Vital Images, Inc. (VTAL) develops, markets, and supports medical visualization and analysis software for use primarily in clinical diagnosis, disease screening, and therapy planning. The company's software applies proprietary computer graphics and image processing technologies to a wide variety of data supplied by computed tomography (CT), magnetic resonance (MR), and positron emission tomography (PET) scanners. The company's flagship product called Vitrea 2 allow clinicians to create two-, three- and four-dimensional views of human anatomy and to navigate non-invasively within these images to better visualize and understand internal structures and pathologies. Vitrea 2 is typically installed in dedicated workstations and is supported by one or more scanners or offered as a standalone product. The company's other principal software called ViTALConnect provides referring physicians with anywhere, anytime access to medical images and visualization and analysis tools through any Internet-enabled computer. Vital Images markets it products to healthcare providers and to manufacturers of diagnostic imaging systems. In 2003, the company began marketing its products to manufacturers of picture archive and communications systems (PACS). PACS solutions enable hospitals and clinics to acquire, distribute and store medical images digitally, eliminating film-based technology. The company's three-dimensional medical imaging products are marketed through its direct sales force, original equipment manufacturers (OEMs), resellers in the U.S., as well as OEMs and resellers in international markets.
The company generates revenue from the licensing of its software and software options, the sale of system hardware (namely workstations), and the sale of maintenance and service agreements. License fees also include the sale of third party software. Maintenance and services consist of software updates, minor feature enhancements, error correction, telephone support, and other general support services. Other services include installation, training, and engineering services. Engineering services consist of software modification or development services that are sold separately to OEMs. The company derives a significant portion of its revenue from Toshiba Medical Systems Corporation. Vital Images has a marketing and distribution agreement with Toshiba, which names Vitrea 2 as Toshiba's primary three-dimensional software for use with their CT scanners in more than 50 countries in North and South America, Europe, the Middle East, Africa, Australia and Asia (except Japan). In the first quarter 2005, the company expanded this agreement into cardiology. Toshiba also offers Vital Images' software solution called ViTALCardia with its CT scanners for performing specific Vitrea applications that include coronary vessel analysis, cardiac functional analysis, calcium scoring, and peripheral vessel analysis. Sales to Toshiba accounted for approximately 41% of total revenue in 2006. The marketing and distribution agreement with Toshiba was renewed for two years (through 2008). License fees, maintenance and services revenue, and hardware revenue contributed 66%, 32% and 2%, respectively, to total 2006 revenue.