Tecan takes comfort from stronger second quarter
torrid first quarter and the departure of former chief executive
Emile Sutcliffe, with diagnostics holding back an improved
performance in biopharma.
Switzerland's Tecan, the world's largest supplier of liquid handling machines, is showing some signs of recovery after a torrid first quarter and the departure of former chief executive Emile Sutcliffe.
The company's second quarter sales declined 2.2 per cent to CHF 80.2 million (€52m) compared to the same period of 2002, but marked a 15 per cent advance on the first quarter. For the first-half, sales dropped 11.1 per cent to CHF 150 million, a better result than analysts had been expecting.
Once again, the company's sales were held back by a lacklustre performance at the diagnostics division, down 21.2 per cent to CHF 32.6 million in the quarter, although this was offset by a much healthier 17.5 per cent gain in biopharma (genomics/proteomics/drug discovery) to CHF 47.6 million.
Diagnostics sales were hit for the third quarter in a row by declining sales of Tecan's FE500 Workcell laboratory automation product, despite a new distribution deal signed with Olympus America's Diagnostic Systems Group in January of this year.
Pretax profits deceased by 26.5 per cent to CHF 7.5 million in the quarter and were swelled by a CHF 1.7 million payment to Sutcliffe on his departure.
Mike Baronian, who is serving as interim CEO, told an analysts' meeting that Tecan is implementing a restructuring programme aimed at saving CHF 4 million a year from 2004. This will involve the closure of Tecan Munich, a consolidation of the European sales force and the termination of some proteomics products lines that were not meeting sales expectations. The company expects to take a charge of CHF 5-7 million in the third quarter relating to this restructuring effort.
Tecan is looking to new products, and particularly its recently launched Freedom EVO liquid handling range, to drive the business, although it would not provide any guidance on the future development of sales.
"Tecan's order book entry during the second quarter was in line with the orders registered over the last two years," said Baronian.
