Nu-Med’s Chances of Survival Questioned

Nu-Med Inc. said its auditors are questioning the company’s ability to continue as a going concern as the ailing Encino-based hospital operator posted a fiscal fourth-quarter loss of $12.3 million.

The loss compared with year-earlier earnings of $28.2 million, which included a $31.2-million pretax gain from the sale of three hospitals. Nu-Med’s revenue in the quarter ended June 30 fell 37%, to $34.2 million from $54.3 million.

Nu-Med said it continues to have problems meeting its payments to trade creditors, and expects substantial difficulty making scheduled payments coming due over the next 12 months on about $100 million of debt.

For those reasons and others, Nu-Med said its outside accounting firm, Deloitte & Touche, questioned in its audit of Nu-Med whether the company can continue operating.

Nu-Med lost $37.6 million during its full fiscal year, compared with net income of $22.4 million the prior year, and its annual revenue dropped 50%, to $123.9 million from $247.7 million, reflecting the sale of the hospitals.