Sfbc (NASDAQ:SFCC)
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SFBC International, Inc. (NASDAQ: SFCC), a provider of
drug development services to branded pharmaceutical, biotechnology,
generic drug and medical device companies, today announced that it
plans to cease all of its operations in Florida, including its Miami
and Ft. Myers facilities. In addition, the Company announced today
that the Miami-Dade County Unsafe Structures Board failed to issue an
extension for reviewing the plans submitted by the Company related to
its planned structural improvements to the Miami facility.
"SFBC International remains dedicated to providing the
highest-quality, early and late phase clinical trial testing services
to our clients," said Jeffrey P. McMullen, president and chief
executive officer of SFBC International. "The recent decision by the
Unsafe Structures Board will further hinder our ability to restore
profitability at our Miami operation, resulting in an acceleration of
our review and decision to discontinue the operations of this part of
the Company. We will work closely with our clients to plan for an
orderly completion of ongoing studies at these locations. Planned
Phase I studies at Florida facilities will be directed where possible
to our clinics in Quebec City, Montreal and, when completed later this
year, in our new Toronto facility. When the various options were
evaluated, it became evident that taking immediate, decisive action by
shutting down our Florida operations would result in greater long-term
value for our shareholders and clients. Removing the burden of the
losses from the Florida operations as well as the previously estimated
remediation costs for the facility in Miami, will enable us to
dedicate our financial resources as well as our executive committee's
time to ensure the reputation and performance for the overall
Company."
"We are withdrawing the guidance that we have provided for our
2006 financial results until we can provide updated guidance,
including an estimate of the loss from discontinued operations,"
stated David Natan, vice president and chief financial officer of SFBC
International. "While the Florida operations were expected to account
for approximately 10% of revenue in 2006, the losses from these
operations were previously expected to impact our earnings from
operations by approximately $7.5 million - $9.0 million in 2006."
Mr. McMullen concluded, "Decisions like this are not made without
extensive review and careful consideration of all factors. We know
that this decision will greatly impact our employees in Florida who
have been valued members of the Company."
The Miami-Dade County Unsafe Structures Board gave the Company 60
days from May 17, 2006, to file for a permit to demolish the Miami
facility. However, the Company intends to appeal this ruling to the
Florida courts and potentially file an injunction to stay these
proceedings to facilitate an orderly shut down of operations and
complete the transition of any studies to its Canadian facilities,
where possible.
About SFBC International, Inc.
SFBC International, Inc. is an international drug development
services company offering a comprehensive range of clinical
development, clinical and bioanalytical laboratory, and consulting
services to the branded pharmaceutical, biotechnology, generic drug
and medical device industries. SFBC has more than 35 offices,
facilities and laboratories with approximately 2,500 employees
strategically located throughout the world. For more information,
visit SFBC's website at www.sfbci.com.
Forward-Looking Statements
The statements made in this press release relating to the
leveraging the strong reputation of the Company's subsidiaries, the
estimated impairment charge, estimated stock option expense, and 2006
guidance are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act").
Additionally words such as "seek," "intend," "believe," "plan,"
"estimate," "expect," "anticipate" and other similar expressions are
forward-looking statements within the meaning of the Act. Some or all
of the results anticipated by these forward-looking statements may not
occur. Factors that could cause or contribute to such differences
include, but are not limited to, whether adverse publicity relating to
SFBC's Miami operations causes clients to select competitors, not only
for early stage branded clinical trials but also for other aspects of
SFBC's business; SFBC's ability to resolve open issues relating to its
Miami property including whether it can change the hospital-type
classification and successfully appeal and/or enjoin the Miami-Dade
County Unsafe Structures Board ruling, whether a building permit will
be issued, whether it can complete its remediation plan on a timely
basis and within reasonable cost parameters, whether SFBC will prevail
in the pending land lease litigation and whether it will be able to
relocate its Miami business; continued adverse publicity related to
actions of the United States Senate Finance Committee; developments
with respect to the SEC's inquiry and securities class action lawsuits
and derivative lawsuits; SFBC's assessment of its current FDA
inspections; SFBC's ability to successfully achieve and manage the
technical requirements of specialized clinical trial services, while
complying with applicable rules and regulations; the Miami
subsidiary's continued ability to recruit participants for clinical
trials; regulatory changes; changes affecting the clinical research
industry; a reduction of outsourcing by pharmaceutical and
biotechnology companies; SFBC's ability to compete internationally in
attracting clients in order to develop additional business;
cancellation of contracts; SFBC's ability to retain and recruit new
employees; SFBC's clients' ability to provide the drugs and medical
devices used in its clinical trials; SFBC's future stock price; SFBC's
financial guidance; and the national and international economic
climate as it affects drug development operations. Further information
can be found in SFBC's risk factors contained in its Form 10-K filed
with the SEC in 2006 and other filings with the Securities and
Exchange Commission.