After Ideon Group Inc. returned to profitability last quarter, besieged chairman Paul G. Kahn came off the ropes to lash out at his critics.
"Do I love it? No, but I can handle it," Mr. Kahn said of his forced retreat from Ideon's expansion strategy. "I grew up in a tougher world." He had been publicly silent on the issue for several months.
Ideon, Jacksonville, Fla., announced a fourth-quarter net profit of $4.7 million, up from $1.1 million a year earlier. This followed a third-quarter net loss of $7.8 million, compared with net income of $6.6 million a year earlier.
For all of 1995, Ideon showed a net loss of $49.4 million after special charges, compared with net income of $20 million in 1994. The loss included a $43.8 million pretax charge the company took related to restructuring in the second and third quarter and $53.2 million of marketing and operational costs.
These losses and a plummeting stock price forced Ideon to cancel its Family Protection Network and a servicing agreement with the PGA Tour Partners MasterCard. They also led the company to slash 30% of its employees.
On Jan. 22, Ideon announced that it would pursue "strategic alternatives" aimed at enhancing shareholder value, including a possible spinoff - interpreted by some as the death knell for Mr. Kahn's reign.
Ideon's stock dipped to a year-low $8.62 on May 26, but it has risen since then, from $9.75 the day after the Jan. 22 announcement to $10.625 on Thursday. It was valued at $20.65 a share last Feb. 28.
"What we feel is a low stock price means we're looking at several options, including different corporate structure and sale of the company," Mr. Kahn said in an interview Friday.
He said he was encouraged by Ideon's recent gains. "I think that we finished off all the writeoffs and shutdowns and two businesses we tried to launch," he said. "We had improvements in our three core businesses" - SafeCard Services Inc., Wright Express, and National Leisure Group.
Fourth-quarter results included a $1.2 million recovery of a $3.9 million deposit written off during the second quarter of 1995.
"I'm committed to seeing this company through a profit- growing '96- '97," said Mr. Kahn. "If the board and I decide there's a different path, I guess I'm prepared to leave. Obviously, if the company is sold, you don't need two CEOs."
Rumors of a "shareholder revolt" have dogged Ideon in recent months. Peter Halmos, the ousted SafeCard founder, has been the most outspoken shareholder. His much-publicized lawsuits and highly personal criticisms of Mr. Kahn have taken a toll.
Mr. Kahn said Ideon's fourth-quarter rebound occurred despite "lots of negativity" from shareholders and Mr. Halmos in particular.
"Peter Halmos' only interest is to destroy this company or extract a huge settlement," said Mr. Kahn. "He's done everything he can to help make that happen."
He dismissed Mr. Halmos' pending litigation as "creative writing at its finest" and an "attempt to intimidate me and the board."
Summing up his fortunes, Mr. Kahn seemed discouraged by the realities that undermined his expansion dream at Ideon.
"It is obvious we made some mistakes ... but businesses have to take risks in order to grow," said Mr. Kahn. "It seems that the stock market doesn't allow for that kind of risk taking in public companies today without very large punishment."