Florida firm dumps gambling and energy assets
NuWay Medical, a 12-year-old firm better known for South American slot machines than diagnostic imaging equipment, is launching a national rental program for 3D ultrasound systems.
"We are creating a way of financing inventory so that our customers-medical practices, physicians, imaging centers-have access to very high tech," said Dennis Calvert, president of NuWay Medical, which is based in North Miami Beach.
The new gambit is unlike any the company has tried before. The firm has tried its luck selling cigars; renting and refurbishing gambling equipment for Latin American drug stores, pool halls, bars, and restaurants; and acquiring oil and gas ventures in Canada. After a change in management in July 2002, the company (also known as NuWay Energy and Latin American Casinos) began focusing on medical businesses and changed its name accordingly. In December, NuWay divested most of its interests in nonmedical businesses including Canadian Oil and Gas Properties, as well as Peruvian and Colombian slot machine rentals, betting that a 3D ultrasound rental program would be a big revenue generator.
Through this program, customers can rent state-of-the-art machines either short- or long-term. Along with the equipment, they will get service, training, and equipment warranty. By relieving customers of the risk of capital investment, the company hopes to attract clients who ordinarily would not be interested in expensive, cutting-edge systems.
The key is a national network of sales agents, according to Calvert. NuWay has closed a deal with KMB Medical Marketing of Mission Viejo, CA, to recruit, train, and supervise sales agents. The company hopes to secure at least 10 master agents and 50 sales agents.
"We are escalating the recruitment effort daily," Calvert said. "Initially, the agent network will not necessarily be geographically defined. We're most interested in people with the know-how and connections to bring us customers."
A Yahoo! profile of the publicly traded company, whose stock is bouncing between 10¢ and 20¢ per share, cites a portfolio of Medison products, but Calvert declined to name any of the manufacturers whose equipment will be leased, preferring to call its program "manufacturer-agnostic." Although NuWay offers 3D ultrasound products through its rental program, the distribution network is really the most important factor, he said.
"We're not necessarily limiting ourselves to ultrasound, but today that is the focus of our effort," Calvert said. "When we jump-start our distribution, we'll then be able to quickly distribute products that meet customers' needs and profit us."
As the network of agents and customers grows, the distribution channel will become more valuable than many other parts of the NuWay business, according to Calvert. The company anticipates that this intangible asset will attract manufacturers to distribute via the NuWay network to the mutual benefit of all concerned.
But NuWay is not putting all its strategic eggs in one basket. Though it got rid of many of its nonmedical businesses, the company will continue to market devices that include wireless networking and handheld computers.
In addition, NuWay is working on a sports medicine product for professional teams. The product will support an electronic medical record and DICOM-compatible PACS to assist professional teams (and eventually college and high school teams) to better manage the healthcare of their athletes.
NuWay expects to realize revenue on both the rental and sports medicine ventures within the first quarter of 2003, Calvert said. The company is currently concluding institutional financing on ultrasound rental agreements for some 20 locations and will close its first installation agreements for the sports medicine product in the next two months.