Charges hammer Norland's results

As expected, one-time charges related to two recent acquisitions conspired to produce a $15.5 million loss for the third quarter (end-September) at bone densitometry firm Norland Medical Systems of White Plains, NY. Norland also reported lower revenues due to confusion over Medicare reimbursement rates for bone densitometry. Norland had warned financial markets of the coming results in October (SCAN 10/15/97).

For the quarter (end-September), Norland had revenues of $6.4 million, down 21% compared with sales of $8.1 million in the third quarter of 1996. The $15.5 million loss was primarily due to charges related to the company's acquisition of Norland Corp. and for restructuring its Dove Medical Systems subsidiary. Without the charges, Norland would have posted net income of $560,000, compared with net income of $515,000 in the same period the year before.

Sales of higher priced, central dual-energy x-ray absorptiometry (DEXA) systems from Norland and other companies have slumped since June, when the Health Care Financing Administration posted Medicare reimbursement rates that were sharply lower than what the agency had previously been paying for the scans (SCAN 10/29/97). The agency released corrected figures for bone densitometry late last month (see story, page 1).