Sykes HealthPlan Services Postpones IPOCiting unfavorable market conditions for initial public offerings, Tampa-based Sykes Enterprises, Inc. and HealthPlan Services Corp., each owners of 50 percent of the outstanding common stock of Sykes HealthPlan Services, Inc. have postponed plans it released in April to go public. The Louisville, Kentucky-based SHPS is a provider of outsourced care management services and products.
The deferral coincides with mixed earnings results for the two companies. While Sykes reported strong results, Healthplan Services, a provider of distribution, employer services, and medical loss ratio management, reported net income of $223,000, or 2 cents per share substantially below the 16 cents per share reported in the second quarter of 1997.
Record earnings were reported for Sykes, a provider of integrated business services to the information technology industry. The company reported record net income and revenue of $7.9 million, or 20 cents per diluted share, and $100.8 million, respectively, for the second quarter ended June 30, 1998. Driven by continued strong growth in its core business of technical product support, earnings increased 63 percent from net income of $4.8 million, or 12 cents per diluted share for the same period in 1997, exclusive of one-time charges.
According to analysts, although Sykes is doing well, with good results for the quarter, it doesn't make sense for the company to enter into the difficult small cap IPO market, especially at a time when SHPS reports disappointing financial results.
SHPS it is only a small part of what Sykes does, analysts said. "They can afford to wait till they get the right price."