Overview of Project
Our client is a publicly held health services company that was struggling due to the poor performance of its physical therapy division. Manchester was engaged to turnaround the client’s operations, refocus the company, and restore it to profitability. Today, the company’s revenues have doubled and the value of its stock price has increased 502% since the time our professionals were engaged.

The Challenge
The company had a 25-year history of success in providing corporate health and fitness management services, but had a stand-alone physical therapy business that had been deteriorating. At the time of our firm’s engagement, the company was unprofitable and facing a crisis.

The Engagement
Manchester’s professionals were engaged in 1999 to turnaround the client’s operations, refocus the company back to its core business, and restore it to profitability. Manchester was subsequently engaged to develop a new strategic plan, and the relationship has continued informally as Manchester’s CEO, Mark Sheffert, has served on the company’s board of directors since 2001. Mr. Sheffert was named Chairman of the Board in May 2006.

The Solution
During Manchester’s engagement under our direction, the client reconstituted its Board of Directors, replaced its senior management team, divested of three under-performing divisions and subsidiaries, and re-focused the company back to its core business of corporate health and fitness management. Subsequently, the client acquired the business assets of its largest competitor in a 2004 “David and Goliath” transaction. The integration of the two businesses resulted in a market-leading business focused on improving employee health and curbing rising corporate health care costs, and brought the client back to operating profitably. In 2005, the company raised $10.2 million of equity used to repurchase previously issued higher cost equity, and acquired a leading provider of Internet-based fitness programs.

The Impact
The company has completed its turnaround and has a strong future with a broader market focus. At the time of Manchester’s initial engagement, the client was a $26 million revenue company with a net loss of $(1.4) million. For the fiscal year ended December 31, 2005, the company had since doubled its revenues to $55 million and reported net earnings of $1.2 million. In addition, the company’s stock price reached a recent 52-week high in 2005 of $2.95 per share, a 502% increase from $0.49 per share at the time of Manchester’s initial engagement.