IntriCon Announces Strategic Restructuring to Accelerate Future Growth
Company Projects Annual Cost Savings of Approximately $3.0 Million;
Initiatives will Sharpen Focus on Key Value Hearing Health and Medical
ARDEN HILLS, Minn. -- June 13, 2013
IntriCon Corporation (NASDAQ: IIN), a designer, developer, manufacturer and
distributor of miniature and micro-miniature body-worn devices, today
announced a global strategic restructuring plan designed to accelerate the
company’s future growth by focusing resources on the highest potential growth
areas and reduce costs by approximately $3.0 million annually.
Specifically, the plan includes:
*Reducing investments in certain non-core professional audio communications
*Aggressively transferring specific product lines from Singapore to
IntriCon’s lower-cost manufacturing facility in Batam, Indonesia;
*Reducing global administrative and support workforce;
*Transferring the medical coil business from the company’s Maine facility
to Minnesota to better leverage existing manufacturing capacity, and
exploring alternatives for the remaining security and microphone business,
including possible sale; and
*Adding experienced professionals in value hearing health and also focusing
more resources in medical biotelemetry.
“As a company, we needed to better align our cost structure with current lower
revenue levels—a trend that is continuing in the second quarter,” said Mark S.
Gorder, president and chief executive officer of IntriCon. “These initiatives
allow us to consolidate operations, reduce our global manufacturing footprint,
lower our costs and provide greater focus on our strategic plan: growing the
value hearing health and medical biotelemetry opportunities that hold the
greatest potential to drive shareholder value.
“While challenges remain in the conventional hearing health channel due to
high device costs and inconveniences in the distribution channel, we’re seeing
opportunities for alternative care models such as the insurance channel—as
evidenced by our hi HealthInnovations program—and the personal sound amplifier
product (PSAP) market. Devoting more talent and financial resources to these
channels, as well as adding sales, marketing and channel expertise, will
better position us for success.”
As part of the restructuring, IntriCon will complete a global workforce net
reduction of approximately 35 administrative and support employees, resulting
in immediate annual cost savings of $2.0 million. The majority of the staff
reductions are immediate, except in the company’s Maine operation, where there
will be a phased approach. Impacted employees will receive financial support
and outplacement assistance.
Additionally, IntriCon will classify its Maine operations, which include the
company’s security, microphone and receivers businesses, as discontinued
operations for financial reporting purposes. Certain Singapore assets that
support the microphone and receiver product lines also will be classified as
The company expects to achieve an additional $1.0 million in annual cost
savings by the end of 2013, through the actions detailed above. Combined,
IntriCon anticipates total annual cost savings of approximately $3.0 million.
The company expects to incur total cash charges ranging from $200,000 to
$250,000, or $0.04 per share, related to its restructuring initiatives for the
remainder of the 2013 fiscal year.
“Change of this nature is hard, but necessary, for the health of IntriCon,”
said Gorder. “By right-sizing our organization, and better leveraging our
existing resources, we’ll be able to aggressively drive our two largest growth
opportunities—which we expect will strengthen in the second half of the year.”
Gorder said the company can accommodate revenue growth and deliver
profitability through the capacity at its existing facilities. IntriCon plans
to announce second-quarter results in the first half of August and will
provide additional information on the restructuring at that time.
About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation designs, develops
and manufactures miniature and micro-miniature body-worn devices. These
advanced products help medical, healthcare and professional communications
companies meet the rising demand for smaller, more intelligent and better
connected devices. IntriCon has facilities in the United States, Asia and
Europe. The company’s common stock trades under the symbol “IIN” on the NASDAQ
Global Market. For more information about IntriCon, visit www.intricon.com.
Statements made in this release and in IntriCon’s other public filings and
releases that are not historical facts or that include forward-looking
terminology are “forward-looking statements” within the meaning of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
may be affected by known and unknown risks, uncertainties and other factors
that are beyond IntriCon’s control, and may cause IntriCon’s actual results,
performance or achievements to differ materially from the results, performance
and achievements expressed or implied in the forward-looking statements. These
risks, uncertainties and other factors are detailed from time to time in the
company’s filings with the Securities and Exchange Commission, including the
Annual Report on Form 10-K for the year ended December 31, 2012. The company
disclaims any intent or obligation to publicly update or revise any
forward-looking statements, regardless of whether new information becomes
available, future developments occur or otherwise.
Scott Longval, CFO, 651-604-9526
At Padilla Speer Beardsley:
Matt Sullivan, 612-455-1709
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