Companies in the News
Graham-Field loses $50 million refinancing
Graham-Field Health Products Inc. (Bayshore, NY) said BankBoston NA will not proceed with a $50 million refinancing that was announced in August. The money was going to refinance the company’s current indebtedness under its credit facility with IBJ White hall Business Credit Corp., as well as provide ongoing working capital needs. Graham-Field did not explain why the refinancing was cancelled. The company intends to pursue alternative sources and the sale of certain non-core assets. It is also considering a restructuring or reorganization.
The company was delisted from the New York Stock Exchange July 12 for failing to meet listing requirements. It reported a net loss of about $49 million, $1.61 a share, for FY98 ended Dec. 31.
On Friday, Standard & Poor (New York) lowered its corporate credit and bank loan ratings on Graham-Field to triple-C-minus from triple-C. It lowered its rating on the company’s subordinated debt to single-C from double-C. The outlook is negative. S&P took the actions because of Graham-Field’s announcement that it will not proceed with the $50 million secured credit facility. Even though the company made its most recent bond interest payment, its liquidity problem has not been solved, S&P said.
HealthSphere to liquidate home health operations
HealthSphere of America Inc. (Memphis, TN) is liquidating its Medicare-funded home healthcare operations in Chattanooga, Memphis and Springfield, MO. This year, about 80 home healthcare agencies in Tennessee have left the business and five major agencies have filed for bankruptcy, reported the Chattanooga Times/Free Press. HealthSphere, a 22-year-old company, filed for bankruptcy in June. Last week, it converted three of its eight companies from Chapter 11 to Chapter 7 bankruptcy, meaning it will liquidate the companies rather than reorganize them. HealthSphere once made more than 250,000 home health visits a year, but it will make fewer than 70,000 this year, the paper reported.
Infu-Tech to distribute Access Med’s products
Infu-Tech Inc. (Carlstadt, NJ) said health insurer Access Med Plus has selected Infu-Tech as the distributor for specialty pharmaceuticals, including Synagis, a drug for the treatment of respiratory syncytial virus, which affects people under 2-year-old. Patients will be able to purchase the products from home on-line and receive healthcare and disease management support from medical professionals, the company said.
Invacare expects to meet analyst estimates in 3Q
Invacare Corp. (Elyria, OH) said it expects to meet analyst earnings expectations for 3Q99 despite a slow domestic sales growth. As long as sales continue to grow in Europe, Asia and Australia and the company aggressively contains costs, it should meet an earnings per share estimate of 46 cents. Invacare also said it was comfortable with earnings expectations of $1.64 per share for the year before charges for the acquisition of Scandinavian Mobility International AS. The acquisition will take one time charges in the fourth quarter of between $10 million and $12 million before tax, or 20 cents to 24 cents per share after tax, for the closing and consolidation of European facilities. The acquisition should generate between an earnings per share accretion of 15 cents to 20 cents in 2000, and an additional 10 cents in 2001, the company said.
In other news, the company’s associates voted to remain union-free, following a filed petition by the United Steel Workers of America to represent the 1,000 hourly production associates at manufacturing locations in Elyria and North Ridgeville, OH. The margin of the vote was 712 to 214.
Government subpoenas Lexington employees
Lexington Healthcare Group Inc. (Farmington, CT) said certain employees of the company were served with a subpoena by the U.S. Attorney’s office. They are told to testify before a grand jury in the U.S. District Court, District of Connecticut. The company has been requested to provide certain documents. A company official said "we are cooperating fully with the inquiry and are confident that the company has not committed any wrongdoings."
MiniMed introduces approved Model 508 pump
MiniMed Inc. (Sylmar, CA) introduced its new insulin infusion pump, which received approval from the Food and Drug Administration in June. The company can now begin marketing its Model 508 programmable pump in the U.S. and Europe. MiniMed also introduced its Sof-set Micro OR disposable infusion set to use with its external infusion delivery systems, reported Dow Jones News Service. The product received FDA approval in September. The company’s shares dipped 16% on Oct. 1, just a day after hitting a 52-week high, but analysts agreed the drop had to do with investors’ concentration on whether the company will meet Wall Street’s 3Q99 expectations. On Sept. 30, MiniMed’s shares set a 52-week high of $108.25, but they closed at $98.25.
Olsten restates FY98 and 1Q99 results
Olsten Corp. (Melville, NY) restated its results for FY98 ended Jan. 3 and 1Q99 ended April 4 in order to shift the periods in which the company accounted for a $56 million charge related to the settlement of two federal healthcare investigations and $2 million in other non-recurring charges. For FY98, the company restated losses as $35.5 million, 44 cents per share, compared with a previously recorded net income of $4.4 million, 5 cents per share. For 1Q99, Olsten restated its loss as $22.4 million, 28 cents per share, compared with its previous statement of a $62.3 million, 77-cent per share, loss.
The company doesn’t expect the restatements to affect terms of its pending merger with Adecco SA. The federal healthcare investigations focused on the company’s Medicare home office cost reports and transactions with Columbia/HCA Healthcare Corp. (Nash ville, TN). Investigators charged that the company sold several Florida home health agencies to Columbia for an amount far below their worth, then charged Columbia inflated fees to manage the agencies. The fees were billed to Medicare.
In other news, the company formally filed a proxy statement with the Securities and Exchange Comm ission (SEC; Washington) detailing the terms of its proposed merger with Adecco SA. When the transaction is effective, each holder of Olsten stock will receive a combination of cash and/or Adecco American Depository Receipts, valued at about $8.75 per share. Shareholders also will receive .25 of a share of Olsten Health Services common stock in the split-off of the company’s health services business. A final version of the proxy will be mailed to shareholders after the SEC completes its review.
PSAI receives go-ahead to sell testing unit
Pediatric Services of America Inc. (PSAI; Norcross, GA) received antitrust clearance, or early termination under the Hart-Scott-Rodino Act, allowing it to sell its paramedical testing unit to Hooper Holmes Inc. The company signed an agreement in August to sell the unit for $85 to $95 million and expects to complete the sale by the end of October.
Judge dismisses charges against Respironics
Respironics Inc. (Pittsburgh) said a judge in the U.S. District Court for the Western District of Pennsylvania dismissed ResMed’s (San Diego) charges that Respironics infringed a patent relating to a delay timer feature, or ramp, available on devices used for treatment of obstructive sleep apnea. It is the third patent in which the court has dismissed charges. One of the other charges involved Respironics’ Continuous Positive Airway Pressure devices. ResMed has one patent infringement claim remaining. It also relates to a ramp patent infringement. The patent infringement cases began in 1995.