STOCK EXCHANGE RELEASE
Free for publication on March 27, 2008 at 08.00 am. (EET)
EB, ELEKTROBIT CORPORATION, GIVES NEW GUIDANCE FOR THE FIRST HALF OF
2008 AND STARTS REARRANGEMENTS
During the first half of 2008 EB expects the net sales to grow
clearly compared to the second half of 2007 (EUR 79.9 million). After
the later referred rearrangement actions, EB expects the operating
loss in the first half of 2008 to be on the same level or less than
during the second half of 2007, (EUR -7.9 million without the
non-recurring net income of EUR 1.5 million as announced in 28
December 2007), with the start of the year being clearly weaker than
the latter part of the half. In addition the result of the first half
of 2008 will be weakened by the non-recurring items referred below.
EB has decided as a part of it's actions to increase the productivity
and improve the fixed cost efficiency to examine the possibilities
for rearrangements in the Wireless Communications Solutions ("WCT"),
Radio Network Solutions ("RNS"), and Wireless Sensor Solutions
("WSS") Business Units. Due to the rearrangements, EB will register
non-recurring costs of approximately EUR 2.9 million for the first
quarter of 2008, which was not taken into account in the guidance
given by EB in its Financial Statement Bulletin published on February
6, 2008. The possibilities for rearrangements have been decided to be
examined as follows:
EB has decided to examine the possibility of renouncing the main part
of production activities of the WCT Business Unit. EB intends to
acquire this activity not belonging to its core businesses from
external outsourcing partners and consequently to improve the cost
efficiency and flexibility of its supply chain. However, the final
assembly, configuration and testing operations of the WCT products
will be maintained in EB. Therefore EB has decided to start personnel
negotiations related to the personnel of the WCT Business Unit on the
financial and production-related as well as on the restructuring
related grounds. The negotiations concern approximately 50 employees
in Oulunsalo.
Due to the weaker than expected demand and due to strong price
competition in the R&D services provided by the RNS Business Unit, EB
has decided to start personnel negotiations also in the RNS Business
Unit on the financial and production related grounds. The
negotiations concern approximately 40 employees mainly in Oulu and
Kajaani.
In addition to the above mentioned, EB has signed a pre-agreement to
sell the shares of its Swiss subsidiary, Elektrobit AG, to the acting
management of the said company. So far the Swiss entity has served
mainly the WSS Business Unit. In the future it will concentrate on
developing products related to wireless industrial solutions and
providing R&D services while acting also as EB's subcontractor. The
arrangement will not change the EB WSS Business Unit's strategy,
according to which the WSS Business Unit will concentrate on
delivering RFID Reader System Solutions. The transaction is intended
to be completed by March 31, 2008 and consequently, the personnel of
EB will be reduced by approximately 34 employees. The transaction
alone will not have a significant impact on EB's balance sheet or
result. The parties have agreed not to publish the purchase price or
other agreement terms.
Due to the rearrangements under examination in the Wireless Business
Segment, a non-recurring cost provision of approximately EUR 2.2
million will be allocated for the first quarter of 2008. In addition,
in case the sales of the Swiss entity is completed, a capital loss
and a write-off totalling in aggregate approximately to EUR 0.7
million will be allocated for the first quarter. Therefore, a total
of approximately EUR 2.9 million of non-recurring items will be
allocated for the first quarter, which were not taken into account in
the guidance given by EB in its Financial Statement Bulletin
published on February 6, 2008
Previously EB told in its Financial Statement Bulletin on February 6,
2008 that it expects the turnover during the first half of 2008 to
grow compared to the second half of 2007 (EUR 79.9 million). Further
EB told it expects the operating loss in the first half of 2008 to be
less than during the second half of 2007, (EUR -7.9 million without
the non-recurring net income of EUR 1.5 million as announced in 28
December 2007), with the start of the year being weaker than the
latter part of the half.
March 27, 2008
Elektrobit Corporation
Board of Directors
Further information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Panu Miettinen
CFO
Tel. +358 40 344 5338
DISTRIBUTION:
OMX Nordic Exchange Helsinki
Principal media
EB, Elektrobit Corporation
EB creates advanced technology and turns it into enriching end-user
experiences. EB is specialised in demanding embedded software and
hardware solutions for automotive and wireless industries. The net
sales for the year 2007 totalled EUR 144.3 million. Elektrobit
Corporation is listed on OMX Nordic Exchange Helsinki.
www.elektrobit.com
EB, ELEKTROBIT CORPORATION, GIVES NEW GUIDANCE FOR THE FIRST HALF OF 2008 AND STARTS REARRANGEMENTS
| Source: Bittium Oyj