News Article
GigOptix poor revenues prompt 10 percent slash in workforce
The firm was affected by weaker demand and a push-out into the first half of 2013 of some anticipated deployments within the company’s optical product line
GigOptix, announced preliminary revenues of approximately $8 million, including recognition of approximately $0.9 million of previously unrecognised government contract revenue, for its fourth quarter of fiscal 2012, ended December 31st, 2012.
This compares with the previous outlook provided on October 30th, 2012, that fourth quarter fiscal 2012 revenues would be roughly in-line with third quarter fiscal 2012 revenues of $10.1 million.
The firm is a fabless supplier of semiconductor and optical components that enable end-to-end high speed information streaming over the network.
Revenues for fiscal 2012 are expected to be approximately $37 million. This compares with $32.3 million in fiscal 2011, representing a year-over-year increase of approximately 14 percent. The annual increase resulted solely from organic growth as the company did not enter into any mergers or acquisitions in 2012.
Factors that contributed to the lower than expected revenues in FYQ4 2012 included weaker demand in the markets the company currently serves, challenging macroeconomic conditions, and a push-out into the first half of 2013 of some anticipated deployments within the company’s optical product line.
The company has also taken immediate actions to adjust overall spending as it continues to focus on its adjusted EBITDA performance. Selected actions, which became effective on January 9th, 2013. These include reducing the company’s global workforce by about 10 percent, primarily in the company’s support and administrative functions, and company-wide salary reductions ranging between 5 to 25 percent based on an individual’s salary level.
These actions are expected to result in approximately $450,000 of quarterly cost savings once the plan is fully implemented.
“After 12 consecutive quarters of increasing revenues we are clearly disappointed that revenues for the fourth quarter of fiscal 2012 are below expectations. We view the revenue performance of the fourth quarter of 2012 as a temporary setback and not indicative of our future prospects,” said Avi Katz, Chairman and Chief Executive Officer of GigOptix, Inc.
“We will use this opportunity to further sharpen our business model and cost structure, enhance our operating efficiency, and deploy a leaner and more structured organization. We are confident these changes will deliver improved Adjusted EBITDA in 2013,” said Katz.
“While we are not in a position to provide specific financial guidance for fiscal 2013 at this time, our current outlook for the year is positive based on customer feedback and the prospect for better conditions in the areas within the optical components market we currently serve, and new product deployments targeting the telecom, datacom, and consumer electronics markets.”
GigOptix cautions that its anticipated revenue results, and the cost reduction savings, are preliminary and based on the best information currently available. The revenue results are subject to completion of the audited financial statements for fiscal 2012.
The company will hold a conference call to discuss its fourth quarter and full year fiscal 2012 financial results and current business outlook in February. The conference call date and participation information will be distributed through a press release at a later date.
