Arcadia: Don't buy our stock

Back to TopCommentsE-mailPrintBookmark and Share

Arcadia Resources Inc. is telling shareholders not to buy its stock because it is out of cash and faces a $40 million pile of debt that comes due on April 1.

The Indianapolis-based health care company completed the sale of its DailyMed pharmacy business on Feb. 17 to a subsidiary of Illinois-based Walgreen Co. But the $2 million in proceeds from the sale went entirely to satisfy a debt to one of DailyMed’s suppliers.

That leaves Arcadia with its home health care and medical staffing businesses, which are being funded right now by an $11 million line of credit from Dallas-based Comerica Bank.

As of Dec. 31, Arcadia already had drawn nearly $9.5 million on that line, which is part of the debt due on April 1. The rest of the debt is owed to unsecured investment funds and likely will not be repaid, according to a quarterly securities filing issed by Arcadia in February. So Arcadia is continuing to look for a buyer for its staffing businesses, as it has unsuccessfully for the past year.

The company stated in its securities filing that it is having “ongoing discussions with several parties regarding the potential sale.”

Arcadia officials, in the securities filing, say they expect a buyer to either repay or assume the debt owed to Comerica. But the remaining debts are unlikely to be paid off. If Arcadia cannot sell its staffing businesses, its only hope will be to negotiate for more time to pay off its debts—and then see a significant improvement in its business performance.

That hasn’t been happening recently. The staffing businesses saw their revenues decline 1.5 percent during the nine months ended Dec. 31, compared with the same period in the previous year. During that period, the businesses pulled in $61.5 million and posted a loss of $13.5 million.

“For these reasons, investors are strongly discouraged from trading in the company’s common stock because it is highly unlikely that there is any equity value related to the common shares,” Arcadia officials stated in the securities filing.

Arcadia had staked its future on the DailyMed pharmacy business, a service that packages all prescription drugs a patient is taking into convenient pouches marked by the time of day or meal at which they are to be taken. But the business didn’t grow fast enough to outrun Arcadia’s massive debts. The company put the business up for sale in October.

In December, Arcadia struck a deal with Walgreen, which will pay Arcadia $25,000 a month to manage DailyMed on its behalf and committed to eventually hiring Arcadia CEO Marvin Richardson. Richardson invented the DailyMed concept when he was CEO of Minnesota-based PrairieStone Pharmacy Inc., which he later sold to Arcadia.

Many Arcadia investors criticized the deal as self-serving on Richardson’s behalf. Many had hoped there might be a larger agreement between Arcadia and Walgreen, which pushed Arcadia's stock price up to 5 cents per share until Feb. 17. Since then, the shares have plunged to just 1 cent apiece.


Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Angela IS the best RD

  2. We are a nation of speed. All of our younger lives are filled with deadlines, quotas and bottom lines. We start to ease out of the pressured rat-race when we finally see "retirement." The most enjoyable travel on the planet is passenger rail service. Indy to Chicago does not beat Megabus or Southwest Airlines in speed. Passenger rail however has the best seating, mammoth legroon, seat backs that recline to more than 45 degrees and employers that really want you to return as a customer. Indiana municipalities need to maintain subsidies to support this transportation mode. Losing it is loss for all of us.

  3. Good day! I just want to testify how i got my loan from Mr. Eric Lefkofsky after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan. Until a friend of mine introduce me to this popular Mr. Eric Lefkofsky who promised to help me and indeed he did as he promised without any form of delay. I never thought there are still reliable loan lenders until i met Mr. Eric lefkofsky who indeed helped me with the loan and changed my belief. I promised to share this testimony after I got my loan. I don't know if you are in any way in need of a genuine and urgent loan,free feel to contact Mr. Eric Lefkofsky via their email{grouponfunding@hotmail.com}

  4. Its a THUG issue. Bleecker Street and NYX are thug bars. They attract thugs of all races. Places that attract thugs need to be kicked out of Broad Ripple. Ain't nobody got time for that!

  5. Hello everyone, My name is Marian Gareth, I am from the Texas, United State, am here to testify of how i got my loan from Mr Andre Frank {frankloancompany@yahoo.com} after i applied Two times from various loan lenders who claimed to be lenders right in this forum,i thought their lending where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr Andre Frank the C.E.O of Andre Frank Loan Company who promised to help me with a loan of my desire and he really did as he promised without any form of delay, I never thought there are still reliable loan lenders until i met Mr Andre Frank, who really help me with my loan and changed my lief for better. I don't know if you are in need of an urgent loan, free feel to contact Mr Andre Frank on his email{ Frankloancompany@yahoo.com} for help