Currency and market conditions drive need for Tundra Semiconductor restructuring
(Business News, 13 Nov 2007 )
Tundra Semiconductor Corp. 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 percent 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 CEO, 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 road maps 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.
