Publicly Traded Med-Tech Co. Cuts 6% Of Work Force
Med-tech company SurModics, Inc., announced Wednesday that it cut 6 percent of its work force as part of a “strategic realignment.”
Seven of the Eden Prairie-based company’s 115 employees lost their jobs Tuesday. SurModics said it would take a hit of $0.5 million, or $0.02 per share, in its fourth quarter—which ends September 30—due to the cuts and primarily related to severance costs.
“The decision to eliminate positions is always a difficult one. We believe these changes are necessary to direct resources into those areas most likely to generate growth,” CEO Gary Maharaj said in a statement. “We appreciate the efforts of our colleagues who are affected by today’s announcement, and we are grateful for their significant contributions to our company.”
SurModics is a provider of medical device coatings and in vitro diagnostic products. The company said it expects to save around $1 million a year due to the realignment, money it will use to bolster “strategic growth initiatives.” Chief Financial Officer Andy LaFrence said some of the savings will be allocated toward new hires but declined to disclose further details.
LaFrence told Twin Cities Business that the staff realignment was made “after evaluating the specific skill sets of our employees,” as opposed to relating to any recent financial performance.
While LaFrance would not disclose what positions were eliminated, he said that none were at the executive level.
SurModics did, however, announce changes to its leadership structure. The company now requires its quality, regulatory, and clinical affairs segment—as well as its R&D segment—to report directly to Maharaj rather than to their business segment leaders. Additionally, LaFrence will also now oversee the company’s operations and information systems functions.
“The actions announced today will enhance our focus on key growth initiatives for our two segments,” Maharaj said. “They also will allow us to increase the investments we are making in our business, such as building a more robust pipeline of technologies and products.”
SurModics reported net earnings of $3.13 million for its third quarter, which ended June 30, up 2.3 percent from the same period in 2012. Third-quarter revenue meanwhile totaled $14.3 million, up 2.4 percent from the same period in 2012.
The company reported $51.9 million in revenue for its most recent fiscal year, down 1.6 percent from the previous year.
SurModics is one of the top 10 publicly traded medical device manufacturers in the state based on revenue. Of all Minnesota public companies, it spends the third-most on R&D as a percentage of its revenue.