SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
June 15, 1994
Mallinckrodt Group Inc.
(Exact name of registrant as specified in its charter)
New York 1-483 36-1263901
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7733 Forsyth Boulevard, St. Louis, MO 63105-1820
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (314) 854-5200
including area code
Item 5. Other Events
A press release was issued June 15, 1994. The relevant portion
of the text of that release was as follows:
Mallinckrodt Medical To Reorganize To Adjust To Health Care
Market Changes
Mallinckrodt Group Inc. is disclosing today that its medical
operating unit will restructure its organization to adapt to
market changes that are being driven by health care reform and to
effectively respond to customer needs in an ever-changing and
more competitive environment.
President and Chief Executive Officer C.R. Holman said the
company expects to record a one-time pretax charge of up to $80
million, or about 65 cents per share, in the fourth quarter to
cover the restructuring. The special pretax charge will apply
only to Mallinckrodt Medical and not to any other part of the
company, according to Holman.
"The decision to take this charge is an investment for the
future of our medical business and has been made after thorough
evaluation and planning by Mallinckrodt Medical's management
team. It is anticipated that the ongoing cost savings from the
restructuring will be approximately $40 million annually. We
expect to achieve most of the savings by 1996," Holman said.
"Mallinckrodt Group remains committed to long-term growth
and improved profitability," Holman stated. "While there can be
no definitive assurances, we believe that total company sales
will continue to grow at a rate of 10 to 12 percent annually and
that earnings growth over the next five years, excluding the
Mallinckrodt Medical restructuring charge, will be at least 15
percent. This is without major acquisitions, which we will
continue to pursue as viable opportunities are presented.
"We also remain on track to achieve the profitability goals
previously communicated for 1998. Our goal is to reach a 10
percent return on sales, 15 percent return on invested capital
and 18 percent return on equity," Holman said.
Mallinckrodt Medical President and Chief Executive Officer
Robert G. Moussa said that the unit expects to deliver 1994 sales
and earnings of about 15 percent over last year, despite some
moderation in the pace of sales growth and increased price
discounting this year, without the benefits of restructuring.
"We are planning for sales to grow at about 12 to 13 percent
annually over the next five years, benefitting from new products
such as Albunex and OctreoScan imaging agents, and earnings to
grow at approximately 14 to 15 percent, resulting from volume
growth, productivity improvement and cost reductions from the
restructuring," Moussa said.
He explained that the structuring program, which the company
will begin implementing early in FY 95, will include a downsizing
of the overall workforce of up to 10 percent. Currently,
Mallinckrodt Medical employs over 5,000 people, with about two-
thirds of the employees in the United States.
A first step in the restructuring will be the reorganization
of the U.S. sales structure, replacing the current five
divisional sales groups with a unified sales organization to be
led by a senior executive. The U.S. sales organization will be
divided into geographic districts, each headed by a business
manager to which a team of account managers and clinical
specialists will report.
Mallinckrodt Medical's current U.S. sales force is made up
of approximately 350 people assigned to one of the five units:
cardiology, radiology, nuclear medicine, anesthesiology or
critical care. Moussa said that the size of the sales
organization will be determined within several weeks.
In parallel, programs will be implemented to reduce,
centralize and standardize certain non-sales related functions
and management systems to better support the sales structure. It
is anticipated that these programs will contribute to lower
employment. The restructuring also will address critical
manufacturing rationalization programs to improve the company's
cost structure on a worldwide basis.
"This program eventually will touch all parts of our
organization," Moussa said. "The steps we are taking with our
U.S. sales organization are needed first, but we also will look
to other parts of the company and our international operations in
the future. Programs will be developed and implemented as
quickly as possible, with most of the anticipated annual savings
to be achieved during fiscal 1996.
"Throughout the restructuring, we will continue to provide
our customers with the same high quality products and services
they expect and deserve from us. In the end, we expect to have
an organization that will allow us to remain flexible to address
future change. We also are intent on taking the steps needed to
reduce costs, remain competitive and sustain our strong market
presence," Moussa said.
Mallinckrodt Group Inc. is a Fortune 250 company, which
moved its corporate headquarters to St. Louis, Mo., from
Northbrook, Ill., and changed its name from IMCERA in March. Net
sales are forecast to be over $1.9 billion for FY 94, which ends
June 30. Through its three technology-based businesses -
Mallinckrodt Chemical and Mallinckrodt Medical (both
headquartered in St. Louis) and Mallinckrodt Veterinary
(headquartered in Mundelein, Ill.) - the company provides human
and animal health care products and specialty chemicals.
Mallinckrodt Group and its subsidiaries have approximately 10,000
employees worldwide.
###
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
Mallinckrodt Group Inc.
ROGER A. KELLER
________________________________
Roger A. Keller
Vice President, Secretary and General Counsel
Date: June 27, 1994
