Access Point investors take control

Sunday, December 17, 2006

ST. LOUIS -- Three top executives at Access Point Medical--including industry icon Jerry Jones--resigned earlier this month as the company's lead investors made moves to improve profitability and reduce costs.

Jones, who served for 14 years a chairman/CEO of Apria and its predecessor companies, served as co-chairman of Access Point along with Tom O'Donnell. O'Donnell and CEO Hans Stover also resigned, Jones said last week.

The investor group that is driving the agenda--Quadra Investments in New York City--prefers to run the company "in a way that is less committee and board driven," Jones said. "Rather than get Tom and I on the phone and ask for our opinion, they have views of how they'd like to do things."

That includes streamlining the company's portfolio of products by eliminating canes, crutches and other lightweight DME that, until now, might have served as loss leaders, Jones said. The company still has "plenty of cash, but clearly they have to look for ways to reduce their burn rate."

Going forward, Access Point plans to modify packaging in an effort to reduce freight costs. The company will also focus more on research and developing a product line that "may not be as me-too as it might have been in the past," Jones said.

As an example of the kinds of products Access Point plans to develop, he pointed to the company's new line of AXS 590 five-liter concentrators, which comes in three models: a basic unit; a unit with an oxygen concentration indicator; and a third model that uses advanced technology to eliminate the standard humidifier bottle.

The concentrators include only four main components, making them easy to repair and reducing a provider's inventory, according to company officials.