Lots of pages to read.
Apart from the Parkside closure - a big loser in congested Santa Monica - PHS had a breakeven quarter operationally. The holidays, falling mid-week, cost them 2 weeks. Cash flow was a positive 1.5M v. (2.1M) in 96Q1. Balance sheet still looks like crap, but the sale to DHS took care of the liquidity issue and some more debt, and the warrant kicker received from DHS has almost doubled in value.
Opened 5 centers, sold 4 to DHS, and closed Parkside. New ones are said to be nicely located. They need to work more on controlling operating expenses and tying PHS and DIS more closely together. DIS was in deep shit when PHS stepped in. Only 23M in net rev, but at least cost of services and G & A headed down throughout 96. DIS revs have been improving in 97.
In the next 2 1/2 weeks, we'll get at a minimum DIS Q1 and PHS Q2. These reports will show rev gains over this set of fins, the gains from the sales to DHS, the reductions in debt and improvement in liquidity. PHS Q3 and DIS Q2 will show further rev gains, lower hits from depreciation and interest, and, perchance, a net profit - if operating expenses don't substantially follow rev up. 5 new centers with recently upgraded machines should start to contribute.
IMO, barring a major market sell-off, .31 was the low. This flurry of nasty-looking fins didn't knock it below .31. PHS has the dominant imaging franchise in the 8th largest economy on the planet. It will be bought, and at a price substantially higher than .36. IMO |
