,147 Selling, general and administrative: Stock based compensation 3,153 3,441 5,229 4,568 Other selling, general and administrative 13,433 14,807 26,140 25,487 Amortization of intangible assets 1,267 1,673 2,664 3,057 Impairment of intangible assets 913 913 25,488 27,022 49,004 45,172 Operating income 9,672 4,207 17,302 9,173 Interest and other income 1,033 211 1,187 412 Interest and other expense (945) (1,117) (1,591) (2,129) Gain on litigation settlement 600 Adjustment to gain on prior period sale of division 648 648 1,094 Income from continuing operations before income taxes 10,408 3,301 18,146 8,550 Provision for income taxes 3,570 934 6,224 2,756 INCOME FROM CONTINUING OPERATIONS 6,838 2,367 11,922 5,794 Discontinued operations: Income from operations of discontinued subsidiary 2,708 5,594 Provision for income taxes 941 1,942 INCOME FROM DISCONTINUED OPERATIONS - 1,767 - 3,652 NET INCOME $6,838 $4,134 $11,922 $9,446 Basic Net Income per Common Share: Continuing operations $0.24 $0.09 $0.42 $0.22 Discontinued operations 0.06 $0.13 Basic Net Income per Common Share $0.24 $0.15 $0.42 $0.35 Diluted Net Income per Common Share: Continuing operations $0.24 $0.09 $0.42 $0.21 Discontinued operations 0.06 $0.13 Diluted Net Income per Common Share $0.24 $0.15 $0.42 $0.34 Shares: Basic 28,169,367 27,979,535 28,156,526 27,334,721 Diluted 28,659,027 28,478,513 28,636,899 27,801,185 INTERMAGNETICS GENERAL CORPORATION RECONCILING STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Amounts) (Unaudited) Three Months Ended Six Months Ended November 27, November 28, November 27, November 28, 2005 2004 2005 2004 Normalized Operations without Acquisition, Integration, Sale and Non-cash items: Revenues $78,112 $66,175 $149,128 $117,699 Cost of revenues 42,952 34,873 82,822 63,143 Gross margin 35,160 31,302 66,306 54,556 Product research and development 7,635 6,188 14,971 11,129 Selling, general and administrative 13,433 13,200 26,140 23,518 Amortization of intangible assets 1,267 1,673 2,664 3,057 22,335 21,061 43,775 37,704 Operating income 12,825 10,241 22,531 16,852 Interest and other income 1,033 211 1,187 412 Interest and other expense (945) (588) (1,591) (1,163) Income from continuing operations before income taxes 12,913 9,864 22,127 16,101 Provision for income taxes 4,429 3,048 7,590 4,942 INCOME FROM CONTINUING OPERATIONS $8,484 $6,816 $14,537 $11,159 Earnings per Common Share: Basic $0.30 $0.24 $0.52 $0.41 Diluted $0.30 $0.24 $0.51 $0.40 Shares: Basic 28,169,367 27,979,535 28,156,526 27,334,721 Diluted 28,659,027 28,478,513 28,636,899 27,801,185 Three Months Ended Six Months Ended November 27, November 28, November 27, November 28, 2005 2004 2005 2004 Reconciliation of Financial Statements to GAAP Equivalent: Pro-forma net income $8,484 $6,816 $14,537 $11,159 Stock based compensation (3,153) (3,441) (5,229) (4,568) Gain on litigation settlement 600 Acquisition and integration related charges (1,680) (2,198) Impairment of intangible assets (913) (913) Interest burden (529) (966) Adjustment to gain on prior period sale of division 648 648 1,094 Provision for taxes relating to pro-forma adjustments 859 2,114 1,366 2,186 Income from discontinued operations 1,767 3,652 As Reported Net Income $6,838 $4,134 $11,922 $9,446 * 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) November 27, May 29, 2005 2005 ASSETS CURRENT ASSETS Cash and short-term investments $10,054 $6,970 Trade accounts receivable 66,328 60,682 Costs and estimated earnings in excess of billings on uncompleted contracts 1,823 718 Inventories 56,766 40,265 Prepaid expenses and other 9,163 8,665 TOTAL CURRENT ASSETS 144,134 117,300 PROPERTY, PLANT AND EQUIPMENT, net 45,186 42,974 GOODWILL, INTANGIBLE AND OTHER ASSETS 229,247 229,374 $418,567 $389,648 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Current portion of long-term debt $212 $12,404 Accounts payable 15,309 22,136 Salaries, wages and related items 9,618 11,691 Customer advances and deposits 1,162 1,951 Product warranty reserve 3,445 4,073 Income tax payable 1,360 3,305 Other liabilities and accrued expenses 7,763 10,189 TOTAL CURRENT LIABILITIES 38,869 65,749 LONG-TERM DEBT, less current portion 58,559 19,885 NOTE PAYABLE 5,000 5,000 DEFERRED INCOME TAXES 20,135 19,618 DERIVATIVE LIABILITY 52 DEFERRED COMPENSATION OBLIGATION 8,047 4,338 SHAREHOLDERS' EQUITY 287,957 275,006 $418,567 $389,648 INTERMAGNETICS GENERAL CORPORATION SUMMARY OF PERFORMANCE AGAINST GOALS Six Months Ended November 27, November 28, 2005 2004 Goal Gross Margin (1) 44% 46% 45% Operating Income: Percent of Sales (1) (2) 15% 14% 15% Percent of Net Operating Assets (1) (2) 42% 45% 50% Return on Equity (1) (2) 10% 9% 15% Working Capital Efficiency (Working capital, less cash divided by net sales) (1) (2) 20% 14% 15% (1) Based on normalized data; (2) Based on annualized data SEGMENT DATA Three Months Ended November 27, 2005 Magnetic (Dollars in Thousands) Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $34,549 $34,549 Patient Monitors & RF Coils $40,727 40,727 Other $2,836 2,836 Total 34,549 40,727 2,836 78,112 Segment operating income (loss) 9,154 5,146 (1,475) 12,825 Total assets $137,119 $269,706 $11,742 $418,567 November 28, 2004 Magnetic (Dollars in Thousands) Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $29,506 $29,506 Patient Monitors & RF Coils $33,644 33,644 Other $3,025 3,025 Total 29,506 33,644 3,025 66,175 Segment operating income (loss) 6,611 5,375 (1,745) 10,241 Total assets $126,371 $243,019 $11,602 $380,992 Six Months Ended November 27, 2005 Magnetic Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $62,664 $62,664 Patient Monitors & RF Coils $80,593 80,593 Other $5,871 5,871 Total 62,664 80,593 5,871 149,128 Segment operating income (loss) 15,958 9,793 (3,220) 22,531 Total assets $137,119 $269,706 $11,742 $418,567 November 28, 2004 Magnetic Resonance Medical Energy Imaging Devices Technology Total Net revenues to external customers: Magnet systems $53,608 $53,608 Patient Monitors & RF Coils $59,516 59,516 Other $4,575 4,575 Total 53,608 59,516 4,575 117,699 Segment operating income (loss) 10,973 9,726 (3,847) 16,852 Total assets $126,371 $243,019 $11,602 $380,992 Three Months Ended November 27, November 28, 2005 2004 Reconciliation of income before income taxes: Operating income from reportable segments $12,825 $10,241 Non-cash stock based compensation (3,153) (3,441) Acquisition and integration related items (1,680) Impairment of intangible assets (913) Net Operating Profit 9,672 4,207 Interest and other income 1,033 211 Interest and other expense (945) (1,117) Adjustment to gain on prior period sale of division 648 Income before income taxes $10,408 $3,301 Six Months Ended November 27, November 28, 2005 2004 Reconciliation of income before income taxes: Operating income from reportable segments $22,531 $16,852 Non-cash stock based compensation (5,229) (4,568) Acquisition and integration related items (2,198) Impairment of intangible assets (913) Net Operating Profit 17,302 9,173 Interest and other income 1,187 412 Interest and other expense (1,591) (2,129) Gain on litigation settlement 600 Adjustment to gain on prior period sale of division 648 1,094 Income before income taxes $18,146 $8,550 Reconciliation of Metrics to GAAP Equivalent: Six Months Ended November 27, 2005 Operating Income as a Gross Percent of Return on Margin Sales Equity As Reported GAAP Equivalent 44% 11% 8% Effect of non-cash related charges and non-recurring gains 4% 2% Effect of averaging Pro-forma metrics 44% 15% 10% Six Months Ended November 28, 2004 Operating Income as a Gross Percent of Return on Margin Sales Equity As Reported GAAP Equivalent 46% 8% 8% Impact of excluding Polycold (3%) Effect of acquisition, integration, non-cash related charges and other non-recurring charges and credits 6% 4% Effect of averaging Pro-forma metrics 46% 14% 9% DATASOURCE: Intermagnetics General Corporation CONTACT: Michael Burke, Exec. VP & CFO, or Cathy Yudzevich, IR Manager, both of Intermagnetics General Corporation, +1-518-782-1122 Web site: http://www.intermagnetics.com/

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