Here's the verbal post by Dr. Walker.....
A Letter From The CEO
July 11, 2011
Dear Shareholders,
Oncology Med, Inc. (OMI) continues to grow and be a strong healthcare company with clients, contracts, or operations now in 12 states from Florida toMassachusetts. Our main clinical offices are in Pittsburgh,PA with our corporate executive offices located in the District of Columbia suburbs of Virginia and additional key executive staff located in other metropolitan areas of the eastern U.S. We continue to maintain a strong presence within the healthcare community and specifically in the area of support for cancer care treatment and services.
With the impending changes in healthcare legislation and implementation as well as the establishment of Accountability Care Organizations (ACOs) for the control of payment to healthcare organizations for best outcome lowest cost, we want to assure our shareholders that we are anticipating nothing but a positive impact to our company from these significant changes in the healthcare market. We have always provided low cost, best outcome, cafeteria options for the support and treatment services we offer our clients and their patients. This will continue to be our goal because it allows our clients to be more flexible and competitive in their markets; moving faster to meet the demands of physicians, patients, and the ultimate payors and future ACOs. We anticipate that as we continue to see consolidation in healthcare to regional and/or large vertically integrated systems which are either trying to become or stay a major player in their respective markets that these systems will expand their willingness to outsource contract services to allow for rapid change, expansion, or market share which will be demanded and necessary in the new healthcare environment. We are already seeing this in the cancer treatment arena.
I have attached Profit and Loss statements for the 1st and 2nd quarters of our fiscal year that runs from November 1 through October 31 (see below.) These are the most recent available but are un-audited and have not been posted through the Pink Sheet reporting mechanism.
During the 1st quarter, we did not renew three contracts in our medical physics staffing division. Subsequently, this had an appreciable impact to our revenue for that period. In turn we reduced staff by two medical physicists and one administrative position to adjust for the reduced demand in that division. We have been successful in signing two additional contracts for startup physics support at two new veterinary radiation oncology practices; one in the Pittsburgh area and the other in North Carolina. Both of these contracts included continuing physics support which will contribute additional long term revenue flow to the company. Revenue from these contracts was not generated in the first quarter; however2011, revenue from them was generated and did show up in the second quarter. There is also a typical seasonal pattern associated with our prostate cancer brachytherapy demand with the winter months being typically slower than other times which contributed to a lowering of our revenue numbers in our 1st and 2nd quarters. Anticipated acquisition of necessary capital equipment for our new contracts is expected in our 4th quarter which will increase expenses due to the cost incurred through the capital leases associated with this equipment. Generally, this is offset by revenues generated from the new contracts in many businesses. However, with prostate brachytherapy, as with most medical procedures, the equipment needs are always in advance of generated revenue from utilization and revenue generating cases being performed by at least one budgetary quarter.
Our prostate cancer brachytherapy business has continued to grow, but at a rate less than forecasted for our current budget year. We are diligently working to finalize negotiations with new contract sites in easternMassachusettsandDistrict of Columbia metropolitan areas which should result in appreciable growth in the coming months. We will be announcing these once the contracts are executed with those medical facilities; however, theDistrict of Columbia facilities are already preparing to schedule cases in the next couple of months indicating that contract execution is near. Prostate cancer brachytherapy treatment is typically scheduled 1-3 months in advance on our schedule after the initial diagnosis of the patient has been made. We continue to work with Dr. Irving Kaplan and his associates from the Harvard Medical Group’s Radiation Oncology practice to recruit new ambulatory surgery centers (ASC) in theBostonarea. Our joint affiliation with this group of radiation oncologists has been very successful and we continue to see growth in this geographical area above expectations and forecast. In addition, we continue to work with other key radiation oncologists in this area and are actively recruiting other physicians for usage of our services in our contracted medical facilities.
One of our other key initiatives is to team with companies that market linear accelerators to a new significant growth market of veterinary radiation oncology practices. Our execution of the two additional medical physics support contracts with new veterinary radiation oncology practices, listed above, contributed nicely to our revenue income during the second quarter. Besides acceptance and commissioning of the equipment for the site, these contracts include continuing medical physics support for continued revenue generation for the remainder of this budget year and into next year. We are aggressively pursuing this potentially lucrative market as a good long term revenue stream for our medical physics division over the next several years.
The primary impediment to OMI’s growth this past year and possibly for the remainder of this budget year is the availability of funds to support aggressive new business development initiatives, expansion into new geographical markets, and the expansion and growth of existing services. The current economic environment has had a dramatic impact on small, medium, and large businesses ability to secure necessary and desired capital for growth and expansion of their companies. Our executive team and Board are looking into our options for infusion of capital for our company’s growth objectives and will report going forward on our success in this area. Otherwise, we may only see growth for the remainder of this budget year in our current markets located in theOhio/easternPennsylvania, northeast (New York,Connecticut, and Massachusetts), and western Pennsylvania/DC markets for our prostate brachytherapy. We are experiencing and expect to continue some moderate growth in our medical physics division in the eastern half of theU.S.for the remainder of this year.
I hope that the information provided is helpful for our shareholders to fully understand OMI’s current status, anticipated near term successes, and our short and long term needs and goals as we continue to build a successful company. I will try to continue to keep the investors and shareholders informed when there is important news to be announced associated with our successes or any other notable change in the company’s operations, goals, expansion initiatives, and new market/services growth so that you will be kept as informed as reasonably possible. Our establishment of a Face Book account is one of the ways we intend to move information to you as quickly as possible. Our past news releases were surgical and strategically targeted which did not necessarily help our shareholders and investors with current news and communications from the company. We encourage you to have patience with us as the executive team and Board works to position the company for long term success. In doing so, much of our short and long term business strategies, as well as, target markets, new markets, and current client negotiations must remain confidential to a large degree to keep us competitive with other companies in our lines of business of which many are not publicly traded nor have to share specific information with investors, shareholders, or the public at large. Please read the disclaimer below and understand that this information is not meant to promote sales of company stock, but only to inform shareholders of our current status.
AI
