The third chief executive since 2010 plans to take a hard look at costs and work on the company's marketing.
When Gregg Lehman took over the reins at troubled Angeion Corp. in May, he knew it would be a challenge.
One of his first tasks was to meet with concerned shareholders after several executives left the medical diagnostic business. Lehman told them he wouldn't be standing in front of them if he didn't believe the company had potential.
Angeion sells cardiorespiratory diagnostic systems under its MedGraphics and New Leaf brands. But the Vadnais Heights-based business is unprofitable, reporting a $81,000 net loss in the third quarter.
Last year, an activist shareholder threatened a proxy fight and won changes to the board. In May, CEO Philip Smith resigned after less than five months on the job. Lehman is the third CEO since 2010.
Lehman, 64, discussed his strategy:
QWhat are the major challenges that Angeion faces, especially in terms of profitability?
AMy belief is our general and administrative expenses as a percentage of revenue are higher than the industry average.
This could be due to several reasons. For instance, the company may have hired additional staff to run special grants or projects in the past but never reduced the staff after the projects were completed.
We spent a lot of time over the past eight years developing New Leaf as a new business line. We added resources during the start-up phase before New Leaf was really able to scale that business. It created a challenge for the company to produce quarter-over-quarter profitability.
I'm not coming in to wholesale cut staff. I think we need staff to focus on our core products and research and development. I believe we can automate a lot of manual processes.
QHow do you plan to do that?
AWe have instituted an investment review board, which means every new capital expenditure (and) software project needs to go before this board. We actually perform a cost-benefit analysis. ... Discipline is very important to return this company to profitability.
I have also talked to my executive team about implementing what we call a "continuous process improvement." We look at every department and get a cross-functional team of employees to take a look at specific functions where we can add value and efficiencies to reduce our overhead cost. That process will begin in earnest in the fourth quarter.
QAngeion has a workforce of 180 full-time employees worldwide. Are you planning on cutting some jobs?
AProbably not cut them, but move them to areas where we are deficient in terms of our human resources. It may mean retraining and developing new skill sets. My initial analysis is that we do not have too many employees. They are just not aligned properly where we have needs within the company.
QWhat are some areas of the business you think could be expanded?
AResearch and development is very important. ... We're also looking at strengthening our internal and external marketing function to rebrand the company.
My goal is to transform the MedGraphics side of the business from a medical equipment manufacturing company to what I call a "complete customer solution," which is better diagnostics that lead to better outcomes, that leads to ultimately lower health care costs.
QWhat is the end goal for Angeion?
AMy answer is "to be determined." The No. 1 goal for the next two or three years is to increase our share price. It doesn't make sense for us to be a roughly $27 million company with a market cap of $16 million to $17 million. The company is undervalued and not fully appreciated by the marketplace.
Our goal for the next two to three years is to continue to focus on organic growth. The group purchasing organization contracts will help, but (we'll) also be opportunistic. If we find companies that could add to our product line, we're not opposed to a potential merger or acquisition strategy.
QWhen you first started at Angeion, you said you were going on a listening tour. Was there anything that people said that surprised you?
AThe board was very open and candid with me when I was interviewing for the interim position. My listening tour did not produce any surprises, nothing I wasn't aware of prior to accepting this position, which is very refreshing, because usually the opposite is true when you take on a new job.
Wendy Lee • 612-673-1712