Direct digital innovator Swissray turns a financial corner

For Swissray, the road to success has had a few bumps. Nonetheless, 2000 is going down as a key year for the company, which has seen brisk sales for its ddRCombi and ddRChest-System. Swissray recently reported its first-ever positive cash flow from operating activities.

The systems were introduced at the 1999 RSNA show as complements to Swissray’s ddRMulti-System. Both employ Swissray’s charge-coupled device (CCD)-based digital detector. Some 80 ddRCombis and ddRChest-Systems have been sold since their introduction 10 months ago, numbers the company hopes to surpass in 2001.

Those systems’ introductions came on the heels of a $13.8 million contract with the Romanian government for 32 ddRMulti-Systems.

“The years 1998 and 1999 were lean years on the digital side of the business,” said Ueli Laupper, CEO of Swissray America. “The year 2000 has been tremendously successful. We’re a very solid company.”

Early on in its digital history, Swissray was challenged on two fronts: It had to convince potential customers that direct digital radiography was advantageous, and it had to convince them of Swissray’s ability to provide support. The company rose to those challenges.

So far, Swissray has invested some $80 million in its digital technology. The return in 1998 and 1999 was comparatively modest, as only 20 units were delivered. But this year’s sales have brought the total number of digital units sold to over 100, Laupper said.

“We believe we’ve established ourselves as the undisputed leader in the field of direct digital radiography,” he said.

The last few years have seen a number of events unfold that are significant for Swissray:

• The company rose to relative prominence in 1995 with its AddOn-Bucky, an x-ray digitization system based on CCD technology. Swissray received 510(k) clearance from the FDA for its AddOn-Multi-System two years later. It was eventually rechristened the ddRMulti-System.

• In September 1999, Swissray International signed a distribution agreement with Hitachi Medical Systems America. The agreement, which provided Swissray access to Hitachi’s sales network, gave both firms key leverage in a market each had been working to penetrate.

• In March 2000, the Romanian Ministry of Health gave Swissray a $2 million cash down payment toward its $13.8 million contract to buy ddRMulti-Systems.

• In September, Swissray moved from its midtown Manhattan office to Elmsford, NY. The move put the company in close proximity to Westchester County Medical Center, where it can more easily demonstrate its ddRMulti-System to potential customers.

• In its most recent earnings report, Swissray posted fourth-quarter net revenue of $9.6 million, an increase of 136%. Gross profits totaled $2.5 million for the quarter, up 164%.

The company was delisted from the NASDAQ stock exchange in 1998 after its stock steadily declined to a per-share price below $1. Today, its per-share value is back up, and Swissray hopes to return to the NASDAQ.

“Our vision is to become the company of choice when it comes to direct digital radiography systems,” Laupper said. “We are determined to implement this vision.”