Forums › Other Topics › Financial › Lumenis
- This topic is empty.
-
AuthorPosts
-
lagunabbSpectatorNot the best of circumstances to start this thread.
Lumenis stock was delisted from the NASDAQ to the pink sheets today and being listed under the symbol LUMEF.PK
The threat of delisting by NASDAQ was first reported last November because the company finances were not audited by independent accountants as required by the SEC. The company has had 2 months to get the independent audit completed so I am sadly shocked that the company has not done it yet.
The threat of delisting was followed by an open letter from the CFO to the customers (posted on their web site):
>>>>>>>>>>>>>>>>>>>>>>&g
t;>>>>>>Letter to our Customers
December 23, 2003
To our loyal Customers,
I understand you may be considering the purchase of equipment from Lumenis and some customers have expressed concerns regarding Lumenis’ current financial situation. I can appreciate why there may be concerns based on press stories and rumors currently in the market but I want to reassure you that Lumenis is financially secure and will be here to serve you for many years to come. I can say this because of the following:
Lumenis’ current financial challenges are short-term in nature – caused by internal difficulties rather than external market issues.
Our liquidity has been affected by integration issues arising from the acquisition of Coherent and the resulting impacts on sales, buildups in inventory and tightening of supplier credit.
Sales of our products continue to be strong. While actual revenues have declined we have built a backlog of ร million reflecting good underlying demand for our products.
We have a Turnaround Plan that is now being implemented.The plan includes an aggressive effort to significantly reduce costs. We have announced a personnel reduction of approximately 25%, closure of 4 sites and a reorganization of our business to be more customer focused and to improve customer service.
We are reorganizing to a more customer focused functional organization that will allow us to be more responsive to customer needs and improve service. We have reduced from 8 to 4 levels of management and eliminated 25% of the senior management positions to become more responsive and closer to the business and customers.
We have resolved our liquidity issues and have the continued support of the company’s primary bank.We have adequate cash on hand and payables are at historic low levels and are current. Operating cash flow, excluding the restructuring costs, at current revenue levels is near breakeven.
We have a new ű million loan from Bank Hapoalim to finance our restructuring costs associated with our Turnaround Plan.
We have reached agreement on a restructuring of our existing debt that:
Defers all principal payments for almost 3 years and stretches future principal payments over a 10 year period
Covenants for 2004 were amended to levels we are confident will be met
Our revolving credit line will be maintained at โ million
Cash interest costs have been reduced to less than ű million annually
This news is an important expression of confidence in the company’s fundamentals and plans.
Importantly, Bank Hapoalim accepted their fees based in the form of stock options therefore counting on improvements in Lumenis’ stock price.
Most recently we have received a “delisting” notice from Nasdaq:The notice is a request for more information regarding our Audit Committee investigation and SEC investigation.
The SEC initiated an investigation in February 2002 and as a result of questions raised by the SEC, our auditors requested the Audit Committee to conduct an internal investigation. Until that is completed the auditors cannot complete their work.
As a result of not completing the audit work, Lumenis is not in technical compliance with Nasdaq rules, thus the request from Nasdaq.
The Company has requested more time to complete the investigation and audit work and expects the Nasdaq to grant the Company time to complete its work.
Until then the Company’s shares will continue to trade on Nasdaq.
As always, Lumenis is still your strongest link for medical innovation:Leading laser solutions for over 30 years, with an installed base of over 65,000 systems.
Largest R&D budget in the industry, with a robust pipeline of new products & valuable upgrades.
Recently introduced the Lumenis One, a comprehensive system incorporating all the latest technology for the dermatology practice
Patented SLT technology with no competitors.
Allegretto Wave™ LASIK laser has achieved acceptance in one of the largest growth markets, which Lumenis has just introduced to the U.S. market.
Lead the replacement market in ophthalmology through with the launch of 4 new products for Retinal, Glaucoma, and Cataract surgery
Innovators of the latest technological procedures in urology
While our share price has performed very poorly recently, it is a result of us disappointing investors. We have failed to meet the very high expectations we originally set for the company following our acquisitions, and the market is very unforgiving of companies which do not meet their targets. Our share price however, is not a good indicator of our viability or our ability to service our customers.In closing, based on the facts highlighted above I hope you feel more confident and at ease regarding Lumenis’ future. If you have any additional questions or concerns please contact me. I hope Lumenis has the opportunity to serve you for many years in the future.
Sincerely,
Kevin Morano
Chief Financial Officer
Lumenis Ltd.
(212) 515-4187>>>>>>>>>>>>>>>>>>>>>>&g
t;>>>>>>I talked to a couple of former Lumenis technical staff employees to try to get an idea of the turn around potential of the current situation. They were part of a group of 40 employees that tried to negotiate a buyout offer for a specific portion of the Lumenis product portfolio. The negotiations failed and the entire group resigned as I understand it. It is very unclear to me, and certainly others, what the financial strength and product line status of Lumenis are. I am sure that existing Opusdent owners would like some clarifications as well.
If Opus management or reps are monitoring this forum, we would love to hear your comments.
disclosure:
I have no current position in Lumenis.
I was long ESC at one point in the distant past.
I was short Lumenis 2-3 years ago
Robert Gregg DDSSpectatorBig laser company, large installed base, great technology, long history of products and divisions in the marketplace has severe company-threatening financial difficulties.
Gone are Chrys laser, Directed Energy, Luxar, ADT, HGM, Premier, Excel Quantronics, Sharplan.
Same old story, different company (some of the same people involved).
Company size is no predictor to long term success. I’m not sure what all the ingredients for long term success are, but I know what a few are not.
News like this is why Del and I built our own laser for our needs. How could we sit back after watching so many companies fail or go out of business (and their bad business/customer practices) and not be concerned for our patients and our laser practice?
When will the industry, and more importantly the business men and women involved learn?
lagunabbSpectatorIn retrospect, the problems at Lumenis started from the early stages of the company when it was still ESC Medical. The problems were bad technology-engineering-support amplified by bad management. That was not my opinion at one point since I bought the stock thinking that the problems were being addressed as promised by the company. The hiring of the Chairman’s 24 year old freshly-graduated MBA as the CFO was the red flag for me. Still I was not clear about the depths of their problems especially since the creditor bank was willing to keep pouring in money. If the former Chairman wasn’t politically connected, I believe the plug would have been pulled by now. It will be interesting to see if Ariel Sharon’s bribery inquiry expands to include bank loans to companies that did not qualify for loans under normal circumstances.
To understand the early problems of the company, you need to go back to the ESC Medical SEC filings before 1999. I reviewed a few of them this morning and the signs were all there, in the numbers and in the legal sections. The management explanation of soon to end “extraordinary one time charges” to cover up the mounting problems should not have been accepted in retrospect. I accepted those explanations, and bought the stock. I sold when the excuse was used again.
Their technology-engineering-support was lacking and management was incompetent in fixing the problems. However, the uppermost managers was able to enriched themselves while this was all going on with generous compensation and bonuses. They have had a new CEO for several months now to try to refloat the ship. I hope he succeeds but the signs are not encouraging at all.
Robert Gregg DDSSpectatorInteresting………….but sad.
This sort of company failure does nothing to help the industry or the adoption of laser by the mainstream dentist.
It makes everyone question the companies, their management, their technology, their engineering.
The marketplace needs value in the products they buy.
lagunabbSpectatorLumenis CEO response to Nasdaq delisting:
=================================
Letter to our CustomersFebruary 10, 2004
Dear Customer,
I wanted to use this opportunity to provide you with additional information relating to recent events at Lumenis. We understand that, as you consider the purchase of our equipment, you may have some questions regarding the recent change in the trading venue of the Company’s stock from the Nasdaq National Market to the Pink Sheets. While we are disappointed in the decision we recently received from Nasdaq giving rise to this change, we want to reassure you that this change in trading venue should have no impact on our operations or ability to serve you, nor does it impact our financing arrangements. In short, it should have no effect on our ability to meet all of our commitments to you as a customer.
First, I would like to explain why the change occurred, what it means and, hopefully, dispel some unfounded rumors.
Why it happened:
Nasdaq delisted our stock because we were unable to file the auditor’s report for our third quarter financial statements in a timely manner, as required by Nasdaq’s rules.
We were unable to file the auditor’s report because the auditors have not performed any reviews until our Audit Committee completes an internal investigation that was requested by the auditors.
The auditors requested the review because of questions raised during the course of the previously announced SEC investigation regarding the Company’s relationship with its distributors and accounting matters relating thereto.
While the Audit Committee is continuing its efforts to complete the investigation, it, unfortunately, was not able to do so in time to retain our listing on Nasdaq.
What the change means:Our shares will now trade on the Pink Sheets. The Pink Sheets is the leading provider of pricing and financial information for the over-the-counter (OTC) securities markets. Approximately 5,000 companies trade in the OTC market.
The Company will continue its practice of issuing press releases on significant events and keeping investors informed.
What happens next:The Audit Committee will continue its efforts to complete the investigation as promptly as practicable and, thereafter, review the results of the investigation with our auditors, in an effort to become current in our SEC filings.
In the meantime, we intend to appeal the delisting decision.
Importantly, Bank Hapoalim, our sole lender, is aware of our situation and is fully supportive of the Company and its plans. We remain in compliance with all of our covenants in our agreements with them.We remain committed to delivering to our customers the best technology and products in the market today and to continuing to improve on the service and support that is so important to your practices. While our share price has performed very poorly recently and the delisting is a disappointment to our shareholders, and us, it is unrelated to, and should have no impact on, our ability to provide you with the best products or our financial viability for the long term.
In light of the facts highlighted above, I hope you feel more comfortable and confident about Lumenis’ future. If you have any additional questions or concerns, please contact Kevin Morano, our CFO, or myself.
In closing, I want you to know Lumenis appreciates your interest in our products and your support of our company. We look forward to serving you for many years to come.
Sincerely,
Avner Raz
President and Chief Executive Officer
Lumenis Ltd.
===================================Mr. Raz almost sounded proud to be delisted to the “leading provider of pricing and financial information for the over-the-counter (OTC) securities markets”. I would have preferred an action plan on the audits to get the company relisted on the regular stock exchange. This is the time to lay out the real numbers and let the chips fall on responsible parties where they may. My understanding is that important records were lost as a result of computer(s) theft from one of their major offices. I sure hope those records were backed-up.
-
AuthorPosts