A former Siemens top medical executive with a reputation as aturnaround specialist has assumed the reins of struggling fluoroscopyimage enhancement firm Fidelity Medical. Werner J. Haas replacedFidelity's previous chief, Efraim Landa, who resigned
A former Siemens top medical executive with a reputation as aturnaround specialist has assumed the reins of struggling fluoroscopyimage enhancement firm Fidelity Medical. Werner J. Haas replacedFidelity's previous chief, Efraim Landa, who resigned earlierthis year after revealing that the firm's balance sheet had beeninflated.
Landa resigned from his posts as CEO, president and chairmanof the board in May after Fidelity, based in Florham Park, NJ,announced that sales revenue had been overstated by hundreds ofthousands of dollars in a preliminary report for the second quarterof fiscal 1992 (quarter end-March).
The Securities and Exchange Commission is investigating theirregularities, and Fidelity faces a number of shareholder lawsuits.The extent of Landa's involvement in the overstatements has notbeen determined.
The imbroglio has caused employee morale to suffer and shareholderconfidence to drop. Enter Haas, former chief executive of SiemensMedical Instrumentation, who has a history of reviving troubledcompanies. Fidelity reported in July that Haas would replace Landaas CEO and president.
"I feel like I've been in situations like this, and ifanybody can turn around a company, I can," Haas told SCAN.
Haas earned his reputation by taking new Siemens acquisitionsfrom hard times to success. His track record includes a stintat the helm of Applied Radiation, a small California radiationtherapy equipment manufacturer that Siemens acquired and renamedSiemens Medical Laboratories.
Haas was also the first head of Siemens Gammasonics, a nuclearmedicine manufacturer known as Nuclear Chicago before Siemensacquired it in 1980. In the case of both companies, Haas turnedunprofitable operations into money-makers.
Haas decided to leave Siemens after the multimodality vendortold him he would be transferred back to Germany as part of acorporate reorganization.
HAAS HOPES TO DUPLICATE his turnaround success at Fidelity. Oneof the products that Haas believes will brighten Fidelity's financialpicture is Fluoro Plus Archiving, a system for storing digitalfluoroscopy images on laser disk. The system was introduced earlierthis year as a complement to the company's Fluoro Plus fluoroscopydigital image enhancement system.
Another Fidelity product is Fluoro Plus Cardiac, which handlesdigital images at a higher frame rate for cardiac applications.
Haas is careful to differentiate between Fluoro Plus Archivingand a full picture archiving and storage system, and does notsee the slow development of the PACS market as affecting Fidelity'sproduct.
"We are not involved in PAC systems here," he said."(Fluoro Plus Archiving) is archiving the cine scenes ofa cardiac lab, for example. It's not a communications system."
Haas is generally gloomy about the prospects for full-blownPACS because of questions about the cost/benefit ratio of suchsystems.
"Number one, nobody can charge for it," he said."If you go into the hospital, you do not expect to get abill for utilization of PACS. So there's not immediate revenuefor it.
"Also, the costs are pretty high, compared to cost savingslike saved film. You don't save personnel costs. It's very difficultto justify."
Haas sees reestablishing confidence in the company as key toimproving Fidelity's fortunes. One of his first tasks will beto restore the integrity of the company's balance sheet and resolvethe investigation and shareholder suits, Haas said.
Earlier this month Fidelity released restated financial resultsthat show aggregate revenues down 13.8% over previously reportedresults for the three and one-quarter years ending December 1991.Revenues for the period had been overstated by $2.2 million, accordingto the company. Fidelity's aggregate net loss over the periodwas increased by $1.9 million more than what had previously beenreported.
Fidelity reported that restated revenues for the three monthsending June 30, 1992 show a 27% decrease from restated resultsof the same period last year. Net loss for the period was $1.4million.
Haas remains optimistic despite the numbers.
"If I did not have a certain conviction that things couldbe done I would not have joined (the company)," he said.