GT Advanced Tech Closes Restructuring, Cutting 35 Jobs, Announces Gray Leaving Co.; Seeking Partners to Buy St. Louis Operations
GT Advanced Technologies (NASDAQ: GTAT) today announced that it is transitioning to a functional organizational structure from its prior business unit organization as it continues to streamline operations and position the company for growth once the markets it serves start to recover.
Under the new structure, sales, service and worldwide operations will be centralized under the leadership of Dan Squiller, who will continue to report to president and CEO Tom Gutierrez. Dave Keck, formerly general manager, polysilicon and photovoltaic equipment, will lead the company's sales and service across all businesses, reporting to Squiller. Jeff Ford, vice president of DSS business development, will continue to have responsibility for GT's DSS business, leveraging his extensive industry knowledge and experience to ensure that GT continues to support its DSS customer base as the company transitions to next generation PV technologies.
The company's R&D initiatives in next generation solar, Hyperion ion implant exfoliation and sapphire will be managed under Vikram Singh, executive vice president, Advanced Systems Development. In addition Dr. Singh remains responsible for all central engineering support services as well as business development and product management for the Hyperion and next generation solar platforms. Dr. P.S. Raghavan, chief technology officer, will be continue to lead technology development for silicon carbide (SiC) and gallium nitride (GaN) applications. As a result of the functional realignment, the business unit general manager positions have been eliminated and Cheryl Diuguid, formerly general manager of the sapphire business, has left the company.
As previously indicated, the company is scaling back its M&A program in 2013. As such, the role of chief strategy and new business officer is being eliminated and David Gray, Ph.D. will be leaving the company effective January 25, 2013. CEO Tom Gutierrez will drive the company's strategic development initiatives.
“The new functional structure reflects GT's continued efforts to streamline our operations and align our business with current market and business conditions,” said Gutierrez. “It further minimizes duplication of resources and provides us with a very efficient platform to grow from in 2013. We are grateful to Cheryl Diuguid and Dave Gray for the significant contributions they have made in their tenure with GT and we wish them the best.”
As part of the reorganization of resources, the company is shifting final development and beta build activities for its HiCz™ product to its Merrimack, NH facility and will be idling its HiCz® materials pilot manufacturing facility in St. Louis, MO. As a result, the company will layoff approximately 35 employees in St. Louis. These employees will be provided severance pay, health and dental benefits and outplacement services.
GT remains committed to the commercialization of the HiCz™ platform, a next generation PV furnace that will produce N-type silicon wafers to help make more efficient solar cells, and improve the economics for PV manufacturers by lowering the cost per watt of solar energy. The company expects to be ready to offer the HiCz product by mid-2013, but given current market conditions in the PV industry, orders for the new generation systems may not occur until 2014 when the industry begins to recover. Several HiCz pullers are already installed and operating in the Merrimack facility where most of the HiCz R&D team is based.
The company is seeking a strategic partner to purchase the St. Louis operation. The 67,000 square foot leased facility currently has HiCz tools installed, representing a capacity of 50MW/~250MT output/~12.5M wafers per year. The facility is designed to support twice as many tools as currently installed.
The company estimates that the idling of the St. Louis facility will reduce its annualized expenses by approximately $15 million, excluding restructuring charges. The savings related to this action were anticipated and reflected in the CY13 guidance range provided by the company on December 18, 2012. In addition, the company expects to incur restructuring and non-cash asset impairment charges in Q4 2012 and in 2013 related to this action. The company is evaluating the timing and amounts of the charges and expects to provide further details on these charges when it reports CY2012 earnings results in February 2013.
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