In a quarter that saw products dropped and staff cut, Zarlink Semiconductor met the Street in its Q2 results released Thursday and said the benefits of the restructuring should be felt by the end of the fiscal year.
The maker of semiconductors for broadband and the medical device markets posted a loss of $11.9 million, or 10 cents a share, compared to a loss of $19.7 million, or 16 cents a share, in last year's Q2 (all figures in U.S. dollars).
Revenues met the company's own guidance at $46.2 million, weaker than the $50.5 million achieved last year and the $48 million reported in the first quarter of this year.
The consensus estimate of analysts polled by Thomson First Call was for the loss of 10 cents a share on revenue of $47.25 million.
Excluding some charges for stock option grants and amortization and others, the company posted an adjusted loss of $11.7 million, or 10 cents per share, compared to $16.2 million, or 13 cents per share, in the same period last year.
"We are not relying on hopeful market rebounds to improve our business,?Pat Brockett, president and CEO, said in a statement. "We remain focused on intelligently reducing our costs while strengthening our product portfolio."
Last month, Zarlink pulled the plug on its next generation chips for Digital Subscriber Line, or DSL. DSL delivers high-speed Internet and data services over regular copper telephone lines.
The move was expected to result in layoffs, though some staff from the Network Access Group would be redeployed in other areas.
In announcing its Q2 results, Zarlink said it cut 200 jobs over the quarter, but did not specify were the cuts have occurred. The company employs about 300 in Ottawa.
CFO Jean-Jacques Carrier and legal/human resources executive Don McIntyre have given up their seats on the board, reducing it to eight positions, to also help trim costs.
"We're in the grinding phase and we're going to keep grinding," Brockett said in a conference call with analysts. "That break even point is going to come down."
The cuts incurred $1.3 million in charges against the operating results of the second quarter and are expected to cost another $3 million in the third quarter. Cost savings stemming from the cuts will be seen in the fourth quarter.
Zarlink launched 24 new products in the second quarter and spent half of its revenue, or $23.2 million, on research and development.
For the third quarter revenues are expected to be flat at $46 million, with an adjusted net loss of 11 cents per share.
Cash and short-term investments are expected to total $125 million by the end of the third quarter, down from $132.7 million at the end of the second quarter. At the end of the first quarter the company's cash position was $153.1 million.
"We are actively managing our cash reserves through this downturn and will significantly reduce our cash burn in coming quarters as further cost reductions take effect," Brockett said.
Provided it can hit the $46 million revenue target and keep on track with its cost cutting efforts, Zarlink expects its cash burn to be less than $5 million by the end of the year.
The maker of semiconductors for broadband and the medical device markets posted a loss of $11.9 million, or 10 cents a share, compared to a loss of $19.7 million, or 16 cents a share, in last year's Q2 (all figures in U.S. dollars).
Revenues met the company's own guidance at $46.2 million, weaker than the $50.5 million achieved last year and the $48 million reported in the first quarter of this year.
The consensus estimate of analysts polled by Thomson First Call was for the loss of 10 cents a share on revenue of $47.25 million.
Excluding some charges for stock option grants and amortization and others, the company posted an adjusted loss of $11.7 million, or 10 cents per share, compared to $16.2 million, or 13 cents per share, in the same period last year.
"We are not relying on hopeful market rebounds to improve our business,?Pat Brockett, president and CEO, said in a statement. "We remain focused on intelligently reducing our costs while strengthening our product portfolio."
Last month, Zarlink pulled the plug on its next generation chips for Digital Subscriber Line, or DSL. DSL delivers high-speed Internet and data services over regular copper telephone lines.
The move was expected to result in layoffs, though some staff from the Network Access Group would be redeployed in other areas.
In announcing its Q2 results, Zarlink said it cut 200 jobs over the quarter, but did not specify were the cuts have occurred. The company employs about 300 in Ottawa.
CFO Jean-Jacques Carrier and legal/human resources executive Don McIntyre have given up their seats on the board, reducing it to eight positions, to also help trim costs.
"We're in the grinding phase and we're going to keep grinding," Brockett said in a conference call with analysts. "That break even point is going to come down."
The cuts incurred $1.3 million in charges against the operating results of the second quarter and are expected to cost another $3 million in the third quarter. Cost savings stemming from the cuts will be seen in the fourth quarter.
Zarlink launched 24 new products in the second quarter and spent half of its revenue, or $23.2 million, on research and development.
For the third quarter revenues are expected to be flat at $46 million, with an adjusted net loss of 11 cents per share.
Cash and short-term investments are expected to total $125 million by the end of the third quarter, down from $132.7 million at the end of the second quarter. At the end of the first quarter the company's cash position was $153.1 million.
"We are actively managing our cash reserves through this downturn and will significantly reduce our cash burn in coming quarters as further cost reductions take effect," Brockett said.
Provided it can hit the $46 million revenue target and keep on track with its cost cutting efforts, Zarlink expects its cash burn to be less than $5 million by the end of the year.
