Blog: PROTERRA INC : Costs Associated with Exit or Disposal Activities … – Marketscreener.com

Item 2.05 Costs Associated with Exit or Disposal Activities.

On January 13, 2023, the Board of Directors of Proterra Inc (the “Company”)
approved a plan designed to improve operational efficiency that includes
reducing the workforce across the Company (the “Workforce Restructuring”) and
closing the Company’s City of Industry facility (the “Facility Closure”). The
City of Industry facility currently manufactures electric transit buses and the
Company’s current generation battery systems. The Company will move
manufacturing from the City of Industry facility to its existing facilities in
South Carolina. Transit bus production in the City of Industry is expected to
end in the first quarter of 2023, and battery production at the end of the third
quarter of 2023. The Company plans to vacate the facility by the end of 2023.

The Workforce Restructuring plan is expected to reduce the Company’s current
workforce by approximately 25%, and impact approximately 300 employees,
including from the Facility Closure. The Company believes these plans will
improve overall efficiency by increasing the utilization of the Company’s
largest manufacturing sites in Greenville and Greer, South Carolina,
streamlining supply chain and distribution logistics, reducing organizational
complexity, and reducing facilities costs. Affected employees are expected to be
offered separation benefits. The Company is beginning the Facility Closure and
Workforce Restructuring efforts effective immediately.

The final costs relating to the Facility Closure and Workforce Restructuring
will not be known until all related activities have been completed. The Company
currently expects to incur restructuring charges, of between $6 million and $10
million attributable to net cash payments primarily for severance benefits to
employees, and $4 million to $5 million in facility closure costs primarily
consisting of lease expense, material and equipment relocation and removal of
tenant improvements in connection with the Facility Closure. Such restructuring
charges are expected to be incurred beginning in the first quarter of 2023 and
continuing through year end of 2023. In addition, in connection with the
Company’s Workforce Restructuring and Facility Closure, the Company is
performing an impairment analysis over certain property, plant and equipment and
could incur non-cash impairment charges. The Company currently expects to use
equipment from the City of Industry facility in other locations and is unable to
estimate any potential impairment charges relating to the Facility Closure and
Workforce Restructuring at the time of this Report.

The costs and charges described above and timing thereof are preliminary
estimates based on the Company’s current expectations and are subject to a
number of assumptions and risks, and actual results may differ materially from
such estimates. The Company may also incur other charges, costs, future cash
expenditures or impairments not currently contemplated due to events that may
occur as a result of, or in connection with, the Workforce Restructuring and the
Facility Closure.

Item 7.01 Regulation FD Disclosure.

On January 19, 2023, the Company issued a press release regarding the Facility
Closure and Workforce Restructuring described in Item 2.05 above. A copy of the
press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Item 7.01 of this Report, including Exhibit 99.1 attached
hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by
reference into any filing of the Company under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such a filing.

Cautionary Statement Regarding Forward Looking Statements

This report includes “forward looking statements” within the meaning of the
federal securities laws relating to the Facility Closure and Workforce
Restructuring, including estimated costs, charges and impairments, and the
expected timing of the implementation and completion of the Facility Closure,
Workforce Restructuring and any associated costs, charges and impairments; the
Company’s plan to increase operational efficiency, including the expectation
that such plan will improve overall efficiency by increasing the utilization of
the Company’s largest manufacturing sites in Greenville and Greer, South
Carolina, streamlining supply chain and distribution logistics, reducing
organizational complexity, reducing facilities costs, and the Company’s
expectation to use equipment from the City of Industry facility at other
locations. These statements are based on assumptions currently believed to be
valid but involve significant risks and uncertainties, many of which are beyond
our control, which could cause our

——————————————————————————–

actual results to differ materially from those expressed in the forward-looking
statements. Such risks and uncertainties include, among others, the effect the
Facility Closure and Workforce Restructuring may have on the business
relationships and operating results of the Company; the extent to which the
Facility Closure and Workforce Restructuring may disrupt the current plans and
operations of the Company; and the ability of the Company to successfully
consolidate production in its Greenville and Greer facilities in South Carolina.
The foregoing list of factors is not exhaustive. Additional risks and
uncertainties that could cause the Company’s actual results to differ materially
from those expressed in the forward-looking statements are identified in the
Company’s reports filed with the Securities and Exchange Commission, including
its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. The forward-looking statements included in this report are
made only as of the date of this report. Readers are cautioned not to put undue
reliance on forward-looking statements, and the Company does not undertake any
obligation to update the forward-looking statements to reflect subsequent events
or circumstances.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number                   Exhibit Description
99.1                               Press Release issued by Proterra on January 19, 2023
104                              Inline XBRL for the cover page of this Current Report on Form 8-K.

© Edgar Online, source Glimpses

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s