Companies in the News
Companies in the News
Government to consolidate Columbia suits
The U.S. Justice Department (Washington) has filed a motion to consolidate all outstanding whistle-blower cases against Columbia/HCA Healthcare (Nashville, TN), reported The Wall Street Journal. The move, the paper reports, might edge the government closer to a settlement of its fraud investigation of the company that started almost two years ago. In papers filed with a judicial panel, government officials stated their desire to complete the probe of Columbia, which is considered to be the largest Medicare fraud inquiry ever launched, and said they wanted to do so without unnecessary litigation, reported the Journal. The Justice Department is asking for six whistle-blower suits against Columbia to be consolidated and transferred to a single venue, the U.S. District Court in Washington, DC. Several other whistle-blower suits that remain under seal would be included in this consolidation. The suits allege a host of improper practices on the part of Columbia, including Medicare billing practices at some of the home health agencies the company formerly owned. Industry experts, reported the Journal, believe Columbia will end up having to pay a massive settlement, maybe as high as $1 billion, to resolve the cases outstanding.
CCSE chooses financial advisor
Community Care Services (CCSE; Mt. Vernon, NY) said last week it has engaged Pinnacle Partners (Miami, FL) to act as its exclusive financial advisor to, among other things, explore the company’s strategic alternatives to enhance shareholder value. CCSE also said its annual meeting for shareholders has been rescheduled for March 23.
Fox Payne, Byram team up
Fox Payne & Company (Foster City, CA), the manager of a $500 million investment fund focused on investing equity capital in growth-oriented management buyouts, start-ups, and restructurings, and the management team of Byram Healthcare Centers announced last week the completion of a growth-oriented investment in privately held Byram, a leader in the medical supplies distribution industry for home healthcare patients. Terms of the investment were not disclosed. Jeremy Jones, former chairman/CEO of Apria Healthcare Group (Costa Mesa, CA), has been appointed Byram’s chairman, and Raymond Noeker, Apria’s former vice president of planning and development, has been appointed Byram’s CEO. Frank Zarka, also formerly at Apria, has been named COO for Byram. Joining the former Apria executives to head the Byram team are Lawrence Janes and Peter Phillips, who were Byram’s principal shareholders prior to Fox Paine’s investment. They will continue as CFO and senior vice president of acquisitions, respectively.
HFP reports increase in FY98 revenues
Healthcare Financial Partners (HFP; Chevy Chase, MD), which provides financing to home healthcare companies, reported FY98 revenues of $57.7 million, a jump of 108% from FY97 revenues of $27.7 million. The company recorded a net income in FY98 of $19.8 million, $1.52 per share, up from a FY97 net income of $8 million, 96 cents per share.
The company’s total revenues for 4Q98 were $15.1 million, compared to revenues totaling $9.8 million in 4Q97. HFP reported a net income for the quarter of $5.8 million, 42 cents per share, up from $3 million, 30 cents per share, in 4Q97. In addition, HFP ended FY98 with $437 million in finance receivables, up from $390 million at the end of 3Q98. During the year, the company formed a real estate investment trust, HealthCare Financial Partners REIT.
Help At Home reaches record 2Q99 revs
Help At Home (Chicago) said last week it reached record levels of net revenue in 2Q99 ended Dec. 31. Net revenue increased 20% in the quarter, reaching $7 million, compared to revenues of $5.8 million in 2Q98. The company recorded a net income in 2Q99 of $136,000, 7 cents per share, compared to a 2Q98 net loss of $207,000, 11 cents per share. Chairman/CEO Lou Goldstein said the results show the company focused during the quarter on its "strategic plan of streamlining operations, reducing expenses, and emphasizing core business services."
Invacare declares cash dividend
Invacare’s (Elyria, OH) board of directors have declared a cash dividend of $.0125 per share on its common shares and $.011364 per share on its Class B common shares payable April 15 to shareholders of record on April 1.
In other news, the company just received 501k clearance for the Invacare Top End Terminator SS suspension wheelchair, which features front suspension casters designed for a smooth ride. Its base price is $2,595.
Mallincrodt terminates rights plan
Mallinckrodt (St. Louis, MO) decided to terminate its rights plan, giving shareholders a redemption payment of 5 cents a share. The company also declared a dividend of 11 cents to reflect the rights redemption. Both are payable March 31 to shareholders of record March 15. The company will recommend to the board to continue paying the regular quarterly dividend of 16.5 cents in future quarters. Facing stockholder criticism of the takeover-defense plan, Mallinckrodt promised last summer to either cancel it or put it to a shareholder vote by the 1999 annual meeting. They decided to terminate it to avoid the "distraction and expense" of a shareholder vote, reported The Wall Street Journal. Some stockholders consider the plans "poison pills" used to entrench management, rather than protect their interests.
The company has also restated its results for FY98 and 1Q99 to reflect restated charges for research and development in the 1997 $1.9 billion acquisition of Nellcor Puritan Bennett. The Securities and Exchange Commission (Washington) last month recommended that the company recalculate and restate the research and development charge. The SEC is concerned that many companies are "managing" earnings to meet analyst expectations and to avoid a drop in stock price, reported Dow Jones Business News. For FY98, the company reported a net loss of $2.81 per share. Its restated results are: 4Q98 earnings of 13 cents per share; 3Q98 earnings of 38 cents per share; 2Q98 losses of 7 cents per share; and 1Q98 losses of $4.13 a share. Results for 1Q99 ended Sept. 30 are earnings of 43 cents per share.
McKesson sells 60 systems
McKesson HBOC (San Francisco) sold more than 60 Practice 2000 systems during 1998. The product is the company’s family of applications designed for large medical group practices, clinics, and physician organizations.
In other news, more than 70 members of McKesson’s senior management group for healthcare information technology and supply management have agreed to purchase about 1.2 million shares of common stock for a total of $76 million based on the closing share price on Feb. 5. Five-year interest-bearing loans will fund their purchases. President/CEO Mark Pulido purchased 150,000 shares, bringing his total holdings to 450,000 shares, and Chairman Charles McCall bought 155,400 shares, increasing his holdings to 1.7 million shares. With the purchases, employees will hold about 20% of the company’s outstanding stock. Also, as part of an incentive and retention program, the company has granted a significant number of non-qualified stock options at $73 per share.
MiniMed seeks approval of sensor
MiniMed (Sylmar, CA) is scheduled to go before a Food and Drug Administration (Washington) advisory panel to gain approval to sell a sensor that continuously measures glucose in the blood. The system should be less painful for diabetics who now must prick their finger and draw blood several times a day, reported The New York Times. Eventually, the company may sell a mechanical pancreas in which a pump would automatically dispense insulin in response to glucose levels detected by the sensor. Minimed sales in FY98 were $138.6 million, compared to FY97 sales of $99.5 million. Net income was $13 million, 92 cents a share, compared to $6.7 million, 49 cents a share, in the previous year. In 4Q98 ended Jan. 1, net income was $4.8 million, 33 cents a share, on revenues of $45.6 million, compared to 4Q97 net income of $2.2 million, 16 cents a share, on revenues of $32.4 million. The 1997 figures include a $1 million, 5 cents a share, merger charge. The company expects to have funding in March to begin construction of its Northridge, CA, headquarters.
PSA holds 3rd annual meeting
Pediatric Services of America (Norcross, GA) has had quite a time getting enough shareholder votes to do anything at its annual meeting. During the Jan. 20 meeting, executives realized that too few votes had been cast to constitute a quorum. They blamed northeastern U.S. ice storms on delaying the delivery of proxy materials to shareholders, reported The Wall Street Journal. The company tried again on Feb. 2, but still didn’t have enough votes to reappoint directors whose terms expired that day. The company scheduled a third annual meeting on Feb. 19.
Gulf South acquires two distributors
PSS World Medical’s (Jacksonville, FL) Gulf South Medical Supply subsidiary recently made two strategic acquisitions of privately held nursing home distributors totaling $20 million in additional revenues. The company acquired National Med Supply (Dayton, OH) and Medical Specialized Systems (Birmingham, AL). Terms of the transaction were not released. Both companies will become part of the Gulf South Medical Supply division, the company said.
The transactions, officials said, will add $20 million to the company’s revenue base and 15 sales representatives.
Respironics Y2K compliance to cost $11M
Respironics (Pittsburgh) expects its Year 2000 compliance efforts will cost about $11 million, according to a company report filed with the Securities and Exchange Commission (Washington). The company said that "a program management office is in place consisting of full time staff resources from the company and a consulting firm." A preliminary review showed the company will have no major problems relating to the compliance. The majority of the costs are due to the ERP system installations and upgrades. The costs will be capitalized and charged to expense over the estimated life of the software and hardware.
Transworld breaks even in 1Q99
Transworld Healthcare (Clark, NJ) reported a 6% increase in its 1Q99 revenues of $40.1 million, compared with 1Q98 revenues of $37.8 million. The increase is mostly due to the company’s growth and strong performance in its United Kingdom home care subsidiary, the company said. Net income for 1Q99 was $4,000, compared to $347,000 1Q99. The company broke even on its earnings per share, compared to a net income of 2 cents per share in 1Q98. The decrease in net income is the result of the company’s sale of its domestic nursing operation, Transworld Home Healthcare, during 3Q98, as well as higher costs for increased sales efforts.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.