Tran said the restructuring
is designed to align the company's scale and workforce and other
expenses with its markets products and financial plans. He described the
restructuring plan as "comprehensive," including adjustments in all
functional areas of the company and in all regions.
Designs said its plan would result in pro forma profitability on a
quarterly basis assuming a quarterly revenue rate of $56 million. The
company said it its expects to incur an initial restructuring charge of
$1 million in the current quarter, primarily as a result of headcount
reduction. The company expects to incur additional charges in coming
"Although we have taken and will take significant
actions to reduce our expense levels, we believe our core strengths
remain intact and poised to capitalize on opportunities in the major
markets that we target, including IPTV and DTV, home connectivity, and
home control and automation," Tran said.
For several months,
Sigma Designs has been pressured by an activist hedge fund that
maintains that the company's shares are undervalued. Last month, Sigma
announced a loss in accordance with generally accepted accounting
principles of $13.3 million for its fiscal second quarter, which closed
July 28. It was at least the fourth consecutive quarter in which the
company posted a GAAP net loss.
In the preceding two quarters,
the company reported GAAP net losses of $13.7 million and $18.8 million,
respectively. For the third quarter of fiscal 2012, which closed in
November 2011, Sigma Designs posted a GAAP net loss of $121.6 million.
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