Printer Friendly

ADVISER RETAINED AFTER BLOW TO DMD; COMEBACK SOUGHT FROM SHARE SETBACK.

Byline: Ben Sullivan Daily News Staff Writer

A week after supply problems cost medical equipment specialist Dental/Medical Diagnostic Systems Inc. more than a third of its share price, the company hired an investment bank to help steer it back to health.

DMD has retained San Francisco-based Sutro & Co., ostensibly to manage the recall of about $18 million in warrants on the company's stock. But coming just a week after the firm announced that a manufacturing partner can't deliver a much-anticipated tooth-whitening device, the move is seen in some circles as at least in part an attempt at damage control.

News of the supply problem sent DMD shares down $2.25, or 34 percent, over the course of last week. DMD shares closed Wednesday at $4.25, up 3.12 cents.

DMD Chief Financial Officer Ron Wittman said Sutro will manage the eventual recall of more than 2 million warrants on DMD stock issued last year as part of a secondary offering. The warrants let their holders buy a corresponding number of DMD shares at $5 apiece, once the stock has traded at $9.50 or more for 10 consecutive days.

But because the company's shares are trading at only about half the target price, Wittman acknowledged it could be awhile before the recall occurs. Until then, he said, Sutro will serve as a general financial adviser to DMD, but was not hired to find a buyer for the company.

``We are not actively pursuing the sale of the company. It's not an option,'' Wittman said.

DMD ran into trouble when its manufacturing partner, Ion Laser Technology Inc. of Salt Lake City, said it could not reliably supply the company with the Apollo 9500, a machine that uses high-intensity light to bleach teeth and to cure, or harden, cavity-filling cement.

DMD had expected to roll out the $6,000 machine this quarter for sales to U.S. dentists. According to Wittman, the company spent a significant though undisclosed amount on marketing preliminaries.

Instead of launching the Apollo 9500, DMD has applied to the Food and Drug Administration for domestic approval of a similar device, built in France, that it already sells internationally. Until this other product is on the market, DMD will use money raised through a $4 million-plus private placement the company conducted in March, Wittman said.

Jeffrey Berg, an analyst at New Jersey-based M.H. Meyerson, said the switch in machines will set the company back about three months in its U.S. sales plans, but that DMD ultimately is well placed in the growing dental technology sector.

Berg said the company's share price will ``unquestionably'' rebound.

``It's a temporary, not a long-term, setback,'' Berg said.
COPYRIGHT 1998 Daily News
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Business
Publication:Daily News (Los Angeles, CA)
Geographic Code:1USA
Date:May 14, 1998
Words:448
Previous Article:WET TRACK, GO BACK; HOLLYWOOD PARK IS FORCED TO POST RARE CANCELLATION.
Next Article:LAKERS NOTEBOOK: MALONE GETTING LEG UP ON RIVALS.
Topics:


Related Articles
Muscular dystrophy: defective inhibitor?
ANALY$OURCE INTRODUCES ANALYTICAL SOFTWARE TOOL.
Friday Report excoriates Direct Marketing Days.
BUSINESS NOTES ELLIS HIRES ADVICE ON PURCHASE OFFER.
Coming events. (Who, What, When & Where).
VARGAS' FIRST STEP INTO RING SMALL FIGHTER RETURNING FROM SUSPENSION.
A 'Dash' to the finish: young doctor overcomes battle with life-threatening illness.
Clear vision.
GIRLS' TENNIS: H.-W. LOSES IN TIEBREAK.
A Women's Guide To Men's Health.

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters