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ComTech to sell home health assets
ComTech Consolidation Group (Houston) will sell certain home health care assets to W.D. Dickerson, who heads the company’s asset management team. Dickerson will buy the PMP Capital Group and its Professional Management Providers unit for $5 million. The acquisition will close within a few weeks. ComTech also formed the NMSI Capital Group to hold its medical services division’s assets, and the Asset Funding Group to provide asset-based funding to the company’s units.
Coram to take $1.8M charge in 1Q99
Coram Healthcare (Denver) said it will take a restructuring charge of $1.8 million in 1Q99 resulting from a major corporate reorganization in 1Q99. The reorganization eliminated certain management positions and is expected to save $6.3 million annually.
Coram’s revenues for FY98 totaled $526.5 million, up from $473.1 million in FY97. Not including the revenue generated by the Lithotripsy Division operations that were sold in 1997 and 1998, Coram’s revenue grew by 20.6%. The company reported a net loss in FY98 of $21.7 million, 44 cents per share, compared to a FY97 net income of $125.3 million, $2.30 per share.
In 4Q98, the company’s revenues increased 10.1% to $158 milion from 4Q97 revenues of $143.6 million. The net income for the quarter was $.8 million, 2 cents per share, compared to a 4Q97 net loss of $19.2 million, 39 cents per share. In 4Q98, Coram reversed $3.9 million of restructuring reserves; expensed $1 million of financing costs; and reported a $1.1 million difference related to a reduction in the gain on the sale of assets in 3Q98 and the write off of certain assets in 4Q98.
Criticare’s lawsuit moves forward
Criticare Home Health Service (Miami) is moving forward with its lawsuit against Option Care (Bannockburn, IL) and its subsidiary, Home Pharmacy. The lawsuit, filed last October, alleges fraud and conspiracy on the part of Option Care. It charges the company with conspiracy, breach of contract, and several counts of interference with advantageous business relationships, reported Dow Jones News Service. Criticare is seeking a trial in Dade County, FL.
HHS owes $750,000 in back pay
Health Staffing Services (HSS; Fort Lauderdale, FL) is prohibited from moving documents out of its Memphis office while the U.S. Department of Labor (Washington) attempts to gain back pay owed to the company’s employees. About 300 workers, employees of Mid-South Home Health (Memphis, TN), are owed four weeks of pay. Mid-South closed suddenly on Feb. 17, when Union Planters Bank (Miami) unexpectedly pulled its financing for daily operations. About $750,000 is still owed to workers. The labor department filed a lawsuit against HSS; President Ron Lusk; Kenneth Welt, bankruptcy trustee; and Capital Factors, a division of Union Planters. HSS converted its Chapter 11 bankruptcy to Chapter 7, so all assets will be sold off for the benefit of creditors. The only secured creditor is Capital Factors, owed about $8 million by the company.
Healthfield buys Alabama HHA
Healthfield (Atlanta) has acquired Mid South Home Health Agency, which has 13 offices in Alabama. Purchased for cash and stock, Mid South was the first acquisition using Healthfield’s recently established $28 million in financing. Healthfield officials said financing included $25 million from Finova Capital Corp.’s Healthcare Finance Division and $3 million from current stockholders and management.
In addition, Healthfield has signed a contract with United HealthCare covering 225,000 capitated lives. With the new contract, Healthfield will cover about 750,000 of the estimated 1.1 million lives covered by HMOs in Georgia.
Healthsouth sees $4B in FY98 revenues
Healthsouth’s (Birmingham, AL) FY98 ended Dec. 31 revenues reached $4 billion, a 28% increase over FY97 revenues of $3.1 million. The company recorded a net income in FY98 of $46.6 million, 11 cents per share, compared to a FY97 net income of $343.1 million, 89 cents per share. Non-recurring expenses associated with the discontinuation of substantially all of the company’s home health operations and other non-core businesses reduced net income by $427 million in FY98.
In 4Q98, the company’s revenues totaled $1 billion, compared to revenues of $884.5 million in 4Q97, an increase of 18%. The company reported a 4Q98 net loss of $193.8 million, 46 cents per share, compared to a 4Q97 net income of $102.2 million, 25 cents per share.
Home Care America may divest home health offices
Home Care America (Boca Raton, FL) is considering divesting its $10-million, healthcare-related companies and re-investing the sale proceeds into its wholly owned internet subsidiary, America Internet Technologies (Boca Raton, FL). Home Care has received some offers for its healthcare operations. It will continue to trade on Nasdaq under the symbol HCAI unless its divestiture is completed.
Lincare acquires Convacare
Lincare Holdings (Clearwater, FL) acquired Convacare Services (Terre Haute, IN), a company with annualized revenues of about $22 million. Convacare provides home oxygen and respiratory therapy services throughout Indiana, Illinois, Kentucky, and Ohio. Lincare has a goal to have $60 million to $70 million of acquired revenue in 1999, reported Dow Jones News Service.
According to a report by Prudential Securities analysts, Lincare’s 4Q98 earnings were 1 cent better than original estimates due to margin improvements. Revenue was $0.3 million higher than expected, and internal unit growth was about 14%, or almost double the industry rate. The company acquired six companies with $15 million in annualized revenue in 4Q98, the report said.
Mallinckrodt, Data Critical team up
Mallinckrodt’s Nellcor Oximetry business (Redmond, WA) signed an agreement with Data Critical Corp. to distribute a line of wireless products to healthcare providers. Terms were not disclosed, but the company said the first product is scheduled for release in 4Q98.
Matria reports drop in FY98 revenues
Matria Healthcare (Marietta, GA) reported FY98 revenues of $135.2 million, compared to FY97 revenues of $144.5 million. Net loss for FY98 ended Dec. 31 was $101.5 million, $2.78 per share, compared to a FY97 net loss of $20.9 million, 57 cents per share. FY98 results included a $113.5 million charge associated with amortization and writedown of goodwill, other intangibles, and research and development. The net loss in 4Q98 was $6.4 million, 18 cents per share, compared to a 4Q97 net loss of $4.1 million, 11 cents per share. 4Q98 revenues were $34.8 million, compared to 4Q97 revenues of $37.1 million. President/CEO Donald Millard said shareholder value should increase with the company’s plan to diversify into different businesses, including that of clinical information management, respiratory services, and women’s health.
McKesson HBOC, Spartanburg sign agreement
McKesson HBOC (San Francisco) and Spartanburg Regional Healthcare System (Spartanburg, SC), which offers home health services, have signed a five-year corporate partnership agreement in which McKesson will supply pharmaceutical, medical-surgical, automation, and information technology products across Spartanburg’s integrated healthcare delivery system. Spartanburg Vice President Raymond Shingler said he expects the agreement to save the company $3.5 million in the five years. Under the agreement, McKesson will supply Spartanburg with programs like Optipak for outsourcing assembly and delivery of procedure-based packages of surgical supplies and Optima for identifying and documenting logistical costs.
McKesson has also signed a five-year agreement with Super Sav-On Drugs, which will generate an estimated $23 million in revenues the first year. Super Sav-On will install McKesson’s computer application in its 16 stores. The application, OmniLink, can provide patients at home with reminders to refill their prescriptions.
FDA advisory panel approves glucose product
Minimed (Sylmar, CA) won the recommendation of a federal advisory panel that the Food and Drug Administration (Washington) approve the company’s continuous glucose monitoring system. The system includes a sensor, implanted just below the skin into the patient’s abdomen, which checks glucose every five minutes. It will take about 288 readings each day. Analysts expect sales of the sensor to be modest at first because few diabetics will want something under their skin, reported The New York Times. The company is building a factory to handle production of the sensors.
In other news, Minimed CEO Alfred Mann has dismissed rumors that the company might sell itself. "We’re always talking with people, but given our strategic plan it’s probably premature," Mann told CNBC.
Option Care expects poor results in FY98
Option Care (Bannockburn, IL) expects to report poor results for 4Q98 and FY98, the company announced last week. The worse-than-expected losses are between 2 cents and 5 cents per share for both 4Q98 and FY98. In 4Q97, the company had a loss of $3.9 million, 36 cents per share, including charges. In FY97, the company posted a loss of $2.1 million, 20 cents per share, including charges. The company also expects to report revenues of $114.4 million for FY98, compared to $100 million for FY97. The company said it is eliminating unprofitable business lines.
Tenet to sell Regional Health System
Tenet Healthcare Corp. (Santa Barbara, CA) has placed Regional Health System (Columbia, MO) up for sale, and BJC Health System (St. Louis) has shown interest. Regional Health System, which includes a home health service, is one of 20 hospitals that Tenet intends to sell because they don’t fit in the company’s core strategy to develop networks of hospitals, a company spokesman told the Columbia Daily Tribune.