Company turn around.

1. News Archives
5-Day Weather | Traffic
SACRAMENTO BEE 1991-09-10 BUSINESS METRO FINAL E1 Larry Hicks Bee Staff Writer SHAKE-UP AT
WEST SAC MEDICAL FIRM
CEO OF LOREDAN BIOMEDICAL LOSES JOB IN POWER STRUGGLE; 38 WORKERS LAID OFF The top
executive of a West Sacramento manufacturer of high-tech medical equipment and one-third of the firm's employees
have lost their jobs in a reported management coup. Jerry Hansen resigned as chief executive officer of Loredan
Biomedical Inc. Friday and 38 other employees were laid off, the company said. Loredan, with $15 million in 1990
sales, develops and markets computerized equipment and software for physical-therapy testing and rehabilitation.
Mark Falkowski, acting president, said the layoffs were necessary to reduce operating costs while Loredan prepares
to seek recapitalization and bring new products to market. We were running a little heavier operating expenses than
we should have, Falkowski said. We're comfortable that we can get the same results with the new staff levels. The
company now employs 73 people. The layoffs were in the engineering, marketing and sales/administration
departments.
The company also has reorganized into management teams, giving front-line employees a greater role in decision-
making, Falkowski said. The layoffs Friday morning came without prior notice, two former employees said.
A former vice president said the shake-up was the result of competing management strategies proposed by Hansen
and Falkowski.
Christine Ritter, laid off as vice president of marketing, said that, unknown to the other managers, Falkowski
presented a proposal about reshaping the company to Loredan's board of directors. The proposal competed with one
from Hansen, she said. The board endorsed Falkowski's proposal. I was surprised the board would make such a
radical change in strategy without consulting existing management, Ritter said. Hansen, who could not be reached
for comment, had just returned from a business trip in Japan the morning the layoffs were announced, she said.
Falkowski, former vice president of operations, said the decision to reduce staff had nothing to do with competition
between him and Hansen. The layoffs had nothing to with proposals, he said. It was about running the business to
make it profitable.
Loredan was founded eight years ago by Malcolm Bond, who left the company a year ago. Company stock is
controlled by venture capital firms. Under Bond, a physiologist with a Ph.D. from the University of California, Davis,
Loredan developed the LIDO family of equipment, which is sold to clinics, hospitals and physicians. The devices
includes the LIDO Back System. Typically used in physical therapy, the system also has found a following among
insurance companies as a method of spotting phony claims of back injury. Other LIDO devices evaluate and
rehabilitate the wrist, elbow, shoulder, hip, knee and ankle.
Loredan plans to release new products by first quarter of 1992, Falkowski said. EMPLOYMENT PROFILE Text
News Archives
 
5-Day Weather | Traffic

2. SACRAMENTO BEE 1991-09-13 MAIN NEWS METRO FINAL A2 Jim Trotter SURPRISE LAYOFF SENDS
HER
INTO TAILSPIN It was the big headline in Tuesday's business pages. The top executive of a West Sacramento
company called Loredan Biomedical had resigned, and 38 other employees had been laid off. The man who
was on top when the smoke cleared, acting President Mark Falkowski, said it was strictly an economy move, an
attempt to get the company running lean and mean. Loredan manufactures physical therapy and rehabilitation
equipment.
But this column is not about Loredan. It's about being a sacrificial number, one of 38 people dismissed as a victim
of the economy. There is a lot of that going around just now, even as Washington talks of a waning recession.
Business is business, but people are getting hurt.
I don't know how they did anyone else, said Ann Golden, an engineering technician at Loredan, but one of the
product managers asked me to come to his office for a little meeting. I had a good working relation with this
person. I assumed he had some special things he wanted done. I grabbed my little clipboard and ran right on
up there. Part of Golden's job assignment was to work on the change board at Loredan. If a customer
complained, or if there was in- house directive for a change in a product, it went to the change board.
There were several instances in which the finish specified by the engineer didn't turn out real well on a metal
part, Golden said, when asked for an example. This would result in a change order, which I would present to
the review board. They would approve it. I usually did the work, making the change on the drawing to
implement the change. But last Friday, when Golden grabbed her clipboard, she didn't realize the extent of
the change the company had in mind.
I walked in and we were in someone else's office. I wondered why the chief financial officer was there, and I
kinda got the feeling right then. He started talking about how bad the economy was. I got the drift right away. I
said, "Why are you doing this? Why not my boss?' He said, "Your boss got laid off, too.'
That was about it. They told me how wonderful I was. What a good employee I was. Then they told me my
insurance was good until Sept. 30. It was very difficult. It didn't really feel very good. I had been there three years
in March, and, yes, I enjoyed it.
I spent two very depressing days. At first, I thought I had done something wrong. I'm just that way. But after
looking at it, and talking to some people, it's an economic fact of life. You're always in jeopardy. Most frustrating
is to get absolutely terrific reviews, to get a good raise, and then to get laid off.
On Saturday, she couldn't bring herself to do anything. Sunday, she received a pep talk from her daughter,
who urged her to go for her usual bike ride along the American River. Exercise helps depression, she said.
It does. By Monday, after a weekend of trying to heal, Golden attempted to look at her situation.
I came to Sacramento in 1981 because my Mom, Dad and Grandma were here. My background is
manufacturing, 20 years worth. I've aways been a supervisor or manager. I've done a lot of technical writing on
procedures and developing systems. This happened to me once before, when Nimbus Medical went under
while developing the "Hemopump.' I'm thinking, "Oh no, not again.' You get kind of tired, also pretty much
apprehensive. I'm 51, soon to be 52, and that makes it that much more difficult. Everybody professes not to
discriminate. But they do. They want my experience in a 25-year-old body.
Of immediate concern, Golden decided, was reducing her expenses. She quickly learned that it isn't at easy as it
seems. Sacramento Cable wanted a $40 service charge to reduce her monthly TV cable bill from $35 to the limited
basic service of $5. I think that is absolutely outrageous, she said. Her home is another concern.
That's the most depressing thing of all, she said. As hard as I've worked to buy my condo, to gain advantage of the
tax situation, if I don't find a job pretty soon, I'll have to sell it or lose it. My home represents a lot of effort.
Almost a week after she had been laid off, Golden said she had begun to feel more positive. She had made an
appointment to have her resume updated.
I feel some hard feelings, but I'm taking the first steps trying to get some stability back in my life and have some
goals. I'm trying to figure out what I'm going to do with my bills.
Loredan's Acting President Falkowski confirmed that Golden was a performer. I'd say 90 percent of the people we
laid off were.
It was strictly economy, he said, nothing personal.
Unless, of course, you're the person who is laid off.
JIM TROTTER'S column appears Monday, Wednesday and Friday. Write him at P.O. Box 15779, Sacramento
95852, or call (916) 321-1062. Text

3. News Archives
5-Day Weather | Traffic
SACRAMENTO BEE 1991-11-12 BUSINESS METRO FINAL F3 Larry Hicks Bee Staff Writer LOREDAN NETS
BIG SALE, LANDS VENTURE CAPITAL Loredan Biomedical, a maker of high-tech medical equipment. CEO Mark
Falkowski closed a licensing agreement for $9.1 million agreement to sell and license exercise and weight-training
machines to a Japanese company. Loredan, which has yet to make a profit in its 8-year history, also announced it
has received $1.5 million in new venture capital.
Shinwa Medical USA, a Japanese medical firm, has agreed to purchase more than 3,500 Strength Training System
machines at $8.5 million over five years from Loredan, based in West Sacramento. Shinwa also paid Loredan
$600,000 for the rights to license the machines in Japan. Loredan, with $15 million in 1990 sales, develops and
markets computerized equipment and software for physical-therapy testing and rehabilitation. In addition to its
Shinwa contract, the company sold $209,000 of its Multi-Joint, a computer-linked isometric and full-motion exercise
system, in Europe.
The company's new venture backing comes from Montgomery Securities of San Francisco and Pathfinder Venture
Capital Funding of Minneapolis, Minn. Loredan's recent sales successes follow a restructuring that resulted in the
layoffs of 39 employees in early September. The company today employs about 75 people. Everything is going in the
right direction, Mark Falkowski, the company's CEO, said in a press release. He could not be reached for comment
on whether the company would be rehiring any of its laid-off employees. Text