Boston, MA 07/01/2014 (wallstreetpr) – ANADIGICS, Inc. (NASDAQ:ANAD), a manufacturer of radio frequency for mobile and infrastructure application, has announced a restructuring strategy that saw it lower revenue target for the current quarter.
The declared strategy hinges on focusing more on infrastructure and less on mobile. As such, the company intends to monetize some of its mobile assets and reduce its workforce to align with growth opportunities.
According to Chairman and CEO Ron Michels, the company expects to deliver improved earnings by increasing focus on infrastructure where revenue and profits are high, while reducing fixed manufacturing and operating expenses.
Cost and staff cutting
ANADIGICS, Inc. (NASDAQ:ANAD) intends to reduce its staff by 30 percent in the latest strategic restructuring plan. When all adjustments are realized, the company expects to lower its fixed costs by $15 million annually, of which $10 million will come from the adjustment in operating costs and $5 million from adjustment in manufacturing costs.
Additionally, the company targets another $10 million annually in cost-savings as previously announced.
Although the company expects to incur about $2.3 million restructuring charges related to the staff reduction, the monetization of assets will help in offsetting the charges. A 30 percent reduction of staff will eliminate about 140 positions, especially in the mobile segment where the company is keen to maintain operations at suppressed capacity as it moves aggressively to infrastructure.
Performance expectation
In the wake of the new restructuring plans, ANADIGICS (NASDAQ:ANAD) moved to adjust its revenue expectation for 1Q2014 downward. The company now expects revenue for the quarter to be in the neighborhood of $23 million, almost in a level with the 1Q revenue of $23.3 million. It previously projected revenue to grow in the range of 8 – 12 percent.
The company also expects expenses in 2Q to be lower than in 1Q, which was about $12.1 million.
In view of the adjustment in the business strategy of ANADIGICS, Inc. (NASDAQ:ANAD), the company expects infrastructure to contribute a larger percentage of its quarterly revenue starting with 2Q going forward.
