TEMPE, AZ - Three-Five Systems will consolidate its U.S. electronics manufacturing and corporate functions into one location and is exploring possible contraction overseas as well, the company said today. The moves are being made to reduce overhead and excess factory capacity.

TFS, which supplies EMS services, will close its plant in Tempe early this year and move all operations to its Redmond, WA, site. The company did not indicate how many employees would be affected.

The company also said CFO Jeffrey D. Buchanan will resign to remain in Tempe. The firm named James E. Jurgens as interim chief financial officer.

The company also announced that it is exploring opportunities to consolidate its operations in Manila, Philippines. TFS is "working closely" with its principal customer in Manila while also exploring the potential sale of the factory.

TFS lost $47 million on $164 million in sales during the 12 months ended last September.

In a written statement, president and CEO Jack Saltich said, "[S]treamlining operations and driving costs to their lowest possible level are imperative to remaining competitive. While profitability will only be accomplished through a combination of revenue growth and the changes I am announcing today, these actions are a necessary step in that direction."

 

On Dec. 31, in a move that forecast TFS' announcement, the company sold the building in Tempe that housed its headquarters.

The consolidation is expected be completed during the second half of 2005. TFS currently performs low-volume EMS, prototype and medical manufacturing operations in Redmond.

 

Several U.S. sales, marketing and engineering support centers will remain intact.

Jurgens was chief financial officer at Ziatech Corp., a privately held developer of embedded computers for telecom applications, which was purchased by Intel in 2001. TFS said other commitments preclude Jurgens from taking the position on a permanent basis.