| | Transmeta stock drops 20% on 'going concern' warning
Monday April 2, 12:37 pm ET
Transmeta Corp. stock dropped more than 20 percent Monday after its auditors issued a "going concern" warning.
Santa Clara-based Transmeta (NASDAQ:TMTA - News) said it has cut about 130 workers as it restructures, including four senior executives. It said that in February it decreased its worldwide work force by about 75 employees, most of whom worked in the engineering services business, and in March cut another 55 staff members.
The company said those affected were primarily employees who had remained with the company to complete engineering services work for Sony Corp. (NYSE:SNE - News) and Microsoft Corp.(NASDAQ:MSFT - News), as well as employees who supported the company's microprocessor production support operations.
At the end of March, the company said, it effectively eliminated the management positions of at least four executive officers: Patrick V. Boudreau, senior vice president of human resources; David R. Ditzel, chief technology officer; Martin A. Levy, vice president of operations; and Robert Rogenmoser, vice president of VLSI development.
At the end of March, the company had about 65 employees.
The company has ceased to pursue engineering services as a separate line of business, stopped operations relating to microprocessor production support, and exited the business of selling microprocessor products. In February, the company said it will focus on its primary line of business in developing and licensing its advanced technologies and intellectual property.
Transmeta said the cuts will result in cumulative restructuring charges of between $11 million and $14 million, most of which will be an expense in the first quarter of 2007. The company estimated these actions will require total cash expenditures of $7 million to $10 million, which will be incurred primarily in the first quarter.
Transmeta said it expects to save between $17 million and $23 million on an annualized basis.
Transmeta stock dropped to 45 cents a share in morning trading, down more than 80 percent from its 52-week high of $2.37 in May.
In the fiscal year ended Dec. 31, Transmeta lost $23.5 million on $48.6 million in revenue, compared to a loss of $6.2 million on $72.7 million in revenue the year before.
Published April 2, 2007 by the Silicon Valley / San Jose Business Journal
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