Immucor's CEO Steps Down - Analyst Blog

Yesterday, Immucor (BLUD) announced that Dr. Gioacchino De Chirico has resigned as a President, CEO and a director of the company. He will be replaced by Joshua H. Levine with immediate effect. However, Dr. De Chirico, who has been with Immucor for the last 18 years, will remain with the company till June 2012 to ensure a smooth transition.

Till recently, Mr. Levine was the President and CEO of Mentor Corporation, a medical device manufacturer in the aesthetic medicine industry. Under his mentorship, Mentor has transformed into a pure play aesthetic medicine company and a global leader in its market. In 2009, Mentor with annual revenues of approximately $375 million was acquired by Johnson and Johnson (JNJ).

Immucor develops, manufactures and sells a complete line of automated systems and reagents used in a number of tests to detect certain properties of human blood prior to blood transfusion. The company's principal customers are hospitals, clinical laboratories and blood banks. In addition to the US, Immucor also operates in Canada, Japan and European countries such as Germany, Portugal, Italy, France, Spain and Belgium

However, revenues from traditional reagents that account for 61% of the total revenue has been under pressure in the recent past. This is because Immucor lost some traditional reagent customers due to its inability to provide the required services and attention as it was concentrating on instruments. To tide over this crisis, the company has undertaken a project to ensure proper support and service to its traditional reagent customers.  It is trying to improve the processes to ensure that customers receive required support and service to optimize their performance and productivity. Mr. Levine will have a tough task ahead to oversee that these steps are implemented properly.

Immucor also revised its go-to-market strategy in the second quarter to cope up with the economic downturn as well as the competitive pressures that it had been experiencing in traditional reagent business. These initiatives are expected to have a positive impact on orders in near future. While no significant benefit is expected in fiscal 2011, these orders would boost the top line in fiscal 2012.

We are currently ‘Neutral' on Immucor, which also corresponds to a Zacks #3 Rank (hold) in the short term.