NEW YORK (GenomeWeb News) - CombiMatrix will close its Washington facility and consolidate its corporate activities in Irvine, Calif., and will cut an unspecified number of jobs as it restructures its operations.
The microarray technologies and molecular diagnostics firm announced its plans to restructure last week. The company said that it expected to reduce its cash burn by 40 percent to 60 percent as it shifts its focus on to its diagnostics business. It also said that it would seek to hire a new CEO with current President and CEO Amit Kumar stepping down once his successor is hired.
In a filing with the US Securities and Exchange Commission on Friday, CombiMatrix said it expects the process of shutting down the Mukilteo, Wash., operations will be completed in six to eight weeks, with the relocation of the firm’s corporate functions over the next few months.
CombiMatrix said that it expects incur approximately $1 million to $1.5 million in restructuring costs in connection with these actions. Of that total, approximately $420,000 to $650,000 are expected to result from non-executive employee benefit and severance arrangements, approximately $170,000 to $440,000 are expected to result from lease termination payments and plant closure and relocation expenses, and the balance is expected to result from write-downs of inventory, property and equipment, and related assets, said CombiMatrix.
The firm added that it expects the majority of these costs to be recorded in its operating results for the fiscal quarters ending June 30 and September 30, 2010. It also does not expect the charges will result in significant cash expenditures after completion of the restructuring.
CombiMatrix said that it expects the restructuring to result in annualized cost savings of approximately $4 million to $5 million per year after its completion.
In Monday afternoon trade on the Nasdaq, shares of CombiMatrix were up 1 percent at $4.03.