HCIA Inc., the Baltimore health data company, reported another quarter in the red yesterday -- its sixth loss in the past seven quarters -- but said the planned sale of its consulting unit, along with other cost-cutting measures, should return it to profitability this year.
HCIA said its loss from continuing operations -- it treated the consulting unit as discontinued, although it will continue to operate the unit until it finds a buyer -- was $3.8 million in the fourth quarter that ended Dec. 31, or 29 cents a share, after a $2.7 million restructuring charge, compared with a loss from continuing operations of $331,000, or 3 cents a share, in the same quarter of 1997.
Including the consulting unit, the net loss was $6.0 million, or 51 cents a share, compared with a net loss of $1.1 million, or 9 cents a share, in the year-ago quarter.
Revenue from continuing operations was $15.7 million, down 4.9 percent from $16.5 million a year earlier.
Michael D. Samols, a vice president for research at BancAmerica Robertson Stephens, said the operating loss was in line with expectations. Also, he said, the company had indicated in October that it might sell the Denver-based consulting business.
The consulting unit developed after HCIA bought LBA Health Care Management Inc. of Denver in July 1996 for $130 million. However, Samols said, the hospitals that buy HCIA's data were not interested in buying high-end consulting along with it, so the business flopped, and "it's goodbye $130 million."
Barry C. Offutt, HCIA's chief financial officer, said yesterday, "We're well on the way to profitability in the near term."
From 700 employees and quarterly expenses of $19 million, the company said, it would, after disposing of the consulting unit, have 520 employees and expenses of $15 million to $16 million.
Offutt said employment in the Baltimore headquarters had declined over the quarter from about 200 to about 185, mostly through attrition, but with a few layoffs.
For the year, HCIA reported a loss from continuing operations of $27.3 million, or $2.31 a share, compared with net income of $411,000, or 4 cents a share, in 1997.
Including the discontinued consulting unit, the 1998 net loss was $48.7 million, or $4.11 a share, compared with a loss of $37.0 million, or $3.12 a share, in the previous year.
HCIA shares closed at $4.625, down 21.88 cents, yesterday before the company released its earnings report.
Pub Date: 1/28/99