API Technologies Announces EMS Business Unit Restructuring
Jun 08, 2012
API Technologies Corp. ATNY +0.63% ("API", "API Technologies", or the "Company"), a provider of RF/microwave, microelectronics, and security solutions for critical and high-reliability applications, today announced restructuring plans for its Electronics Manufacturing Services (EMS) product lines. The restructuring plan is intended
to realize synergies from the Company's combined EMS businesses, contain costs, and streamline operations.
API Technologies' Electronics Manufacturing Services (EMS) product lines provide value-added contract manufacturing services to defense and commercial customers. "The restructuring of the EMS business enables us to take advantage of business synergies and streamline our management structure and business processes. We anticipate a seamless transition that enables us to continue delivering valued services to our customers, while also driving shareholder value. We are taking these measures in order to reduce our future exposure to low margin and unprofitable revenue streams within the EMS business. We believe these actions will enhance our ability to achieve our 20% adjusted EBITDA margin target," said Bel Lazar, President and Chief Operating Officer of API Technologies.
Elements of the restructuring plan include management re-alignment, workforce reductions, and write-downs and charges related to inventory, fixed assets, and long term leases.
In the May 31, 2012 ending quarter, API completed headcount reductions related to its EMS business. Overall 40 positions, approximately 10% of its EMS workforce and 2% of API's global workforce, were affected. API expects to record aggregate restructuring charges ranging from $8.5 million to $10.3 million, which will be substantially recognized in the May 31, 2012 quarter end financials. All but approximately $200,000 of these charges are non-cash charges. Additional details are contained in the Company's Form 8-K filed with the SEC on June 6, 2012.