Medical Advisory profit doubles

But shares drop amid concerns that firm might be acquired

Medical services

June 16, 1999|By Mark Guidera | Mark Guidera,SUN STAFF

Medical Advisory Systems Inc., which provides medical services for ships at sea and the AmericasDoctor.com Web site, said yesterday that second-quarter profit more than doubled, but shares in the company dropped 15 percent amid concerns that the company might be sold.

For the second quarter that ended April 30, the company said net income rose to $292,000, or 6 cents a diluted share, up from $123,000, or 3 cents a share, for the corresponding three months a year ago.

Second-quarter revenue surged to $1.62 million, compared with $791,000 booked in the second quarter last year.

Despite the strong earnings statement, shares in the Calvert County-based company plunged more than 27 percent yesterday before regaining some ground to close at $22.25, down $4, or 15 percent.

Ron Attkisson, a partner with Atlanta-based brokerage Attkisson, Carter and Akers, said he was unsure why the company's stock took a hit yesterday, but speculated that investors may be confused by a company announcement Monday.

The company disclosed that it has hired BancBoston Robertson Stephens to "explore strategic alternatives," including a possible sale of the company.

"The only thing I can figure is that investors might be concerned or confused about the direction of the company now," said

Attkisson. "We still think a lot of the company and its management."

Neither founder and Chairman Ronald Pickett nor Chief Executive Officer Thomas Hall were available for comment yesterday.

Some analysts have speculated that AmericasDoctor.com Inc., which filed to raise $60 million in a public offering Monday, might buy Medical Advisory Systems.

Attkisson said yesterday that the companies "naturally fit together," but said he had no specific knowledge of a deal.

Medical Advisory, based in Owings, is under contract with AmericasDoctor.com to provide physicians to answer medical questions through the Internet site's private, live 24-hour "chat" service known as Doc-Talk. It has 120 doctors under contract for the service. Medical Advisory also holds a 14 percent stake in AmericasDoctor.com.

The money-losing AmericasDoctor.com Inc. disclosed in a securities filing that it plans to use a portion of its IPO proceeds to fund operating losses -- and for potential acquisitions. Executives at the company are barred by securities rules from commenting about the company's plans during the IPO period.

For the first half of its fiscal year, Medical Advisory said that it had net income of $425,187 on revenue of $2.99 million.

By comparison, in the corresponding six months last year, the company earned $156,133 on revenue of $1.42 million.

Pickett said in a statement that revenue growth in the quarter and first six months were due primarily to growth in the physician Internet service.

A spokesman for the company estimated that Medical Advisory's doctors handle more than 5,000 live chats daily.

Pub Date: 6/16/99

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