WEST BRIDGEWATER, Mass., March 9 /PRNewswire/ -- Boston Biomedica Inc. (Nasdaq: BBII) announced today that BBI-Source Scientific, Inc., a wholly owned subsidiary of the Company, and ABX Hematologie of Montpellier, France have entered into a letter of intent to modify a three-year contract, previously announced in October 1997. This contract provided technical, customer and field services for instruments sold by ABX Hematology, Inc. in the United States. Under the modified arrangement, individual customer service contracts will be assigned to ABX, and ABX will assume all technical, customer and field services for its U.S. instruments. The personnel associated with this contract, including the nationwide field service organization and Hotline technical support, will be offered employment by ABX. Financially, the modified agreement will be settled as if all aspects were implemented as of January 1, 1998.
BBI will continue its relationship with ABX in a multi-faceted advisory capacity through March 1999. ABX will use, on a continuing third-party basis, a number of key BBI-Source Scientific personnel for sales and marketing, operational, human resource, and administrative consulting services in order to ensure a smooth transition for both companies. In addition, under the new arrangement, the amount of space leased to ABX will be doubled.
"We decided to modify our relationship because ABX has determined that it needs to accelerate its investment in the U.S. market significantly beyond our original contract, and because the business from the assigned contracts turned out to be much lower than originally estimated," said Richard T. Schumacher, Founder and Chief Executive Officer of Boston Biomedica. "In addition, we recognize that the original contract was not meeting our short term financial requirements or ABX's immediate operating needs in their changing and rapidly expanding market. Consequently, we have both decided that ABX will be better able to fortify their market position by assuming full responsibility for technical, customer and field services.
"No question, this is a win/win situation for both companies," continued Schumacher. "For BBI-Source Scientific, the modification of our relationship with ABX will allow us to focus on the development of our core products and services, while eliminating many of the heavy costs, in both time and money, associated with building an infrastructure necessary to make the original contract successful. Additionally, ABX now has the requisite framework in place to grow its hematology systems business in the United States.
"We fully expect this ongoing relationship to continue to have a positive impact on our bottom line through March 1999, despite the decrease in expected revenue associated with the modified agreement," said Schumacher.
"We are extremely pleased with the job BBI-Source Scientific has done to date to set up a framework for technical, customer and field services in the U.S.," said Jean Eduoard Robert, President of ABX Hematologie. "We continue to be impressed with the experience and capabilities of BBI-Source Scientific, and look forward to having these resources readily available to us."
ABX Hematology Inc. is a newly established U.S. subsidiary of ABX Hematologie of Montpellier, France, a worldwide supplier of innovative, cost- effective hematology systems since 1983. ABX systems were previously distributed in the U.S. by Roche Diagnostic Systems (RDS) under the COBAS label. ABX will continue to sell their products directly in the U.S., and will service them through the newly established field service organization developed by BBI-Source Scientific.
BBI-Source Scientific is a developer and manufacturer of a broad line of clinical instrumentation and biomedical devices for the worldwide in vitro diagnostics industry (IVD). In addition, they are an important provider of contract services for instrument development, engineering and manufacturing. BBI-Source Scientific also operates Service Centers at its headquarters in Garden Grove, Calif. and in Giessen, Germany.
Boston Biomedica Inc. is a worldwide manufacturer and provider of proprietary quality control products for use with IVD test kits for the detection, analysis and monitoring of infectious diseases, including AIDS, Hepatitis, Lyme Disease and ToRCH. These products are used by clinical and research laboratories, blood banks, IVD manufacturers, and regulatory agencies to help ensure the accuracy of infectious disease test results through the routine monitoring of test performance. The Company also manufactures diagnostic test kit components and laboratory instrumentation, and provides specialty laboratory testing services.
This release may include forward-looking statements that may or may not
materialize. There can be no assurance that BBI-Source Scientific and ABX
will execute a definitive agreement; there can be no assurance that the
modified relationship with ABX will be profitable to BBI or that ABX will not
seek to further modify the relationship in the future. Additional information
and risk factors that could potentially affect Boston Biomedica's financial
results may be found in the Company's filings with the Securities and Exchange
Commission (SEC).
SOURCE Boston Biomedica Inc.
CONTACT: Richard T. Schumacher, Pres./CEO or Kevin W. Quinlan, CFO of Boston Biomedica, Inc., 508-580-1900 or Jeff Goodman or Maribel Lopez of Ronald Trahan Associates, Inc., 617-332-0101
