(RTTNews) - In a bid to improve its business performance and future growth against the continuing macroeconomic factors, SmileDirectClub Inc. (SDC) has announced a series of strategic actions.
While the company has decided to expand its professional channel, the SmileDirectClub Partner Network; innovations to its aligner products; its burgeoning oral care product business; and SmileShop growth in markets with strong consumer demand, expansion into new international markets will be paused.
The company said that it will continue to operate in and scale its presence in the United States, Canada, United Kingdom, Ireland, France and Australia.
However, it has suspended operations in Mexico, Spain, Germany, Netherlands, Austria, Hong Kong, Singapore and New Zealand. Accordingly, the company will reduce its workforce to right-size in order to adjust its operating structure in the countries in which it will continue to operate and focus.
The strategic actions are expected to result in year-over-year cost and capital savings of approximately $120 million in 2022. The one-time reorganization costs between Q4 2021 and 2022 are estimated to approximately $25 million, which may include lease buyouts, asset impairments related to the closure of regional operating centers and SmileShops, and employee-related costs, including severance and retention payments, associated with the organizational changes, the company noted.
Approximately $3 million of one-time reorganization costs are expected to be booked in Q4 2021 with the remainder, $22 million, being incurred during 2022.
Additionally, SmileDirectClub affirmed its previously issued guidance for full year 2021 revenue in the range of $630 million to $650 million. This compares to revenue of $657 million in 2020.
SDC closed Monday's trading at $1.99, up 2.05%. In premarket trading Tuesday, the stock is up over 7% at $2.13.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
