Petaluma-based specialty pharmaceutical company Sonoma Pharmaceuticals Inc. (Nasdaq: SNOA) on Tuesday announced cost-cutting measures, including reductions to the company’s workforce and management.
The company did not state how many people were being laid off, only that “the primary reductions were in the company’s consulting expenses, manufacturing force and manufacturing expenses.”
Announcement came even though the company reported its highest-revenue quarter, ending Dec. 31, 2018. Total revenues were $5.3 million in the fiscal third quarter, “the highest in company history, an increase of 9 percent compared to the quarter ended December 31, 2017, and 7 percent quarter over quarter,” Sonoma Pharmaceuticals announced.
“Our chief goal is to allocate our resources in a manner that maximizes shareholder value,” CEO Bubba Sandford stated in the company’s March 12 announcement. “While we are pleased with the direction of the 3rd quarterly results, we are not yet finished with the process of accessing ways to grow revenues, reduce expenses, and improve gross margins. This process takes time and can be painful, and we recognize that personnel reductions are difficult for our employees, their families and the community. We value the dedicated team at Sonoma for working hard towards this goal.”
Sandford joined the company on Dec. 11 and, in addition to CEO, serves as its interim chief financial officer. Review of cost-cutting measures began after his arrival, ”to reduce the company’s cash burn and focus spending on the company’s growth.”
There will be charges related to the cuts, but the company stated it expected to result in a lower costs starting the fiscal fourth quarter of 2019.
Sonoma Pharmaceuticals has manufacturing operations in the United States and Latin America. European marketing and sales are headquartered in Roermond, Netherlands.
On Jan. 4, the company was notified by the Nasdaq market that its stock price had fallen below $1 a share for 30 consecutive business days and that it had until July 3 for the price to rise above that level for at least 10 days, else face delisting, according to a regulatory filing.
The stock price had been below $1 between Nov. 16 and Monday, closing Tuesday at $1.06 a share, down about 2 percent. The price was up by the same amount in after-market trading Tuesday.