Intrinsyc Optimizes Operations in Response to Market Conditions
Vancouver, BC – December 1, 2008 – Intrinsyc Software International, Inc. (TSX: ICS), a leading provider of mobile and embedded software solutions, today announced that it will implement a comprehensive cost reduction plan designed to preserve cash and working capital through the reduction in operating expenses by approximately US$10 million to US$11 million to approximately US$18 million to US$19 million on an annualized basis, resulting in a substantially reduced revenue breakeven level.
By streamlining its global operations, and reducing its workforce by approximately 30% to 215 employees worldwide, the Company is positioned to preserve cash on hand and better weather the current global economic environment. The company is instituting other cost reduction initiatives over and above those steps announced on September 22, 2008. Further reductions include closure and space reductions in higher cost facilities including the Company’s sales offices in Arizona and California, reduction of other facilities corresponding to the headcount reduction, reductions in travel, use of consultants and professional service relationships, and a freeze on executive bonuses and salary increases.
“With today’s announcement, we are focused on meeting our customers’ needs, driving improved financial performance and achieving our cash preservation goals”, said Tracy Rees, Interim Chief Executive Officer, Intrinsyc. “This is a disciplined cost reduction plan that balances fiscal prudence with the need to pursue growth opportunities and generate long-term profitability in a challenging market environment. As we work through this plan, we will become more agile, responsive, and efficient in providing our market leading solutions to our customers.”
The Company, led by a leaner, more operationally focused executive team, will continue development and marketing of the Soleus® and Destinator® product lines, with plans to focus future development investments toward fast growing markets such as navigation and Location Based Services, and other converged devices. Additionally, Intrinsyc will continue to enable device makers to create innovative and differentiated solutions through its Solutions Engineering services offerings and deep understanding of leading edge technology across multiple operating systems, including Microsoft, Symbian and Linux/Android, as well as leading silicon vendors.
Intrinsyc is positioned to capitalize on the previous investments in Soleus and Destinator, improvements in labor efficiency provided by the Company’s low cost development center in Beijing, China, and the synergy from cross-selling opportunities among the Company’s existing Soleus, Destinator and Solutions Engineering customers.
Intrinsyc expects to record a one-time restructuring charge in the fourth quarter of 2008 related to these activities of approximately US$1.5 million.
Forward Looking Statements
This press release contains statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking information under applicable Canadian securities legislation. Such forward-looking statements or information may include financial and other projections as well as statements regarding the Company's future plans, objectives, performance, revenues, growth, profits, operating expenses or the company's underlying assumptions. The words "may", "would", "could", "will", "likely", "expect," "anticipate," "intend", "plan", "forecast", "project", "estimate" and "believe" or other similar words and phrases may identify forward-looking statements or information. Persons reading this press release are cautioned that such statements or information are only predictions, and that the Company's actual future results or performance may be materially different. Factors that could cause actual events or results to differ materially from those suggested by these forward-looking statements include, but are not limited to: the Company’s ability to continue to earn the revenue from Destinator products after the acquisition, and to integrate the acquired business into its own operations; the need to develop, integrate and deploy software solutions to meet our customer's requirements; the possibility of development or deployment difficulties or delays; the dependence on our customer's satisfaction; the timing of entering into significant contracts; our customers’ continued commitment to the deployment of our solutions; the risks involved in developing integrated software solutions and integrating them with third-party products and services; the performance of the global economy and growth in software industry sales; market acceptance of the Company’s products and services; customer and industry analyst perception of the Company and its technology vision and future prospects; the success of certain business combinations engaged in by the Company or by its competitors; political unrest or acts of war; possible disruptive effects of organizational or personnel changes; technological change, new products and standards; risks related to acquisitions and international expansion; reliance on large customers; concentration of sales; international operations and sales; management of growth and expansion; dependence upon key personnel and hiring; reliance on a limited number of suppliers; industry growth; competition; intellectual property; product defects and product liability; currency exchange rate risk; and including but not limited to other factors described in the Company’s reports filed on SEDAR, including its Annual Information Form and financial report for the year ended December 31, 2007. In drawing a conclusion or making a forecast or projection set out in the forward-looking information, the Company takes into account the following material factors and assumptions in addition to the above factors: the Company’s ability to execute on its business plan; the acceptance of the Company’s products and services by its customers; the timing of execution of outstanding or potential customer contracts by the Company; the sales opportunities available to the Company; the Company's subjective assessment of the likelihood of success of a sales lead or opportunity; the Company's historic ability to generate sales leads or opportunities; and that sales will be completed at or above the Company's estimated margins. This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. All forward-looking statements made in this press release are qualified by this cautionary statement and there can be no assurance that actual results or developments anticipated by the Company will be realized. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
About Intrinsyc Software International, Inc.
Intrinsyc empowers device makers, mobile operators, and silicon vendors to deliver compelling, next generation mobile and devices with faster time-to-market, higher quality, and differentiating innovation. Our customers and partners rely on our award-winning device development solutions and our industry-leading navigation software and LBS solutions. Intrinsyc is a 2009 winner of the Microsoft Windows Embedded Excellence Award. Intrinsyc is publicly traded (TSX: ICS) and headquartered in Vancouver, Canada, with offices in China, Taiwan, U.K. and the United States.
© Intrinsyc Software International, Inc. All rights reserved.
Intrinsyc, Soleus, Destinator and their respective logos are trademarks, registered and otherwise, of Intrinsyc Software International, Inc. in Canada, European Union, Taiwan, United States of America and other jurisdictions. Other products and services mentioned in this document are identified by the trademarks or service marks of their respective companies or organizations.
For more information, please contact:
Chief Financial Officer
Intrinsyc Software International, Inc.
Vice President, Corporate Development & General Counsel
Intrinsyc Software International, Inc.