ESI outlines restructuring, severance costs [The Oregonian, Portland, Ore.]
(Oregonian (Portland, OR) Via Acquire Media NewsEdge) March 13--Washington County electronics manufacturer Electro Scientific Industries said in a regulatory filing this morning that it will record $24 million in restructuring and severance costs as it aims to refine its business.
And ESI said it will also take a $43 million "valuation allowance" this quarter, an accounting charge acknowledging that future profits won't be large enough for ESI to take advantage of deferred taxes on its books.
ESI, Oregon's oldest technology company, said in January that it plans a "fundamental" transformation of its business to concentrate on three areas: laser micromachining for consumer electronics, packaging technologies for a new generation of computer chips, and the company's laser tools.
The company did not return a call seeking additional details on its plans.
ESI's financial results have been highly erratic, reflecting dramatic ups and downs in the markets it serves. The company forecasts that sales in its current fiscal year -- which ends this month -- will be down more than 15 percent from last year.
The company says restructuring will enable it to better weather its cyclical industry.
Until today, though, ESI hadn't said how much the transition will cost.
It still hasn't said how many jobs the company will eliminate (ESI had 627 employees worldwide at the end of its last fiscal year, in March 2012), but said today that its restructuring charge includes $2 million for severance and other "employee-related costs." That suggests the layoffs will be relatively small.
ESI's shares closed up 1.8 percent, or 19 cents, at $10.82. In the past year, the stock has traded between $9.28 and $15.37.
Note: This item was updated with ESI's closing share price.
-- Mike Rogoway; Twitter: @rogoway; phone: 503-294-7699
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