Akeena Solar, d/b/a Westinghouse Solar, will be leaving its solar panel installation business in California behind as it begins its exclusive focus on manufacturing and distribution in the state. Since the company will no longer be in the California installation business, it has advised that its third quarter 2010 records will show a restructuring charge of around US$2.5 million. This amount accounts for headcount reductions, equipment and inventory write-offs, lease accelerations and write-off of goodwill, which will mainly be non-cash charges.
“Expanding our channels to include authorized dealers in California will accelerate the growth of our distribution business,” said Barry Cinnamon (pictured), chief executive officer of Westinghouse Solar. “California is the largest state in the country for solar products, accounting for approximately 50 percent of the U.S. market… As we transition to a distribution model in California and sign up new dealers, we will continue to focus on securing new distribution partnerships and adding dealers around the country. We will honor all outstanding installation obligations, and in many cases expect to work with new Westinghouse Solar dealers to take over our remaining backlog of California installation projects.”
Since Akeena will also be sustaining transition expenses from its terminated operations for the next two quarters, the company expects for its quarterly cash and operating expense to be around US$1.5 million, a US$3 million decrease in quarterly cash operating expenses compared to the first two quarters of this year. Akeena is looking to reach a cash flow breakeven of US$9 million for quarterly revenue in mid-2011 with revenues presumed to be between US$25 and US$30 million.
