Agere restructures, plans to close facilities in Breinigsville and Reading
In its 1.3 million sq. ft Reading location Agere manufactures a broad range of optoelectronic components and chips for communications networks. In its 645,000 sq. ft Breinigsville facility, Agere focuses on the design, development and automated manufacturing of optoelectronic components. Agere will move the majority of its optoelectronics and integrated circuits assembly and test operations from Breinigsville and Reading into the company s assembly and test facilities in Bangkok, Thailand; Matamoros, Mexico; and Singapore. The remaining operations, primarily assembly and test development activities, will move to Allentown. By consolidating and continuing to invest in these operations, Agere will ensure competitive advantage in cycle time and delivery performance.
The Reading facility has 1,600 employees, while the Breinigsville location employs 1,100 people. The company expects that its plans to combine operations from these facilities into Allentown will result in a net reduction of about 300 positions. Agere also will transfer about half of its approximately 700 corporate support and product development positions currently in multiple New Jersey locations to Allentown. The remaining 350 research and development positions in New Jersey will move to a new site in central New Jersey over the next several months. Through the consolidation of operations from nine sites to the Allentown campus and one New Jersey location, the company will reduce its square footage in the two states by approximately two million sq. ft or about 50 percent, significantly lowering costs.
"We are streamlining our business to create an operating model that will best support Agere s future profitable growth and improve our ability to meet customers needs, said John Dickson, president and CEO, Agere Systems. "In Pennsylvania, we are bringing together a large part of our integrated circuits and optoelectronics manufacturing and product development into a single site to optimize design and manufacturing synergies and more rapidly introduce integrated solutions to the market.
Once these actions are complete, Agere will have about 6,000 employees in Pennsylvania, representing about half of its workforce worldwide. The company s Pennsylvania employees will be located in its current facility in Allentown and a new, adjacent building in Hanover Township, expected to be complete by this summer. To accommodate the consolidation, Agere s existing facility on Union Boulevard in Allentown will undergo extensive renovations over the next year. Ultimately, Agere s Lehigh Valley buildings will encompass about two million square feet of space for design, manufacturing and support operations.
Financial results
Agere also announced its financial results on January 23. Revenues for the quarter ending December 31, 2001 were $537 million, down approximately 10% from the September 2001 quarter and in line with guidance. Pro forma net loss was $282 million or $0.17 per share, an improvement of $0.07 sequentially. For the March quarter, Agere expects both revenues and pro forma net loss per share will be at about the same levels as in the December 2001 quarter.
Agere expects that today s initiatives, combined with the previous actions, will allow the company to reach, by the end of the calendar year, its target cost and expense structure. This will enable the company to break even at $700 million of quarterly revenue.
Glen Haley
Media Relations Manager, Optoelectronics
Tel. +1 908 508 8662
E-mail: glenhaley@agere.com
Web site: http://www.agere.com
