"Our focus is now on restoring profitability and positive cash flow, and repositioning the business to take advantage of high-growth opportunities in communications semiconductors," said Kirk K. Mandy, the new president and chief executive for Zarlink (Ottawa), in a statement. "We are determined to make Zarlink successful and continue to review strategic alternatives for the company."

In the release, which included Zarlink's dismal results for its fourth fiscal quarter, Mandy did not elaborate on what "strategic alternatives" the troubled company is seeking. Some speculate that Zarlink could be on the block.

In February, the board of Zarlink appointed Mandy to the posts of president and chief executive, replacing Pat Brockett, who resigned in January. At the time, Mandy announced a restructuring for the company that includes cutting 15 percent of staff and certain R&D programs (see Feb. 17 story). Meanwhile, Zarlink said fourth quarter revenue was $48.4 million, compared with $51.2 million in the like period a year ago. It recorded a fourth quarter net loss of $23.9 million, or minus $0.19 per share.

This figure includes severance costs of $11.9 million, according to the Canadian chip maker. In the 2004 fourth quarter, the company reported a net loss of $2.3 million, or minus $0.02 per share.

The fourth quarter loss of 2005 also included asset impairment and excess space provisions of $4.0 million, inventory provisions and other production charges of $3.7 million, and a tax expense of $0.4 million.

Also included in the results for the quarter was a net gain resulting from installment payments of $6.0 million on the note receivable from X-FAB Semiconductor Foundries AG.

For fiscal 2005, Zarlink recorded revenue of $214.2 million, up 8 percent from $198.5 million a year ago. The net loss in 2005 was $20.8 million, or minus $0.18 per share, an improvement on the net loss of $38.6 million, or minus $0.32 per share, in 2004.

Based on a lower opening order backlog of $31 million, reflecting weakness in certain product segments and geographic markets, Zarlink is forecasting that revenues will be between $43.0-to-$45.0 million in the first quarter of Fiscal 2006.

It expects to record a first quarter net loss of $0.05-to-$0.06 per share.