X-ray and mammography giant Trex Medical is for sale. Trex's parent, conglomerate Thermo Electron, announced today that it intends to seek a buyer for the Danbury, CT-based firm, as part of a corporate reorganization to divest non-core businesses in favor of its core measurement and detection instruments business.
The announcement will mark the end of Thermo Electron's bid for success in the medical imaging marketplace. Thermo Electron built Trex through a series of acquisitions, buying Lorad, Bennett X-Ray, Continental X-Ray and XRE in 1995 and 1996. It also comes less than six months after Thermo Electron decided to keep Trex as one of 11 publicly traded subsidiaries following its initial reorganization announcement.
Although Trex executives were not immediately available for comment, Trex president and CEO William Webb indicated in a press release that Trex hopes to align itself with a premier player in the imaging industry that would offer strategic focus, targeted marketing strength, and a greater opportunity for growth.
Despite its early promise, Trex has stumbled in recent years. In mid-1998, Trex's deal to supply breast biopsy tables to U.S. Surgical began to deteriorate, a development that has hampered profitability. The vendor was also seen by some industry analysts as being a leader in the race to bring to market a full-field digital mammography system, but has been hurt by the Food and Drug Administration's changing regulatory process for the technology.
In mid-1999, Trex's 510(k) application for its digital mammography system was rejected, more than a year and a half after the application was initially submitted. Trex received the CE Mark for the system, called Trex Digital Mammography System, in October 1998, opening the door for shipments to begin in Europe.
Turnover has occurred in Trex's executive ranks. Former CEO Hal Kirshner departed Trex in late 1998. In a move to right Trex's recent lackluster financial results, new CEO Webb announced a restructuring plan that included the closing of two of its four U.S. manufacturing facilities.
For its 1999 fiscal year (end-October 2), Trex had revenues of $241.6 million, down 9.5% compared with the $267 million recorded in 1998. Trex had a loss of $28.1 million, compared with net income of $18.2 million the year before. Excluding restructuring and related costs, the company's net loss would have been $12.6 million. In its November 1999 announcement, Trex indicated that its goal was to return to profitability during fiscal 2000.
By Erik L. Ridley
AuntMinnie.com staff writer
January 31, 2000
Copyright © 2000 AuntMinnie.com
