Avatech Solutions Announces Operational Restructuring and Cost Reduction Program Supporting Updated Strategic Plan.Restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). Will Increase Productivity, Efficiency, Communication and Performance $2.5 Million Reduction in Annual Expenses Expected BALTIMORE, Md. -- Avatech Solutions, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : AVSO AVSO Association of Voluntary Service Organisations .OB) has implemented an operational restructuring and cost reduction program that is expected to save the company in excess of $2.5 million annually. The program supports Avatech's fiscal plan to achieve consistent profitability and enhanced shareholder value. Once fully implemented, Avatech's cost reduction actions are projected to reduce ongoing operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , as a percentage of sales, by approximately seven percentage points. Savings from the full program - which reduced overhead, elevated critical sales and services functions, and streamlined information flow and accountability - began in the second half of fiscal 2007 and will be fully realized beginning in the quarter that began on July 1, 2007. President and Chief Executive Officer George Davis George Davis may refer to:
"More recently, we have focused our attention on streamlining our organization and strengthening fiscal accountability at all levels. During the second half of fiscal 2007, we significantly reduced our work force through the elimination of 20 positions, including four senior managers. In addition, we have taken many other steps, including administrative and organizational changes, to contain costs and improve efficiency. "We expect our actions to have a positive impact on Avatech's future financial results. However, due in part to the disruptions caused by the restructuring and cost reduction program, we now expect fiscal 2007 revenues to be between $50 - $51 million rather than $51 - $55 million, as previously estimated. In addition, due to severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when charges of approximately $500,000 and previously disclosed changes in Autodesk's incentive program, we now expect an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in the fourth quarter of 2007. As we return to normalized margins, we do not expect these losses to continue into fiscal 2008." Mr. Davis added, "Our organizational changes have focused on improving accountability, communications and productivity. We have eliminated several layers of executive management and streamlined the organization by elevating Sales and Engineering Services leadership positions, which now will report directly to me. Along with my senior management team, including CFO See Chief Financial Officer. Larry Rychlak, Senior Vice President, Sales Bruce White and Senior Vice President, Services Bill Zavadil, I am confident that this organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. will allow us to better focus on sales performance, engineering productivity and operational efficiencies - all crucial to improving bottom-line results. "In addition to dramatically reducing costs, we have been working to improve our performance under Autodesk's new incentive program. As a result of the steps we are taking to enhance the training of our sales force, our marketing strategies, and our sales and services incentive structures, we expect our margins to improve significantly over those realized in the most recently reported quarters. "Our updated business strategy is built on three core principles designed to leverage Avatech's existing strengths and to improve profits and shareholder value as rapidly as possible: * Maintain and profitably grow our strong position in the Autodesk value-added reseller A value-added reseller (VAR) is a company that adds some feature(s) to an existing product(s), then resells it (usually to end-users) as an integrated product or complete "turn-key" solution. economy. * Grow our engineering consultancy and services business by leveraging our core value as a proven, trusted technical advisor in the design engineering community. * Acquire and integrate diverse, yet complementary service businesses to extend our product offerings. "The market's need for engineering services is growing, offering us many opportunities to diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. Avatech's activities and drive Services revenue. On a year-over-year basis, we increased Services revenue more than 40% through the third quarter of fiscal 2007. To continue to expand our Services division, our acquisition strategy is focused on providers of services and software to the architectural, engineering, construction, and manufacturing communities. Growing this critical segment of our business will demonstrate increased value to our customers, distinguish us from the competition, provide a recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. , profitable revenue base and help us enhance shareholder value. Our balance sheet remains strong and will facilitate this program. "We believe the actions taken over the last several months have positioned Avatech well to build on our core strengths and advance our strategic vision in fiscal 2008 and beyond," concluded Mr. Davis. About Avatech Solutions Avatech Solutions, Inc. (OTCBB:AVSO.OB) is the recognized leader in design and engineering technology with unparalleled expertise in design automation, data management and process optimization Process optimization is the practice of making changes or adjustments to a process, to get results. Optimization is the use of specific techniques to determine the most cost effective and efficient solution to a problem or design for a process. for the manufacturing, engineering, building design and facilities management The management of a user's computer installation by an outside organization. All operations including systems, programming and the datacenter can be performed by the facilities management organization on the user's premises. markets. Headquartered in Owings Mills, Maryland Owings Mills is an unincorporated community and a census-designated place in Baltimore County, Maryland, United States. The population was 20,193 at the 2000 census. Owings Mills is home to the northern terminus for the Baltimore Metro Subway and to Owings Mills Mall. , the company specializes in consulting, software systems integration and implementation, standards development and deployment, education, and technical support. Avatech is one of the largest integrators of Autodesk software worldwide and a leading provider of PLM (Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design solutions. The company's clients include industry leaders from Fortune 500 and Engineering News Record's Top 100 companies. Visit http://www.avatech.com for more information. Forward-looking Statement forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words "goal," "expect," "anticipate," "estimate," "should," "believe," "intend," and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Avatech operates, and they are not guarantees of future performance. Whether actual results will conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations. |
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