01.12.15
Salt Lake City, Utah-based Amedica Corporation, a company that makes silicon nitride ceramics as a biomaterial platform, is restructuring.
The company is executing four immediate strategic actions. First, it will cut 25 employees, which is 28 percent of its workforce. Second, it is reducing corporate overhead and operational expenditures by approximately 35 percent, excluding non-cash stock compensation and other non-cash expenses. Third, it will align sales, marketing, and product development teams to drive broad product portfolio growth and adoption of silicon nitride. Last, is will leverage its Kyocera manufacturing partnership to reduce manufacturing costs by 25 percent. Amedica began a manufacturing partnership with the Japanese company Kyocera in November 2013.
Amedica estimates that the impact from these strategic actions will deliver $6 million to $8 million of annualized operating profit benefit, beginning in the first quarter of 2015. These changes will reduce total cash burn, increase financial sustainability, and strengthen the balance sheet, allowing the company to become operating cash flow breakeven in the second half of 2016.
The actions associated with the plan were implemented and completed on January 8. Amedica estimates the staff reductions to result in savings of approximately $2.8 million in cash operating expenses on an annualized basis, with estimated one-time severance and related costs related to the restructuring of approximately $600 thousand expected to be recorded in the first quarter of 2015.
As a result of the restructuring, the company anticipates 2015 silicon nitride revenue to increase by approximately 30-40 percent over the prior-year period, equating to a total annual revenue range of $23 million to $24 million for the period ending Dec. 31.
“We are committed to our shareholders to improving the focus and profitability of Amedica, as these initiatives will strengthen our financial position, and allow us to execute on the development of our core silicon nitride technology,” said Sonny Bal, M.D., chairman and CEO of Amedica. “The difficult decisions we made reflect a thorough review of our business by the leadership team and Board of Directors. We have smartly positioned Amedica to capture the opportunities for driving silicon nitride sales growth, while expanding the indications for our unique biomaterial. We are very mindful of the impact these changes will have—particularly to our outstanding employees, and will help those who are impacted through this transition phase.”
The company is executing four immediate strategic actions. First, it will cut 25 employees, which is 28 percent of its workforce. Second, it is reducing corporate overhead and operational expenditures by approximately 35 percent, excluding non-cash stock compensation and other non-cash expenses. Third, it will align sales, marketing, and product development teams to drive broad product portfolio growth and adoption of silicon nitride. Last, is will leverage its Kyocera manufacturing partnership to reduce manufacturing costs by 25 percent. Amedica began a manufacturing partnership with the Japanese company Kyocera in November 2013.
Amedica estimates that the impact from these strategic actions will deliver $6 million to $8 million of annualized operating profit benefit, beginning in the first quarter of 2015. These changes will reduce total cash burn, increase financial sustainability, and strengthen the balance sheet, allowing the company to become operating cash flow breakeven in the second half of 2016.
The actions associated with the plan were implemented and completed on January 8. Amedica estimates the staff reductions to result in savings of approximately $2.8 million in cash operating expenses on an annualized basis, with estimated one-time severance and related costs related to the restructuring of approximately $600 thousand expected to be recorded in the first quarter of 2015.
As a result of the restructuring, the company anticipates 2015 silicon nitride revenue to increase by approximately 30-40 percent over the prior-year period, equating to a total annual revenue range of $23 million to $24 million for the period ending Dec. 31.
“We are committed to our shareholders to improving the focus and profitability of Amedica, as these initiatives will strengthen our financial position, and allow us to execute on the development of our core silicon nitride technology,” said Sonny Bal, M.D., chairman and CEO of Amedica. “The difficult decisions we made reflect a thorough review of our business by the leadership team and Board of Directors. We have smartly positioned Amedica to capture the opportunities for driving silicon nitride sales growth, while expanding the indications for our unique biomaterial. We are very mindful of the impact these changes will have—particularly to our outstanding employees, and will help those who are impacted through this transition phase.”