Global Village Announces Comprehensive Restructuring.SUNNYVALE, Calif.--(BUSINESS WIRE)--Dec. 16, 1996--Global Village Communication (Nasdaq:GVIL) today announced a comprehensive restructuring plan to streamline its operations, reduce its workforce and enable the company to return to profitability. The company expects revenues for its fiscal third quarter will fall significantly below expectations. Accordingly, the company will report 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. for the quarter, including non-recurring charges resulting from the planned restructuring, of approximately $25 million to $30 million. "The goal of these changes is to return Global Village to profitability, while allowing us to focus on our core business of making easy-to-use personal communications products for both Macintosh and Windows users," said Neil Selvin, Global Village's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . The restructuring will involve several steps designed to streamline the company and position it for future profitability and growth. Specifically, the company announced: - A reduction of its workforce by approximately 20 percent to streamline various departments and bring headcount and 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. in line with projected revenue. The 42 employees affected by the layoff will receive severance packages and outplacement out·place·ment n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. services. - A reduction in other operating expenses. Non-headcount related expenses will be reduced -- specifically in administration, marketing and operations -- to reduce the break-even point break-even point - In the process of implementing a new computer language, the point at which the language is sufficiently effective that one can implement the language in itself. and align the operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. model with expected revenues and gross margins. - A reserve against anticipated product returns from resellers and distributors. While the quarter has not been completed, the company expects the sell-through of certain products, both on the Macintosh and Windows platform, will not achieve the levels originally anticipated. - A write-down of inventory and other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. to better match the expected sales of various products in future quarters, and to reflect a refocusing Noun 1. refocusing - focusing again focalisation, focalization, focusing - the act of bringing into focus on core product lines. "The actions we are taking today will position Global Village as a more streamlined and focused company," said Selvin. "We will have a renewed emphasis on personal communications products, designed to be easy-to-use and to appeal to home and small-business professionals on all major personal computer platforms. "During the last six months, Global Village has introduced and shipped several unique products for Windows users, along with several new Macintosh-based products," Selvin continued. "These products have won significant critical acclaim and form the cornerstone of our focus on creating innovative products that deliver unique value to the personal computer user. Global Village will continue to develop and market products that support this tradition of combining innovative software and reliable hardware to create a total solution for the user." Global Village expects to announce its third fiscal quarter results on January 21, 1997. About Global Village Communication With nearly eight million customers, Global Village Communication (Nasdaq:GVIL) is a leading supplier of integrated communication solutions for personal computer users. The company sells its products directly and through leading VARs, retailers and distributors worldwide. For more information about Global Village products, please visit "The Village" web site at http://www.globalvillage.com Portions of this news release contain forward-looking statements 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. . Investors are cautioned that all forward-looking statements involve risks and uncertainties, including, without limitation, announcements by the company's customers and competitors, product returns, risks related to delays in product development and new product introductions, rapidly changing technology, an intensely competitive market, market acceptance of new products, foreign operations, and general economic conditions. Each of these factors, and others, are discussed more fully in the company's last filed Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Form 10-Q Form 10-Q See 10-Q. and the company's other filings with the Securities and Exchange Commission. CONTACT: Demer IR Marianne Baldrica, 510/938-2678 (Investor) baldrica@demer-ir.com OR Global Village Kevin Burr, 408/523-2260 (Media) kevinburr@globalvillage.com |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion