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 product lines;
- 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
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.