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Tecan, a leading manufacturer of laboratory equipment for the pharmaceutical and biotechnology industries, generated total sales of CHF 286 million for the 2004 business year (2003: CHF 311.6 million), some CHF 12 million less than projected in October 2004. The shortfall is attributable to currency effects, logistical issues with the delivery of certain equipment components and to a slowing down of production, which was itself due to the internal review conducted over the past few months to monitor the observance of regulatory standards. New CEO Thomas Bachmann assumes his position on February 1. His top priority will initially be to effect a clear improvement in operating efficiency and margins.
Männedorf, January 19, 2005 – Tecan announced projected annual sales of CHF 298 million for 2004 as recently as October. The discrepancy between the annual sales projected in October 2004 and the sales actually generated for the year stems from currency movements (CHF -5 million) as well as from production and installation delays (CHF -7 million). “Because of these issues, part of our sales could not be included in our 2004 revenues while, at the same time, our current order backlog is CHF 31 million above its prior-year equivalent,” says Mike Baronian, Chairman of the Board. As a result, EBIT and net profit for 2004 will also be lower than projected.
Fourth-quarter sales in 2004 stood at CHF 77.1 million (2003: CHF 87.1 million), a year-on-year decline of 11.6% (6.6% excluding the net negative impact of currency movements). All these figures are provisional: the final audited results for 2004 may vary slightly from those stated above.
Regulatory review completed
The “GAP analysis” review of Tecan’s observance of regulatory standards initiated in September 2004 has now been completed. The review revealed that further modifications to processes and documentation were required. An exceptional earlier-than-planned upgrade of equipment will not be needed, however. Equipment which has already been delivered will be replaced as part of the normal replacement process and on normal pricing terms. Executive Management has informed customers accordingly.
The total cost of the regulatory analysis and the process and documentation modifications required amounts to CHF 13 million, of which CHF 2 million was apportioned to the 2004 business year. The remaining CHF 11 million will be debited equally to the 2005 and 2006 business years, and has already been included in the budgets concerned.
Chairman of the Board
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