Respironics to restructure; closes sites, lays off 10% of staff
Respironics to restructure; closes sites, lays off 10% of staff
By KAREN PIHL-CAREY
HHBR Staff Writer
Respironics (Pittsburgh) has outlined its plans for a restructuring that will cost 200 people their jobs when it closes facilities in Colorado and around the nation.
It also will record over the next several quarters a pre-tax charge of about $25 million as a result of the restructuring.
The company reported its sales and net earnings last week for 4Q99 and FY99 ended June 30. Net sales for 4Q99 were $90.1 million, compared with $85.2 million in 4Q98. Net income was $1.1 million, 4 cents per share, compared to $3.6 million, 11 cents per share, in 4Q98.
For the year, net sales were $357.6 million, compared with $351.6 million in FY98. Net income was $23.1 million, 72 cents per share, compared to a net loss in FY98 of $1.8 million, 6 cents per share.
All 4Q99 and FY99 results include restructuring charges of $2.4 million, 4 cents per share, and a special addition to the company’s allowance for uncollectible receivables of $5 million, 10 cents per share.
Part of the company’s plan is to restructure its operations into four divisions, being that of home care, hospital, asthma/allergy, and international. In addition, it will close the Westminster, CO, manufacturing facility and its 19 customer satisfaction centers around the nation. It will reduce in size its Marietta, GA, manufacturing facilities, which will focus only on oxygen and monitoring. The company will open within two months a centralized distribution and repair center in Youngwood, PA, which will employ about 90 people. The PLV ventilator manufactured in Westminster will be transferred to the Murrysville, PA, facility.
"I sincerely regret that the actions we are taking will impact some of our people negatively," said President/CEO Dennis Meteny. "I do believe that we have cushioned any effects to these individuals to the best of our ability, and I know that these actions were necessary for the viability of the company."
The company plans to reduce its workforce by about 10%, or 200 people.
Meteny also appointed Craig Reynolds, executive vice president and chief operating officer, to lead the operating management team. The team will consist of CFO Daniel Bevevino, Richard Gruber of corporate quality assurance, Corporate Secretary Dorita Pishko, and the senior vice president of new ventures and corporate services, Robert Crouch. Reynolds will also be in charge of the four officers heading the divisions: John Miclot for home care, Paul Woodring for hospital, Susan Lloyd for asthma/allergy, and Geoffrey Waters for international.
"The new organization structure, with a reduced number of direct reports for me, will allow me to focus more directly on the future opportunities and strategic initiatives of the company," Meteny said.
Respironics was once a star performer in the industry, but has faced lower earnings due to cost-cutting in healthcare and acquisition-related problems, reported the Pittsburgh Post-Gazette. The company has traded between 9 5/8 and 21 3/8 over the past year.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.