Urohealth Shares Bounce Around After Moves

Shares of Urohealth Systems Inc. fluctuated widely Tuesday following a reverse stock split and two acquisitions announced by the biomedical company.

The stock, having split on a reverse one-for-three basis as trading began on the American Stock Exchange on Tuesday, opened at $7.75 a share, down 12.5 cents from its adjusted Friday close of $7.875. The shares crept up to a Tuesday high of $8, dropped during trading to $6.875, then recovered somewhat to close at $7.25, down an adjusted 67 1/2 cents for the day.

At the company’s annual meeting Friday, shareholders approved its plans to buy two companies, Osbon Medical, in Augusta, Ga., and Advanced Surgical in Princeton, N.J. The company issued 15 million shares to buy Osbon and 3 million for Advanced, then commenced the reverse split.

The deals are part of CEO Charles Laverty’s plan to turn the company into a diversified producer of items to treat female incontinence and male impotence.

But judging from the company’s trading range, stockholders aren’t as enthusiastic about its prospects as they seemed in mid-September when Laverty announced plans for the two acquisitions. In eight days of trading, the stock ran up $4.125 to close at a high of $13.50 on Sept. 20.

Since then, it slipped steadily to close at a low of $6.938 last Thursday.

John Dutton, an analyst at Irvine-based L. H. Friend Weinress, says, “The market still is waiting for performance.”

For the three months ended Sept. 30, the company posted a loss of $2.7 million, or 14 cents a share, compared with $2 million, or 11 cents a share, last year, on a 30% sales increase to $6.2 million. The recent loss included a charge of $1.1 million, or 5 cents a share, for acquisition expenses.