PainCare Holdings, Inc., a provider of pain-focused medical and surgical solutions and services, has announced a series of actions - including cutbacks and the resignation of the company's president - in an effort to improve the company's standing.
The company announced today it had reduced its corporate monthly overhead from approximately $300,000 to $200,000 through the elimination of cost redundancies and by scaling back its corporate staff from 27 to 18 employees. In addition, Ronald Riewold will be resigning as company president and executive board member effective Jan. 31. Katie White, a former executive vice president at PCH and current president of Integrated Pain Solutions, PCH's managed services company, will succeed him and continue as president of IPS.
"The key to long term success for IPS relies on our ability to establish a national network of leading physicians and surgeons who share IPS' mission of delivering higher quality, more efficient quality interventional pain treatment through utilization of our proven clinical pathways and the effective administration of patient-centric care and attention," White said.
In financial matters, PCS announced that it signed a forbearance agreement with its senior lender on Jan. 11, allowing the lender to hold off on exercising the company's loan agreement for 120 days. In addition, the lender has agreed to make up to $1 million available to PCS in predetermined installments through March 31. All extensions of credit will be added to the principal balance of the term loans, which have been reduced to about $8.5 million from approximately $30 million through ongoing restructuring efforts.
The company has also hired a specialized investment banking group, Martins Acquisition Group, to help with the sale of Dynamic Rehabilitation Centers, a Michigan-based spinal rehabilitation practice that PCH had acquired in 2004.
"The company intends to continue assessing all other available strategic alternatives in hopes of further strengthening its operating platform and providing the necessary financial resources to support ongoing growth with IPS," PCH officials said.
PCS's restructuring effort began early last year with the divestiture of four underperforming practices and two surgery centers, leaving the company with ownership or management of 10 properties in the United States and Canada. Total revenues from continuing operations through the third quarter of 2007 were $21.8 million, a 21 percent decline from the $27.5 reported through the third quarter of 2006, while net losses were reported at $82.4 million, compared to $13.6 million in net income reported for the first nine months of 2006.
IPS has signed contracts with FOCUS Healthcare Management, Inc. and Coalition America, Inc. and is negotiating three other national contracts, officials say. Since being launched in early 2007, IPS has established provider networks in Colorado, Florida, Illinois, Michigan, New Jersey and Tennessee and is planning to expand into Alabama, California, Georgia, New York, Ohio, Pennsylvania and Texas.
Last October, PCS formed a partnership with MedeFile International, Inc., which specializes in electronic medical records, to market MedeFile's personal EMRs nationwide.