Medical Advisory reports loss of $3.6 million

Health care

February 18, 2000|By M. William Salganik | M. William Salganik,SUN STAFF

Although revenue more than doubled, Medical Advisory Systems Inc. reported yesterday a loss of $3.6 million, or 96 cents a share, for 1999 after a number of one-time charges.

That compares with income of $315,000, or 8 cents a share, in fiscal 1998 for the Southern Maryland company, which provides health information from doctors by phone and Internet.

Most of the loss, $2.5 million, stemmed from a new accounting treatment of MAS' ownership stake in its largest customer, AmericasDoctor.com, said Matt Hayden, a spokesman for MAS.

Because MAS owned 14.5 percent of AmericasDoctor, accountants told it to account for that share of AmericasDoctor's income -- or, in this case, loss -- in its own financial statements.

Now, however, MAS' stake in AmericasDoctor has been reduced to 2.3 percent, so AmericasDoctor losses will no longer show up in MAS accounting, Hayden said.

AmericasDoctor contracts with MAS to provide live chat with doctors on the Internet. Internet chat services accounted for 71 percent of MAS revenue in 1999.

Another noncash charge was $756,000 related to the issue of stock options and warrants.

All of the remaining loss, Hayden continued, was accounted for by $351,076 in start-up costs for Doc-Talk, a service offering a telephone chat with a doctor for a fee.

The noncash losses "do not affect the company's cash flow, or its financial health," said Ronald Pickett, president and chairman of MAS.

Revenue jumped to $7.1 million for fiscal 1999, up 124 percent from $3.2 million in the previous year.

That was driven by the rapid growth in Internet chat revenue, to $5.1 million in fiscal 1999 from $721,000 in the earlier period.

For the fourth quarter, MAS posted a loss of $1.9 million, or 44 cents a share, compared to earnings of $335,000, or 9 cents a share, in the year-earlier quarter. Revenue for the quarter was $2.9 million, up 123 percent from $720,000 in the corresponding quarter in 1998.

MAS stock closed yesterday at $9.875 a share, down 50 cents for the day.

Pub Date: 2/18/00

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