GeoPharma Inc. is discontinuing its distribution business and has sold most of the assets of the former Dynamic Health Products Inc.
USA Sports LLC, based in Plymouth Meeting, Pa., paid $2.2 million for a substantial portion of the inventory and accounts receivable in a deal that closed on July 10, GeoPharma said in a filing with the Securities and Exchange Commission. The effective date of the sale was June 30.
At closing, Wachovia Bank received a cash payment of $1.85 million toward the settlement of Dynamic Health’s outstanding obligations, the filing said. The Dynamic Health subsidiary will continue to pay down the balance of its obligations to Wachovia through the orderly liquidation of its remaining assets, the filing said.
The sale included the non-prescription nutritional supplements and other health and beauty care products distributed by Dynamic Health.
Dynamic Health had been an independent publicly traded company prior to its acquisition by GeoPharma in October 2007 in a deal valued at about $8.7 million at the time.
The distribution segment was unprofitable with falling margins, sales and cash flow, and could not get credit line financing, GeoPharma (NASDAQ: GORX) said in its annual report, filed June 30 with the SEC. The Largo-based company said it was in its best interest to scale back the diversity of its business model and concentrate on its core business. It now focuses on formulating generic drugs for human and veterinary use, developing medical devices used by oncologists and other medical professionals, and manufacturing and distributing generic drugs, nutraceuticals, cosmetics and function food products for companies worldwide.
For the 2009 fiscal year, GeoPharma reported a loss of $26.6 million, or $1.62 a share, on revenue of $63 million. Discontinued operations accounted for $16 million, or 97 cents a share, of the loss.
In fiscal 2008, GeoPharma lost $7.4 million, or 59 cents a share, on revenue of $57.9 million.
