After the company placed three of its top executives on leave while it investigates practices regarding stock option grants, news has not been good for Vitesse. The Camarillo-based semiconductor company appointed an interim chief financial offer who specializes in turnaround management and announced that it would have to restate financial statements going back more than three years. An internal investigation revealed that customer credit may have been handled incorrectly and that payments may not have gone to the appropriate accounts receivable. Last week, class action lawsuits against the company began rolling in. By the end of the week at least eight law firms had announced suits on behalf of the company’s investors. Vitesse’s stock was trading at about $1.85 toward the end of the week, having reached a 52-week high of $3.79 earlier. Analysts expect that the stock price will remain under serious pressure until the company can complete its investigation and reach some kind of conclusion to put its accounting concerns behind it. Mortgage Shakeout Half a million people employed in the mortgage business across the country took notice as Ameriquest Mortgage Co.’s parent company ACC Capital announced it was planning to fire 3,800 people and close 229 branches. The number of loans throughout the industry is continuing to fall, and some experts are predicting that up to a fourth of the people working in the mortgage business may end up looking for new jobs in the coming year. There are plenty of signs that the market is grinding down and last month the Federal Reserve indicated it would probably raise interest rates one more time. Calabasas-based Countrywide Financial Corp., along with other mortgage giants, has been increasing its business, however, as smaller companies are shutting their doors. Countrywide Chairman and CEO Angelo Mozilo has been predicting a slowdown in the industry for months. But during a conference call at the end of April, Mozilo said that the decreasing level of competition and prices coming back down to earth can only be good for Countrywide. IHOP Recommendation Michael W. Gallo, an analyst at CL King, gave IHOP Corp. high marks last week and recommended that investors start purchasing the company’s stock. He said that the company’s executives should be commended for turning the brand around during the last year, and their efforts have increased the value of the company while its stock price has remained fairly stable. He was also please to see that while other casual dining establishments are having trouble keeping sales up, IHOP reported a five percent increase in its same store sales this past quarter. On Assignment Report On Assignment, a health care and scientific staffing firm in Calabasas, saw growth in the first quarter of 2006 which typically sees a reduction in the number of billing days for traveling nurses because of year-end holidays. The company increased its revenues by 34 percent compared with the previous year and posted $302,000 in earnings vs. a loss of $2.8 million in the same quarter last year. CEO Pete Dameris, who was appointed in 2004 to take the company away from its cash-hemorrhaging ways, said he was happy to be able to report that the growth in revenue and profits came without acquisitions, new branch offices or new service offerings. “Our focus in the remainder of 2006 will be to translate our expanding revenue base into improved EBITDA and operating margins,” Dameris said. “In order to achieve this, we will continue to work to increase bill rates and raise gross margins above the seasonally impacted first quarter levels, increase staffing consultant productivity, invest in our highest growth markets and lines of business and control, rationalize and leverage our SG & A; expenses. During the first quarter of 2006, our gross margins expanded throughout the quarter.” North American Scientific Gets OK April brought good news and bad news for Chatsworth-based North American Scientific. the company reported on April 25 that it had received the thumbs up from the Food and Drug Administration to market its low-dose internal radiation breast cancer treatment. The company also announced that it was hoping to get approval for a similar, high-dose therapy product and be able to release both of the products in November. The technology is called brachytherapy, and uses radioactive seeds to treat prostate cancer, and recently, breast cancer. Investors liked what they heard and the company’s stock price went up 23 percent to $2.70 that day. On April 28, however, the company received notice from the Nasdaq Stock Market that it did not meet the minimum $10 million stockholder’s equity requirement for continued listing on the exchange. The company requested a hearing before the Nasdaq Listing Qualifications Panel to ask for continued listing, but can’t say what the outcome of the request will be. If its request is denied, the company may decide to seek listing on the National Capital Market. Passing Inspection A.M. Best Co. completed its review of Health Net Inc. and affirmed the company’s financial strength ratings of the parent company and its subsidiaries and also affirmed its debt and issuer credit ratings. The ratings are no longer under review and have been assigned a stable outlook. The company said that Health Net has been able to make a significant turnaround in its operating performance, although it is showing some decline in membership and has some profitability concerns in its New Jersey Plan. The company noted its rise in net income in 2005, which brought it back to the levels it reported in 2003, and said it expects improved earnings this year. Total membership dropped by six percent, after the company raised its rates and made other corrective decisions, but it will probably report a boost in 2006 after purchasing Universal Care in Long Beach. It also highlighted the improved performance in the Northeast and noted that even the struggling New Jersey segment has improved from 2004.
Vitesse Troubles Continue With Announcement of Suits