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Laser Designer Trimedyne Hires New Accountants

September 24, 1998|BARBARA MARSH | TIMES STAFF WRITER

Trimedyne Inc., the troubled Irvine designer of medical lasers, said Wednesday it has changed public accountants to cut expenses.

Marvin P. Loeb, chairman and chief executive, said the company dropped the major accounting firm PriceWaterhouseCoopers LLP in favor of a small firm that charges about half as much.

"It's purely a cost thing for us," Loeb said. "PriceWaterhouse is a great firm. We've used them for a number of years, and they're quite expensive." He wouldn't elaborate on the cost savings.

PriceWaterhouseCoopers resulted from the recent merger of two major firms--Price Waterhouse and Coopers & Lybrand.

In a report filed Wednesday with the Securities and Exchange Commission, Trimedyne said it hired McKennon, Wilson & Morgan as its new accountants on Sept. 15. Loeb said one of the accounting firm's partners--Michael McKennon--recently worked for PriceWaterhouse, where he had been in charge of its Trimedyne account.

McKennon couldn't be reached for comment. Officials for PriceWaterhouse didn't return calls.

In the filing, Trimedyne said it had "no disagreements" with PriceWaterhouse on any accounting matters during the last two fiscal years. In a letter accompanying the filing, the accounting firm agreed.

Loeb said the company has been cutting staff and other expenses to curb losses.

In August, it reported a loss of $906,000, or 8 cents a share, for the fiscal nine months ended June 30, which included $2.2 million of start-up, research and development expenses at a subsidiary. Revenue fell 14% to $5.5 million from $6.4 million.

The company posted income of $2.1 million, or 19 cents a share, for its third fiscal quarter, but the profit included a one-time gain of $3.6 million from the sale of a patent license. Revenue for the quarter declined 28% to $1.8 million from $2.5 million.

On Wednesday, the stock closed unchanged at 94 cents a share, matching a 52-week low, in Nasdaq trading.

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