Originally Published MX March/April 2006
COVER STORY
Bettering the Bottom Line|
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During his time as chief executive officer, Joseph DeVivo has engineered a restructuring of RITA Medical (Fremont, CA) that has turned largely on the integration of a major acquisition. Consequently, the company's financial performance has improved steadily in recent quarters.
Since RITA Medical acquired Horizon Medical (Atlanta) in June 2004, revenue for the combined company has grown from $8 million in the third quarter of 2004 to $11.2 million in the third quarter of 2005. Horizon Medical's vascular access business represented a strategic fit for RITA Medical, as RITA's radio-frequency ablation (RFA) devices and Horizon's ports and catheters share the same physician customer base.
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| Share price for RITA Medical Systems Inc. (Fremont, CA) versus the S&P 500 Index, from April 2004 through January 2006. (click to enlarge) |
The completion of the acquisition in June 2005 significantly improved the company's bottom line. RITA's net loss for the third quarter of 2005 was $705,000—or 2 cents per share—the best bottom-line performance in the company's history. This loss was a reduction by nearly half of the $1.4 million net loss incurred in the second quarter of 2005, and is even more dramatic when compared with the $3.3 million loss in the third quarter of 2004. During the third quarter of 2005, RITA's earnings before interest, tax, depreciation, and amortization (EBITDA) of $500,000 represented the first time the company's EBITDA ventured into the positive.
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