Industri-Matematik International Announces Cost Realignment Plan
MARLTON, N.J.--(BUSINESS WIRE)--March 12, 1999--Industri-Matematik International Corp. (NASDAQ-NM Symbol: IMIC), a recognized leader in customer-driven supply chain management solutions, today announced a restructuring plan to restore profitability to the company.
The restructuring plan addresses declining profitability in the Company's services business, certain under-performing markets and non-essential expenses. Specifically, the plan will reduce Industri-Matematik's workforce by approximately 20% or 175 to 200 employees. The cuts will impact all functions but primarily the Company's consulting services organization. The Company will also consolidate regional sales offices, focus research and development spending to support key market opportunities, and reduce administrative expenses. The full impact of these actions is expected to commence on May 1, 1999, the start of the first quarter of the company's fiscal year 2000. In connection with the restructuring plan, the Company expects to report a non-recurring charge of less than $5 million for the quarter ending April 30, 1999.
In addition, the Company reports that certain operating expenses incurred during the fiscal year ended April 30, 1999, which total approximately $15 million, will not recur in the next fiscal year. These include product development costs in connection with the Company's recently expanded Advanced Supply Chain Execution Suite, an in-process research and development charge related to the acquisition of Abalon AB, and expenses related to the development of new implementation and education tools and methodologies.
"Our performance during this fiscal year required us to take immediate and comprehensive action to restore profitability to the company," said Stig Durlow, President and Chief Executive Officer of Industri-Matematik.
"While we have a growing number of reference accounts for our Supply Chain Execution solutions in production in North America and Europe, the decline in our Oracle ERP-related revenue has been sharper than anticipated. This restructuring plan allows us to focus our efforts on capturing the growth of Supply Chain Execution solutions in the fast-moving high-volume industries, such as wholesale distribution, consumer durables, high tech and business equipment. Further, we will continue to invest in extending the scope of our solutions to enable Internet fulfillment and eCommerce supply chain management: we expect to bring these new capabilities to market within the next few months."
"This is a challenging time for Industri-Matematik, but we are taking the steps that we believe will move us forward and return us to profitability. Given our strong cash position, currently in excess of
$ 60 million after taking account of the non-recurring charge to be reported as of April 30, 1999, we believe that Industri-Matematik has the resources to execute this focused strategy."
Industri-Matematik International Corp. is a leading supplier of customer-driven supply chain management solutions for manufacturers, distributors and third-party logistics providers of fast-moving, high-volume products. Industri-Matematik has more than 200 logistics management systems implemented worldwide at organizations such as Ahlsell, British Airways, Campbell Soup, Canadian Tire, Canon, Carlton and United Breweries, Hartz Mountain, Kellogg's, VWR, Skyway Freight Systems, Spicers and Starbucks.
The statements contained in this release that are not historical facts contain forward-looking information with respect to plans, projections or future performance of Industri-Matematik and further versions of System ESS (R), the occurrence of which involve certain risks and uncertainties, including, but not limited to, product demand and market acceptance risks, the effect of economic conditions, the impact of competitive products and pricing, product development, commercialization and technological difficulties and other uncertainties detailed in Industri-Matematik's filings with the Securities and Exchange Commission, particularly the Form 10-K filed in July 1998.
Editors: For Industri-Matematik company and product information, and press releases, access the Industri-Matematik site on the World Wide Web at im.se.
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CONTACT: Industri-Matematik International Corp.
Stig Durlow, e-mail: stdu@im.se
Lars-Goran Peterson, email: lgpe@im.se
phone: +46 8 676 5000
or
Lippert/Heilshorn & Associates
Contact:
John Heilshorn, email: john@lhai.com
Jody Burfening, email: jody@lhai.com
phone: 212-838-3777 |
