Drug Testing Company’s Problems Getting Worse
CINCINNATI (AP) _ Future HealthCare Inc., a drug testing company whose stock plummeted last week when it reported bookkeeping discrepancies, said Monday it expects to report substantial losses for 1993 and 1994.
Prior years also could be affected, the company said.
The news prompted a further dip in the company’s once-vaunted stock. Shares fell $1.06 to $5.94 on the Nasdaq Stock Market.
Future, which conducts studies of experimental medicines for the drug industry, reported $1.8 million in 1993 profits and its share price once approached $24. Earnings for the nine months ended Sept. 30, 1994 had previously been reported as $3.04 million.
On March 13, when it first reported the accounting problems, Future shares fell by more than $10 to less than $5. On that day, the company said it had fired Price Waterhouse as its auditor. The bookkeeping problems concern accounts receivable and revenue, the company said.
Because of the transition to new auditors, the company said Monday it could be four to six weeks before it reports its 1994 results and restates 1993 figures.
Future said it is in default under terms of its borrowing agreement because of the financial problems and is negotiating with its chief lender.
Shareholders filed at least six lawsuits in federal court last week accusing the company of filing false financial statements to make its bottom line look bigger than it really was, inflating the stock price. The company said Monday it will defend against the lawsuits.
Timothy Ross resigned March 9 as president. He was replaced by Donna Myers, who was promoted from executive vice president.
Myers did not return a phone call seeking comment Monday.
Future HealthCare is getting help investigating its problems with its new accounting firm Deloitte & Touche.
Future HealthCare, founded in 1985, is largely the work of Ross and John Peckskamp Jr., chairman and chief executive officer.
Ross and Peckskamp did not return phone calls Monday. However, Peckskamp said in a written statement that new contracts and enrollment of patients in tests ``continue at a strong rate in March after establishing record months for January and February.″
While the company has, over the past few days, ``reorganized the corporate staff to gain substantial efficiencies in its operations,″ there are no plans to cut research staff at its 17 sites around the country, Peckskamp said.