Itron Inc.'s board brought back retired CEO LeRoy Nosbaum this year in part to help correct the company's plunging stock price over the past 14 months.
Despite kinda scary 3Q earnings (see below for details), Nosbaum has begun to fix that issue.
The publicly traded stock gained more than $3 on Wednesday after Itron officials announced tghey will undertake a massive restructuring. It will close six production sites, most of them in Europe and Latin America. One unidentified US site will also be closed and one in Asia as well.
It will also lay off 7.5 percent of its global workforce, about 750 jobs.
Also relevant to the stock uptick: Itron also announced on Wednesday it will repurchase up to
"This program reaffirms our commitment to increasing shareholder value and underscores our confidence in the long-term prospects of the company," said
The good local news: Liberty Lake, with about 500 workers, is not affected by the layoffs, Nosbaum said in an interview.
Itron is considered the leading manufacturer of metering systems and software services for the utility industry.
Layoffs will be either in the closed production sites or seven other facilities that will downsize.
At the same time, the goal is to increase overall production capacity by consolidating work and investing money in new technology at other key production sites, said Barbara Doyle, vice president of investor relations for Itron.
“We will move work to other sites and actually be adding workers to provide more production capacity” than Itron now has, Doyle said. She said the increased production will come online in 2013.
The sites to be shut down in Europe include some acquired by Itron in 2007 when it bought Brussels-based Actaris Metering Systems.
The financial impacts will begin to be felt in 2012, with a projected savings of $15 million the second half of next year and $30 million in 2013, a company press release said.
Ins third quarter earnings released Wednesday, Itron reported quarterly and nine-month net losses of $12.70 and $11.21 per share, but those resulted from a $10 million goodwill charge and $25 million in warranty costs that affected the quarter’s balance sheet, said Nosbaum.
If one backs out those non-typical charges, Itron’s "adjusted" quarterly earnings came to a profit of $1.30 per share, Nosbaum said.
“We’re making plenty of money, that’s not the problem,” he added. The restructuring is all about streamlining and making Itron’s global facilities more efficient, he added.
Shares of Itron stock gained $3.19 or 9.8 percent in trading Wednesday.