Companies in the News
Allied reports loss for FY99
Allied Healthcare (St. Louis) reported FY99 revenues of $72.8 million, compared to revenues of $96.5 million in FY98. About $10.4 million of the decrease in sales is attributable to FY98 revenues generated by Bear Medical prior to its sale in October 1998, the company said. In addition, home care product sales suffered in FY99 due to shipping delays resulting from the reduction of B&F Medical’s manufacturing operations, Allied said, and emergency product sales were hurt by the recall of LSP oxygen regulators. Allied posted a net loss in FY99 of $4.1 million, 53 cents per share, compared to a net loss in FY98 of $7.4 million, 95 cents per share.
According to Chairman John Weil, medical gas products, which account for more than half of the company’s revenues, posted solid 4Q99 sales gains, and emergency product sales rebounded as Allied began shipping the new LSP oxygen regulators. He said sales continued to lag in the B&F home care products division during 4Q99, but he added that B&F production has stabilized, and Allied continues efforts to improve efficiency and lower manufacturing costs through outsourcing arrangements.
Allied posted a net loss in 4Q99 of $0.7 million, 10 cents per share, compared to a 4Q98 net loss of $0.3 million, 4 cents per share.
Apria gets new rating
Standard & Poor’s (New York) revised its outlook on Apria Healthcare (Costa Mesa, CA) last week to stable from negative. S&P’s also affirmed its BB- corporate credit and bank loan ratings and its B subordinated debt rating for Apria.
The outlook revision, said S&P’s, reflects the improvement in Apria’s operating performance and the company’s enhanced financial flexibility that now allow it to better cope with limited pricing flexibility. While the home care environment continues to be harsh, Apria’s bolstered financial position should provide an adequate cushion for the rating, S&P’s said.
Continental completes purchase of Tenet assets
Continental Home Healthcare (Vancouver, British Columbia) has completed the acquisition of substantially all of the assets of Tenet HealthSystem QA’s Queen of Angels-Hollywood Presbyterian Medical Center home medical equipment business. Continental has paid $65,000 for substantially all of the assets of the home medical equipment business, which is operating within the Queen of Angels-Hollywood Presbyterian acute care hospital, including inventory and accounts receivable. The transaction also includes all capital inventory currently rented to more than 200 patients in the Los Angeles area and has a retroactive effective date of June 1. The equipment rented to the Los Angeles patients represents about $20,000 to $25,000 in monthly revenue, according to Continental CEO Robert Thornton. The company plans to service the new patients for its existing operation in Glendale, CA, and does not expect any additional expenses for this new revenue stream.
Court date set for Coram, Aetna dispute
Coram Healthcare (Denver) has set an April court date for its Aetna U.S. Healthcare (Blue Bell, PA) suit. In June, Coram terminated an agreement with Aetna to manage home health services in Northeast and Mid-Atlantic states. Coram also filed a $50 million lawsuit against Aetna, alleging fraud, misrepresentation, breach of contract, and rescission. The companies will meet in court in April 2000.
Coram said last week that it remains focused on growing its core businesses, despite the recent legal actions relating to the termination of the Aetna contract. "We are resolute that these legal actions will not be allowed to slow the business momentum of the overall company," said Coram President/CEO Richard Smith. "We have sound business lines that are growing and that promise to keep Coram as a leader in the home care industry. We have no intention of losing this momentum."
Smith said Coram’s aggressive business plan includes the following: redesigning the company’s 88 branches for better use of technology; expanding market ing activities for the company’s new Clinical Trials and Medical In for matics subsidiary; creating an e-commerce presence for the Coram Prescription Services subsidiary; and continuing expansion of the infusion therapy business.
Mallinckrodt launches new CPAP
Mallinckrodt (St. Louis) has introduced a new continuous positive airway pressure product (CPAP) in the United States, its third since November 1998. The company’s new GoodKnight 418G home care system is designed to treat patients suffering from obstructive sleep apnea, whose breathing is interrupted during sleep, which, if left untreated, can cause high blood pressure, irregular heartbeats, or even heart failure. The GoodKnight 418G follows Mallinckrodt’s GoodKnight 418 CPAP and its CloudNine auto-CPAP systems on the market in the United States within the past year.
The GoodKnight 418G connects to a mask that patients wear during sleep, Mallinckrodt said. Air pressure generated by the system prevents air passages from being obstructed, which ensures that patient breathing is uninterrupted during the night. The company said the new CPAP is its first intended for worldwide sale.
Olsten branches receive accreditation
Olsten Health Services (Melville, NY) has achieved accreditation from the Joint Commission on Accreditation of Healthcare Organizations (JCAHO; Oakbrook Terrace, IL) at another 24 of its branch offices, including its licensed infusion pharmacy locations, in six regions around the country. Olsten Health said 96% of its branches have now been accredited by JCAHO. Among the branches that were recently accredited are those in the Roseville, MN, region; the King of Prussia, PA, region; the Fall River, MA, region; the Fort Lauderdale, FL, region; the Greensboro, NC, region; and the St. Louis region.
Priority approves stock repurchase plan
Priority Healthcare’s (Altamonte Springs, FL) board approved a stock repurchase program for shares of Priority common stock. Under the program, the company may repurchase up to 2 million shares at its discretion during the next 12 months. The purchases may be made from time to time in the open market or in privately negotiated transactions, depending on market conditions and other considerations. Company officials said that at its current market price, the common stock is an attractive investment for the company. Shares acquired under the repurchase program will be held as treasury shares and will be available for general corporate purposes.
Sabratek again delays filing 2Q99 results
Sabratek (Niles, IL), who received an extended deadline of Aug. 20 to file its 2Q99 financial earnings, said last week that it will not meet the extended deadline and has retained Jay Alix & Associates to develop and implement a restructuring plan, reported Dow Jones News Service. Sabratek first said it would delay releasing its 2Q99 results because independent auditors hadn’t completed a review of the figures. Last week, Sabratek said it is concerned about its low cash position and liquidity, and has authorized Jay Alix to take all steps necessary to improve them.
Sabratek Chairman/CEO Shan Padda and Vice Chairman and Secretary Doron Levitas both have stepped down. Padda will remain a director, the company said, and will assist Jay Alix in the restructuring. A representative of Jay Alix will be appointed acting CEO. Sabratek named Edson Spencer chairman.
Sunrise receives honor
Sunrise Medical (Carlsbad, CA) was honored by The Med Group as their 1999 Vendor of the Year. David Miller, president of The Med Group, presented the award to Sunrise with a speech in which he focused on the themes of unity and perseverance and how Sunrise and The Med Group share those common values.
The company also reported its FY99 financial results. Sunrise saw total revenues in FY99 of $660 million, an increase of 0.5% from FY98 revenues of $657 million. The company posted a net income in FY99 of $4.5 million, 20 cents per share, compared to a net loss in FY98 of $12 million, 55 cents per share. Sunrise said its home healthcare group reported total sales of $343 million in FY99, compared to sales of $344 million in FY98.
For 4Q99, the company reported a net loss of $2.7 million, 12 cents per share, compared to a net loss in 4Q98 of $13.7 million, 62 cents per share. Sunrise saw sales of $162 million in 4Q99, compared to sales of $169 million in 4Q98 a decline of 4%.
U.S. Homecare faces financial problems
U.S. Homecare’s (Hartford, CT) recent financial problems are forcing Connecticut to pay off a $3 million debt on its behalf as the company struggles to reduce its losses and re-work financial arrangements. The company has had to consolidate offices in Connecticut and New York, and in 2Q99, the company reported a net loss of $177,000 and a stockholder’s deficit of $10.8 million, reported the Hartford Courant. The Connecticut Development Authority this month is paying off a $3 million loan it guaranteed to help U.S. Homecare secure credit from Fleet Bank. The loan guarantee was part of a recruitment effort that convinced U.S. Homecare to move to Connecticut from Hartsdale, NY, in 1995, the Courant reported. U.S. Homecare’s credit arrangements expired in January and had been renewed month-by-month through July. But Fleet terminated talks for further extensions and sought payment under the state’s guarantee. U.S. Homecare now owes the state $3 million. The company is trying to negotiate a change in payment terms for its debt with another bank, Thomas Grogan, U.S. Homecare’s CEO, told the Courant.