Zila faces tough financial times
The current economic crisis continues to
wreak havoc with the financial results of many dental product suppliers. One of
the latest to report tough times is Zila, the manufacturer of the ViziLite Plus
oral cancer screening product.
Zila announced this week that it failed to
make a convertible note interest payment due January 31 and may have to file
for Chapter 11 bankruptcy protection unless it can resolve its debt.
Zila reported a net loss of $25.3 million
on revenues of $8.5 million in the second quarter of fiscal 2009 (end-January
31), compared to a net loss of $4.7 million on revenues of $10.5 million in the
same quarter in 2008.
The loss was due primarily to a $23.2
million noncash charge required under accounting rules, Zila said. The decline
in revenues is being attributed to the global economic downturn and customer
concern about its viability as an ongoing business, according to the company.
"We are making every effort to
conserve our cash," said David Bethune, chairman and CEO of Zila, in a
press release. "We have, among other things, continued salary reductions
for a number of management personnel, further reduced headcount throughout the
organization, eliminated the employee stock purchase plan and its associated
costs, furloughed certain manufacturing production personnel, reduced the
number of seminar programs and streamlined the cost structure of these
programs, and reduced tradeshow expenditures."
As a result of the technical default and
sales declines, the company stated that it has substantial doubt about its
ability to continue as a going concern.
"In order to continue as an ongoing
business and fund our operations over the next 12 months, we will require
additional funds and need to restructure our senior secured convertible
notes," Bethune said. "We have had discussions with a number of
potential investors, all of whom have required, as a condition of their
investment, that the senior secured convertible notes be repaid from the funds
provided by the investor(s) and that this repayment be at a substantial
discount from the $12.0 million principal outstanding to reflect what they
believe to be the current market value of those notes."
Levin Group announced that it has formed an
alliance with ABEL Dental Software, a Buffalo, NY-based practice management
software firm. ABEL will work with Levin Group's Total Practice Success
practice management consulting division and its Total Practice Success training
division.
Levin Group will provide training for ABEL
Dental Software customers on Power Cell Scheduling, a scheduling system
developed by Levin Group to maximize dental practices' efficiency and
productivity. The training program will be custom-designed around ABEL Dental
Software's products to help its customers fully understand the products,
leading to maximum utilization.
In addition, ABEL is sponsoring Levin Group
CEO Roger Levin's Total Success Seminar for general dentists in Toronto this
May. The seminar is designed to teach dentists and dental teams the Levin Group
Method, which the company describes as a results-driven approach to practice
development that addresses core issues, redesigns outdated systems, and
provides customized solutions based on a practice's needs.
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