Alliance HealthCare Services Inc.’s new chief executive is settling into the job with some wind at his back, thanks to a big run-up of its shares on Wall Street.
Shares of the Newport Beach-based medical imaging provider have shot up 331% since the start of the year to a market value of about $290 million last week.
The gain on Wall Street has come amid continued losses that have totaled $17.5 million on about $338 million in revenue through the first three quarters of this year.
Investors appear to see the same potential Alliance’s new chief executive has cited as reasons for taking the job.
“Now that I’ve been on board for roughly five weeks, I can say with confidence that all of the potential that I saw during the interview process and historically from the outside looking in, if you will, has proven to be true,” Percy “Tom” Tomlinson Jr., who became Alliance’s chief executive Oct. 1, said in the company’s recent third-quarter earnings call.
Alliance provides doctors and hospitals with scanning services, such as MRI and diagnostic imaging. It also runs radiation treatment facilities for cancer patients.
The company had been dealing with some turbulence in recent years, starting with the recession, which brought a combination of high unemployment among patients and reduced office visits, along with closer scrutiny from insurers and higher patient deductibles and co-payments for services.
Alliance also had to deal with the departure of its top executive and with restructuring itself to deal with what company Chairman Larry Buckelew characterized as a “choppy” healthcare environment. Buckelew had served as Alliance’s interim chief executive since Paul Viviano left in June 2012 to run the University of California, San Diego Health System.
Tomlinson pointed to a large customer base that has remained largely intact after the recession as a reason for optimism.
He said another positive is “a time of dynamic change within healthcare” as the Affordable Care Act takes effect “and we see a future where more healthcare will be delivered via hospital-affiliated service providers.”
“So I’m excited because the change in the industry plays to the historical strengths of our hospital-centric business model.”
He said Alliance should benefit due to its alignments with hospitals.
Tomlinson said sales and business development would also be a major focus area for him.
The new chief executive also touched upon Alliance’s cost-saving efforts, calling them “part of our DNA now” and that “we will not lose focus on being a cost-efficient organization, even as we look to grow.”
Alliance put its Project Phoenix plan into place two years ago under Viviano and has cut some $36 million in costs since its implementation. Alliance embarked on Project Phoenix to counter recession-related challenges; actions included what the company called the strategic pruning of its customer base to eliminate unprofitable portions of its imaging and oncology businesses.
Alliance has picked up some Wall Street attention lately, as analysts with Deutsche Bank AG and RBC Capital Markets participated on the company’s most recent earnings call.
