Ottawa's Plaintree Systems Inc., struggling to keep afloat as customers defer orders, announced a fresh round of cost cutting measures aimed at saving it another $400,000 a year.
The wireless communications firm will allow insurance policies on directors and officers of the company to lapse in December, indefinitely postpone its annual general meeting, and cut a deal with its creditors.
President and CEO David Watson reiterated that the company's woes are only temporary and the money saved will go toward sales and manufacturing.
"Things have levelled off," he said. "We think in three or four months we should see some improvement."
The immediate focus will be on what was a smaller business for the company that has proven relatively robust - business to business Ethernets.
The company plans to make a formal proposal under the Business Insolvency Act that will allow it to cut a deal with all of its creditors at the same time. The creditors would all agree to settle for a flat percentage of what Plaintree owes them.
Watson hopes the formal proposal can be made before Christmas.
The latest cost-cutting measures are only the latest in a series of painful moves the company has been forced to make in order to preserve cash.
Last month Plaintree vacated its offices on Merivale Road and consolidating at its Arnprior manufacturing facility. It had been in default on its rent payments for the Merivale location since June.
Plaintree's woes began last March when customers deferred a series of key orders. The company has been reducing operations, cutting staff and scaling back salaries ever since to weather the drought.
In May two-thirds of its staff, about 30, were put on temporary layoff. The layoffs were made permanent in August.
In June the company increased its credit line with Targa Electronics Systems from $450,000 to $600,000. Targa Group is Plaintree's largest shareholder and holds the lease on the Merivale location. The June juggle also included a deal with Targa allowing it to defer $120,000 in outstanding lease payments until January 2003. The company put up its property in Arnprior as collateral for the deferral.
The cost-cutting moves have significantly improved the company's bottom line in the face of declining revenues. Watson pointed out that losses have bee reduced from $1.27 million in the fourth quarter of the last fiscal year to only $284,900 in the recently completed first quarter.
The wireless communications firm will allow insurance policies on directors and officers of the company to lapse in December, indefinitely postpone its annual general meeting, and cut a deal with its creditors.
President and CEO David Watson reiterated that the company's woes are only temporary and the money saved will go toward sales and manufacturing.
"Things have levelled off," he said. "We think in three or four months we should see some improvement."
The immediate focus will be on what was a smaller business for the company that has proven relatively robust - business to business Ethernets.
The company plans to make a formal proposal under the Business Insolvency Act that will allow it to cut a deal with all of its creditors at the same time. The creditors would all agree to settle for a flat percentage of what Plaintree owes them.
Watson hopes the formal proposal can be made before Christmas.
The latest cost-cutting measures are only the latest in a series of painful moves the company has been forced to make in order to preserve cash.
Last month Plaintree vacated its offices on Merivale Road and consolidating at its Arnprior manufacturing facility. It had been in default on its rent payments for the Merivale location since June.
Plaintree's woes began last March when customers deferred a series of key orders. The company has been reducing operations, cutting staff and scaling back salaries ever since to weather the drought.
In May two-thirds of its staff, about 30, were put on temporary layoff. The layoffs were made permanent in August.
In June the company increased its credit line with Targa Electronics Systems from $450,000 to $600,000. Targa Group is Plaintree's largest shareholder and holds the lease on the Merivale location. The June juggle also included a deal with Targa allowing it to defer $120,000 in outstanding lease payments until January 2003. The company put up its property in Arnprior as collateral for the deferral.
The cost-cutting moves have significantly improved the company's bottom line in the face of declining revenues. Watson pointed out that losses have bee reduced from $1.27 million in the fourth quarter of the last fiscal year to only $284,900 in the recently completed first quarter.
