Fourth quarter, equipment, supplies and accessories sales totaled $7.1 million, compared to $6.7 million during last year’s comparable quarter. Service revenues for the fourth quarter decreased $26,000, or 2%, to $1.1 million compared to last year’s fourth quarter. The decrease in 2012 fourth quarter service revenues reflects the Company’s strategic decision to no longer support older customer equipment as the parts needed to meet our service standards are no longer available. We will focus on transitioning these customers to newer MGC Diagnostics equipment. For the 2012 fourth quarter, the Company recorded a gain of $816,000 related to the sale of its New Leaf assets to Life Time Fitness, Inc. Overall, the Company reported net income of $790,000, or $0.20 per diluted share, versus net income of $391,000, or $0.10 per diluted share, in the comparable quarter last year.

Gross margin for the quarter was 55.1% compared to 56.2% in the fourth quarter of fiscal year 2011, respectively. This decrease is due in part to lower margin Group Purchasing Organization (GPO) sales accounting for a higher percent of fiscal 2012 Company sales. For the fourth quarter and fiscal year, GPO sales increased 176% and 218%, as compared with the prior year quarter and fiscal year, respectively. GPO sales accounted for approximately 58% and 45% of total sales for the just completed quarter and fiscal year, respectively.

Fourth quarter 2012 general and administrative expenses totaled $1.2 million versus $1.1 million in the comparable quarter last year. Sales and marketing expenses were $2.5 million compared to $1.8 million in the fourth quarter of fiscal year 2011. Increases included GPO fees, personnel/consulting and related meeting, travel and convention costs introducing rebranded products, as well as separation costs totaling $90,000 for terminated sales and marketing management positions. Research and development costs were $791,000 compared to $852,000 in last year’s fourth quarter.

For fiscal year 2012, the Company reported total revenues of $27.2 million compared to $27.0 million in fiscal year 2011. Income from discontinued operations was $1.1 million, reflecting a gain of $816,000 attributable to the sale of the Company’s New Leaf assets to Life Time Fitness, Inc. on August 28, 2012, compared to a loss of $712,000 in fiscal 2011 (see “Discontinued Operations” below). The Company reported a net loss of $1,000, or $(0.00) per fully diluted share, compared to a net loss of $152,000, or $(0.04) per diluted share in fiscal year 2011.

Gregg O. Lehman, Ph.D., president and chief executive officer of MGC Diagnostics, said, “As we enter fiscal year 2013, the former Angeion Corporation has completely transformed into MGC Diagnostics, a highly focused global medical technology company specializing in cardio/respiratory health solutions. We have reconfigured and strengthened the executive management team and now have the appropriate skill sets to consistently grow the company. We have streamlined the sales and marketing management team to enhance efficiencies that will drive sales. We have successfully rebranded our products and corporate identity by leveraging the strength of our highly respected MedGraphics brand and we concluded the sale of our New Leaf operations to Life Time Fitness, Inc.

“From an operating standpoint, we have taken a major step in stabilizing, and bringing a level of predictability to our revenue stream by having expanded our GPO (group purchasing organization) sales channel in the U.S. Given that a majority of hospitals in the U.S. are members of a GPO, this distribution channel has the ability to effectively showcase our products on a much wider scale than we could ever do in-house. These types of efficiencies permit us to focus our resources on reengineering and refreshing our existing products and developing new products to drive future growth.

“In the just concluded fiscal year,” continued Dr. Lehman, “we initiated the roll-out of our new Real Time Diffusion product, which has been very well received to this point and that we expect will generate substantial traction in fiscal 2013. We expect to introduce two new products in fiscal 2013 that will be important contributors to the top and bottom lines in the coming years. New product development is a priority at MGC Diagnostics and we are uniquely positioned to bring innovation to a space that has traditionally relied on older technology. We are focusing on improving operating efficiencies, achieving better patient outcomes and managing costs in a manner consistent with the needs of the market and the coming regulatory requirements.”