• The home care division experienced year-over-year declines in revenue, profitability and cash flow resulting from cuts in reimbursement rates and the cessation of reimbursement for certain rental equipment. In addition, this business unit was is in the process of modernizing its medical billing systems.
• The hospital division was negatively affected by a downturn in the economy, which caused lower hospital occupancy levels and less patient visits. This led to low asset utilization rates causing reduced cash flows and tight liquidity.
• Fort Dearborn Partners worked with management to define and implement its strategic initiatives, which included:
–Returning to sustainable profitability to allow for the ability to refinance its senior debt facility.
–Rationalization of headcount, penetrating new sales channels and develop a plan to close and/or relocate its retail locations.
–Reduced equipment purchases and subsequent capital lease requirements and developed a plan to reduce inventory. In addition, management contributed capital to finance its operations.
–Management also hired a controller to improve the Company’s financial information and management reporting systems.