In the wake of unexpected losses and a cash crunch in the third quarter, Adeptus Health CEO Tom Hall is retiring sooner than expected. Board director Gregory Scott will take the helm on an interim basis, Adeptus said Tuesday.
Scott is the former co-president of Universal American Corp. and was CEO of APS Healthcare before it was acquired by Universal American. He joined the Adeptus board as an independent director in 2013.
He has agreed to lead the operator of free-standing emergency rooms while the company continues with a CEO search that originally was to replace Hall.
Hall had planned to stay on at Adeptus until mid-2017 after announcing his plans to retire earlier this year. But he agreed to leave earlier after alarming financial results in the third quarter.
Adeptus shares plummeted 68% last Wednesday after the company waited until the markets closed the day before to announce a surprise $14.5 million loss from operations in the third quarter. The company said it was taking emergency measures to avoid a cash crunch. Its stock prices closed that day at $8.60. In May, the once high-flying stocks traded as high as $72.35 per share.
The third-quarter results also revealed that Adeptus had obtained $30 million in additional credit and had lined up $27.5 million more in preferred stock from Sterling Partners, Hall, and co-founders Richard Covert and Dr. Jack Novak.
“In light of the current challenges Adeptus is experiencing, the board is pleased that Greg has agreed to take on this executive leadership role,” Adeptus Vice Chairman Richard Covert said.
The company is refinancing through investment bank Goldman Sachs to provide additional financial flexibility.
Adeptus is the nation's largest operator of free-standing EDs with 66 facilities, including 24 that are owned in conjunction with hospitals.
In its third-quarter earnings release, the Lewisville, Texas-based company noted that its hospital-owned facilities performed better than those operated independently by Adeptus.
The company reported that patient volumes at the hospital-owned facilities increased to 32,086 patient visits in the third quarter, an increase of 39% from the 23,038 visits logged in the prior-year quarter. Revenue from those visits increased to $40.3 million, a jump of 18% from the prior year.
Meantime, volumes at Adeptus' stand-alone centers deceased 19% in the third quarter to 24,243 patient visits. Revenue at those centers fell in a similar manner. It was down 23% to $50 million from $65 million in the year-earlier quarter.