SFBC International has decided to close down its Florida operations following an unfavorable ruling regarding a clinical facility it operates in Miami, and as a result is withdrawing its 2006 financial forecasts.
SFBC had already scaled back its earnings forecasts for 2006 earlier this month after reporting a first-quarter loss of $4.1 million, mainly a result of difficulties in winning new contracts for its early phase clinical and laboratory services business in the wake of a damning Bloomberg report which claimed to have uncovered safety problems, sloppy reporting and lax procedures at the Miami facility.
Adding to the company’s woes, the Miami facility had been deemed structurally unsafe by the local authorities, which declined to extend a review of a remediation plan drawn up by SFBC and aimed at bringing the building up to code. The company said it plans to appeal the Miami-Dade County Unsafe Structures Board ruling, which gives it 60 days to file for a permit to demolish the building, in the Florida courts in order to allow an ‘orderly shut down of operations’.
Losses from its Florida operations were previously expected to cut 2006 earnings from operations by about $7.5 million to $9 million, but in a statement SFBC chief financial officer David Natan said this guidance had now been withdrawn until the company can get a clearer picture of the loss from discontinued operations.
The Miami facility had been expected to account for around 10% of the firm’s revenues in 2006.
