Despite strong numbers at the year's halfway mark, Luminex ($LMNX) will cut about 5% of its 709-person workforce and close its offices in Brisbane, Australia, a move the company says will save between $5 million and $6 million per year.
As it chips away at its workforce, Luminex has decided to invest in R&D to support the development, sales and marketing of its next-generation molecular diagnostics arm. In the company's late-July financials, Luminex projected its annual revenue guidance to fall on the lower end between $220 million and $230 million, and the company reaffirmed that estimate with the announcement of its restructuring.
Luminex's problems fall in line with the rest of the diagnostics industry, as companies struggle with more stringent reimbursement standards, including administrative red tape at the Centers for Medicare and Medicaid Services, Luminex has said. But the company did see a 12% jump in revenue in the first half of the year, as well as a reopened agreement with Merck KGaA's EMD Millipore, which will provide assays for Luminex's technology.
Luminex expects the restructuring itself to cost around $7 million to $8 million, more than offsetting this year's gains but setting it up for a leaner future. The company plans to expense half of the charge in the third quarter, spreading the rest out over the fourth quarter and next fiscal year's first quarter.
"These changes reflect an increased focus on our growth initiatives and our ongoing strong commitment to a leadership position in molecular diagnostics and our partnership franchises," CEO Patrick Balthrop said in a statement. "While we never take decisions that affect the composition of our workforce lightly, we strongly believe that this reallocation of resources and related adjustments will make our company stronger and deliver value to our shareholders in the short term and the long term."
- here's the release
Special Report: 2013's biggest job-cutters in medical devices and diagnostics (so far)