OTTAWA, Nov. 12 /CNW Telbec/ - Tundra Semiconductor Corporation (TSX:TUN), a leader in System Interconnect, announced today that the Company is implementing a restructuring plan to immediately adapt its cost structure to the rapid Canadian dollar movement and telecom market conditions.
"Two contributing factors compelled Tundra to make the decision today to reduce our overall expense base, including both elimination of positions and reduction of other operating costs. The rapid appreciation of the Canadian dollar is putting significant pressure on our financial results as indicated in Tundra's recently revised guidance for the second quarter. The strengthening Canadian dollar has resulted in a near 15% reduction in Tundra's top line revenue over the last several quarters. In addition, the communications market is currently experiencing an industry slowdown," said Daniel Hoste, President and Chief Executive Officer, Tundra Semiconductor. "We have responded rapidly to this market and economic volatility to address our short term cost requirements and to protect our long term strategy. We have carefully executed this restructuring initiative to ensure that rolling out our planned product roadmaps and realizing our long term growth plan is achieved," continued Hoste.
The restructuring initiative will reduce Tundra's headcount by approximately 30 positions. Restructuring charges of approximately $4 million will be recorded in the third quarter of fiscal 2008. Cost savings as a result of this activity are expected to be approximately $1.5 million on a quarterly basis comprised of $1 million in research and development and $0.5 million from sales, general and administrative. The effect on fiscal 2008 third quarter financial results will be reflected in the guidance which the Company will provide on November 29th in its fiscal 2008 second quarter earnings announcement.
CONFERENCE CALL AND WEBCAST
Tundra management will be holding a conference call today, November 12 at 5:30 p.m. EST to address questions regarding this announcement. You may access the conference call via any of the following:
Teleconference: +1.416.644.3423
Replay: +1.416.640.1917 Pass code: 21253216(number sign). The replay will
be available through November 19, 2007.
About Tundra Semiconductor
Tundra Semiconductor Corporation (TSX:TUN) supplies the world's leading communications, computing and storage companies with smart System Interconnect products, intellectual property (IP) and design services backed by world-class customer service and technical support. Tundra's track record of product leadership includes over a decade of bridges and switches enabling key industry standards: RapidIO(R), PCI, PCI-X, PCI Express(R), PowerPC(R), VME, HyperTransport(TM), Interlaken, and SPI4.2. Tundra's products deliver high functional quality and simplified board design and layout, with specific focus on system level signal integrity. Tundra's design services division, Silicon Logic Engineering, Inc., offers industry-leading ASIC and FPGA design services, semiconductor intellectual property and product development consulting. Tundra's smart technology connects critical components in high performance embedded systems around the world. For more information, please visit www.tundra.com.
Tundra Semiconductor Corporation is a public company with common shares listed for trading on the Toronto Stock Exchange (TSX:TUN) in Canada. All figures, unless otherwise noted, are stated in Canadian dollars in accordance with accounting principles generally accepted in Canada.
The Company cautions that the forward-looking information in this release is based on certain assumptions made by the Company that may prove to be inaccurate. Assumptions made include, but are not limited to; the anticipated costs and resulting savings related to or that may result from the restructuring, the Company's ability to bring to market the products currently under development, customer demand for the Company's products and services, and the Company's ability to maintain and enhance existing customer relationships, and leverage existing partnerships.
Furthermore, the Company cautions that the forward-looking statements in this release are based on current expectations that are subject to risks and uncertainties. Actual results may differ due to factors such as lower than anticipated cost savings, new product development, customer demand, customer and partner relationships, new services offerings, product shipping schedules, product mix, competitive products and services, pricing pressure, exchange rate fluctuations, and changes in the embedded systems market specifically. Additional information identifying risks and uncertainties is contained in the Company's filings with the various provincial securities commissions.
TUNDRA and the Tundra logo are registered marks of Tundra Semiconductor Corporation in Canada, the United States, the European Union and the People's Republic of China. Design.Connect.Go. is a trademark of Tundra Semiconductor Corporation. Other registered and unregistered trademarks are the property of their respective owners.
(C) Copyright 2007 Tundra Semiconductor Corporation. All rights reserved.
Information subject to change without notice.