KENTWOOD ? Color matching company X-Rite continued to feel the wrath of Wall Street Friday afternoon a day after the company announced it would not meet earnings expectations and could lay off Michigan employees.
The company?s stock was trading at $5.61 a share, down 6 cents on the day. X-Rite stock has traded as high as $16.42 a share in the past year. On Thursday, its stock price tumbled to $4.85, a level not seen since 1991.
First quarter revenue at X-Rite is expected to be down 3 percent versus last year after earlier saying it had expected relatively flat growth in the first quarter followed by 5 to 8 percent growth for the year.
Chief Financial Officer Mary Chowning said the job cuts would be spread across its operations and declined to say how many local jobs would be cut. X-Rite has about 500 local employees and has announced plans to consolidate jobs at its Kentwood headquarters, a suburb of Grand Rapids, over time.
“I don’t want to have a number out there and have everyone tallying up and saying, ‘Oh, no we’ve got about 40 more to go,'” she said.
The company said it hopes to achieve $23 million in annual cost savings, two thirds of which will come from job reductions.
Chowning said investor reaction to the announcement was likely due to fears the company would try to raise more equity, further diluting shareholder equity. The company has not said whether or not it will make such a move.
The company also said it is not in compliance with certain components of its loan agreements with banks, but declined to disclose how it was not in compliance.
Chowning said the company has made all required payments under our loan agreements, but will require approval of lenders before making further draws on its revolving lines of credit. X-Rite has more than $380 million in debt related to its 2006 purchase of Amazys and its 2007 acquisition of Pantone Inc.
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