Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of
The Securities Exchange
Act of 1934
Date of Report (Date
of earliest event reported): January 10, 2013
||Performance Technologies, |
(Exact name of registrant as specified in its charter)
or other jurisdiction
||(Commission File Number)
|140 Canal View Boulevard Rochester, New York
|(Address of principal executive
telephone number, including area code: (585) 256-0200|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
||Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
||Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
||Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
||Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.05 – Costs Associated with Exit or Disposal Activities
On January 10, 2013, the Registrant, Performance Technologies, Inc.
(“the “Company”) announced its decision to sharpen its strategic business focus, concentrate on its high value-add
communications product families, transition away from other product portfolio elements, and implement operational expense reductions.
In conjunction with this decision, the Company reduced its personnel by ten employees or 8% of its workforce
as of January 10, 2013. As a result of this action, the Company expects to incur first quarter 2013 pre-tax restructuring
charges of approximately $.3 million, representing employee-related costs which will result in cash expenditures.
When combined with the savings from the
restructuring PT announced in October 2012 along with other efficiencies the Company has already implemented and the effects of
the impairments of software development costs and purchased intangible assets (see below), the total cost savings to PT
are anticipated to be in the range of $3.2 million to $3.4 million on an annualized basis, of which
$2.5 million to $2.7 million are expected to be cash flow savings.
Item 2.06 Material Impairments
In conjunction with the decision to suspend its Xpress SIP
applications product line, the Company expects to record an additional fourth quarter 2012 impairment charge of approximately $.8
million, which combined with the fourth quarter 2012 impairment charge announced in October 2012, will bring the total fourth quarter
2012 impairment of software development costs and purchased intangible assets to approximately $1.6 million. The
Company continues to evaluate the ramifications of its new strategic direction on its recorded balances of assets and liabilities
including the impact on excess and obsolete inventories.
(99.1) Press release issued by PT on January 10, 2013.
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
||PERFORMANCE TECHNOLOGIES, INCORPORATED|
|January 10, 2013
||/s/ John M. Slusser|
John M. Slusser
President and Chief Executive Officer
|January 10, 2013
||/s/ Dorrance W. Lamb|
Dorrance W. Lamb
Senior Vice President and Chief Financial Officer
For more information contact:
Dorrance W. Lamb
SVP and Chief Financial Officer
585-256-0200 ext. 7276
PT Sharpens Its Strategic Business Focus
Company Concentrating on Its High Value-Add
- Diameter and SS7 Network Signaling & Applications
- Multi-Protocol Communications Gateways &
ROCHESTER, NY – January 10, 2013
– PT (NASDAQ: PTIX), a leading global provider of advanced, high availability network communications solutions, today announced
it is sharpening its strategic focus and refining its business vision. This multi-faceted initiative involves concentrating on
two product families, transitioning away from other product portfolio elements, and operational expense reductions.
With regard to this initiative, John Slusser,
PT president and CEO commented, “Our announcement today reflects the next phase of our business’
evolution resulting from our detailed analysis of our core competencies and review of our extensive product portfolio. Given the
challenging global economic climate and dynamics in the vertical markets we serve, we have narrowed our product portfolio scope
and have identified the primary forward-looking market opportunities that we believe will solidly position our Company for future
“Our going forward business focus
will be on our high value-add network communications solutions – leveraging our core competencies. In the telecommunications
space, we are building upon our installed customer base for our SEGway™ SS7 Signaling Systems and our seventeen years of
real-world signaling systems experience. We are particularly pleased with the positive market reaction for our recently announced
SEGway Universal Diameter Router – our premier Diameter Signaling solution set for next-generation 4G LTE networks. The
Diameter signaling market is projected by industry analysts to result in an aggregate spend of over $2 billion in the next five
years. We expect to be a key player in this growth market by providing high value proposition “best-of-breed” solutions
and by taking those solutions to the global market through a combination of strong channel partners and focused direct sales activities.
In the government infrastructure arena, we are focusing on maximizing the sales of our IPnexus® Multi-Protocol
IP-interworking solutions. These PT systems have enabled extremely reliable and highly available radar and sensor communications
services over IP networks - gathering and delivering vital data such as weather, flight tracking, and ground surveillance. Our
presence in air traffic control and defense-related communications is approaching 4,000 systems deployed in over 30 different
countries. Moving forward, we expect to expand our IPnexus® Multi-Protocol Gateways and Servers in military/aerospace
applications as well as potentially enter new emerging markets such as Energy and Smart-Grid. In summary, given this concentrated
product focus, the substantial steps we have taken to reduce our operating expense levels and our strong and unleveraged balance
sheet, we believe PT is now well positioned for a positive future trajectory as economic conditions improve.”
As part of this strategic realignment,
PT began transitioning out of the general OEM platform business during the fourth quarter 2012. PT will continue to utilize its
own open standards platforms as key elements of its network communications solutions and maintain a certain number of strategic
customers. This transition includes a last-time buy and build program that will run out through 2014 for major customers.
has also suspended its own direct sales and development activity on its Xpress SIP applications product line and in December 2012
entered into an agreement with an independent value-added reseller for subsequent Xpress-related sales and support. The
Company expects to record an additional impairment charge in the fourth quarter 2012 amounting to approximately $.8 million relating
to this decision.
As of this date, the Company is reducing
its personnel by ten employees, or 8% of its workforce. As a result of this action, the Company expects to incur a pre-tax restructuring
charge for employee-related costs of approximately $.3 million in the first quarter 2013, which will result in cash expenditures.
When combined with the savings from
the restructuring PT announced in October 2012, along with other efficiencies the Company has already implemented, the total
cost savings to PT are anticipated to be in the range of $3.2 million to $3.4 million on an annualized
basis, of which $2.5 million to $2.7 million are expected to be cash flow savings. The Company continues to evaluate the ramifications
of its new strategic direction on its recorded balances of assets and liabilities including the impact on excess and obsolete inventories.
About PT (www.pt.com)
PT (NASDAQ: PTIX) is a global supplier of advanced, high availability
network communications solutions.
Its SEGway™ Diameter and SS7 Signaling Systems provide
tightly integrated signaling and advanced routing capabilities and applications that uniquely span the mission critical demands
of both existing and next-generation 4G LTE and IMS telecommunications networks. The Company’s IPnexus® Multi-Protocol
Gateways and Servers enable a broad range of IP-interworking in data acquisition, sensor, radar, and control applications for aviation,
weather and other infrastructure networks. Established in 1981, PT is headquartered in Rochester, NY and markets and sells its
products worldwide through its direct sales organization as well as through channel partners that include major telecommunications
equipment vendors, government prime contractors and value-added resellers.
The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements which
reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions
of those Sections. The Company’s future operating results are subject to various risks and uncertainties and could differ
materially from those discussed in the forward-looking statements and may be affected by various trends and factors which are beyond
the Company’s control. These risks and uncertainties include, among other factors, business and economic conditions, rapid
technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers and
the potential loss of key customers, inability to gauge order flows from customers, fluctuations in quarterly and annual results,
the reliance on a limited number of third party suppliers, limitations of PT’s manufacturing capacity and arrangements, the
protection of PT’s proprietary technology, errors or defects in our products, the effects of pending or threatened litigation,
the dependence on key personnel, changes in critical accounting estimates, potential impairments related to investments, foreign
regulations, possible loss or significant curtailment of significant government contracts or subcontracts, and potential material
weaknesses in internal control over financial reporting. In addition, during weak or uncertain economic periods, customers’
visibility deteriorates causing delays in the placement of their orders. These factors often result in a substantial portion of
PT’s revenue being derived from orders placed within a quarter and shipped in the final month of the same quarter. Forward-looking
statements should be read in conjunction with the most recent audited Consolidated Financial Statements, the Notes thereto, Risk
Factors, and Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company, as contained
in the Company’s Annual Report on Form 10-K, and other documents filed with the Securities and Exchange Commission.
PT is a trademark of Performance Technologies, Inc.
The names of actual companies, products, or services may be the trademarks, registered trademarks, or service marks of their respective
owners in the United States and/or other countries.