Wellness program provider Healthways has decided to remain independent, despite pressure from its largest shareholder, after concluding a review of various growth options.
The Franklin, Tenn.-based company, which creates wellness-improvement programs for employers and insurers, had been under pressure from hedge fund North Tide Capital to give shareholders a greater voice in governance after several quarters of financial losses.
However, the company returned to the black in its most recent quarter, reporting net income of $2.6 million on $199.1 million in revenue for the fourth quarter compared with a net loss of $5.3 million on $169.2 million in revenue during the fourth quarter of 2013.
North Tide began agitating for a leadership change at the company more than a year ago. In June, it reached a compromise with Healthways to replace three directors on the company's board, including its chairman.
The new board then created a strategic review committee and hired J.P. Morgan Securities as its financial advisor in January. The company considered a sale but decided against one.
“Ultimately, we unanimously determined that continuing to focus on the company's growth plan provides the best opportunity to enhance value for our stockholders,” Donato Tramuto, Healthways' new chairman, said in a release. “Although the formal process of reviewing strategic alternatives has concluded, we will continue to evaluate all opportunities to enhance stockholder value.”
The company is on track to meet the revenue and earnings projections it provided to shareholders this year, CEO Ben Leedle added in the release. It expects to add new customers and services under both new and existing contracts.
Healthways is scheduled to report its first quarter financial results April 23.
