Kirschner Medical Corp. has replaced its chairman and chief executive effectively immediately with C. Scott Harrison, a director of the struggling medical-products company in Timonium.
Bruce J. Hegstad, who relinquished his post as chief executive, will remain Kirschner's president and chief operating officer, the company said yesterday. The former chairman, Kirby L. Cramer, will continue as a director and chairman of the board's executive committee.
"The problem was that I had a lot of hats," said Mr. Hegstad, who had been chief executive and president since the company was formed in 1983. "As we've grown, we need to start sharing that responsibility and the job descriptions that we have had."
Mr. Cramer, who lives in Seattle, also had held his position since 1983. Dr. Harrison, a clinical professor of orthopedic surgery at the Penn State University Medical Center and chief of orthopedic surgery at Harrisburg Hospital in Pennsylvania, will begin devoting "his full time to the Kirschner business," the company said.
Dr. Harrison, who has been one of five members of the company's board since the beginning of 1989, was not available for comment yesterday.
Yesterday's announcement came near the end of a tumultuous year at Kirschner, a maker of orthopedic implants and other medical products.
As of Sept. 30, Kirschner's current liabilities, including $52 million in short-term debt and the current portion of long-term debt, exceeded its current assets by $5.4 million. Total assets were $85.1 million.
The company's $18 million line of credit with Maryland National Bank has been fully used, and a $17 million note that was due earlier this year is payable on demand.
The interest on both borrowings was increased earlier this year to 2 percentage points above the bank's prime rate.
In addition, Kirschner is the target of a number of shareholder lawsuits filed this year, and the terms of its credit have been "adjusted" by its suppliers, the company has said.
"The company's continued existence is dependent upon its ability to resolve its liquidity problems and maintain the support of the company's current lenders and suppliers," Kirschner said in its third-quarter filing with the Securities and Exchange Commission. "The company is continuing to seek debt or equity financing to improve its short-term debt position."
As part of a restructuring, the company announced in April that it planned to sell an unprofitable subsidiary in Greenwood, S.C., that had been the subject of a legal battle.
The lawsuit, surrounding Chick Medical Products, a maker of surgical lights and operating-room tables, was settled in July, and the operation was sold earlier this month for $9 million.
Kirschner earned $193,000, or 8 cents a share, for the third quarter after losing $448,000, or 18 cents a share, a year earlier.
It had revenue of $15.1 million during the third quarter, up from $12.8 million during the same period in 1989.
The company's stock, traded over the counter, closed yesterday at $10.75 a share.