Ceres Inc. (CERE) said Friday that it will restructure its Brazilian seed operations and is exploring discussions with additional local partners and collaborators to support the continued development and commercialization of its technology in Brazil.
It announced the continued realignment of its business to focus on food and forage opportunities and biotechnology traits for sugarcane and other crops.
The company's current restructuring plan is intended to further align expenditures toward improved forages for dairy and meat production and biotech traits for sugarcane and other crops.
Ceres indicated that its Brazilian operations after implementation of the restructuring plan would be focused primarily on sorghum breeding and sugarcane. In particular, the company plans to expand its sugarcane trait development activities for the Brazilian sugarcane market, which Ceres expects to fund, in part, under a grant available from the Brazilian government.
The realignment plan, which is expected to be substantially completed by October 31, 2015, includes, among other actions, a workforce reduction that will impact 14 positions in Brazil primarily related to administration, operations and manufacturing as well as 2 support positions in the United States.
Ceres estimates that it will incur total charges of approximately $0.6 million over the next five months with respect to these workforce reductions in Brazil and the U.S., including $0.1 million in continuation of salary and benefits of certain employees until their work is completed and their positions are eliminated, and $0.5 million of one-time severance and other costs, all of which will be cash expenditures.
The company expects to achieve additional cost reductions as part of the realignment, which may include additional workforce reductions. Once fully implemented, the company's realignment plan is expected to deliver cash savings of up to approximately $6.0 to $8.0 million in fiscal year 2016.
In addition to the realignment in Brazil, the company continues to evaluate options available for additional funding, including public or private debt or equity financings, collaborations, licensing arrangements, government programs, or the sale of intellectual property, technology or other assets.
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