Companies in the News
Companies in the News
Allied announces net loss and product recall
Allied Healthcare Products (St. Louis) reported a net loss, including a charge for a previously announced product recall, of $1.9 million, 25 cents per share, for 2Q98 ended Dec. 31. The loss compares to a net loss of $6.7 million, 86 cents per share, for the same period last year. Last year’s results, the company said, were impacted by a number of non-recurring items including a gain on the sale of Bear Medical Systems and its BiCore Monitoring Systems subsidiary, a large tax liability on this gain, and the charges recorded for the impairment of goodwill. Revenues for the second quarter were $17.1 million, compared to $24 million in the previous year’s second quarter.
The company said it is preparing to recall oxygen regulators sold under its Life Support Products brand to replace aluminum components in the unit’s high-pressure chambers with brass components. Allied is taking this action in cooperation with the Food and Drug Administration (FDA; Washington) in response to reports of fires and explosions, the exact cause of which remains unknown. The FDA is expected to recommend that all aluminum oxygen regulators be taken off the market and replaced. Allied will soon be introducing new brass regulators and will offer a trade-in program to existing users. In connection with this product recall and replacement plan, the company recorded a charge of $.9 million, 12 cents per share, in this quarter.
Continental wins return of $237,000
Continental Home HealthCare, formerly Canadian Medical Legacy, has won the return of $237,000 held under a garnishing order by Busnex Business Exchange. In a unanimous decision released last week, the Court of Appeal for British Columbia directed the release of $299,991 into court, less deemed debts of $62,100, reported Canada Stockwatch. The dispute traces back to Sept. 26, 1997, when Busnex, a disgruntled dealmaker, filed a $300,000 suit seeking a finder’s fee for a previously failed acquisition in Alberta. The suit was filed two weeks after Canadian Medical Legacy raised $4 million for the acquisition of Continental Hospital Supply of California.
Busnex claims it is fully entitled to a $272,500 commission for Legacy’s proposed $4.2 million purchase of Health Care & Rehab Specialties, even thought the deal collapsed in January 1997.
Coram purchases Cognitive Design
Coram (Denver) has purchased the assets of Cognitive Design Associates (Upper Saddle River, NJ), a consulting company specializing in the research, development, and implementation of new product lines and business models for healthcare industry and clinical staff education processes that utilize computer and Internet-based training strategies. Kate Douglass, co-founder of Cognitive Design, has been named vice president of nursing for Coram, a newly created position. In this role, Douglass will be responsible for overseeing Coram’s nursing functions. Eric Kastango, Cognitive Design’s co-founder, has been appointed vice president of pharmacy services succeeding David McCormick, who has been promoted to president of Coram’s newly created Clinical Research and Medical Informatics Division. In his new position, McCormick will be responsible for managing Coram’s pharmacy operations.
Healthsouth’s rating changed to stable
Healthsouth’s (Birmingham, AL) negative rating from Standard & Poor’s (S & P’s) has been changed to stable. S & P’s also reaffirmed its ratings on the company. "The outlook revision follows clarification of the company’s financial policies subsequent to a sharply reduced stock price ad increased managed care pricing pressure," S & P’s said. "The investment-grade ratings incorporate the company’s success over the past couple of year’s in acquiring, pruning, and integrating its healthcare activities. This has contributed to its position as the leading operator of rehabilitation facilities and as a leading operator of medical centers, outpatient surgery centers, and diagnostic imaging centers." Still, S & P’s said, Healthsouth faces significant pricing pressures from managed care providers and governmental payers.
Interwest establishes new web page
Interwest Home Medical (Salt Lake City) has established a world wide web home page, www.iwhm.com, where customers can place orders and shareholders can find links to financial information. The company has also set a time for its annual meeting of shareholders at 3 p.m. April 8 in Sandy, UT, when a new board of directors will be elected.
Lincare reports 10% increase in FY98 revenues
Lincare Holdings (Clearwater, FL) reported $487.4 million in revenues for FY98 a 10% increase over $443.2 million for FY97. Net income for the year ended Dec. 31 was $85.3 million, $1.44 per share, compared to $80.1 million, $1.37 per share, for the previous year. During FY98, Lincare acquired 24 companies with annual revenues of $58 million, and it added 70 new operating centers, explaining its increase in revenues, said Lincare CEO John Byrnes. The company was also affected by a 25% reduction in Medicare payments for oxygen and related products, and by a 5% reduction for drugs and biologicals.
Revenues for 4Q98 were $130.3 million, compared to $118.7 million for 4Q97. Net income for 4Q98 was $23.7 million, 40 cents, compared to $14.7 milion, 25 cents, for 4Q97.
Mallinkrodt acquires $3.5M company
Mallinckrodt (St. Louis) acquired Life Design Systems (LDS; Dallas) for $3.5 million at the end of January. LDS produces resuscitation bags with carbon dioxide detection capability, a feature that could become the standard of care when providing manually assisted ventilation, said Mallinckrodt President John Hesemann. Mallinckrodt bought all outstanding LDS stock and related intellectual property, free of debt. The company will assume the existing lease in Dallas, but plans to relocate production within 18 months.
National Healthcare gets new symbol
National Healthcare Manufacturing Corp. (Winnipeg, Manitoba) is now trading on the Nasdaq market under the symbol, NHMC. The symbol change is a result of a change in Nasdaq listing requirements.
Olsten FY98 revenues increase
Olsten (Melville, NY) saw FY98 revenues increase 12% to $4.6 billion, compared to FY97 revenues of $4.1 billion. But net income for FY98 ended Jan. 3 was $4.4 million, 5 cents a share, compared to $93 million, $1.15 a share, the previous year. The FY98 results include a one-time charge of $40 million, 50 cents a share, for the restructuring of the home health business, which will result in the closure of 60 field offices. 4Q98 net income was $12.5 million, 15 cents a share, on revenues of $1.3 billion, compared to 4Q97 net income of $23.3 million, 29 cents a share, on revenues of $1.08 billion. Olsten’s 4Q revenues increased due to acquisitions and growth in Europe operations, but its 4Q earnings fell 46% partly because of an operating loss in its health services business.
New credit facility for Option Care
Option Care (Bannockburn, IL) has a new $25 million credit facility through Bank America Business Credit, a subsidiary of Bank of America. The facility will replace a previous borrowing arrangement with four banks. The three-year secured line of credit will be used for working capital and general business purposes. Option Care CFO Michael Siri said the new facility reflects a "growing confidence" in the company’s new management team. The team has significantly reduced the $28 million in outstanding debt, Siri said.
Rehabilicare’s U.K. subsidiary to distribute Babitens
Rehabilicare (Laguna Niguel, CA) has formed a subsidiary in the United Kingdom, which has acquired the electrotherapy business there. Primarily, the new business will distribute Babitens, a device used to help women manage their pain during labor and delivery. Rehabilicare wants to consolidate the home electrotherapy industry, said President/CEO David Kaysen. He will discuss the transaction and growth strategies in a presentation Feb. 12 in Laguna Niguel at the Cruttenden Roth Growth Stock Conference.
Star tightens operations for savings
By lowering fixed costs, maximizing a new computer system, and eliminating 30 positions, Star Multi Care Services (Hicksville, NY) hopes to save $900,000 this fiscal year. Efficiencies gained through the new computer system should result in the savings effective March 1, said President/CEO Stephen Sternbach. That should return the company to profitability in 4Q99 ending May 31, he said. The company posted a 4Q98 loss of $881,512, 20 cents a share, on revenues of $14.4 million.
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