Nichols Reports Loss of $181,000 in Quarter Despite Revenue Gain

Despite increased revenues for the period, Nichols Institute reported a net loss of $181,000 for the third quarter ended Aug. 30, contrasted with a gain of $324,000 for the same period last year. Revenues for the third quarter were $8.9 million--a 43.5% increase from $6.2 million.

The San Juan Capistrano-based medical testing firm also posted a loss of $209,000 for its first three quarters, in contrast with a gain of $813,000 for the first three quarters of fiscal 1985. Revenues for the nine months were $25.4 million, up 49% from $17 million.

William A. Mahan, Nichols’ chief financial officer, said that despite the revenue increase--which fell 10% below the company’s projections--income was not sufficient to cover the costs of increasing the number of testing services the company offers. Mahan also said that for a company of Nichols’ size, “it doesn’t take too much fluctuation in revenues to have an impact on the bottom line.”

The company increased the number of tests it offers to 900, up from 260 in 1984, in a bid to lure regional laboratories or large hospitals that want a “one-stop” firm to handle a wide variety of costly and technology-intensive medical testing.

Mahan said the result of that expansion would be increased revenues, a small profit in the fourth quarter and possibly a small profit for the year. He also predicted improved earnings over the next two fiscal years.