AHS restructures debt, finds equity support

Imaging center firm American Health Services has restructuredits debt and received a significant vote of confidence from amajor shareholder last week.

The Newport Beach, CA, firm had been opening centers at a rapidrate last year when OmniCorp Holdings of Switzerland, a majorshareholder, went into receivership (SCAN 3/27/91). Without thechance of new funding by OmniCorp, AHS ran into cash problems.

AHS fell behind in its payment to senior lender Philips Credit,according to The Wall Street Journal. Last month, Philips agreedto extend additional credits and restructure payments to bringthe firm up to date in its obligations.

"We were growing the company quickly and expected cashfrom our preferred shareholder (OmniCorp), which never materialized.This put us into a liquidity crunch. We had to slow down growth(of new centers) significantly," E. Larry Atkins, presidentand CEO, told SCAN.

AHS had a net loss of $3.2 million in fiscal 1990 (end-December)compared to net income of $910,000 in 1989. Revenues increased36%, from $25 million in 1989 to $34 million last year.

Philips Credit, which is separate from Philips Medical Systems,is the center firm's senior lender, Atkins said. Loans from Philips,amounting to about $19 million, provide AHS with working capitalas well as construction and equipment financing. Philips providedan additional $1.2 million of credit as part of the debt restructuringarrangement.

"Philips has been very supportive. We work closely withthem. With the new (financing) arrangement, improved operatingresults and slower growth, our cash situation is good," Atkinssaid.

Philips Credit draws no connection between its financing andsales of medical imaging systems by PMS, he said.

With the firm's cash flow straightened out, an agreement inprinciple was signed last week for the sale of OmniCorp's 3.2million shares of preferred stock to Kovens Enterprises, controlledby Cal Kovens. Kovens, who already owned 17.5% of AHS, will increasehis stake in the company to 40.7%.

"I have followed American Health very closely since ourinitial investment in the common stock of the company," Kovenssaid. "I felt this was an excellent opportunity to increaseour stake in the company. We see a strong future for the companyand for the imaging field."

BRIEFLY NOTED:

• Vision Ten of Torrance, CA, plans to raise $4 millionthrough a public stock offering. A letter of intent for the offeringwas signed with an underwriter last month, subject to filing aregistration statement and clearance by the Securities and ExchangeCommission.

Vision Ten is already officially a public company, althoughits stock is not listed on any exchange, said Richard K. Gerlach,president. The supplier of picture archiving and communicationssystems was spun off from Truvel, a film digitizer manufacturer,two year ago (SCAN 4/12/89).

If completed, the upcoming offering will place Vision Ten'sstock on the NASDAQ market. The offering will involve the saleof packaged combinations of three shares of common stock and twowarrants, exercisable over a five-year period.

• Hologic faces a shareholders' class-action suit in BostonFederal Court. The suit involves allegations that the companyprovided inaccurate information prior to its initial public offeringlast year.

The first motions in the case were made last month, and thejudge's decision on those motions is expected shortly, said S.David Ellenbogen, president and CEO. Hologic has moved to havethe charges dismissed, he said.