Beckman Coulter CEO Announces His Retirement
Having completed a merger that positions his company to be a top player in the medical diagnostic equipment business, longtime Beckman Coulter Inc. Chief Executive Louis T. Rosso announced plans to retire on Sept. 1.
Rosso, who turns 65 in August, will be succeeded by heir apparent John P. Wareham, 56, who is currently president and chief operating officer. Although he’ll retain the title of chairman, Rosso said he is stepping down from day-to-day responsibilities at the company he has run since 1982.
He leaves the Fullerton-based concern well on its way to completing the game plan it undertook last year, when Beckman Instruments Inc. acquired Coulter Corp. in Miami for $1.15 billion. The combined company is one of Orange County’s largest concerns, with about $1.8 billion in annual revenue.
The merger, which has resulted in a heavy debt load and sharp declines in earnings this year, is nonetheless expected to be a home run for Beckman Coulter over the long term. It was the first major acquisition by the company since it was spun off from the old SmithKline Beckman in 1988.
Under Rosso’s leadership, Beckman Coulter has “not only gotten its own house in order in recent years, but with the acquisition of Coulter has positioned itself as a leader in the diagnostic industry,” said analyst Jeffrey L. Holmes at Cleary Gull Reiland & McDevitt Inc. in Milwaukee.
Rosso’s career with the company began in 1959 in marketing and sales. In the 1980s, he oversaw Beckman’s transition into a pure life sciences and clinical diagnostics company, as he divested industrial divisions.
Ann Pleumer Barber, an analyst at Credit Suisse First Boston in New York, said Rosso has “clearly transformed Beckman from a mid-sized player in diagnostics to a market leader. That’s a pretty powerful legacy to leave behind.”
The medical diagnostics business has been consolidating rapidly, and only some companies are expected to succeed.
The combination of Beckman’s strength in clinical chemistry analysis and Coulter’s blood cell analysis business gives the merged company a major advantage, Holmes said. Beckman Coulter can offer hospitals a “one-stop shopping” source of equipment used in procedures that account for about 75% of routine daily laboratory testing, he said.
Few changes are expected under Wareham, who has been the point man in implementing Rosso’s strategy. A former SmithKline executive, Wareham joined Beckman in 1984 as an executive with the diagnostics systems group. He was appointed president in 1993. “I view it as a very logical succession of management,” said Holmes.
Wareham was traveling and could not be reached for comment.
Rosso praised his successor as “terrific,” saying that Wareham has increasingly been assuming the management reins. The strategic plan is on track, and the company is stable, he said. “It’s timely for me to go and he’s ready.”
Beyond continuing to integrate the operations of the merged company, Wareham’s challenge will be to help make the health-care field more efficient and productive, Rosso said. That will be critical to Beckman Coulter’s customers, who also have also been consolidating and operating in an environment of severe cost containment, he said.
In the first half of this year, as Beckman Coulter digested the acquisition, its profit plunged to $1.1 million, or 4 cents a share, from $36.4 million, or $1.26 a share, in net income a year earlier.
Sales climbed 66% to $834.1 million from $502.5 million. As of June 30, the company had more than $1 billion in long-term debt.
But analysts say Beckman Coulter’s earnings should begin to recover later this year--in line with the company’s expectations. Holmes projects fourth-quarter earnings of $1.03 a share, compared with a year-earlier loss of seven cents a share.
