January 21, 1995 in Nation/World

Wismer Martin Cuts Back, Sets Stage For Growth More Than Two Dozen Employees Lose Jobs As The Software Company Continues Its Restructuring

Michael Murphey Staff writer
 

The restructuring of one of Spokane’s leading software manufacturers continued Friday as “between 25 and 30” employees of Wismer Martin were laid off.

“What we’re attempting to do,” said Ron Holden, the company’s chairman and chief executive officer, “is review every strategic aspect we have, every activity, and reallocate our resources with a focus that dictates growth.”

The layoffs follow a reshuffling of the company’s senior management earlier this month in which Holden, Wismer Martin’s principal shareholder, added the CEO title to his board chairmanship.

Former CEO Stan Hatch retained the title of president, but will reduce his responsibilities in the company “over time.”

Doug Wilford replaced Bob Wilson as the company’s chief financial officer, with Wilson shifting his duties to more direct customer involvement, Holden said. Wilford was previously CFO of another of Holden’s companies in Southern California.

Holden emphasized in a telephone interview from his offices in Detroit, Mich., Friday, that all the changes are aimed at capitalizing on Wismer Martin’s health care information network business.

“What we’ve done is review our staffing mix and basically made judgements concerning those activities that fail to support our core objectives of network expansion and product development.

“Anything that doesn’t directly support those things, we want to either phase out, or find a better way of doing it.”

Many of Friday’s layoffs came in the company’s “remarketing group,” Holden said. He said the group was involved in sales of add-on and upgrade features to Wismer Martin’s principal health care management software packages, “which in today’s competitive environment is a very low-margin business.”

Some rumors surrounding the changes at Wismer Martin have suggested that the company is being groomed for a sale. But Holden denied those rumors.

“I see Wismer Martin as an independent entity right there in Spokane for a long time,” Holden said.

But he added that remaining competitive in the health care industry today requires “joint ventures and alliances, and we have our eyes wide open as far as that goes.”

Wismer Martin was founded in 1980 by Glen and Judy Martin who developed a software package for the management of physicians’ practices. The product was well-received but the company struggled financially until the Martins brought in Hatch as president and CEO. Hatch stemmed the losses, and beginning in 1990, the company has produced a series of modest profits.

Holden, a Detriot-based entrepreneur who has owned a number of health care-related software companies, acquired 52 percent of Wismer Martin’s stock through a series of deals that were initiated in 1992.

In 1993, Hatch positioned the company to capitalize on a new software package that supports health care information networks. Such networks provide electronic linkages between insurance companies, doctors, hospitals, medical laboratories and other health care providers. By speeding the flow of patient information and eliminating duplication of tests and paperwork, the networks are designed to improve service and reduce overhead costs.

Hatch and Fred A. Jacot, president and CEO of Medical Service Corp. of Eastern Washington, initiated such a network here that may eventually encompass all of Eastern Washington and North Idaho.

Other Wismer Martin network clients include the University of Tennessee and Blue Cross of Washington and Alaska.

The product fit neatly with the national health care reform movement and its emphasis on cost-cutting. Holden said Friday that the political stalemate over health care reform at the national level has not untracked the potential of Wismer Martin’s new product.

“We don’t see that,” Holden said. “Our sales funnel right now is more full of exciting opportunities than ever in the area of network customer relationships.”

Holden also announced Friday that the company expects to report a “moderate operating loss” for the third quarter ended Dec. 31, while anticipating revenues for the six months ended Dec. 31 to show “about a 40 percent increase” over the same period in 1993.

He said one of his concerns about the company’s performance has been “these violent quarterly swings in operating results.

“We are trying to get the cost structure such that these operating results will be smoothed out and hopefully shareholders will have some peace of mind,” he said.

He said since taking over as CEO he has thoroughly reviewed operations.

“The business is in a growth mode,” he said, “but in terms of staffing I think we got a little ahead of ourselves in certain areas that don’t directly relate to these growth elements.”

And, he added, “As the activities we are investing in now bloom, I would expect to see our future head count increase.”


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