Nu-Med Reports Loss, Struggles With Debt
Nu-Med Inc., an Encino-based hospital operator that’s in serious financial trouble, reported a $21.5-million fiscal third-quarter loss and said it’s currently unable to meet debt payments due this month.
The loss in the quarter ended Jan. 31, which mainly reflected a $19-million restructuring charge, compared with a year-earlier loss of $3.5 million. Nu-Med’s third-quarter revenue plunged to $31.2 million from $61 million because the company sold three hospitals during the past year.
For the first nine months of its current fiscal year, Nu-Med lost $25.3 million, compared with a year-earlier loss of $5.87 million, and its nine-month revenue fell to $89.7 million from $188 million.
Nu-Med said that because of its problems, it does not have the cash to meet $5.3 million of debt-interest payments due during this month. Nu-Med said it’s trying to get financing to make the payments within the allowed 30-day grace periods by selling part of its PsychGroup Inc. unit that operates psychiatric hospitals.
Nu-Med said it is in negotiations with an unspecified party for the partial sale of PsychGroup, but warned that if there is no sale agreement, “the company does not have an alternate source” to make the debt-interest payments.
As a result of Nu-Med’s new strategy, the company is no longer pursuing its previously announced plan of spinning off part of PsychGroup to the public via a stock offering, Nu-Med said.
Nu-Med said it also remains in talks to negotiate new lease terms with Medical Properties Inc., an Encino real estate investment trust that leases three medical facilities to Nu-Med. One of those facilities is the Medical Center of La Mirada, whose losses have been a major factor in Nu-Med’s problems.
