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TranSwitch Provides Corporate Update
(Wireless News Via Acquire Media NewsEdge)
TranSwitch, a provider of semiconductor solutions for the converging
voice, data and video network, announced the following in anticipation
of its pending merger with Centillium Communications, a supplier of
communications processing technology.
- TranSwitch now expects revenues to be in the range of $10.3 million
to $10.5 million for the third quarter ended September 30. The
company's previous outlook for third quarter revenues, as announced on
its July 29, conference call, was to be around $10.2 million.
- The company is also revising its expectations for potential expense
savings, assuming the completion of the merger, from at least $10.5
million annually to around $14 million, compared to the two companies'
current expenses. In addition to $10.5 million of previously identified
expense savings at Centillium, TranSwitch has identified an additional
$3.5 million of potential annual savings for 2009 through restructuring
of its current operations along with other expense reduction steps
already initiated.
- Pending approval of Centillium's Shareholders, TranSwitch anticipates
closing this transaction on or about October 24.
As a result of the restructuring, TranSwitch expects to record a
one-time restructuring charge of approximately $400,000 in the fourth
quarter of 2008, in addition to other anticipated one-time
restructuring charges related to the merger.
The new TranSwitch, resulting from the combination of the two
companies, will have a broad portfolio of communications products for
next-generation broadband access, transport, carrier Ethernet and VoIP
applications with important design wins in the next-generation projects
of major carriers in the UK, Japan, China, Korea and India.
"We are well-positioned with strong footprints in the UK's upgrade to
an all-IP network, Japan's Fiber-to-the-Home initiative, and China's 3G
network deployment, along with other initiatives," said Dr. Santanu
Das, CEO of TranSwitch. "These projects are just beginning to ramp and
we expect them to contribute a growing stream of high-margin revenue
for many years to come.
"TranSwitch has invested heavily over the past years in anticipation of
the architectural change that is occurring now as carriers transition
from legacy to Ethernet and IP technologies. While we will continue to
invest systematically in the communications space, it will be measured
and consistent with the long cycle nature of the business
"Going forward, TranSwitch has a unique opportunity to become a leader
in the large and rapidly growing field of digital video transport,
which complements the company's traditional communications business.
The company has just begun to license its HDMI and DisplayPort
intellectual property, which offers industry leading performance and
functionality. We believe that the video transport business presents an
opportunity for faster return on investment. Our plan is to increase
investment in this area to take advantage of our technology leadership
with the goal of developing a rapidly growing revenue stream.
"We will continuously re-evaluate our investment decisions with the
objective of maximizing shareholder value."
Additional details on TranSwitch's third quarter results will be
discussed during a conference call that will be scheduled in October. A
formal announcement for the date of the conference call will be made by
TranSwitch.
((Comments on this story may be sent to newsdesk@closeupmedia.com))
((Distributed on behalf of 10Meters via M2 Communications Ltd -
http://www.m2.com))
((10Meters - http://www.10meters.com))
Copyright ? 2008 Wireless News
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