Irvine-Based TriCare Will Move to Atlanta

In the wake of a $13-million loss for its latest fiscal year, financially troubled TriCare Inc., which runs clinics for treatment of workplace injuries, said Tuesday evening that it was moving its operations to Atlanta.

The company also said it has hired Larry G. Gerdes, its longtime director, to be its new chief executive officer and president, completing a monthlong search for a replacement for longtime President Stephen F. Bullock, who will remain with the company as chief operating officer.

Company officials were not available for comment.

But in the prepared statement, TriCare said it was planning its move “as a result of the continuing difficult economic environment in California.”

The company did not say when the move would take place, how many workers would be laid off because of the move or whether it believes that Georgia has a friendlier legal and economic environment for companies that operate workers’ compensation programs.

The workers’ compensation system has increasingly come under fire in California by state regulatory agencies as well as business groups, insurance companies and medical experts. Concerns center on fraud in the claims and treatment systems and on the high cost to employers of the state-required insurance coverage.

TriCare did provide one clue as to the reason for its planned move: Its new chief executive officer is a general partner of Gerdes Huff Investments, which is in Atlanta.

The company said Gerdes, who also spent 14 years with an Atlanta-based health information services company, is well qualified for the job.

TriCare has been fighting for nearly a year to stay solvent.

It was apparently running near the break-even mark at the end of its first nine months, when it posted a net loss of $140,000.

But for the fourth quarter and the year, which ended May 31, TriCare said it expects losses of between $13.2 million and $13.7 million. Of that, $6 million comes from a previously announced write-down of restructuring costs and $7 million comes from the write-off of goodwill associated with its purchases in 1990 and 1992 of five industrial care clinics.

In late April, the company said that it was laying off 117 workers and abandoning its medical and legal evaluation business to focus on its treatment centers.

That announcement came four months after TriCare laid off 50 employees in the medical and legal evaluation division. A month before that, in December, 1992, the company laid off 74 employees and closed 11 clinics in Southern California.

The stream of financial bad news has played havoc on the company’s stock. From a high of $6.13 a share in September, TriCare shares have plummeted on the NASDAQ market. On Tuesday the company’s common stock closed at $1.88 a share, down 13 cents for the day.

The company said Tuesday that its net loss for its fiscal 1993 will range from $1.71 to $1.78 a share.

The company has not yet issued an annual financial report and did not release year-end sales figures.

Despite its troubles, TriCare said it is confident of a turn-around.

Gerdes “possesses the necessary industry and operational experience to develop and implement its future strategies,” the company said in its release.

The company also said it is not cash poor: It expects to be receiving about $10 million from asset sales and collection of receivables. It also has $7 million in cash.