Tokos Posts $26-Million Loss for 1993, Cites Write-Offs

SANTA ANA —  Tokos Medical Corp., a struggling maker of pregnancy monitors that recently cut 200 employees, Thursday reported an annual loss that included an $8-million charge against earnings for 1993. Tokos had a net loss of $26.4 million, or $1.35 a share, compared with net income of $6.5 million, or 37 cents a share, a year earlier. The loss included write-offs to cover the costs of layoffs, consolidating various administrative and manufacturing functions, and inventory.

Last month, the company said it would cut back its use of staff who talk directly to patients using its pregnancy monitoring devices and eliminate in-house manufacturing.

Revenues for the fiscal year fell 24% to $120.8 million from $159.9 million a year earlier. For the fourth quarter, the company reported a loss of $16.7 million, or 98 cents a share, compared with net income of $698,000, or 4 cents a share a year earlier.

Revenues for the fourth quarter fell to $26.4 million from $39.2 million a year earlier.

In addition to the restructuring charge, the company recorded a $4.3-million tax provision, or 25 cents per share, during the fourth quarter as an allowance for payment of possible future taxes.

“There were no surprises in this release,” said Howard Rosencrans, analyst at HD Brous & Co., an investment bank in Great Neck, N.Y. “I think they have a bright future but are in a transitional phase now.” Rosencrans remains upbeat.

He said a 17,000-patient study by researchers at the University of Mississippi indicated that 75% of women who are at risk of premature birth can be brought to full term through the use of Tokos’ equipment. The study is due for publication in December in the Journal of Reproductive Medicine.

He said such a report could improve Tokos’ reputation in the medical community, which has been skeptical because of poor results in previously published studies.

Despite the expected benefit from such a positive study, Rosencrans said he still expects Tokos to lose 50 cents a share in 1994. He said he did not rule out the possibility of a future merger with an industry rival. Joe Millsap, an analyst at investment bank Morgan Keegan & Co. in Memphis, Tenn., also was upbeat about Tokos’ future, particularly as the company aggressively seeks new business with HMOs.