Michigan, United States [RenewableEnergyWorld.com] In another blow to the economy of Michigan, already one of the states hardest hit by the recession, Energy Conversion Devices has confirmed that it plans to initiate a restructuring plan that is says will align operating expenses with near-term revenue expectations while positioning the company to more efficiently leverage future growth opportunities. The company said that its workforce will be reduced by approximately 400 people, approximately 20 percent of ECD’s current workforce.
“We are committed to reducing our cost structure, while still satisfying the increasing demand for our products in the marketplace,” said Mark Morelli, ECD’s president and CEO. “We expect our business will strengthen in the second half of our fiscal year, and these steps should lower our overall operating costs for both the near and long terms, and position our company to better capitalize on growth opportunities in our rooftop solar markets.”
The company’s restructuring plans are expected to create annualized savings of approximately US $17 million, with half to be realized in fiscal 2010. ECD expects to record related charges of approximately $9 million in fiscal year 2010, including the previously announced restructuring costs related to ECD’s acquisition of Solar Integrated Technologies. This restructuring plan will be completed in fiscal 2010.
The specific restructuring actions include additional workforce reductions and the previously announced restructuring related to ECD’s acquisition of Solar Integrated Technologies (SIT) which was announced in July.
Under the terms of that agreement, ECD agreed to pay approximately US $0.11 for each share of SIT or approximately $11.2 million in total. Including the assumption of SIT’s net debt obligations, the purchase price will be approximately $16.3 million. ECD plans to finance the acquisition from existing corporate funds.