MRIGlobal cutting expenses because of revenue declines
04/02/2014 11:54 AM
04/02/2014 11:54 AM
MRIGlobal has been cinching its budget belt several notches as it chases fewer available dollars for research.
Moody’s Investors Service, in a newly-released credit report, said the Kansas City research institute slashed expenses by 25.7 percent in fiscal year 2013 because of a drop in revenue. It said the financial situation at the institute has yet to stabilize because of the competitive environment for research funding.
The rating agency reaffirmed its negative outlook as MRIGlobal’s reliance on federal government contracts makes it vulnerable to funding cuts and delays.
The institute was previously issued $20 million in bonds from the Missouri Development Finance Board, and Moody’s rates the debt as Baa2 or a moderate credit risk.
MRIGlobal, in an email response, said this is the third year Moody’s has issued a negative outlook and there would be no impact on operations. The institute wouldn’t share its 2014 budget or forecast.
“MRIGlobal has no further comment,” the organization said.
But in its 2013 annual report, MRIGlobal provided a few details, stating it had $498 million in combined revenues down from $683 million the previous year. The decline was blamed on reduced or delayed federal funding and sluggish corporate spending.
The institute continues to focus on global health, national security and defense and energy with 550 employees, the report said.
There are growing concerns about the decline of research funding in the U.S. According to the Information Technology & Innovation Foundation, the United States is no longer a leader and instead is 24th among 39 countries in government funding and 27th in business research funding.
MRIGlobal is co-manager of the National Renewable Energy Laboratory in Golden, Colo., which is owned by U.S. Department of Energy. One of the laboratory’s new facilities was recently named R&D Magazine’s Laboratory of the Year.
MRIGlobal was formerly called Midwest Research Institute with a history going back to 1944 when it was founded in Kansas City. By the next year, it had 33 employees developing such things as compounds to fight cancer — and later perfecting the coating process for M&Ms candy.