Executive Team Strengthened; September Dividend Set at $0.058 Per Share
TORONTO and HOUSTON, Sept. 22 /CNW/ - Northstar Healthcare Inc. (TSX:NHC)
today announced a strategic realignment under which the company is
strengthening its executive team with the appointment of Silvano (Syl)
Ghirardi as Interim CEO and also reducing its monthly dividend to reflect
current and expected cash flow.
"The time is right to add further depth to Northstar Healthcare's
professional management team," said Robert Kanee, Chairman of the Board. "In
June we appointed our first Chief Operating Officer. Now we are adding a
highly experienced chief executive with relevant public company managerial
experience. We're pleased that Syl has committed to the Interim CEO role until
such time as a permanent CEO is engaged."
A senior executive with leadership experience in the medical device,
pharmaceutical, biotechnology, consumer and technology industries, Ghirardi
has been working as a strategic consultant to Northstar since early June. In
that role, he has been working with Northstar's board and management team in
the development of a new strategic plan for the company.
Ghirardi's related experience includes 15 years with the CIBA Vision
business unit of Novartis AG. In a number of management positions there,
including president, he was part of a team that built a very profitable
business from start-up to over $1.3 billion in revenue.
"I'm very excited by this opportunity to help grow Northstar," said
Ghirardi. "It's a great opportunity to work with motivated and talented
professionals to implement the strategic plan we've put together over the past
few months." Ghirardi has agreed to remain as Interim CEO until a permanent
CEO is appointed by the board.
Dr. Donald Kramer, co-founder of Northstar and CEO since the company's
initial public offering, remains actively involved with the company, as Vice
Chairman, Medical Affairs. In this role he will focus his full attention on
driving organic revenue growth through higher case volumes in the company's
two ASCs. This management realignment enables Northstar to benefit more
meaningfully from Dr. Kramer's experience in surgeon recruitment, ASC
marketing and relationships with medical staff.
In a second realignment initiative, Northstar's Board of Directors
declared a $0.058 per share dividend for September, 2008, representing $0.70
per share on an annualized basis. Payment will be made on October 15, 2008 to
shareholders of record September 30, 2008. This payment represents a reduction
in the level of the company's monthly dividend to a sustainable level, with a
payout ratio comfortably below 100 per cent.
"The board recognizes that many investors will be disappointed by our
decision to reduce the dividend," said Kanee. "Our most recent cash flow
forecast indicates that the operating issues affecting the first half of the
year continue to affect our results, and have in fact been exacerbated by the
weak US economy. As a result, without a dividend reduction, the ratio would
have remained above 100 per cent. With volatile and illiquid capital markets
limiting the company's access to potential new capital, this alignment of the
dividend with cash flow ensures that we will maintain that strength."
Northstar has a strong balance sheet with no long-term debt. The dividend
reduction reflects the board's emphasis on maintaining that strong financial
position. "The directors recognize the importance of the dividend stream to
many investors," added Kanee. "Having said that, our responsibility is to do
what's in the company's long-term best interests. This action ensures that we
will retain our financial strength, better positioning us to grow the company
and maximize long-term returns for shareholders."
A conference call for analysts and interested listeners will be held
today, September 22, 2008 at 10:00 a.m. (ET). The call-in numbers for
participants are 416-644-3414 or 800-733-7560. A live audio feed of the call
will also be available on the Internet at:
A replay of the call will be available from 12:00 p.m. (ET) on September
22, 2008 until 11:59 p.m. on September 29, 2008. To access the replay, call
416-640-1917 or 877-289-8525, enter pass code number 21283603, and then press
the pound # key. The replay can also be accessed over the Internet at the
About Northstar Healthcare Inc.
Northstar owns and/or manages ambulatory surgery centres in the United
States, focusing initially on Houston and other metropolitan areas in Texas.
The Company currently holds interests in two ambulatory surgery centres in
Houston - a 70% partnership interest in The Palladium for Surgery - Houston
and a 60% partnership interest in Medical Ambulatory Surgical Suites. In
addition, Northstar manages an ambulatory surgery centre in Dallas and three
pain management clinics in Houston.
Northstar was founded and sponsored by Donald Kramer, M.D., its Chief
Executive Officer, and Stewart A. Feldman. Mr. Feldman also served as the
co-principal and Chairman and Chief Executive Officer of Healthcare Ventures,
Ltd., which sponsored Northstar, with Dr. Kramer serving as its President.
This press release may contain forward-looking statements (within the
meaning of applicable securities laws) relating to business of Northstar
Healthcare Inc. (the "Company") and the environment in which it operates.
Forward-looking statements are identified by words such as "believe",
"anticipate", "expect", "intend", "plan", "will", "may" and other similar
expressions. These statements are based on the Company's expectations,
estimates, forecasts and projections. They are not guarantees of future
performance and involve risks and uncertainties that are difficult to control
or predict. These risks and uncertainties are discussed in the Company's
regulatory filings available on the Company's web site at
www.Northstar-Healthcare.com or at www.sedar.com. There can be no assurance
that forward-looking statements will prove to be accurate as actual outcomes
and results may differ materially from those expressed in these
forward-looking statements. Readers, therefore, should not place undue
reliance on any such forward-looking statements. Further, a forward-looking
statement speaks only as of the date on which such statement is made. The
Company undertakes no obligation to publicly update any such statement or to
reflect new information or the occurrence of future events or circumstances.
For further information:
For further information: Allan Austin, Tel: (416) 447-4740 Ext. 240,