SFBC To Eliminate FL Operations

SFBC International, Inc. plans to cease all of its operations in Florida, including its Miami and Ft. Myers facilities. In addition, the company announced that the Miami-Dade County Unsafe Structures Board failed to issue an extension for reviewing the plans submitted by the company related to its planned structural improvements to the Miami facility.

“SFBC International remains dedicated to providing the highest-quality, early and late phase clinical trial testing services to our clients,” said Jeffrey P. McMullen, president and chief executive officer of SFBC International. “The recent decision by the Unsafe Structures Board will further hinder our ability to restore profitability at our Miami operation, resulting in an acceleration of our review and decision to discontinue the operations of this part of the company. We will work closely with our clients to plan for an orderly completion of ongoing studies at these locations. Planned Phase I studies at Florida facilities will be directed where possible to our clinics in Quebec City, Montreal and in our new Toronto facility. When the various options were evaluated, it became evident that taking immediate, decisive action by shutting down our Florida operations would result in greater long-term value for our shareholders and clients. Removing the burden of the losses from the Florida operations as well as the previously estimated remediation costs for the facility in Miami, will enable us to dedicate our financial resources as well as our executive committee’s time to ensure the reputation and performance for the overall Company.”

“We are withdrawing the guidance that we have provided for our 2006 financial results until we can provide updated guidance, including an estimate of the loss from discontinued operations,” stated David Natan, vice president and chief financial officer of SFBC International. “While the Florida operations were expected to account for approximately 10% of revenue in 2006, the losses from these operations were previously expected to impact our earnings from operations by approximately $7.5 million – $9.0 million in 2006.”

The Miami-Dade County Unsafe Structures Board gave the company 60 days from May 17, 2006, to file for a permit to demolish the Miami facility. However, the company intends to appeal this ruling to the Florida courts and potentially file an injunction to stay these proceedings and to facilitate an orderly shut down of operations, as well as complete the transition of any studies to its Canadian facilities, where possible.