MDS Inc. positions for growth
28 Ottobre 2003 - 10:30PM
PR Newswire (US)
MDS Inc. positions for growth Fourth-Quarter Charge, Annual Cost
Savings Beginning Next Year TORONTO, Oct. 28 /PRNewswire-FirstCall/
-- MDS Inc. (TSX: MDS, NYSE: MDZ) has announced a number of key
initiatives targeted at positioning the company for strong growth
and improved financial performance over the next 12-24 months and
beyond. "Our plan has three areas of focus which are now in
progress. We are re- allocating capital to the fastest growing
segments of our business. We are creating a more integrated and
efficient organization. And we are further aligning the interests
of management and shareholders," said John Rogers, President and
CEO of MDS. While the various initiatives are expected to result in
a pre-tax charge of $45 to $55 million in the fourth quarter, the
company anticipates that these changes will result in savings of
approximately $10 million in 2004, growing to approximately $40
million in 2005. These changes will result in the elimination of
450-500 positions (including 100 positions transferred to IBM)
across MDS. Some of the initiatives are already underway. Other
steps are being announced today. Focus on Growth - Today, the
company announced an orderly exit from the generic
radiopharmaceutical business located in Fleurus, Belgium. The
generic radiopharmaceutical business is subject to increased
regulatory standards, which would require a further investment not
warranted by the prospects of this business. It is our intention to
continue to use the Fleurus operation to support the remaining
radioisotope business. - The company's U.S. Diagnostics business
has not met expectations for growth and profitability. MDS is
taking steps to improve margins while examining the best way to
participate in this market. - MDS continues to review all of its
businesses to ensure that capital is directed to higher growth
areas. For example, the company sold its High-Dose-Rate
Brachytherapy and Oncology Software Systems businesses in 2003.
Integrated & Efficient Operations - MDS has entered into a
seven-year outsourcing agreement with IBM to manage a more robust,
higher quality IT infrastructure. - MDS will begin the
implementation of an enterprise wide common business system -
Oracle e-Business Suite beginning November 1, 2003. - MDS
Enterprise Services has been created, effective November 1, 2003.
Our new organization, which includes finance, human resources, IT,
legal, communications, supply chain management and facility
services, will act as a service provider to our growing global
business units and our streamlined corporate center. - In 2003, MDS
has consolidated and outsourced several support functions including
its global payroll, employee benefit administration and stock
option administration. Enhanced Alignment of MDS Shareholder and
Management - MDS management compensation plans have been aligned
with new financial metrics beginning in 2004. - MDS has implemented
a new mid-term incentive plan linked to specific operating margin
improvement targets and achievement of defined change outcomes
across MDS. This will result in the replacement of a portion of
annual option grants with performance share units. - The MDS annual
bonus compensation plan has been modified to emphasize return on
capital and operating cash flow metrics in addition to earnings
targets. - MDS intends to expense stock options and implement share
ownership guidelines for senior management beginning in fiscal
2004. "MDS management is unwavering in its commitment to delivering
15% compounded annual earnings growth. Today's announcement, in
combination with specific actions across the enterprise, will help
us move quickly to achieving that goal," John Rogers added. MDS
will host an analyst day tomorrow, which will be available for
viewing via webcast at http://www.mdsintl.com/. MDS Inc. (TSX: MDS;
NYSE: MDZ) is an international health and life sciences company. In
many of its products and services, it is among the largest and most
respected companies in the world. MDS's focus is on advancing
health through science. It does this by providing: laboratory
testing, imaging agents for nuclear medicine testing, sterilization
systems for medical and consumer products, research services to
speed discovery and development of new drugs, therapy systems for
planning and delivery of cancer treatment, analytical instruments
to assist in the development of new drugs, and medical/surgical
supplies. MDS employs nearly 11,000 highly skilled people at its
global operations on five continents. Detailed information about
the company is available at the MDS Web site at
http://www.mdsintl.com/ or by calling 1-888-MDS-7222, 24 hours a
day. This document contains forward-looking statements. Some
forward looking statements may be identified by words like
"expects", "anticipates", "plans", "intends", "indicates" or
similar expressions. The statements are not a guarantee of future
performance and are inherently subject to risks and uncertainties.
The Company's actual results could differ materially from those
currently anticipated due to a number of factors, including, but
not limited to, successful integration of structural changes,
including restructuring plans, acquisitions, technical or
manufacturing or distribution issues, the competitive environment
for the Company's products, the degree of market penetration of the
Company's products, and other factors set forth in reports and
other documents filed by the Company with Canadian and US
securities regulatory authorities from time to time. DATASOURCE:
MDS Inc. CONTACT: Sharon Mathers, Vice-President, Investor
Relations, MDS Inc., 100 International Boulevard, Toronto, ON M9W
6J6, (416) 675-6777 x 2695,
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