Companies in the News
April 19, 1999 5 minutes read
Companies in the News
Counsel withdraws 27% stake in AHOM
American HomePatient’s (AHOM; Brentwood, TN) largest shareholder, Counsel Corp. (Toronto), says it is cashing out. Counsel, a publicly traded healthcare investment company, said earlier this month that it plans to divest its 27% stake in AHOM by the end of FY99, reported the Nashville Business Journal. Counsel has recorded losses of more than $32 million in a single quarter because of its investment in AHOM, Counsel said.
In a quarterly statement filed with the Securities and Exchange Commission (SEC; Washington) earlier in April, Counsel recorded its investment in AHOM as a discontinued operation. The filing further reported that the company’s 27% investment cost it a little more than $32 million in 4Q98 and a total of $33.1 million in FY98.
AHOM announced in late March that it is in default on a $360 million credit facility and is in negotiation with its lenders to amend its credit agreement. As a result, AHOM requested an extension for filing its year-end report with the SEC.
AHOM spokeswoman Kathy Palmer told the Business Journal that AHOM understands Counsel’s motivations.
"It goes back to who is Counsel," she said. "Counsel is an investment company . . . and AHOM is part of their portfolio."
Biomerica reports 3Q99 net loss
Biomerica (Newport Beach, CA) reported $1.8 million in consolidated revenues for 3Q99 ended Feb. 28, compared to $2.1 million for 3Q98. The company reported a 3Q99 net loss of $170,415, 4 cents per share, compared to a net income in 3Q98 of $25,755, 1 cent per share. The company attributes the sales decrease to lower foreign sales, and the net income is lower because of more money spent on marketing and advertising, as well as increased manufacturing labor costs. The company said it has spent a lot of time and resources establishing its new Web site, www.TestatHome.Com, for selling home health diagnostic tests.
Catholic Health to expand home health
Catholic Health Initiatives (CHI; Denver) plans to expand its home health business in Philadelphia. It will offer its services out of three hospitals beginning in May. Holy Redeemer Health System (Abington, PA) had served two of the hospitals, but with the CHI announcement the company changed its name to Holy Redeemer Home Care and Hospice Services, reported the Philadelphia Business Journal.
Ceres Group sees increased sales
New sales at Ceres Group (Strongsville, OH) in 1Q99 have increased to $63 million of annualized submitted new premium a 340% increase over 1Q98. The increase is due partly to a larger agent force as a result of new acquisitions. In 3Q99, the company expects to expand its distribution of senior products and roll out new products for home healthcare.
Coram amends shareholder agreements
Coram (Denver) has entered into an agreement with the holders of its series A senior subordinated and series B senior subordinated convertible notes to amend certain provisions of these instruments. In addition, Coram has agreed to amend certain provisions of its stockholder rights agreement, dated June 25, 1997, with BankBoston as rights agent.
Pursuant to an amendment to the Securities Exchange Agreement, under which the series A and series B notes were issued, Coram and its debt holders, Cerberus Partners, Goldman Sachs Credit Partners, and Foothill Capital Corporation, have agreed to increase the annual interest rate applicable to the series A notes from its current rate of 9.9% to 11.5% until maturity. In addition, the parties have fixed the conversion price applicable to the series B notes at $2 per share, subject to customary anti-dilution adjustment. No other provisions of either the series A notes or the series B notes were changed, the company said.
After giving effect to the amendment, the number of shares of Coram common stock that would be issuable upon full conversion of the series B notes would be 44 million shares as of March 31.
Coram also has agreed to amend its stockholder rights agreement to provide that the current holders of the series A and series B notes, Cererbus, Goldman Sachs, and Foothill, will be designated as exempted persons for purposes of the stockholder rights agreement with respect to the shares of Coram that may be issued to them in connection with any conversion by any of them of the series B notes or any exercise by any of them of the stock purchase warrants held by them that were issued by Coram under its current or former credit facilities as long as they do not acquire beneficial ownership of additional shares of the company’s common stock. The exempted person designation shall apply only to these debt holders and not to their assignees or transferees.
Continucare director buys shares
Continucare Corp. (Miami) Director Phillip Frost purchased 194,000 shares of the company’s common stock in March, according to a Form 4 released by the Securities and Exchange Commission (Washington). Frost bought the shares on March 8 for $1 each, bringing direct ownership to 1.3 million shares and indirect ownership to 1,058 shares.
Genesis to expand non-Medicare services
Genesis Health Ventures (Kennett Square, PA) faces a $30 million loss in revenue this year, reported the Philadelphia Business Journal. The expected loss is due to the changes in Medicare reimbursement, despite efforts to cut costs by divesting the company’s ambulance, Medicare home healthcare, and physician practice management businesses. Genesis expects to save millions by getting out of those businesses. It is planning on expanding services that are not dependent on Medicare reimbursements, the Journal reported.
Invacare promotes its HME products
Invacare Corp. (Elyria, OH) is launching the Media Advertising Partners Program (MAPP) to help home medical equipment providers promote Invacare products. MAPP will provide television spots, print advertising, merchandising support materials, and professional consultation on media buying, the company said. The campaign will primarily advertise the company’s power chairs, scooters, lift-out chairs, and other products.
Option Care opens three locations
Option Care (Bannockburn, IL) will open three new franchises in Orlando, FL, Saginaw, MI, and Alexandria, MN. The franchises will provide home infusion therapy and other home care services. Option Care has also completed its second triennial corporate survey through the Joint Commission on Accreditation of Healthcare Organizations. The survey includes a review of policies and procedures.
Paracelsus sees higher FY98 revenues
Paracelsus Healthcare Corp. (Houston) announced the company brought in $664.1 million in net revenue for FY98 ended Dec. 31, compared to $659.2 million in FY97. It reported a net loss of $6.2 million, 11 cents per share, for the year, compared to a net loss of $6.4 million, 12 cents per share, for the previous year. In 4Q98, the company posted a net loss of $8.2 million, 15 cents per share, on revenues of $143.3 million, compared to a net loss of $8.7 million, 16 cents per share, on revenues of $156.8 million in 4Q97. President/COO Charles Miller estimated that the company’s restructuring of its home health operations reduced FY98 net revenue by $39.5 million, compared to the previous year.
Sutter Health recognized by SMG
Sutter Health (Sacramento, CA) was ranked among the nation’s top 15 integrated healthcare networks for 1999 in a national survey compiled by SMG Marketing Group (Chicago). About 600 healthcare systems were tracked and analyzed for annual performance, outpatient and hospital use, financial stability, services and access, contracting, and relationships with physicians. Sutter owns acute care hospitals, research facilities, home health networks, and long term care centers, among other businesses.
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