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DVI to Sell Its 7 Unprofitable Outpatient Clinics : Health care: Irvine firm intends to concentrate on core business of leasing expensive medical equipment.


IRVINE — Faced with a 15% drop in profits last fiscal year, DVI Inc. said Monday that it is selling off its seven outpatient clinics to concentrate on its core business of leasing high-priced medical equipment.

The company said it plans to rid itself of its owner-operated clinics within the next year. Those clinics have cost the company some $1.9 million in the past year.

"The performance . . . had failed to meet expectations," according to a prepared statement.

Company officials did not return phone calls for comment.

But Thomas W. Friedberg, health care analyst for Genesis Merchant Group, a San Francisco-based brokerage, said that the company had diversified itself too far in the past two years.

DVI initially sold and held leases for such medical devices as Magnetic Resonance Imaging machines, which give doctors three-dimensional views of internal organs, and CAT Scans, which provide similar diagnostic images. The company has also provided financial services to health care companies.

But in recent years it has expanded its services to include factoring--or buying accounts receivables at discounts from physicians--and outpatient diagnostic clinics.

Now, a restrictive health care economic environment has forced the company to return to its original business, according to Friedberg.

"The company has done a complete 360-degree turnaround in 24 months," he said. "Its roots were in the leasing of expensive medical equipment. That is what they are going back to. This doesn't come as a surprise."

Still, the company has not suffered any bottom-line losses, though its performance has been far from stellar.

Net income for the year ended June 30 was $2.58 million, or 10 cents a share, a 15% drop from the previous fiscal year's net income of $3.05 million, or 51 cents a share.

Revenue for the year was $26.2 million, down 9% from revenue of $28.9 million in the previous fiscal year.

DVI stock fell 12.5 cents a share Monday on the New York Stock Exchange, to close at $8.125 a share.

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