EXFO Electro-Optical Engineering (www.exfo.com) has announced a restructuring plan that includes a 30% workforce reduction and manufacturing-operation consolidation. The announcement, made on June 3, said the company expects its restructuring plan to provide approximately US$10 million in annualized pre-tax savings. EXFO is based in Vanier, Quebec, Canada.
The announcement also said that the company will "rationalize its business activities.
"These cost-reduction initiatives are expected to lower the company's pro forma break-even level, excluding the after-tax effect of amortization of intangible assets, restructuring charges and other related charges, to approximately US$18 million in quarterly sales.
The measures will incur charges of approximately US$4.8 million, of which US$350,000 will be recorded in the third quarter of fiscal 2003 and the remainder mostly in the fourth quarter.
Germain Lamond, EXFO's chairman, president, an CEO, commented, "Continued depressed spending levels in the telecommunications industry, geopolitical and economic uncertainty, and the impact of SARS lead us to adjust our cost structure in order to accelerate our return to profitability."
Also on June 3, the company lowered its financial outlook for the third quarter of fiscal 2003. Original guidance of US$16 million to US$19 million in revenues was lowered to US$15 million. EXFO's fiscal third quarter ended May 31. The company will report its third-quarter results on June 26.
