Probably to late, but: Eicon Technology Unveils its New Strategy
MAY 11, 2000
MONTREAL, CANADA--Eicon Technology today unveiled its new business
plan. Acknowledging the increasingly competitive market and the
resultant pressure on gross margins, Eicon Technology has decided
to refocus its operations in order to return to strong sustainable
growth. The operational changes, which affect most levels of the
Company, carry one common theme: focus, alignment and
profitability.
This new strategy will focus Eicon on three distinct markets: the
Internet Access market, the Unified Messaging market and the
"Design-in" markets. In the short term, Eicon is committing
additional resources to obtaining market recognition as a major
player in the US DSL market. As the European market evolves,
Eicon further intends to leverage its current leadership in the
ISDN Internet Access markets into becoming the leading DSL
Internet Access vendor in Europe.
Eicon intends to become an important supplier of communications
platforms for the Unified Messaging and VoIP gateway markets.
Eicon will also remain active in the "Design-in" markets, which
have generated significant revenues in the past.
The Company intends to increase its focus on regions with the
highest market opportunities and growth, principally Europe, US,
China and Southeast Asia and to particularly emphasize prompt and
efficient execution in all facets of its operations. To that
effect, Eicon has started a search for a new Chief Operating
Officer whose responsibilities will be to focus on the Company's
operations.
These choices are consistent with Eicon's strengths in developing
innovative, reliable and easy-to-use networking products resulting
in a proven track record in the European Internet Access markets
and practical experience in maintaining a solid and reliable
distribution network.
As part of its restructuring plan, a new cost structure has
already been implemented in the Company. Through staff reductions
and attrition, Eicon is committed to reducing its workforce by
approximately 15 % (about 120 employees) mostly in North America.
The Company will also eliminate unprofitable product lines. These
reductions will allow Eicon to save approximately $24 million on
an annual basis.
"This strategy will enable the Company to become more profitable.
It translates into simpler operations, more emphasis on execution
and a shorter time to market. Ultimately, we are looking at a
better alignment between product development and specific market
demand, " said Peter Brojde, President and CEO of Eicon
Technology.
"We are committed to deliver stronger earnings and to create value
for our shareholders. With this adjustment to our global
strategy, we are confident that sales and earnings will grow in
fiscal 2001 although we anticipate that the current and the first
quarter of FY01 will be difficult as we transition through this
restructuring. Going forward, Eicon is positioned to
significantly benefit from the enormous growth in the Internet
Access and Unified Messaging markets and intends to do what is
necessary to take advantage of emerging opportunities," added Mr.
Brojde.
A conference call discussing Eicon's new strategy will be held on
May 11, 2000 at 5h00 PM Montreal time. All those interested may
access a live web cast of the conference call through the
Investors Relations section of Eicon's web site,
eicon.com or by going directly to Vcall at
vcall.com.
Eicon Technology Corporation
Eicon Technology Corporation is a worldwide provider of Internet
access products for personal computers. The Company develops,
markets and supports hardware and software products for connecting
network servers and desktop and notebook PCs to corporate
networks, host computers and the Internet. Its products are sold
in more than 80 countries through a network of certified channel
partners and Original Equipment Manufacturers. Eicon Technology
shares are traded on the Toronto Stock Exchange under the symbol
"EIC." Information about Eicon and its products is available at
eicon.com. |
