AMSC cuts jobs, will close plant in Wisconsin
AMSC, of Devens, has announced a restructuring plan that has meant the loss of jobs at its headquarters and the closing of one of its two plants in Wisconsin.
Wind energy equipment manufacturer AMSC laid off an unspecified number of employees at its Devens headquarters today as part of a restructuring that will include the closing of a plant in Wisconsin and the opening of a new one in Romania.
The company today announced a series of moves designed to “better capitalize on emerging opportunities in the wind and grid businesses.” Two of those moves include consolidating its U.S. grid manufacturing and product development program, and diversifying its international wind-power manufacturing operations.
As a result, AMSC said it will close its facility in Middleton, Wis., where part of its grid manufacturing operation is located, by the end of this year and move its operations to Devens. Another Wisconsin facility, in New Berlin, will remain open.
The company also said the restructuring will lead to a global headcount reduction of 5 to 10 percent by the end of this year. It expects the restructuring to cost between $4 million and $6 million, with $1 million of that to be included as part of its charges in the fourth quarter of its 2013 fiscal year, which ends March 31.
The company employs about 100 in Devens.
AMSC, which has operations throughout the world, said the Romania plant, in the city of Timisoara, will manufacture wind turbine electrical control systems for customers located outside China. The company said it will be operational during its next fiscal year, which begins April 1.
AMSC said it expects to save about $3 million a year from the restructuring moves starting in the fourth quarter of its 2014 fiscal year.
Quarterly loss expected
The company also said it expects fourth-quarter 2013 revenue to fall between $14 million and $16 million, which will include the restructuring charge and a non-cash charge of about $5 million for a loss on the extinguishment of its convertible note. AMSC said it expects a net loss for the quarter of between $20 million and $22 million, or 27 to 30 cents per share.
In a statement, AMSC President and CEO Daniel P. McGahn called the decisions “the beginning of a new chapter for AMSC as we focus more intently on manufacturing and product development across all lines of our business.”
McGahn said the company expects to end the quarter with a positive net cash flow, one year ahead of its target. “We believe our liquidity position is more stable, but we believe we must grow revenue beyond current levels to achieve sustainable profitability and positive cash flows,” he said. “Our employees are truly some of the best and the brightest and they are dedicated to solving the world’s foremost power challenges.”
In its last quarter, which ended Dec. 31, the company suffered a much smaller net loss, of $8.4 million, or 14 cents per share, which was better than analysts’ expectations. In the third quarter of 2012, it suffered a much deeper loss of $20.1 million.
Also in the last quarter, AMSC cited wind revenue growth primarily from demand in India and China. But it also said those gains were offset by declines in AMSC's grid segment.
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