RESTRUCTURING PLAN
I suppose this was inevitable. They're cutting staff to cut costs to achieve profitability at a lower revenue level. I'd much rather see them reach profitability by growing the top line revenue; this is only 2nd-best.
I find this statement encouraging: "Aviat Networks believes that the restructuring will have no long term impact on the Company's ability to generate revenue." I can also sympathize with them when they say "This was a difficult decision for our management team and Board...".
I just hope these restructuring efforts do not distract them from their far more important revenue generation efforts.
Conference call is at 4:20 PM ET this Wednesday 25 August 2010.
Rob
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Aviat Networks Announces Corporate Restructuring Plan Plan
will reduce operating costs and improve business processes
SANTA CLARA, Calif., Aug. 12 /PRNewswire-FirstCall/ -- Aviat Networks, Inc. ("Aviat," Nasdaq: AVNW), a leading wireless expert in advanced IP network migration, today announced that it is implementing a corporate restructuring plan to reduce operating costs, restore profitability and establish a platform to drive sustainable revenue growth.
The Company expects to realize a reduction in annual spending of $30 to $35 million as a result of a number of actions. In connection with the restructuring plan, Aviat Networks will incur pre-tax restructuring charges currently estimated to be approximately $11 to $13 million related to severance costs as well as impairment of facilities and other assets. The Company expects to record these charges in fiscal 2011. Aviat Networks believes that the restructuring will have no long term impact on the Company's ability to generate revenue.
As part of its restructuring plan, Aviat Networks plans to reduce its global workforce and consolidate its global presence by closing and/or relocating select facilities. The workforce reduction will be achieved through severance programs and attrition, with most of the key actions occurring in the first and second quarters of fiscal 2011. Prior to this announcement, the Company had already ceased manufacturing operations in San Antonio, and had begun consolidating operations in India and in China. In addition, the Company is implementing certain changes in its processes designed to enhance responsiveness to customers and to accelerate decision-making.
"Our Board has been focused for some time on actions to reduce costs, refocus the product portfolio to match current customer needs, and optimize our business model," said Chuck Kissner, recently appointed Chairman and CEO of Aviat Networks. "The restructuring program that we are announcing today is an important step for the Company as we work to restore profitability and focus our programs to drive sustainable revenue growth. This was a difficult decision for our management team and Board given the significant contributions made by all of our employees in expanding Aviat Networks' presence in recent years. However, the actions we are taking are clearly necessary as we look to improve our business fundamentals and drive shareholder value."
"Cost reductions are the first step in improving Aviat Networks' performance. As we look ahead, we will focus on maintaining an efficient cost structure, concentrating on the right product portfolio and optimizing our business model. As we previewed in our prior release, we will discuss the key actions we plan to implement upon completion of our comprehensive strategic plan during our next earnings call. We remain committed to driving sustainable, profitable growth and enhanced shareholder value through innovation and operational excellence," Kissner concluded.
The Company will provide more details of the restructuring announcement including the effects on the financial model, on its regularly scheduled earnings call, which it plans to host in late August 2010. All savings and charges indicated in this press release are estimates and subject to change. |
