Sorin Restructured: Interview with Andre-Michel Ballester

Sorin, as a whole, has historically been known as a company more focused on R&D and technology development than on the commercial side of the business. Despite being among the market leaders in several cardiovascular product segments in both Europe and Asia, outside of cardiopulmonary devices Sorin is not a significant player in any other US product area. Sorin's CEO talks frankly to IN VIVO about why the company needed to reorganize to bring its sales and marketing efforts, particularly in the US, up to the level of its technology development.

Sorin’s CEO talks frankly about why the company needed to reorganize to bring its sales and marketing efforts, particularly in the US, up to the level of its technology development.

by Stephen Levin

With the global cardiovascular device industry dominated by US-based companies, the challenge of improving sales and marketing in Europe is a frequently discussed topic. The flip side of that challenge—increasing US sales for European-based companies—is not talked about as much, but actually represents a more daunting obstacle given that the US represents the single largest market, by far, for the vast majority of cardiovascular devices. No company is more acutely aware of the need to crack the US market than Milan-based Sorin Group SPA. Despite being among the market leaders in several cardiovascular product segments in both Europe and Asia, outside of cardiopulmonary devices Sorin is not a significant player in any other US product area.

Sorin, as a whole, has historically been known as a company more focused on R&D and technology development than on the commercial side of the business. Despite that internal bias, the company has achieved significant product breakthroughs over the years in a number of clinical areas, most prominently cardiac rhythm management (CRM), heart valves, and cardiopulmonary devices. Primarily on the strength of those product innovations, Sorin has gained market-leading positions in several of those segments in many countries in Europe and, more recently, in Japan. What has been missing is anything approaching that level of success in those US markets, outside of cardiopulmonary.

It is not surprising then to hear that high on André-Michel Ballester’s to-do list upon being named Sorin’s CEO in 2007 was to strengthen the commercial side of the company’s business generally, with particular emphasis on the US, and eventually have its sales and marketing be on a par with Sorin’s renowned R&D capabilities. To do so, however, required tearing down parts of the company in order to rebuild it. Ballester has overseen a restructuring of the company’s previous matrix organization into one now organized into business units. In addition, he has refocused the company by narrowing its businesses from five to three through divesting its renal care and vascular therapy divisions.

Throughout this reorganization process, Ballester has set the company’s sights squarely on expanding its presence in the US market, particularly in CRM and heart valves. These are areas in which Sorin’s technology innovations have helped the company become market leaders elsewhere in countries where its sales organization is on a level commensurate with its level of product innovation. To date, that has not been the case in the US, where Sorin’s commercial efforts have lagged woefully behind the US-based major device companies who are the leaders in those areas and for whom sales and marketing is a major strength.

Challenging these giants on their home turf, particularly when Sorin is basically starting from scratch—rebuilding its US operations from the ground up—is not for the faint of heart. Indeed, other non-US based cardiovascular companies have been content to build good businesses focused exclusively on non-US markets. But Ballester believes Sorin has the products and the technological capabilities to establish a solid footprint in the US, and he points to the company’s recent success in gaining market share after having gained FDA approval of its first tissue heart valve to validate this approach. In this interview, he talks frankly about the new face of Sorin, following the restructuring, and outlines the company’s strategy and commitment to competing in the US and globally.

IN VIVO: You were named CEO of Sorin in 2007, after having headed the company’s CRM [cardiac rhythm management] business for the previous two years. What were your first priorities upon taking your current job?

André-Michel Ballester: Before becoming CEO, I only had a partial view of the company because I was focused on the CRM business. When I became CEO, I needed to develop a global, long-term perspective for the company. One of the first things I did was to develop a multi-year vision for the company, and then implement that strategic plan on a short-term basis.

Another priority was to reshape the management team. Then our new group sat down and analyzed the current state of the company. One thing we agreed upon immediately was that the organization was too complex. Sorin was then structured as a matrix organization, which probably produces good results in a large, very diversified multi-national company. But as far as we were concerned, the structure made running the company more complicated than it needed to be. So we decided to move to a business unit-based organization that would increase the level of visibility and accountability in the company.

The next area that our new management team looked at was profitability compared to other medical device companies, including US companies. While there are a number of reasons why one could expect us to be less profitable than US companies, I would prefer to set the bar high because, at the end of the day, it is a good goal to have to reach the kind of profitability level that the US companies have.

With Sorin’s low single-digit sales growth and too rich a product pipeline, it was going to be hard to improve profitability. That led us to determine which product lines we should focus on, based on which provided the greatest opportunities.

Q: Was the company’s complex structure a legacy of Sorin having grown through acquisitions or of geography or of having such different business units? (See "The Sorin Group: Europe’s Last, Best Hope in Cardiovascular Devices," IN VIVO, September 2004. (Also see "The Sorin Group: Europe's Last, Best Hope in Cardiovascular Devices" - In Vivo, 1 Sep, 2004.))

The structure probably grew out of Sorin having been organized along the lines of the separate companies and separate legal entities--Stockert, Dideco, Ela Medical, Sorin Biomedica, etc., that comprised the whole organization following all of the acquisitions over the years. These entities were sometimes even competing with each other in the same market. This led me to reorganize the company as a business unit-based organization. This new organization already brings many benefits: cost-effectiveness, fewer management layers, enhanced performance visibility, and accountability. In addition, it favors talent management and international diversity.

Q: Outline for us the key points of the strategic plan for Sorin that emerged from this analysis, including your decision to divest two of your businesses.

When we added together all of the things that we found, the good news was that we had good technology and good people, and for a medical device company, these are key assets and a solid foundation to build on. From there, we designed a strategic plan for 2008 through 2010 that was very focused on improving profitability and cash flow, and restoring the company’s predictability. We set a goal for profitability: to become a company that generates more than 20% EBITDA margin within the next three to five years.

Our strategic plan has been designed to support the company’s aspirations for the future. This means refocusing on our core businesses and therapeutic areas: cardiopulmonary, heart valves, and cardiac rhythm management. Toward that goal, in 2008 we successfully completed the divestiture of Sorin’s renal care and vascular therapy businesses.

Renal care was a well-performing business, but hemodialysis is a completely different business than cardiovascular—different competitors, different technologies, different market dynamics. Also, when you look at the evolution of the renal care market, there is not much growth there. The products are becoming more commoditized, so we thought it was really not a business where Sorin would become a key player.

The second business unit—vascular therapy—was focused around our stent products. We liked our technology, however our first clinical trials with our drug-eluting stent were not as successful as we anticipated. Therefore, for us to really make an inroad in this market, we would have had to redevelop a new drug-eluting stent and restart our clinical trials. Then, assuming the clinical trials would have been successful, we would have had to build an entire sales and distribution organization for this business, calling on the interventional cardiologist. We looked at this and said this is not something Sorin can do because it needed heavy investments to grow optimally.

We successfully divested the vascular therapy business in two steps: first we sold our peripheral business to Datascope [Datascope Corp.] in June of 2008, which was then acquired by Getinge [Getinge AB]. [See Deal] And then we sold our coronary stent business to a group of Italian investors in Turin, Investimenti e Partecipazioni SPA. [See Deal] That business is now an independent company with dedicated management and funding. Then, on December 31, we sold the renal care business to a consortium of private equity investors led by a Franco-Italian private equity fund. [See Deal]

Q: In the case of the stent business, what can the new owners do for that business that Sorin couldn’t?

A start-up company can lose money and it's ok, but a division of a larger company losing money cannot. When you look at the risk/return ratios of projects in a company like ours, given our situation in terms of overall finances and cash flow, we chose to go with the lower risk, lower return projects. That means the new owners can take more risk than we could.

Q: What kind of reaction did you get from investors after you restructured the organization and divested those two businesses?

In terms of our stock price, we didn’t get much of a reaction, although we didn’t expect much, given the state of the market. These transactions were made under very tough circumstances because the markets were tanking at the same time. We believe it was the right thing to do because it refocused the company around the areas where we hold strong positions. The feedback we got was that this was an important change in the company’s strategy and one that we needed to follow through on, and we did that.

The other component of our strategic analysis was that we looked at our profitability and decided to significantly reduce our cost base. We took a restructuring charge of €18 million in the fourth quarter of 2007. Our goal is to save, on an annual basis, €20 million in expenses by 2010. This was very aggressive, but it now looks like we will reach this objective one year ahead of schedule.

Q: Did you do that mostly through layoffs?

Yes. Our goal was to have a fast impact on our bottom line, and unfortunately, the fastest way to do that is by eliminating head count. That was not the only way we reduced expenses, but it was the biggest portion.

Q: Much of Sorin is based in Italy and France, two countries where it is historically difficult to conduct layoffs. How did you go about addressing those labor issues?

We spent a significant amount of time working with the employee representatives, including the unions, to make sure they understood that the organization needed to focus on our core businesses in order to survive and ensure future growth. Sorin became a leaner organization at all levels; for example, our headquarters management was reduced by 50%.

Q: Through the companies it has acquired over the years, Sorin has accrued a significant history, including having employees who have been in their jobs for many years, taking great pride in the company’s technology leadership in several device markets. What has the impact of this restructuring and these layoffs been on company morale?

It is much tougher to conduct reorganizations later than to do it early. A lot of the things that we did in 2008 could probably have been done earlier in the history of the company, but they weren’t done, probably for a number of good reasons. But as a result, when you eventually need to restructure, it is more painful. But again, I think the employees of the company understood the need for these significant changes. For the employees of the renal care and vascular therapy businesses, I think they realized that they had an opportunity to do better outside of the company than if they had remained within Sorin where they typically were the last ones to get resources and investment.

When you look at the people at Sorin today, they are seeing the improvements that these measures are delivering. They see improved profitability. They see that we generated €45 million in operating cash flow in 2008 that has enabled us to pay down a significant amount of debt. They also see that we have been able to meet our projections for several consecutive quarters and that we can confirm our guidance to the market. Those positive results demonstrate that it was absolutely necessary for us to take the steps that we did. In fact, those measures were probably long overdue.

Q: When you became CEO, could you sense that morale was low and that employees were disappointed with the company’s direction and how it was being run?

People saw that Sorin was not achieving its targets. The strategic plan that was put forward in 2004 was based on certain assumptions centered around sales growth targets coming from projects such as our drug-eluting stent that just didn’t work out. In addition, the company’s infrastructure had been allowed to grow with the assumption that the company was going to be much bigger in 2008 than it actually was. As a result, there was an imbalance between the investments that had been made, the people that had joined the company, the complexity of the organization, and the results that were delivered.

I spend a lot of time talking with our managers and employees. One of my goals in doing so is to remain in touch with the morale of our team. In all of my recent meetings, the feedback has been very positive. We have a fired-up organization now that is leaner and more aggressive. You’re right when you said that there is good reason for Sorin employees to be proud of working here and proud of the company’s technology accomplishments over the years. Not everything was perfect, but we’ve done a lot of great things historically, and we have a lot of future opportunities that we should be very excited about. Sorin’s future is not going to be about restructuring and selling businesses; it is going to be about developing the company.

Q: You have actually had to convince Sorin’s board of directors twice that you were the best person for the job of CEO. Let’s talk first about your initial appointment to the position in September of 2007. How did your experience heading the CRM business help you get the job?

Sorin has historically been a very technology-driven company. When I came to Sorin to head the CRM group, I found classic examples of people working in silos—technology was on one side, manufacturing was on another side, and sales and marketing were somewhere else. One of my most important jobs was to create a new environment in CRM focused on building a management team that would work together, driven by common goals, and making sure that people work toward these common goals. There is no point in R&D winning if manufacturing loses. That is the culture that, as CEO, I have tried to instill in my managers so that it percolates up throughout the company.

Also, when I took over at CRM—there were a lot of things that needed to be improved, such as cash flow, profitability, sales growth, and customer service. The track record I had with CRM helped me convince the board that I was the right person for the CEO job. In 2006, Sorin was the fastest growing company in the cardiac rhythm management market, with 16.7% growth.

Q: Your second interview, so to speak, for the CEO job came just recently when Sorin’s board changed following a change in the company’s major shareholders. Tell us about that process.

Basically, Sorin has four major shareholders. One of them, Hopa, was recently acquired by a consortium consisting of a private equity fund and an investment bank. This group acquired Hopa because it owned 25% of Sorin and they wanted to be involved in the company. Therefore, once they became one of our major shareholders, they were permitted, under Sorin’s bylaws, to have a board majority. In December of 2008, they requested that the existing board resign, which included me, and there was no guarantee that I would be reappointed either as a board member or as CEO of the company. I had to convince our new shareholders that I was the right person for the job, and I’m sure that my track record as CEO made that easier.

Q: In addition to Hopa, who are Sorin’s other major shareholders?

GE Finance, through Interbanca, which is one of its Italian subsidiaries, holds roughly 17% of Sorin. Then we have an Italian bank called Monte dei Paschi di Siena that owns around 7%, and Olmo, which is part of a fairly large insurance company called Unipol, has roughly 5%.

Q: Coming on the heels of this major corporate reorganization, has it been a further disruption to have to deal with a new board, or is that more of a pro forma matter?

If it has had any impact, it has been positive because it comes at the right time for the company. The previous board did a good job supporting the management through a tough restructuring phase. Many of the board members were Italian so they know how difficult it can be to accomplish this kind of reorganization. Also, many of the previous board members had been involved with the company for a long time, so seeing two business units being sold was a hard decision. Yet, through this whole process, they were very supportive of our efforts.

We look at the future as entering into a slightly different phase in Sorin’s corporate life. Our new strategic plan reflects not only the hard work that management has been doing, but it also reflects the vision of the new board. Our strategic plan for this year and going forward will have a slightly different color compared to that of the previous years. Our current plan is less about restructuring and cutting costs, and more about investing in innovation and in accelerating sales growth. We are not going to dramatically change the numbers we have already committed to—for example, we previously announced that, for 2009, we will generate 14% EBITDA margin, improving from 10% in 2007 and 12% in 2008. The new board is supportive of this approach. In many ways, this is a good time for a new board to come in because it allows for a natural transition for these new people to help the company enter a different phase, one oriented more toward growth.

Q: Sorin has built a reputation as a technology innovator, particularly in complex areas that depend on rapid technology iteration like CRM. That reputation has been built largely by relying on the internal R&D of the companies that Sorin has acquired over the years. For example, in CRM, 25% of your employees were in R&D, on which you spent roughly 15% of sales each year. Following the reorganization, will Sorin continue to maintain its commitment to being an R&D-driven company? (See "Sorin CRM: Cracking the US Market," IN VIVO, April 2008. (Also see "Sorin CRM: Cracking the US Market" - In Vivo, 1 Apr, 2008.))

The answer is yes, we remain committed to R&D, and, in fact, on a company-wide basis, we have actually increased our overall R&D spending. Having said that, different businesses within the company require less R&D than others—for example, cardiopulmonary because it is a more mature market with less room for product evolution. But in CRM, the reorganization process has not reduced either the amount of money or the percentage of people devoted to R&D. Overall, we have also focused on prioritizing our R&D projects. As I said, we probably had too many diverse projects ongoing. Now, we are spending more money on R&D company-wide as an overall percentage of sales, and we are spending that on fewer targeted projects.

Q: Unfortunately, the global economic downturn took place in the midst of Sorin’s restructuring and efforts to divest the renal care and vascular businesses. What impact has the economic collapse had on the company’s plans? Have you been forced to reschedule or cancel any projects?

The biggest challenge we faced was that some of the parties interested in acquiring our two non-core businesses had a hard time with financing because of the financial crisis. We really worked hard to find the right partners for those businesses, not just in terms of financial partners, but people who had a good understanding of the businesses and the strengths they were acquiring in terms of employees, customers, and impact on patients. Once we determined that these were the right partners, we worked with them to find the best solution for financing these deals. All in all, it was a lot tougher than it would have been a couple of years ago. Overall, we worked out deals that were favorable for both sides. We never announced any specific target figures that we were looking to achieve in selling these businesses, but we did set internal targets, which we achieved even though they were set before the financial crisis occurred. But our primary purpose was not necessarily to get a lot of money from these sales, but to re-focus the company on three businesses of excellence, rather than five.

Q: Along with the company’s commitment to R&D, Sorin has also had a history of acquisitions. Having just divested two of your businesses, does that signal that Sorin is not as receptive to acquisitions at this time?

No, actually we closed a medium-sized acquisition in February in which we bought the endoscopic vessel harvesting business from Datascope. [See Deal] When that company was sold to Getinge, an antitrust issue arose around this product area and we approached both companies to advise them that we were interested in buying this business. It is a positive transaction for us in that it gives us access to a product line that is complementary to our cardiopulmonary product line, and is mostly US-based, which is even better for us as we are trying to build our business there.

This deal is also important because it shows people inside the company that we are also able to play offense, not just defense. For the company’s long-term strategy, I strongly believe that the best growth you can have is internally generated growth. We have several internal projects that can generate the growth that we need to achieve our financial objectives under our strategic plan.

Q: With Sorin now focused around three business units—CRM, heart valves, and cardiopulmonary—it sounds like you will have different strategies for each business in terms of where growth will be achieved through R&D and where it will come from acquisitions; is that accurate?

You are probably one step ahead of us in terms of our current strategic plan, but in principle, that is true. For example, CRM has more opportunities in-house than we can deal with. We are limited by the amount of resources we can put into clinical trials and the regulatory process to validate new CRM products. So that is an area where we don’t need a lot of external help. I’m not saying that we won’t look for outside opportunities in CRM, but we have a lot of options in house.

In heart valves, it takes a long time to develop a valve. We maintain great relationships with our cardiac surgeon customers, and we believe that we are uniquely positioned to become the company of choice globally for these surgeons. That is especially true now that we have a tissue valve available in the US, which we did not have before. In our first year of selling that product in the US, we have been successful in capturing around 5% of the aortic tissue valve market. And we believe we have more opportunities moving forward that will help us increase our franchise with cardiac surgeons. There could be opportunities for us in cardiac surgery or with cardiac surgeon-driven products, not necessarily heart valves, that could complement our existing product lines, and we are open to those opportunities.

With cardiopulmonary products, it’s much of the same story. As worldwide leaders, we have a great franchise, and there might be opportunities for us to complement our current offerings with products that would fit right into our distribution channel, and we are open to looking at those kinds of deals.

Q: Sorin is the number two heart valve company in Europe, even though you don’t currently offer a percutaneous product. Two of your main competitors, Edwards, who also happens to be your former employer, and CoreValve/Medtronic, are currently competing in the percutaneous market in Europe. How will not having a percutaneous product affect your position in the heart valve market?

If you look at the publicly available data from the one company of the two you mentioned that is publicly traded, you’ll see that the expectation is that the surgical valve market is not going to be impacted in the foreseeable future by the hype surrounding percutaneous valves. The percutaneous market looks to provide an upside on top of the surgical market. So as far as Sorin is concerned, we can play our game in the surgical market, which is what we do. We have a new sutureless valve that is just entering clinicals that will allow surgeons to save a great deal of time because they can just plug it in without suturing, using a minimally invasive procedure that also represents an important benefit for the patient

This year, we expect a growth rate of slightly more than 9% in heart valves. That is in the surgical valve market that is only growing at around 4%, so we are capturing market share. We believe we can continue to grow our market share with our cardiac surgeon-focused strategy. In our view, percutaneous valves represent an additional segment that doesn’t negatively impact us at this point in time.

Q: Historically, Sorin’s strength has been in R&D and technology innovation, and the company has not done as well on the commercial side of the business. How do you plan to beef up the company’s sales and marketing efforts across the board, and you mentioned getting the Mitroflow tissue valve approved in the US, what are you doing to expand Sorin’s US sales efforts in all of your businesses?

You’re right that, traditionally, our company has been a technology company, not a sales and marketing company. That is particularly true when comparing Sorin with our US competitors, who are very good at sales and marketing, and I would suggest they are not as good at developing new technology. Percutaneous valves are a good example; they were developed not by a US company, but by two companies that originated in Europe, CoreValve and PVT. [Editor’s Note: CoreValve Inc. was recently acquired by Medtronic Inc., and PVT was acquired by Edwards Lifesciences Corp.] [See Deal] [See Deal] But when it comes to sales and marketing, we have to respect the fact that our competitors are doing something well, and rather than complaining about it, we need to understand what they do well and try to do it even better. It’s a journey that is going to take us a while to build that capability but it’s on track.

Q: You have recruited several new members of Sorin’s management team who, like yourself, came from large US-based device companies. In your effort to build an organization that can compete globally against these companies, is it the experience gained in a US company, with their sales and marketing focus, that you are looking to impart to the rest of Sorin, or are you simply looking to recruit the best talent from top companies no matter where they are located?

It’s a combination of both. One of our aspirations is to make Sorin the employer of choice. We are getting increased interest from European medtech executives who have worked for US companies and appreciate the strengths and professionalism of these companies, but are excited by the opportunity to work for a European company. I believe that by combining the technological creativity that Sorin has always been known for with a more systematic, process-oriented organization with a more aggressive sales and marketing strategy, we can take this company to the next level where we can compete globally. It’s going to take a long time, but I believe it can be done.

Q: Sorin’s reorganization has involved recruiting senior management from other companies to fill key positions. Yet, for the company to grow, it can’t depend on recruiting outside talent. How far is Sorin from the point where the company is developing managers internally who can assume leadership positions and help the company grow its business globally, particularly in the US?

I’m a firm believer that developing people in-house, just like in-house R&D, is the best way to develop management talent. And Sorin needs to become a company where not only do we recruit good people, but we also develop good people. As a manager, even though they are our competitors, I take great pride in knowing that I developed very successful management teams when I was at Edwards, many of whom are still there. Building a team is the most important thing a manager can do, and that is why we are embarking on a major development plan for management level employees at Sorin.

In terms of building our business in the US, I think the best way to do that is for us to hire our own people and train them, which is what we are doing in heart valves. We replaced our entire US management team with people both from within Sorin and from outside, and we are training them to be ambassadors for the company. That is a winning strategy long-term, and is part of the reason we have gained market share in heart valves in the US so quickly.

We have also made changes in our US CRM team. The US opportunity in CRM remains the biggest opportunity we have and is still one of our biggest challenges. The US represents 65% of the entire CRM market, which makes it around a €5 billion market, and we only have a less than one percent share. If we can’t get 5%-10% of the US market with 20% annual growth, then it doesn’t even pay for us to play there. And we were making progress toward those targets until 2008, when a couple of things happened.

First, we discovered that some of our US partners—not direct employees—were not operating in the way Sorin wants to do business. Sales are important, but more important than the numbers is how you achieve those sales. We want to be a company that has the highest level of ethical behavior and business practices. As a result, we had to separate ourselves from a group of distributors. That has delayed our progress by one year, and we really need to regain our momentum. We remain committed to building our US CRM sales effort because it is a huge opportunity that we cannot ignore.

Q: Roughly half of Sorin’s sales come from Europe and one-quarter of the company’s sales come from the US. Would you like to see those ratios change, and if so, how?

Obviously I would like to see Sorin’s sales in every region grow faster than the average market rate, but I would certainly like the US and Japan to take a bigger share of the whole company’s sales. That is because, when you look at the device industry, the US and Japan are typically the most profitable markets, and they are also the markets in which we have the lowest shares, giving us the greatest opportunities for growth.

By comparison, in Europe, we are number one in mechanical valves, number two in tissue valves, and number one in cardiopulmonary products. That means it’s tougher for us to grow in Europe because we already have such a high level of market share. So I would like to rebalance our business so that our share of the US and Japanese markets becomes much bigger over time.

Q: Obviously, Sorin would like to succeed in growing its CRM and heart valve sales in the US. But given where the company is starting out in those markets and the stiff competition you face, and also given your success with those products in Europe, could Sorin succeed with a CRM and heart valve strategy that focused on Europe and Asia if you couldn’t make your milestones in the US?

Let me start with heart valves. We are already demonstrating success with heart valves in the US, having gone from nothing to 5% of the market in one year. Already some of the largest institutions in the US, like the Mayo Clinic, are regular users of Sorin heart valves. Our rapid penetration of the US heart valve market is one of our proudest recent achievements. And we fully expect this growth to continue as we introduce new products such as our stentless valve and our sutureless valve.

In CRM, I look at the success that we have generated in countries where we have a strong organization, like Italy, France, and Japan. We are perceived as leaders in those markets, and are generally either number two or three in most of those CRM market segments. Japan is perhaps the best example because we were a very small player there, but almost overnight by entering into a relationship with a new distributor—Japan Lifeline, who previously was Boston Scientific’s distributor, we became number three in pacemakers and are very close to becoming number two. In the defibrillator market, we went from nothing to number three. That tells me that Sorin has great products, and that once the customers begin using these products and are serviced by a professional sales and clinical organization, they will buy our products, no matter what market we are in.

The US is the next frontier for us, and I’ll be the first to admit that we have not yet achieved the objectives we have set for ourselves there. But I’m not even thinking in terms of not meeting our goals and abandoning that market, and neither is anyone else on our management team. Our products are recognized as leaders throughout the world and are well accepted by customers when we have in place the customer-facing organization that they deserve. In markets where Sorin doesn’t have the necessary organization, the US being the most obvious example but there are also examples in Europe, our sales have suffered. In those markets, we are rebuilding our organizations, often from the ground up. In many ways, that is the story of this company in a nutshell: weak organization, weak results; strong organization, strong results. Everything we are doing in this restructuring is designed to strengthen the whole organization because we are confident, based on our experience, that it will demonstrate positive results.