SurModics Reorganizes, Cuts 13 Percent of Work Force

The Eden Prairie-based company, which had another reorganization earlier this year, will now cut close to 30 employees and reorganize into three business units.

SurModics, Inc., said Thursday that it plans to reduce its work force by 13 percent-or slightly more than 30 employees-in order to more closely align operating expenses and revenue.

The Eden Prairie-based company also said that it will reorganize into three business units-medical device, pharmaceuticals, and in vitro diagnostics.

“We've made a difficult but necessary decision as a result of factors affecting our business. Today's actions will bring operating expenses more in line with revenue and enable us to achieve our near- and long-term goals,” SurModics Senior Vice President, Chief Financial Officer, and interim CEO Philip D. Ankeny said in a statement. “Rightsizing the business provides SurModics with the flexibility to make investments and pursue growth opportunities in our medical device and in vitro diagnostics businesses, while positioning the company for long-term success in our pharmaceuticals business.”

In March, SurModics announced a separate reorganization plan that included leadership changes, combining its product development groups, closing a California office, and relocating some product manufacturing from Maryland to its Eden Prairie headquarters.

As a result of the most recent restructuring, the company expects to record a one-time charge of $1.3 million to $1.7 million in the first quarter of fiscal 2011. However, SurModics said that the changes will save the company $3 million to $3.5 million going forward.

“We believe that our customers' needs will benefit from these organizational changes, which enhance accountability, improve efficiency, and allow us to more effectively deploy our resources,” Ankeny said in a statement.

SurModics has had a tough year in 2010. During the nine months that ended June 30, the company reported $54.3 million in revenue-down 47 percent from $102.3 million during the same period the prior year.

During the company's third fiscal quarter, which ended in June, SurModics reported a $916,000, or 5-cents-per-share, loss-a substantial departure from the $3.5 million, or 20 cents per share, in earnings during the third quarter of last year.

In March, SurModics' CEO of five years, Bruce J. Barclay, resigned from the company in order to take the helm at Mountain View, California-based Hansen Medical, Inc.

SurModics, founded in 1979, provides drug-delivery and surface-modification technologies and in vitro diagnostic test kits to the health care industry.