Local Med-Tech Firm Cuts Jobs, Transfers Others To MN
A publicly traded medical device firm based in Arden Hills on Thursday announced restructuring plans designed to reduce annual costs by $3 million.
The plan calls for cutting 35 jobs globally, although the consolidation of operations will shift workers to Minnesota from Maine, likely offsetting the job cuts here.
IntriCon Corporation—which manufactures and distributes miniature medical devices to be worn on the body—said that its restructuring plan is “designed to accelerate the company’s future growth by focusing resources on the highest potential growth areas” and reducing costs.
The move is meant to shift focus to its hearing health business, which includes providing hearing aids to UnitedHealth Group subsidiary Hi HealthInnovations, and “biotelemetry,” which manufactures monitoring devices for medical device companies such as Fridley-based Medtronic, Inc.
IntriCon operates Minnesota facilities in Arden Hills and Vadnais Heights, which employ about 215 workers. Globally, the company currently has more than 500 employess; in addition to Minnesota, it operates facilities in Maine, Singapore, and Batam, Indonesia.
The restructuring will result in a net loss of 35 administrative and support employees worldwide, a move that is expected to immediately cut annual costs by $2 million. Affected employees will receive financial support and outplacement assistance, the company said.
About 10 to 12 of those cuts will occur in Minnesota, although the company also plans to reduce costs by moving its “medical coil business” from Maine to Minnesota to better leverage manufacturing capacity here, Chief Financial Officer Scott Longval told Twin Cities Business in a Thursday phone interview. That move will occur during the next four to six months and is expected to offset the job cuts in Minnesota, he said.
“As a company, we needed to better align our cost structure with current lower revenue levels—a trend that is continuing in the second quarter,” President and CEO Mark Gorder said in a statement. “These initiatives allow us to consolidate operations, reduce our global manufacturing footprint, lower our costs, and provide greater focus on our strategic plan: growing the value hearing-health and medical biotelemetry opportunities that hold the greatest potential to drive shareholder value.”
The company also has operations in Maine that focus on securities and microphone products to be sold to the government; it’s “exploring alternatives” for that business—which will most likely involve a sale of the business, Longval said. IntriCon will also transfer the manufacturing of some products from Singapore to Indonesia in an effort to reduce costs.
The restructuring process will result in $200,000 to $250,000 in charges, or $0.04 per share, this year, the company said.
IntriCon said it plans to add “experienced professionals in value hearing health.” Longval said it is “premature to talk specifically” about those plans, although they could involve the hiring of new Minnesota employees.
IntriCon is among Minnesota’s 10 largest publicly traded medical device manufacturers based on revenue, which totaled $63.9 million in 2012. The company reported 2012 earnings of $709,000, an improvement from a net loss of $1.4 million in 2011.