Struggling investor may sell AHS shares

A major shareholder in imaging center firm American Health Serviceshas been placed in receivership. It is expected that 3.8 millionshares of preferred AHS stock held by OmniCorp Holdings of Switzerlandwill be offered for sale. This amounts to about 28% of AHS equity.AHS hopes that an investor with experience in imaging servicesacquires the stock, said president E. Larry Atkins.

The financial problems of OmniCorp should not impact AHS operationsor growth plans. It became apparent last year that the investmentfirm would not infuse additional capital into the firm. AHS, basedin Newport Beach, CA, had also made the strategic decision toslow new center growth this year, Atkins said.

"Over the last few months, we had discounted them (OmniCorp)as a future source of investment. Assuming the block of stockthey own will probably be sold, management would like to facilitatethe transfer of stock into strong hands," he said.

OmniCorp is a large investment company with a portfolio valuedin excess of $2 billion. AHS was OmniCorp's only U.S. health-careinvestment.

OmniCorp's $7 million equity investment a year and a half ago(SCAN 10/25/89) fueled a rapid expansion of AHS imaging centers.The company launched 18 centers over the last 14 months, nearlydoubling its total network to 40 centers. Bringing so many start-upson line at once, however, had a depressing effect on company profits(SCAN 12/12/90), Atkins said.

"We had a lot of brand-new centers starting out at fiveto six scans a day. We expect to add six centers in 1991, whichis about a third of the growth rate we had last year," hesaid.

BRIEFLY NOTED:

• Health Images, an Atlanta imaging center firm, oversolda secondary public stock offering this month, grossing nearly$30 million. HI sold 2 million shared of common stock at $13.5a share, up from the original target of 1.5 million shares. HIstock on the NASDAQ over-the-counter market traded at over $14last week.

Funds from the offering will be used to pay off debt and expandHI's network of 28 magnetic resonance imaging centers and oneradiation oncology center. HI also manufactures MRI scanners,largely for use in its own centers, and provides third-party imagingequipment maintenance services.

• Medical Imaging vendor Elscint made a strong financialcomeback last year. The Israeli firm had revenues of $161.9 millionin fiscal 1990 (end-December), up 10% from $147.5 million in 1989.Elscint's net income, however, nearly quadrupled, from $3.1 millionin 1989 to $13.5 million, prior to a $27.7 million extraordinarygain in 1990 (see graph).

The extraordinary gain involved relief of Elscint debt broughtabout by a financial restructuring of the company and an agreementwith creditor banks completed in late 1989 (SCAN 11/22/89).

• Instrumentarium of Helsinki struggled with depressed medicalsales in fiscal 1990 (end-December). Overall turnover declined17% from 2.1 billion markkas ($536 million) in 1989 to 1.7 billionmarkkas ($442 million) last year. The vendor had a loss beforereserves and direct taxes of 83 million markkas ($21.2 million)last year, compared with a profit of 96 million markkas ($24.5million) in 1989 (see graph).