AFTER SPENDING MOST OF 1998 digesting its 1997 acquisition of Coulter Corporation, Beckman Coulter, Inc. is ready for new business initiatives in the diagnostics marketplace.
Beckman Coulter enters 1999 with a new leader. John P. Wareham, currently President and CEO, will assume the additional duties of Chairman. Louis T. Rosso, Beckman’s long-time chief executive, stepped down as President and CEO last September. He is retiring from Beckman’s board, effective February 4.
Beckman Coulter has a motive to perform well in the coming year. Although no major operational or financial surprises resulted from its acquisition of Coulter, Beckman has not met the expectations of shareholders and financial analysts. On the same day that Beckman reported fourth quarter and full year earnings, Bear Stearns analyst Ethan T. Lovell downgraded the company’s rating from “attractive” to “buy.”
Fifth Largest Company
As the fifth largest diagnostics company in the world, Beckman Coulter’s financial performance is closely watched. For the fourth quarter, Beckman reported revenues of $483 million, up 14% from same quarter in 1997.
Revenues for 1998 were $1.7 billion, a 43% increase. Its acquisition of Coulter Corporation (See TDR, October 6, 1997) occurred on October 31, 1997, so 1998 revenues are the result of the consolidation. Pre-tax earnings were unimpressive, at $24.6 million and $46.6 million for fourth quarter and full year, respectively.
Since the Coulter acquisition, about 1,400 positions have been eliminated. Sales and marketing teams from both companies were consolidated and an integrated information systems capability is now in place. Manufacturing facilities in England were closed, and plants in San Diego and Puerto Rico will be closed in 1999, in keeping with earlier announcements.
Watching The Changes
Hospital laboratory administrators are warily watching developments within the Beckman Coulter organization. Laboratorians tend to be skeptical of change. As the sales force and service departments were consolidated, some hospital labs lost their long-time favorite Beckman or Coulter representative and now deal with a new face.
Diagnostics represents about 80% of the company’s annual sales and Beckman has several new instruments that it is introducing in the market- place. The remaining 20% of the company’s business is in bioresearch. In particular, a fast-growing segment is biopharmaceutical sales. This is perceived to be a more profitable and stable market than diagnostics.
It is still too early to determine how the newly-consolidated diagnostics giant will market itself to the clinical laboratory industry. But with new leadership at the helm, and shareholders pressing for better financial performance, it can be expected that Beckman Coulter will try something different to make a big splash in the marketplace.