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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 10, 1998
SUMMIT MEDICAL SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-26390 41-1545493
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10900 Red Circle Drive, Minnetonka, Minnesota 55343
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 939-2200
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On June 10, 1998, Summit Medical Systems, Inc. (the "Company")
announced, in a press release attached hereto as Exhibit 99, a series
of strategic decisions intended to focus the Company's resources on
its medical product manufacturer segment and to transition the Company
out of the healthcare provider software market. The Company plans to
concentrate exclusively on clinical research outsourcing for
pharmaceutical, device and biologic manufacturers and will discontinue
development and marketing of its healthcare provider software
products.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Exhibits
Exhibit No. Description
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99 Press Release, dated June 10, 1998.
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: June 16, 1998 SUMMIT MEDICAL SYSTEMS, INC.
/s/Barbara A. Cannon
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Barbara A. Cannon
Chief Executive Officer
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INDEX TO EXHIBITS
Exhibit
Number Item
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99 Press Release, dated June 10, 1998
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EXHIBIT 99
[Summit Medical Logo]
SUMMIT MEDICAL ANNOUNCES STRATEGIC REPOSITIONING PLAN
Minneapolis (June10, 1998)...Summit Medical Systems, Inc. (Nasdaq: SUMT), today
announced a series of strategic decisions intended to focus the Company's
resources on its medical product manufacturer segment and to transition the
Company out of the healthcare provider software market.
The Company plans to concentrate exclusively on clinical research outsourcing
for pharmaceutical, device and biologic manufacturers. The Company's subsidiary,
C.L. McIntosh & Associates, will broaden its capabilities to provide additional
services which complement its excellent reputation in the regulatory consulting
area. In addition, the Company's Nashville office is focused on developing
various clinical trial management and registry product services.
Barbara Cannon, President & CEO, commented, "I believe it is in the best
interest of Summit Medical to focus its resources on the manufacturer market.
The clinical research arena continues to provide significant growth
opportunities to companies that are able to deliver high quality service. We
believe the talent and experience of our team, combined with the Company's
technological expertise, will allow us to differentiate ourselves in this
market."
Cannon stated, "The Board directed the senior management team to evaluate our
provider software business in light of the ongoing losses in this segment. We
concluded that infrastructure costs and continued product development expenses
presented significant challenges in achieving profitability. In the best
interests of our shareholders, we have decided to take steps to limit the losses
in this segment, which include reducing costs and implementing an exit strategy.
We also believe there is a trend toward consolidation in our industry,
supporting our interest in identifying a buyer for the provider software
business."
(more)
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[Summit Medical Letterhead]
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Summit Medical Systems, Inc.
June 10, 1998
Page 2
As part of its decision to exit the provider software market, the Company
intends to retain an investment-banking firm to evaluate its alternatives
regarding the provider software business, including the possible sale of this
business.
The Company also announced it will discontinue development and marketing of its
healthcare provider software products. As a consequence, the Company will reduce
its work force by 29 employees, primarily in its Minneapolis office. The Company
will, however, continue to support its Summit Vista(R) and Crescendo!(TM)
clients through June 1999. In order to provide support for these clients, the
Company will retain employees in customer service, implementation and other
support roles. Cannon commented, "We are committed to providing our clients
support and service for the next year while helping them through this time of
transition."
As a result of its decision to exit the provider market, the Company estimates
that it will incur charges in the second quarter of approximately $5.4 million,
consisting primarily of costs related to employee severance and retention,
facility restructuring and remaining contractual obligations. Beginning in the
second quarter of 1998, the provider segment will be presented in the Company's
financial statements as a discontinued operation.
Summit Medical is a provider of clinical information systems, regulatory
consulting, clinical research, and clinical trial management services to the
healthcare industry. Database technology and research and consultative services
offered by the Company give healthcare providers and manufacturers the
information tools to capture, analyze, manage, and report clinical, economic,
and patient-reported outcomes. Regulatory consulting, clinical research, and
clinical trial management services aid manufacturers of healthcare products in
device evaluation, regulatory strategy, product and manufacturing quality
assurance, statistical analysis, clinical study design, and clinical trial
management.
(more)
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Summit Medical Systems, Inc.
June 10, 1998
Page 3
This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
include statements regarding intent, belief or current expectations of the
Company and its management. Such forward-looking statements are not guarantees
of future performance and involve risks and uncertainties that may cause the
Company's actual results to differ materially from the results discussed in the
forward-looking statements. Factors that might cause such differences include,
but are not limited to, the lack of an operating history in the clinical
research market on which to base expectations for future performance, failure of
the Company's clinical research services to obtain market acceptance, failure of
the Company to compete effectively in the highly competitive clinical research
market, failure of the Company to recruit and integrate experienced clinical
services employees, failure of the Company to find a purchaser or purchasers for
its provider business, failure of the Company's assumptions regarding
reorganization changes to be fulfilled, and adverse outcomes related to the
Company's shareholder lawsuits or SEC investigation. The forward-looking
statements herein are qualified in their entirety by the cautions and risk
factors set forth in Exhibit 99, under the caption "Cautionary Statement," to
the Company's Annual Report on Form 10-K, dated March 27, 1998.
Contact: Paul Johnson
Chief Financial Officer
612-939-2200
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