Smart Wires Technology Ltd Refocuses Business And Reduces Cost Structure
October 31, 2022
Smart Wires Technology LTD (Smart Wires) today announced a restructuring to further focus its business on core markets and improve its cost structure. Aligned with the restructuring, Smart Wires implemented a reduction in force affecting 35% of employees.
“It is always a very difficult decision to reduce staffing and separate from valued colleagues,” said Peter Wells, CEO of Smart Wires. “Our business has been affected by supply chain challenges that have delayed backlog execution, making it difficult for us to balance our cost structure with current revenue and cash generation. This decision is part of broader re-structuring efforts, business model re-framing and the ongoing pursuit of strategic and financial alternatives. We expect to deliver the current backlog of $67 million from Q4 2022 through Q2 2023.
The reduction in force is part of a broader strategy to reduce operational expense and costs of goods sold, focus on three core geographic markets, and re-assess the current business model with the goal of capturing more of the value created by the SmartValve technology and improving project economics. The annual impact of the cost reduction initiatives including the reduction in force is expected to be in the range of $10 million to $12 million dollars. Savings in Q4 2022 will be offset by severance related expenses and therefore we expect the positive cash impact to be realized starting in Q1 2023. More details will be shared in the upcoming earnings release in November.
About Smart Wires Technology LTD
Smart Wires conducts grid technology business that helps utilize, modernize, optimize and monetize grid capacity to meet the demands and opportunities of the energy transition. The Company operates in the global transmission grid technology market and is a leader in modular power flow control technology. Power flow control technology controls and directs power flow on high voltage electric transmission systems. Smart Wires serves transmission owners, primarily electric utilities. Transmission owners use power flow controllers to eliminate line overloads by redirecting power to other lines, to reduce transmission congestion, and to enable renewable energy connection and dispatch. Currently, Smart Wires’ main projects are located in Europe, the United States and Australia with upcoming projects in South America and Canada. The Company has a large customer base comprised of utilities globally. Smart Wires Technology Ltd is listed on the Nasdaq First North Growth Market. For more information, please visit www.smartwires.com.
Julie Andrews, Chief Financial Officer
Tel: + 1 901-687-8314
Smart Wires’ Certified Adviser is Erik Penser Bank AB, Apelbergsgatan 27, Box 7405, SE-103 91 Stockholm, E-mail: firstname.lastname@example.org, Tel: 08-463 83 00, www.penser.se.
This information is information that Smart Wires Technology Ltd is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2022-10-31, 20:20 CET.