STOCKHOLM, Sweden, Jan. 21, 2003 (PRIMEZONE) -- Vitrolife has launched a savings and restructuring program that will be charged to the 2002 years accounts. The strategy is to focus harder on the core business, i.e. the development and marketing of clinical media for cell and tissue culturing. "Vitrolife believes that this program will make us reach a positive cash flow and a net profit at the latest for 4th quarter and onwards from our core business" said CEO Magnus Nilsson.
Non-core operations have fallen short of expected revenues during 2002. The focusing on the core business area will therefore be completed during 2003.
In contrast, sales from core business continue to show good growth. However, the company has had higher costs and lower revenues than were expected due to technical problems with the starting up of production at the Kungsbacka facility which was delayed with 9 months until second half 2002. Furthermore, due to a delay in delivery of the production plant in Denver, Colorado, production there is expected to be started in 2004 at the earliest. The facility in Denver is however since November the base for marketing and distribution in the US.
Due to the above, Vitrolife believes that investments made in preparations for production in Kungsbacka and Denver as well as some research and non-tangible assets falls below book values and will therefore be depreciated on the 2002 accounts. The savings program means that circa 18 positions are removed from the Vitrolife group, that production in the Goteborg facility will be phased out and hence concentrated in Kungsbacka and that the research unit at Sahlgrenska Science Park will be closed. When implemented this program will lead to considerably lower running costs and improved margins during 2003.
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