See through: Radlink turns digital X-ray from a concept into a viable product.

INNOVATIVE technology will only take you so far, Radlink Inc. president and founder Richard Gerlach has learned.

His dream of putting affordable digital X-ray equipment in thousands of clinics and doctor's offices around the world wasn't going to get off the ground unless his South Bay company brought in experts who could help raise capital, build distributor networks and ramp up production to match customer demand.

That's what led veteran investment banker Thomas Hacking, a major backer of the company, to come on board as Radlink's chief executive in July. Hacking filled the holes in his expertise by recruiting managers and board members with years of experience in the medical profession and manufacturing industry.

Founded in 1999, Radlink got its start by helping health care providers transition into the digital age with equipment and software to convert bulky X-ray films into a more efficiently stored and managed electronic form. Its latest product is a filmless imaging system that uses proprietary laser and fiber optic technology developed by Gerlach.

Manufacturing costs are low enough that the new machine, the CR Pro, can be sold for around $45,000, compared to the $125,000 to $150,000 for the high-end systems found at a typical imaging center.

Though competing with more than two dozen other medical imaging equipment makers, Gerlach said he was motivated by the belief that he could create a product that could reach a wider audience.

"For me, it's the idea of creating technology that has some characteristics that are beneficial to the world, a better way of doing something out there," he said. "And in the process, create wealth."

The company last month moved from 9,000-square-foot offices in Torrance to a 30-square-foot facility in Redondo Beach, just in time to ramp up production on the CR Pro, which recently began shipping to customers.

"I'm taking Dick's technology and turning it into a business," Hacking said. "I initially was going to come in two days a week just to help out, but now I'm here six days a week because we're growing so fast."

Gerlach had helped develop key technology used in floppy disk drives and airport security X-ray equipment before turning his attention to medical radiology Hacking, a former executive at Kemper Securities, continues to run his own investment and merchant banking firm, Hacking and Co., which he founded in 1992.

Film free

Traditional X-ray film has long been a logistical headache for radiology groups, physicians, diagnostic imaging centers, hospitals and health clinics. Films have to be stored in climate-controlled rooms and, because of their size and fragility, are cumbersome and time-consuming to transport to other locations.

Digital radiology overcomes many of those shortcomings.

Digital X-rays taken at a rural medical clinic, for example, can be sent over the Internet to a radiologist for analysis within hours rather than days. Doctors in small offices could have routine images taken and analyzed in their office during the same appointment, rather than referring patients to an imaging center requiring a separate appointment.

Radlink's first product, the LazerPro 16 Digitizer, is a transitional product enabling medical facilities to convert their archives of conventional X-rays into digital images. The company also markets proprietary software for organizing and accessing the database of images either locally or remotely. The CR Pro eliminates the need to use a separate piece of film for each X-ray.

Gerlach expects revenues could grow to at least $8 million in the coming year.

Digital radiology picked up in the United States about five years ago. Previously doctors and hospitals resisted because of cost and concerns over image quality.

Arlington, Wis.-based Radiographie Services Inc., part of Radlink's network of master dealers, still saw hall its sales last year come from conventional X-ray equipment, said president Tom Howard.

"It's still a matter of cost," Howard said. "I'm really expecting that products like the CR Pro, which have the features of systems that cost three times as much, are what could convince smaller practices to finally make the switch."

Gerlach raised the initial $2 million to launch his company from family and friends. In 2004, Hacking and some of his investment clients invested an additional $2 million. Then last year, a few of those same investors kicked in an additional $3 million.

Radlink Inc.

Year Founded: 1999

Core Business: Develops and manufactures digital medical imaging equipment

Revenues in 2004: $1.6 million

Revenues in 2005: $2.5 million

Employees in 2004: 12

Employees in 2005: 31

Goal: To become the market leader in affordable medical imaging equipment

Driving Force: Customers who haven't been able to afford existing high-end systems