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| In total, these actions will deliver significant annualized savings and we started to see benefits in the fourth quarter of 1998. While they were sizable restructuring actions, we took great care to ensure that we did not reduce our ability to serve and satisfy our customers, in Microelectronics and elsewhere in the Company. We also maintained spending for key research and development programs so important for our future growth.
During the first half of 1999 we anticipate continued softness in the microelectronics industry and the beginning of modest growth in the second half. We also expect our business in Asia to stabilize after a year of decline. Given this environment, Millipore should return to a growth trend in both sales and profitability in 1999. Our long-term strategy remains sound. The Biopharmaceutical & Research segment will continue its attractive growth of the recent past. Both new products and market share gains will add to this growth and offset market lethargy in Asia. We have recently introduced a new “personal” lab water system for the laboratory, and a new technology platform for biomolecular sample preparation. A number of major product launches are planned in 1999. From a market perspective, new biotechnology drugs are purification intensive, and the rate of new drug approvals should be strong over the next several years. We also benefit from increases in life science research funding. Our Microelectronics segment is poised to gain market share with the anticipated industry turnaround in the second half of 1999. We have a number of exciting new products in the pipeline. In past industry cycles, we have gained market share during the upturns, and we have the products and infrastructure in place to do this again. Also, with our reduced expense base, we will be able to leverage revenue growth to higher levels of profitability growth. I feel we have come through 1998 as a stronger, leaner company, prepared for the challenges of the future. I feel we have weathered the worst of the microelectronics industry “storm” and we are prepared to take advantage of the upturn forecasted for late 1999 and 2000. In the Asia/Pacific region we are also prepared to restore growth in profitability. We will do this in the traditional Millipore way, with a prolific new product flow and by satisfying customers. In closing, I would like to recognize the contributions to Millipore of Dr. Steven Muller, President Emeritus, Johns Hopkins University, who retired from the Millipore Board of Directors in April 1998. Steve served on the Board for sixteen years and was a valuable contributor to the growth of our business during that period. I would also like to welcome to the Board Ms. Elaine Chao, Distinguished Fellow at the Heritage Foundation. We are pleased to have Elaine join the Board and look forward to many years working together. Sincerely,
C. William Zadel |
