Norland turns corner under new management

June 5, 1991

Business is up at Norland, the Fort Atkinson, WI, bone densitometermanufacturer. Catheter firm Cordis sold Norland a year ago toNovatech, an investment group led by Albert S. Waxman, founderand former chairman of Diasonics (SCAN 5/23/90). As Norland

Business is up at Norland, the Fort Atkinson, WI, bone densitometermanufacturer. Catheter firm Cordis sold Norland a year ago toNovatech, an investment group led by Albert S. Waxman, founderand former chairman of Diasonics (SCAN 5/23/90).

As Norland chairman, Waxman installed a new management teamled by John Mankowich, president and CEO. Mankowich joined thefirm in September. He moved quickly to change Norland's operatingphilosophy and cut dependence on foreign sales. Sales have increasedover the first year and Norland's market position is improving,Waxman told SCAN.

"It has been a good year for us," he said.

Norland still ranks third in contentious competition with Lunarand Hologic, the number one and two players in the $43-million-a-yearbone densitometry industry. But the company is catching up, with58 new placements of its XR-26 Mark II system in the first quarterof 1991. Norland sold only 41 units in all of 1990.

The company has been profitable in each of the last three quarters,Waxman said.

Mankowich is redefining the corporate culture at Norland, Waxmansaid. As a Cordis subsidiary, Norland was a classic technicalcompany. "Somebody would invent a product, then someone wouldfind a market for it," he said.

Mankowich mandated a stronger market orientation.

"More emphasis is placed on understanding the marketplace,then developing products for it," Waxman said.

Norland organized a U.S. sales force in March as part of thateffort. It will have about 10 sales representatives selling systemsin the U.S. by year's end, according to Joel Blank, marketingvice-president.

The company depended on Japanese and European markets for 96%of its sales in 1990. By building its own sales team, Norlandanticipates that its dependence on exports will drop to 90% ofsales this year.

Lunar and Hologic, to a lesser extent, also rely on exporttrade. Lingering questions in the U.S. about reimbursement andthe appropriate treatment for osteoporosis have dampened purchaserinterest in the bone mass measurement devices.

Although Waxman admits influencing Norland's overall strategy,he has remained at arm's length from the company's operationssince Mankowich's entry. Most of Waxman's attention is devotedto American Biodyne, a South San Francisco mental health facilitiesmanagement company. He is chief executive of the firm, which hasfiled with the Securities and Exchange Commission for an initialpublic offering.