IntriCon to Divest Non-Core Electronics Business
January 05 2010 - 5:05PM
Business Wire
IntriCon Corporation (NASDAQ: IIN), a designer,
developer, manufacturer and distributor of body-worn medical and
electronics devices, today announced that it will divest its
non-core electronics business, Anaheim, Calif.-based RTI
Electronics, Inc. The plan, which includes an orderly liquidation
of all RTI Electronics assets, was approved by the company’s board
of directors on December 29, 2009, and will commence immediately;
it is expected to be completed by mid-2010. Associated with the
divestiture, IntriCon expects to record an estimated charge of $1.4
million to $1.8 million in discontinued operations, of which
approximately $1.0 million to $1.4 million is non-cash.
“RTI Electronics has been a part of IntriCon since 1997. We are
grateful for the many contributions of our 60 electronics
employees,” said Mark S. Gorder, president and chief executive
officer at IntriCon. “This divestiture clarifies IntriCon’s mission
and sharpens our focus on the body-worn device market. It allows us
to devote more resources and capital to our core body-worn device
business, and improves our overall margins and profitability. When
completed, we will be a 'pure play' in body-worn technology, which
we believe will enhance our appeal to a wider range of
investors.”
IntriCon will work with customers impacted by the divestiture to
ensure that their needs are met and any outstanding orders are
fulfilled.
For the nine-month period ended September 30, 2009, net sales
for RTI Electronics were $4.0 million, a 30.3 percent decline from
the same prior-year period. RTI Electronics posted a 2008 net loss
of $277,000 and a net loss of $382,000 for the nine-month period
ended September 30, 2009.
Said Gorder, “The future is clear—the device marketplace,
particularly in the medical arena, is moving toward smaller,
body-worn devices that offer wireless capabilities and other
critical monitoring capabilities. It is more important than ever
that we focus our resources and capital on our core business. We
intend to support medical OEMs, as well as our partners in hearing
health and professional audio communications, with new devices, and
continue to prudently invest in new initiatives that we believe
will fuel long-term growth.”
About IntriCon Corporation
Headquartered in Arden Hills, Minn., IntriCon Corporation
designs, develops and manufactures miniature and micro-miniature
body-worn medical and electronics products. The company is focused
on three key markets: medical, hearing health, and professional
audio and communications. IntriCon has facilities in the United
States, Asia and Europe. The company’s common stock trades under
the symbol “IIN” on the NASDAQ Stock Market. For more information
about IntriCon, visit www.intricon.com.
Forward-Looking Statements
Statements made in this release and in IntriCon’s other public
filings and releases that are not historical facts or that include
forward-looking terminology such as “may”, “will”, “believe”,
“expect”, “should”, “optimistic” or “continue” or the negative
thereof or other variations thereon are “forward-looking
statements” within the meaning of the Securities Exchange Act of
1934, as amended. These forward-looking statements include, without
limitation, statements concerning the divestiture of the Company’s
electronics business and expected costs, prospects in the miniature
body-worn device arena, new products, strategic alliances, future
growth and expansion, market fundamentals, future financial
condition and performance, prospects and the positioning of
IntriCon to compete in chosen markets and the Company’s planned
investments in research and development. These forward-looking
statements may be affected by known and unknown risks,
uncertainties and other factors that are beyond IntriCon’s control,
and may cause IntriCon’s actual results, performance or
achievements to differ materially from the results, performance and
achievements expressed or implied in the forward-looking
statements. These risks, uncertainties and factors include, without
limitation, risks related to the current economic crisis, the risk
that IntriCon may not be able to achieve its long-term strategy,
weakening demand for products of the company due to general
economic conditions, risks related to the company’s strategic
alliances and joint venture, possible non-performance of developing
the MPETS product and other technological products, the volume and
timing of orders received by the company, changes in the mix of
products sold, competitive pricing pressures, the cost and
availability of electronic components and commodities for the
company’s products, ability to create and market products in a
timely manner, competition by competitors with more resources than
the company, foreign currency risks arising from the company’s
foreign operations, ability to satisfy and maintain compliance with
the covenants under the company’s loan facility, the costs and
risks associated with research and development investments and
other risks detailed from time to time in the company’s filings
with the Securities and Exchange Commission, including the Annual
Report on Form 10-K for the year ended December 31, 2008. The
company disclaims any intent or obligation to publicly update or
revise any forward-looking statements, regardless of whether new
information becomes available, future developments occur or
otherwise.
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