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Women First Eyes Merger Partner, Sale

Women First Eyes Merger Partner, Sale

Women First HealthCare Inc.’s stock fell 65 percent from $1.78 to 65 cents on March 20 after the San Diego-based specialty pharmaceutical firm for women said it had a net loss for the fourth quarter, fell out of compliance with its financial covenants, and would explore a merger or sale of the company.

“We hired CIBC as an adviser and have been exploring strategic options including a merger or sale of the company,” said Edward F. Calesa, president and CEO of Women First.

Women First posted a $6.8 million net loss for the fourth quarter in 2002, or 30 cents per share, including a $1.1 million excess inventory charge.

That compares to a net income of $52,000, or 1 cent per share, for the fourth quarter in 2001.

Women First attributed the net loss to lower gross margins, increased marketing and sales costs and higher interest expenses.

The firm said its fall out of compliance related to its senior security notes, which required, among other things, minimum earnings before interest, taxes, depreciation, and amortization.

It plans to restructure its debt with lenders.

The firm has $1.5 million outstanding on its working capital line of credit and $28 million outstanding on its senior secured notes.

Student Loan Firm Reports Losses for Year 2002

Education Lending Group Inc., a San Diego-based originator of federally insured student loans, said it lost $28.3 million for 2002, compared to a net loss of $4.1 million for the previous year.

CEO Robert deRose said the larger loss is proof the company has emerged as a player in the make-and-hold lending market.

“The more originations, the more upfront costs; we’re expensing (loan) originations upfront,” deRose said.

ELG originated about $1.5 billion in student loans last year, retaining some $1.3 billion on its balance sheet.

Web Developer Reports Higher Revenues

Z57, a San Diego-based Web site development firm, said it posted sales of more than $4.7 million in 2002, up 37 percent from the previous year.

This year’s revenues are expected to exceed $6 million, the firm said.

The privately held company, started four years ago, now has about 100 employees and 7,000 clients nationwide. It has two offices, in Miramar and Carlsbad.

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