Power One Sets Restructuring

Power One(PWER Quote) plans to lay off about one-quarter of its workforce in a restructuring. The company also said its previously stated third-quarter guidance is on track, with expected sales to be flat to "slightly up," and earnings consistent with analysts' predictions.

The company expects sales to be between $56 million and $59 million, compared with sales of $56.2 million in its second quarter this year, and to report a loss of 6 cents to 9 cents a share. Analysts expect the company to lose 7 cents a share.

The company said restructuring costs will account for $60 million of operating expenses and inventory charges will be about $70 million, but both charges will save the company about $25 million beginning in 2003. The restructuring will result in the laying off of 24% of the workforce and a consolidation of manufacturing facilities. Due to employee severance packages and the facility consolidation, Power One expects to take a pretax charge of $15 million.

Additionally, the company said restructuring will reduce the level of revenue needed for it to break even on an EBITDA basis to below $55 million, down from $65-$70 million, and operating break-even to about $65 million, down from $80-$85 million.

Power One will announce its results on Oct. 23.

Shares of the company closed at $4.15 Wednesday on the Nasdaq.

Headquartered in California, Power One is a manufacturer of power conversion products sold to telecom equipment manufacturers and Internet service providers.