Satcon Technology Corp. (SATC) said Wednesday that it will cut 140 jobs, or about 35 percent of its workforce, and close its Canadian manufacturing facility as part of an organizational restructuring. The maker of photovoltaic inverters expects the restructuring action to result in charges of about $2.8 million to $3.0 million, with majority of the charges to be incurred in the fourth quarter of 2011. Shares of the company are currently gaining more than 9 percent in pre-market trading.
The cost reduction initiatives as part of the company's strategic plan to improve its financial performance and align its global workforce as well as operations infrastructure. The company expects ongoing savings of about $15 million to $17 million annually once all actions are implemented by the second quarter of 2012.
Boston, Massachusetts-based Satcon said that under the restructuring plan, it will focus on delivering the industry's highest performing turnkey solutions for the large scale commercial and utility solar markets, with focus on North America, China, India and Thailand as well as other emerging markets in the Asia-Pacific region.
Satcon will concentrate its product development resources on cost reduction and place an increased emphasis on Prism Platform, the company's next generation turnkey multi-megawatt medium voltage building block.
Further, the company will close its Canadian manufacturing facility and is working to partner with a contract manufacturer to maintain Ontario production capacity for Satcon solutions to continue to satisfy Ontario's feed-in tariff requirements. Satcon has also restructured its office and warehouse infrastructure in Europe, China and the U.S.
Satcon said that the workforce reduction, combined with the closure of the Canadian facility, will result in charges of about $2.8 million to $3.0 million. The company expects the majority of the charges to be incurred in the fourth quarter of 2011, with the remainder taking place in the first quarter of 2012.
Satcon said it is currently analyzing its inventory and certain non-cancellable supplier-held inventory, and will write down the value or take a charge to reflect current market conditions.
The company expects the move to result in expected charges during the fourth quarter of 2011 of about $20 million to $26 million, with the majority of the charges comprised of non-cash items. The company said it did not anticipate these charges when it provided its fourth quarter 2011 guidance.
Aaron Gomolak, Satcon's Chief Financial Officer said, "Our commitment to achieving profitability, combined with the dynamic PV environment of 2011, have led us to adjust our cost structure to ensure that we are able to successfully deliver the industry's most advanced and cost effective solutions profitably. These spending reductions, coupled with our accelerated cost reduction programs, significantly lower our breakeven level during the first half of 2012."
SATC closed Tuesday's trading at $0.64, up $0.04 on a volume of 966,200 shares. In Wednesday's pre-market, the stock is adding $0.06 or 9.87 percent to $0.70.
by RTT Staff Writer
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