Newport Beach-based Alliance HealthCare Services Inc. has surpassed the cost-cutting goal it set out when it announced a turnaround plan just more than 18 months ago, the company announced earlier this month.
The medical imaging company has cut some $36 million in overhead since it put its Project Phoenix plan into place in August 2011, surpassing a previously stated goal of $20 million to $25 million in annual cost cutting.
Alliance provides doctors and hospitals with scanning services, such as magnetic resource imaging and diagnostic imaging. It also runs radiation treatment facilities for cancer patients.
The company embarked on the plan to counter turbulence that started with the recession, which brought a combination of high unemployment, reduced office visits and closer scrutiny from insurers. Higher patient deductibles and co-payments affected its performance.
Alliance made its announcement on the recent cost cuts as part of its fourth-quarter and 2012 earnings release, which also gave its guidance for this year. It said it expects adjusted earnings before interest, taxation, depreciation and amortization of $140 million to $160 million. It didn’t offer guidance on net earnings, and no analysts have weighed in with projections.
Alliance lost $11.9 million on revenue of $470.2 million last year.
It reported a narrowed net loss of $5.1 million for the fourth quarter, compared with $16.4 million in red ink a year earlier.
The company said it expects full-year revenue of $460 million to $485 million, less than consensus expectations of $502.1 million.
Its revenue fell 5% in the fourth quarter to $114.9 million, and it said the decline was almost entirely driven by “the strategic pruning of our customer base,” which eliminated unprofitable portions of its imaging and oncology divisions.
The trim of its customer base is expected to eventually “lead to higher renewal rates and deeper relationships with our most valued customers,” said Larry Buckelew, the company’s chairman and interim chief executive.
Buckelew took on the chief executive role after Paul Viviano left last year to run the University of California, San Diego Health System.
Alliance also cited progress in reducing its overall debt—it said its net debt totaled $518.7 million as of Dec. 31, down 13% from a year earlier.
New CalOptima Medical Boss
CalOptima, an Orange-based health plan, has named Dr. Richard Helmer its new chief medical officer.
Helmer’s appointment is effective May 6; he replaces Dr. Trudi Carter, who is now with L.A. Care in Los Angeles.
CalOptima has had a lot of churn in its executive ranks—Carter is one of 16 top executives or directors who have departed since the 2011 reorganization of its board by Orange County Supervisor Janet Nguyen in her role as a CalOptima board member.
The changes have given more representation on the board to healthcare providers and county government and cut down on seats once held by nonprofits.
CalOptima receives its funding from the federal and state governments, not Orange County.
Helmer is currently chief medical officer at the Central California Alliance for Health in Scotts Valley.
Octane Examines Covidien
The Irvine-based neurovascular business of device conglomerate Covidien PLC will be the subject of a March 28 presentation sponsored by Aliso Viejo-based technology booster group Octane.
Covidien employs more than 500 people in the county, primarily through its acquisition of Minnesota-based device maker ev3 Inc. in 2010.
The company opened a neurovascular-device research and development center last year in the Irvine Spectrum.
Company executives are scheduled to “share insights and strategies on how they successfully identified and commercialized new early-stage treatments, and put internal programs in place to create a culture conducive to innovation.”
Speakers include Brett Wall, the Irvine-based president of Covidien Vascular Therapies, Neurovascular and International; Earl Slee, the company’s vice president of research and development, strategy and business development; and John Liedtky, Covidien’s vice president of global marketing.
