Increased Costs Cited in Planned Action on Up to 10 Centers : Falling Profits Push ReadiCare to Close Clinics

ReadiCare, an Irvine-based chain of industrial medical clinics, said Tuesday that it will close as many as a third of its facilities in an effort to boost profits.

“Up to 10 centers and programs not meeting desired levels of growth and profitability will be divested or relocated,” the company said in a prepared statement.

The company did not disclose which centers will be closed, and the company’s officers were unavailable for comment. ReadiCare operates two clinics in Orange County, in Fullerton and Orange.

ReadiCare contracts with businesses to provide medical care for workers who get sick or injured on the job. It grew quickly through acquisitions of clinics in California, Nevada and Washington but has seen its earnings eroded by increased operating costs.

The company said its strategy of selling or terminating leases on certain medical centers will result in write-downs of their assets. It did not estimate the amount of the write-downs.

But partly because of these write-downs, the company said it expects to post losses for both the fourth quarter and its 1989 fiscal year, which ends Feb. 28.

By contrast, the company in fiscal 1988 earned $900,000 on sales of $19 million. And in the first 9 months of fiscal 1989 the company reported earnings of $843,000 on revenues of $14.8 million.

Steven B. Reid, a health care analyst with L.H. Friend & Co. Inc. in Century City, said he considers the company’s divestitures and write-offs to be wise business moves. He noted that the company’s stock already has suffered from a general malaise of health care investments on Wall Street and has dropped below book value.

He said he expects ReadiCare to take advantage of any further decline in the company’s market value by continuing a steady buy-up of its shares.

The company’s stock was unaffected by Tuesday’s news, selling for $1.50 a share at the close of trading, unchanged from Monday’s close.