Trade Resources Industry Views Pioneer Power Restructuring Initiative Progressing Ahead of Schedule

Pioneer Power Restructuring Initiative Progressing Ahead of Schedule

Pioneer Power Solutions, Inc. (Nasdaq: PPSI) ("Pioneer" or the "Company"), a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, today provided an update on the Company's restructuring efforts, which are designed to create at least $2.5 million in annualized expense reductions by rationalizing the Company's infrastructure.

Low voltage production of the Company's Bemag division, located in Farnham, Quebec, was successfully relocated to the Company's facility in Reynosa, Mexico, with a portion of that production also transitioned to a manufacturing partner in India. This project was completed on October 31, 2015, approximately two months ahead of schedule. Total labor savings at Bemag from this relocation, before the expected benefit of lower manufacturing costs in Mexico and India, approximate $1.3 million annually. At the end of November, the Company instituted select staff cuts at each of its U.S. business units, representing expected annual cost savings of approximately $750,000. The consolidation of the operations of Pacific Power, acquired in August 2015, into the Company's existing facility in Southern California, is expected to be completed by January 31, one month behind schedule due to several large, time critical orders which were awarded after the acquisition date. The consolidation of the Titan headquarters' facility into the Company's existing Minneapolis location remains on track to be completed during the first week of January 2016.Nathan Mazurek, Pioneer's Chairman and Chief Executive Officer, said, "Our ongoing efforts to improve operations and reduce fixed expenses is moving forward on budget and ahead of schedule, reinforcing our confidence of better consolidated financial results in 2016 and beyond. We promised our shareholders that we would take decisive action to return the Company to an acceptable level of profitability, and we are delivering on that promise. This effort includes the consolidation of six manufacturing facilities to ultimately three, and rationalizing our Canadian dry-type transformer operations, as well as outsourcing certain lower margin, less value-added activities to lower cost facilities. The most significant portions of these efforts are already completed, and we are highly encouraged with the progress to date."

"Our India partner has consistently shipped more than $1 million worth of product to us per month since September, helping us to reduce our costs in the most price sensitive product categories we sell," added Mr. Mazurek. "When our strategy is fully implemented, we expect total annual savings to be in excess of $2.5 million."

Pioneer Power Solutions, Inc. manufactures, sells and services a broad range of specialty electrical transmission, distribution and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets. The Company's principal products and services include custom-engineered electrical transformers, low and medium voltage switchgear and engine-generator sets and controls, complemented by a national field-service organization to maintain and repair power generation assets. Pioneer is headquartered in Fort Lee, New Jersey and operates from 14 additional locations in the U.S., Canada and Mexico for manufacturing, centralized distribution, engineering, sales, service and administration.

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Topics: Machinery