SAVANNAH, Ga., March 31, 2014 (GLOBE NEWSWIRE) -- The U.S. health care system is on the cusp of a tidal wave of change driven largely by the demands of aging baby boomers and the Obama administration's Affordable Health Care Act. Costs are expected to skyrocket without some major changes, and stakeholders of all stripes -- from doctors to hospitals to insurers -- will be under increasing pressure to deliver their services much more efficiently and cost effectively.
These challenges represent a major opportunity for MIT Holding Inc. (OTC:MITD) with corporate headquarters in Virginia, a company formed in the early 1990s to provide outpatient infusion services at its own, fully equipped and functioning clinic in Savannah, Georgia. MIT went public in 2007 and since 2010 has been re-organized and re-structured and it is now armed with a well-conceived business plan that could lead to explosive growth.
MIT spokesman William Nalley says the company intends to roll out its growth strategy by acquiring owner-operated closed-door pharmacies. There are an estimated 15,000 closed door pharmacies across the U.S. and they typically service defined institutional client bases such as nursing homes, prisons, hospitals, assisted living and hospices to name a few, as opposed to being street-level retail outlets that cater to the general public. Those at the low end have annual sales of $3 million to $8 million while mid-range closed door pharmacies can generate revenues of $8 million to $15 million.
MIT intends to focus on acquisitions in these two segments of the market and, along with acquiring revenues, the company will also acquire their licenses to dispense pharmaceutical products in the states in which these pharmacies operate. Once it has a foothold in a state, through the acquisition of one or more closed door pharmacies, MIT can then roll out its other two divisions and begin aggressively cross marketing its services.
Nalley says MIT will then seek out opportunities to acquire clinics, often located around major medical facilities that provide kidney dialysis or other out-patients services and will then add beds for patients who require infusions -- usually powerful medications that must be administered intravenously over a period of three to four hours from a drip bag.
These clinics and the patients they treat will create additional markets for MIT's closed-door pharmacies. As well, nurses employed at MIT clinics will be able to infuse patients in a hospital, if they wish, or in their homes. "We can acquire facilities anywhere in the country and introduce our infusion services overnight," says Nalley. "We're interested in cross-marketing our services. From an infusion center we get pharmacy business and DME sales leveraging each divisions goods and services. MIT has trained all staff to personalize and prioritize the patients' needs. Our patient interaction is often up to or more than 4 hours per visit. We get to know the patient and their personal needs."
Durable medical equipment, which includes such things as crutches, wheelchairs, walkers, canes, hospital-style beds and a wide array of other goods, is a natural extension of the infusion and pharmacy divisions. Many patients who require infusions also need durable medical equipment of one sort of another and MIT plans to acquire businesses that sell such equipment to take advantage of the opportunity for cross marketing.
"We're not re-inventing the wheel," adds Nalley. "We're simply making it more efficient by bringing interlocking services under one roof."
Drakeford, the former senior managing director of Washington-based Drakeford and Drakeford, one of the oldest accounting firms in the U.S., says that MIT is the holding company for three operating divisions -- infusion services, compounding pharmacies and durable medical equipment. Each of these divisions has the potential to grow rapidly over the next few years and the growth of each can be further enhanced by ample opportunities for cross marketing of services.
The company has an ambitious growth strategy, but Drakeford and his team have laid the groundwork for a successful roll out of their business plan. They have spent four years re-structuring, re-organizing and adopting an ethic that puts sound management first. The company had annual revenues of $5 million when they got involved, but they terminated a number of money-losing or unfavorable contracts, which had the effect of shrinking their revenues in half.
They are re-launching with revenues of around $2.5 million, but Nalley says they could double their sales this year even without acquisitions. As well, when the company goes looking for pharmacies, clinics or durable medical equipment outlets it will be looking for financially sound, well-run operations.
"MIT is very strong on management," says Drakeford. "If we looked at three different pharmacies and two of them had questionable management but big revenues and the third had good management but low revenues we'd bypass the first two."
MIT has a market cap of $3.75 million and trades at $0.13 cents.
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MIT Holding, Inc William Nalley 305-790-2688
