Announced Changes, Improving Visibility and Increased Order Flow Point to Improved Profitability and Cash Flow in 2009 and BeyondBurlington, Ontario – August 5, 2009
– Gennum Corporation (TSX: GND) today announced more details on its previously disclosed plans to improve profitability and cash flow to help achieve its business model targets. The company’s plans include realigning its investment to maintain its R&D programs while reducing corporate infrastructure and business operations costs and capital expenditures. Additionally, Gennum is focusing its marketing, sales and administrative investment on short and mid-term customer revenue generation activities and new product development.
These actions have resulted in an approximate 10 percent reduction of the company’s workforce primarily impacting corporate infrastructure, business operations and support functions. It is estimated the company will incur a charge in the third quarter of fiscal 2009 of approximately US$3.5 million consisting of severance and related costs along with an approximate US$2 million non-cash asset impairment charge resulting from the realignment of company investments.
“I believe our collective actions will allow us to improve profitability and cash flow in 2009. Looking into 2010, I believe these initiatives, coupled with improvements in our market segments and early volume ramps of new products should result in us achieving operating returns in line with our 2008 performance,” said Dr. Franz Fink, President and CEO of Gennum.
“We are encouraged by improving visibility. This is a function of continued reduction of customer inventory levels and improvement in end market demand for our products as well as modest improvements in our fiscal third quarter orders,” continued Dr. Fink. “I remain confident in our long-term strategy to deliver more new products to the market place, capitalize on new customer opportunities and grow our leadership in target markets.”
The company also announced today plans to provide a business update via conference call to the investment community on Monday, August 10th at 8:30 am Eastern Time.
“Today’s actions result in a number of positive changes for Gennum, operationally, organizationally and financially as we will be able to achieve better leverage moving into 2010,” said Mr. Gordon Currie, Senior Vice-President, Finance & Administration and Chief Financial Officer. “To better communicate these changes, and provide more detail on the impact of today’s announcement on our business model moving forward, we are holding a call on Monday to update the financial community. Following our normal schedule, we expect to be reporting our third quarter financial results the week of September 21st.” Conference Call Details
Management will hold a conference call on Monday, August 10, 2009 at 8:30 a.m. (ET). To access the call, participants should dial 1-800-590-1508 or 416-644-3428. The conference call will also be Webcast live at www.gennum.com
and subsequently archived on the Gennum site. A rebroadcast of the call will be available until midnight on September 10, 2009. To access the rebroadcast, dial 1-877-289-8525 or 416- 640-1917 and enter the passcode 21312789#.About Gennum
Gennum Corporation (TSX: GND) designs innovative semiconductor solutions and intellectual property (IP) cores for the world’s most advanced consumer connectivity, enterprise, video broadcast and data communications products. Leveraging the company’s proven optical, analog and mixed-signal products and IP, Gennum enables multimedia and data communications products to send and receive information without compromising the signal integrity. An award winner for advances in high definition (HD) broadcasting, Gennum is headquartered in Burlington, Canada, and has global design, research and development and sales offices in Canada, Mexico, Japan, Korea, Germany, United States, Taiwan, India and the United Kingdom. www.Gennum.com