Debt-laden Aurora Diagnostics has all but revamped its executive ranks and engaged in several deals in the past few months that has refocused the Florida-based laboratory on pathology and dermopathology services. In little more than five months, Aurora has appointed a new chief operating officer (the promotion of Bruce Walton, the former vice president of operations, was the only internal move); a chief medical officer (Alan D, Pierce, M.D., a Florida-based pathologist); a chief information officer (Anthony Bobos, former chief technology for a Wisconsin blood bank and laboratory); a vice president of hospital operations; and a vice president of revenue management. Aurora, which has about 130 pathologists and 21 testing sites, also engaged in five deals in the last six months after a couple of years of all but staying on the M&A sidelines. Five of those deals were acquisitions of regional pathology laboratories in Georgia, Arizona, Virginia, and Massachusetts. The most recent transaction, announced on Jan. 5, was the sale of Aurora’s blood testing lab in Greensboro, N.C., to Dominion Diagnostics in Rhode Island. The terms of the transaction were not disclosed. “We are pleased to complete this transaction, which allows us to focus our efforts and resources on […]
Debt-laden Aurora Diagnostics has all but revamped its executive ranks and engaged in several deals in the past few months that has refocused the Florida-based laboratory on pathology and dermopathology services.
In little more than five months, Aurora has appointed a new chief operating officer (the promotion of Bruce Walton, the former vice president of operations, was the only internal move); a chief medical officer (Alan D, Pierce, M.D., a Florida-based pathologist); a chief information officer (Anthony Bobos, former chief technology for a Wisconsin blood bank and laboratory); a vice president of hospital operations; and a vice president of revenue management.
Aurora, which has about 130 pathologists and 21 testing sites, also engaged in five deals in the last six months after a couple of years of all but staying on the M&A sidelines. Five of those deals were acquisitions of regional pathology laboratories in Georgia, Arizona, Virginia, and Massachusetts.
The most recent transaction, announced on Jan. 5, was the sale of Aurora's blood testing lab in Greensboro, N.C., to Dominion Diagnostics in Rhode Island. The terms of the transaction were not disclosed.
"We are pleased to complete this transaction, which allows us to focus our efforts and resources on our core business of anatomic pathology," said Aurora Chief Executive Officer Daniel D. Crowley in a statement.
Aurora officials declined comment for this article, as the company is currently in a "dark period" mandated by the U.S. Securities and Exchange Commission. Although Aurora stock is not publicly traded, its debt is, according to spokesperson Bill Halldin. The company expects to announce quarterly and year-end earnings in the near-term, Halldin added.
Aurora's recent SEC filings show it is struggling to reach profitability and significant growth. It noted in its filings that it's been hit hard by recent reductions in both Medicare and commercial reimbursement for pathology services.
For the third quarter ending Sept. 30, 2014, it reported a loss of $7.3 million on revenue of $63 million. In the third quarter of 2013, Aurora reported a loss of $3.5 million on revenue of $62.1 million.
For the first nine months of 2014, Aurora reported a loss of $16.8 million on revenue of $180.9 million. During the first nine months of 2013, Aurora reported a loss of $16.3 million on revenue of $186.1 million.
Aurora had significantly improved its cash on hand with $22.1 million at the end of the third quarter, compared to little more than $1 million during the same time in 2013. That's primarily due to Aurora obtaining $220 million through a new credit facility last summer, including a $30 million revolving credit line.
It used the bulk of the proceeds, $145.6 million, to retire its prior credit facility, and another $9.7 million to fund an acquisition, most likely Arizona Dermopathology, based on the timeline mentioned in the filing (Sept. 30) and the day the deal was announced (Oct. 1).
Its most recent SEC filing indicated that the credit line provided Aurora its current working capital, and also explained the relative flurry of transactions in recent months.
"In order to access the amounts available under its revolving credit facility, the company must meet the financial tests and ratios contained in its senior secured credit facility," the filing said. "The company's management currently expects to meet these financial tests and ratios at least through the end of 2014. The company may undertake acquisitions which it believes would add to earnings and performance with respect to the credit facility covenants."
Takeaway: Aurora Diagnostics appears determined to refocus its clinical mission in order to help pay down its debt.
