Companies in the News
Companies in the News
AHOM proposes stock split
American HomePatient (AHOM; Brentwood, TN) is asking its shareholders to approve a proposal that would allow the company to affect, at its own discretion, a one-for-four reverse stock split at any time between now and AHOM’s 2000 annual meeting, according to a filing with the Securities and Exchange Commission (Washington). Shareholders of record as of March 8 will be entitled to vote on the proposal at the company’s annual meeting, scheduled this year for April 29. According to the filing, the board believes the reverse split will enhance AHOM’s ability to maintain its common stock listing on Nasdaq. AHOM does not meet requirements of Nasdaq’s listing standard 1 because its net tangible assets are less then $4 million. The company also noted that it does not satisfy Nasdaq’s listing standard 2 because the minimum bid price of its common stock is less then $5 per share. On Nov. 11, 1998, Nasdaq sent AHOM a letter noting that the common stock had failed to maintain a closing bid price greater than or equal to $5 for the last 30 consecutive trading dates. The letter further noted that AHOM’s securities would be subject to delisting if the company was able to demonstrate compliance with the minimum bid price requirement or any other listing criteria by Feb. 8.
AHOM requested a hearing before the Nasdaq Listing Qualifications Hearing Panel, which is scheduled to take place on April 9. Nasdaq has postponed delisting the company’s securities.
The company said it intends to explain its strategy to increase the bid price of its common stock by, among other things, effecting the reverse split and by continuing to satisfy Nasdaq’s other listing criteria. Such actions, AHOM maintained, will keep the bid price above the minimum level.
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Apria warned by FDA
According to a warning letter issued by the Food and Drug Administration (FDA; Washington), Apria Healthcare Group (Costa Mesa, CA) failed to adequately document and test procedures to ensure the quality of its medical oxygen. The Feb. 10 letter cited the company’s facility in Des Moines, IA, for not keeping proper records documenting purity testing of its oxygen. The records did not ensure that test procedures met necessary standards. The company received seven warning letters in 1997, reported the Los Angeles Times. The FDA can hold up product shipments and pursue civil fines if companies don’t adhere to requirements.
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Bindley Western’s FY98 revenues up
Bindley Western (Indianapolis), which spun off its Priority Healthcare subsidiary to shareholders on Dec. 31, reported increased revenues for FY98 of $7.6 billion, up from FY97 revenues of $7.3 billion. The results for the year and 4Q98 include those of Priority Healthcare. The company reported a net income of $19.1 million, 84 cents per share, compared to a net income in FY97 of $23.7 million, $1.19 per share.
For the quarter, the company recorded revenues of $2 billion, about the same as 4Q97. Bindley Western reported a net loss in 4Q98 of $4.5 million, 21 cents per share, compared to a net income in 4Q97 of $7.1 million, 32 cents per share.
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Continental reported rise in 4Q98, FY98 revenues
Continental Home HealthCare’s (Vancouver, British Columbia) revenues for FY98 ended Dec. 31 were, in Canadian dollars, $13.7 million, compared to FY97 total revenues of $3.4 million, an increase of 309%. Continental recorded 4Q98 revenues of $4.2 million, a 145% jump over revenues in 4Q97 of $1.7 million. The increases in revenue and record strong performance is due mainly to the acquisition by the company of its Continental Hospital Supply Corp. (Glendale, CA) subsidiary, which includes results from Hopson’s Health Equipment Centre (Indian Wells, CA) and Mesa Medical Equipment (Las Vegas). Continental changed its FY end from April 30 to Dec. 31, effective Dec. 31, 1997.
Recently, the company’s Mesa Medical subsidiary purchased the disability aid rental business from Interwest Home Medical (Salt Lake City). The company is now a key supplier of disability aid equipment for customers of a growing number of Las Vegas-area hotels and casinos.
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Consolidation of Columbia suits denied
Columbia/HCA Healthcare (Nashville, TN) said last week a Department of Justice (Washington) motion to consolidate all the whistleblower lawsuits facing Columbia was denied. Columbia senior vice president Vic Campbell told Dow Jones News Service he is hopeful the Justice Department will resubmit its filing to a multi-district litigation panel so that the cases, including some that are still under seal, can be consolidated.
Earlier in February, the Justice Department applied to consolidate all of the cases against Columbia related to allegations of Medicare fraud at its hospitals and some of its home health agencies. The government wanted all of the cases to be heard in U.S. District Court in Washington. If the cases are not consolidated, each will be heard in its original jurisdiction.
Analysts had predicted that because of the possible consolidation, a settlement was close to being reached on the charges. But Campbell said the timing of any settlement is not predictable.
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HealthCor Chairman resigns
HealthCor Holdings (Dallas) Chairman/CEO Wayne Bazzle and President/COO Cheryl Bazzle have resigned from all positions with the company, HealthCor announced last week. The Bazzles will continue to provide consulting services to HealthCor, the company said. Michael Ayres, CFO, has been named acting CEO. HealthCor also said it has retained Victor Palmieri of The Palmieri Co. to assist the HealthCor board in assessing the company’s business plans and financial viability. The company continues to pursue a recapitalization transaction with its principal bondholders.
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Infu-Tech sees drop in 2Q99 revenues
Infu-Tech (Englewood Cliffs, NJ), Kuala Healthcare’s home infusion therapy subsidiary, recorded 2Q99 revenues totaling $6.6 million, a decrease from 2Q98 revenues of $7 million. The company reported a net income of $37,000, 1 cent per share, compared to a 2Q98 net income of $167,000, 5 cents per share. Operating profit margins in the quarter were impacted by a change in the overall business mix, which included a higher percentage of revenue generated from Ceredase and Synagis programs. President/CEO Jack Rosen said the company is "continuing to maintain stringent pricing and cost controls to help improve profitability and will exit or renegotiate pricing of non-profitable managed care contracts."
Parent company Kuala reported revenues for 2Q99 of $16.5 million, compared to 2Q97 revenues of $16.3 million. The increase in revenues, the company said, was attributable primarily to an increase in revenue at the company’s Bach’s Institutional Pharmacy subsidiary, partially offset by a decline in revenues at Infu-Tech. Kuala recorded a net loss in 2Q99 of $839,000, 25 cents per share, compared to a net income in 2Q98 of $26,000, 0 cents per share.
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McKesson, Perot Systems team up
McKesson HBOC (San Francisco) will implement its Amisys health insurance and managed care information system into the operations of Perot Systems Corp. (Dallas). Amisys Open is a three-tier client/server system to process claims, membership, benefits, billing, and other business transactions on behalf of payor- and provider-based managed care organizations.
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NHC sees net loss in FY98
National Healthcare Corp. (NHC; Mufreesboro, TN) reported a net loss in FY98 of $6.4 million, 58 cents per share, on revenues of $441.2 million. 4Q98 net loss was $14.6 million, $1.29 per share, on revenues of $107.7 million. The figures include a non-recurring charge of $28 million for the settlement of the lawsuit with Florida Convalescent Centers (Sarasota, FL) and the assumption of liabilities and expected litigation charges. The results are not comparable to the prior year because NHC converted from a limited partnership to a corporation and spun off its real estate assets into a new company.
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NYC buys HHA in New Jersey
New York Health Care (NYC; Brooklyn, NY) has acquired a home healthcare office in Shrewsbury, NJ, once owned by Staff Builders (Lake Success, NY). The purchase price was not disclosed, but the purchased office generates about $600,000 in revenues a year, the company said. NYC plans to merge its Shrewsbury offices with the new office in order to double its revenues from that location.
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Nursefinders acquires Pre/Stat
Nursefinders (Arlington, TX) completed its acquisition of Pre/Stat Nursing Services, which has offices in California and Louisiana. The acquisition will bring the company $15.5 million more in annual revenues. Nursefinders had $195 million in revenues in 1998. The company also purchased Medsource in Connecticut and Amedisys’ staffing/patient care services in Louisiana within the last five months. The company did not disclose the Pre/Stat purchase price.
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Olsten declares quarterly dividend
Olsten (Melville, NY) declared a regular quarterly dividend of 4 cents per share on the company’s common stock and class B common stock. The dividend is payable March 16 for shareholders of record at the close of business on March 5.
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Option Care shares jump in price
Due to a high trading volume and a stock price increase, Option Care (Bannockburn, IL) CFO Michael Siri issued a statement saying the company knows of no reason for the activity. "We are not aware of any condition or activity within the company that would account for this We have been advised that Option Care was mentioned in an Internet web site called Fast Track.’ However, we are unaware of the content of this posting and consequentially have no opinion regarding its possible relationship to the current market activity in the stock."
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Staff Builders employee accused of stealing
A 42-year-old woman has been accused of stealing more than $46,000 from Staff Builders Health Care Services (Lake Success, NY) while she worked as a customer service representative for the company in Henrico County, VA. The woman was responsible for finding and hiring temporary workers for the company and kept track of the time sheets they submitted for pay, reported the Richmond Times-Dispatch. She allegedly created a fictitious employee with a social security number and filled out bogus time sheets and submitted them. Company officials took notice when several companies called Staff Builders to say they hadn’t hired out the employee named.
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Sunrise Medical unit settles lawsuit
The Securities and Exchange Commission (Washington) filed and settled a lawsuit against former Bio Clinic Corp. CFO Robert S. Barton for suspected accounting fraud and insider trading. Bio Clinic is a unit of Sunrise Medical (Carlsbad, CA). According to the SEC complaint filed in Los Angeles, Barton, who no longer works with the company, reduced report expenses in 1994 and 1995 by at least $19.6 million by recording fictitious assets and decreasing liabilities, reported The Wall Street Journal. He allegedly received a $25,000 bonus in 1994 for meeting annual earnings targets, and he allegedly engaged in insider trading by exercising stock options knowing public filings were false, therefore avoiding $32,000 in losses. He did not admit or deny the allegations, nor does he have to pay a civil penalty, but he agreed not to violate U.S. securities laws in the future. The SEC also filed two administrative proceedings against Sunrise, as well as three individuals formerly connected to Bio Clinic. Sunrise consented to an order that it violated the periodic reporting, books and records, and internal accounting-control laws. While the company and the three individuals settled the lawsuits, none admitted or denied wrongdoing.
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