Tokos Earnings Hit Record $7.1 Million

Benefiting from growing acceptance of its in-home pregnancy monitors, Tokos Medical Corp. reported Tuesday that its 1991 earnings reached a record $7.1 million as sales jumped 45% from a year earlier.

The Santa Ana firm’s profit, which was equal to 44 cents a share, contrasted with a $1.4-million loss, or 10 cents a share, the year before.

Revenue was $115.2 million, up from $79.2 million in 1990.

Since 1990, when Tokos received Food and Drug Administration approval for home use of its pregnancy monitors, a growing number of medical insurers have agreed to reimburse patients who use the devices and pay for related nursing services.

The FDA approval “has had a halo effect,” said Nicholas A. Mione, chief financial officer. “It has allowed us to get certain players--like Prudential (Insurance Co.)--that otherwise wouldn’t reimburse.”

The monitors are used by pregnant women who are considered likely to have early deliveries. Expectant mothers strap on the device twice a day for an hour to record contractions. The information is then sent by telephone to Tokos’ central offices, where nurses look for early signs of premature labor.

However, the Tokos devices generated controversy last November when an influential obstetricians’ group, writing in the prestigious New England Journal of Medicine, questioned the need for the device and its ability to prevent premature births.

But Robert F. Byrnes, Tokos’ chairman and chief executive, said the device only monitors pregnancy and does not itself prevent premature births.

The medical journal’s argument “would be like asking a thermometer to be an instrument to prevent infectious diseases,” Byrnes said. The FDA, in an unusual step, issued a rebuttal to the article.

The Tokos earnings “show the increasing acceptance by insurers and physicians of home obstetric care,” said Howard Rosencrans, an analyst with HD Brous & Co. in Great Neck, N.Y. “The prospects (for Tokos) are exceptional.”

Rosencrans said the market for Tokos’ products has the potential to grow significantly. The handful of companies that market the devices and related nursing services reported about $180 million in sales in 1991, Tokos officials say.

Tokos captured about 64% of the market last year. Its $115 million in sales compare to $10 million for privately held Carelink in Laguna Hills and $49 million reported by a division of Healthdyne Inc. in Marietta, Ga.

Tokos’ earnings in 1991 reflect payment of $8.4 million during the fourth quarter for marketing rights and a minority interest in Adeza Biomedical Corp. of Sunnyvale.

Earlier in 1991, Tokos also spent $605,000 to acquire Medical Resource Management Inc. of Greenville, S.C.

In the fourth quarter, Tokos reported a loss of $1.8 million, or 12 cents a share, compared to a loss of $755,000, or 5 cents per share, in the corresponding period a year before. Revenue rose 46% to $32.9 million from $22.5 million.

Tokos Medical Corp

Tokos Medical Corp. posted a profit of $7.1 million in 1991, contrasted with a loss of $1.4 million the prior year. Revenue increased 45% to $115.2 million.

Figures are in thousands, except per-share data.

4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $32,902 $22,489 $115,159 $79,221 Net income (loss) (1,796) (755) 7,128 (1,434) Per share (loss) (0.12) (0.05) 0.44 (0.10)

Source: Tokos Medical Corp.