WFI Announces Update on Strategic Actions Previously Announced
Monday March 12, 4:45 pm ET
Company Executing on Plan to Minimize Obstacles to Improve Operating Results in 2007
SAN DIEGO, MARCH 12 /PRNewswire-FirstCall/ -- WFI (Nasdaq: WFII - News), a leader in the design, deployment, and management of wireless communication networks, information technology solutions and security systems, reported its update on strategic plans and business activity previously announced on January 3, 2007. The Company also announced today it has been conducting an ongoing internal review, initiated by the Company's current executive management team, of past practices for granting stock options and pricing in light of recent media and Wall Street reports regarding the option granting practices at numerous publicly traded companies. As a result of this ongoing internal review, the Company is unable to announce full financial results until the internal review has been completed. In addition, all financial data presented in this release is unaudited as the ongoing review has not been completed.
However, the Company is providing an update of actions previously announced on January 3, 2007. These actions will impact the Company's results from continuing operations by the following non-cash charges:
* a goodwill impairment charge of $18.3 million related to acquisitions
made in the Company's Enterprise Network Services segment in 2003,
* a $9.2 million charge related to stock compensation expense as a result
of the Company's actions to accelerate vesting on substantially all
outstanding employee stock options in December 2006 and,
* a restructuring and other asset impairment charge of $3.4 million
primarily reflecting an excess facility accrual for consolidation of
the Company's headquarters facility, the impairment of an asset and
employee termination costs.
The results from discontinued operations will include losses generated from the operating performance of the Company's European and South American operations of approximately $3.2 million as well as the estimated loss on disposal of the South American business of approximately $5.2 million based upon indications of interest. The impact of the recent sale of the European operation, which resulted in a net gain from disposal, will not be recorded until the first quarter of 2007 which is the period the transaction was consummated. As discussed previously, the Company's plan to dispose of the European and South American operations is a result of the Company's plan to improve strategic focus, profitability and free cash flow by divesting or exiting portions of its businesses where critical mass and profitability has not been achieved.
Substantially all of the charges noted above are part of the Company's plan to divest its international operations which have generated operating losses throughout 2006 due to the Company's inability to achieve critical mass, actions to reduce certain general and administrative costs, and implementation of organizational changes. The accelerated vesting of stock options eliminates stock compensation expense associated with current outstanding employee stock options issued prior to June 30, 2006.
WFI believes the changes announced today regarding the use of stock-based incentives and the acceleration of the vesting of employee stock options for employees are in line with similar actions by other public companies to eliminate or reduce stock option expenses.
WFI expects to provide an update regarding the ongoing stock option review as the review is completed and will provide the financial results for the fourth quarter 2006 and fiscal 2006 when the external audit is completed.
WFI will hold a conference call to discuss these actions today at 1:30 p.m. Pacific Time. The call will be web cast over the Internet and can be accessed at WFI's website at www.wfinet.com.
About WFI
Headquartered in San Diego, CA, WFI is an independent provider of systems engineering, network services and technical outsourcing for the world's largest wireless carriers, enterprise customers and for government agencies. The company provides the design, deployment, integration, and the overall management of wired and wireless networks which deliver voice and data communication, and which support advanced security systems. WFI has performed work in over 100 countries since its founding in 1994. News and information are available at www.wfinet.com. (code: WFI-mb) |
