Hologic launches strategic restructuring

In an effort to boost profitability and revenue, Hologic is implementing an expansive restructuring plan aimed at strengthening its competitive position in the women’s health and digital imaging markets. The plan includes a company-wide cost savings initiative, expected to bring real annual cost savings of around $10 million by cutting 10% of the workforce and reducing operating expenses. The company expects a restructuring charge, primarily related to severance costs, of about $1.3 million, or 8¢ per diluted share, in the fourth quarter of fiscal 2001, which ends Sept. 29.

The next step in the plan will be to focus on long-term revenue growth through new marketing programs, expanded distribution channels, and development of strategic business relationships. Jack Cumming, Hologic’s new president and CEO, cited costs associated with the acquisitions of Trex Medical in 2000 and Direct Radiography in 1999 and the ongoing investment in digital radiography and digital mammography systems as drags on profitability. Cumming took the helm of Hologics in late July following the death of David Ellenbogen. Cumming had joined Hologic in August 2000 as senior vice president and president of Lorad, a Hologic company.