Telular Corp. said it is emerging from its restructuring “lean and focused,” in spite of the $12.4 million in one-time charges it cost the company to accomplish the changes.
Telular reported a net loss of $17.4 million, or 69 cents per share, for the second quarter ended March 31. The net loss for the same quarter a year ago was $4.1 million, or 17 cents per share.
“While operating results were obviously disappointing, I was impressed with what the company accomplished during the second quarter,” said Kenneth E. Millard, Telular’s president and chief executive officer.
Millard worked for Ameritech from 1982 to 1992, and also served as president of Michigan Bell Telephone Co. He previously worked as an attorney for AT&T Corp. He replaces Richard Gerstner, who left earlier this year.
The 10-year-old Buffalo Grove, Ill.-based company holds patents for telecom interface technology and manufactures terminals for wireless local loop products. Telular is 20 percent owned by Motorola Inc.
Net revenues fell 44.3 percent during the second quarter, from $8.2 million to $4.6 million. For the six-month period ended March 31, Telular’s sales fell to $8.6 million, down 42.8 percent from the same period in the prior fiscal year. Net loss for the first six months of fiscal 1996 was $22.6 million, or 92 cents per share, compared to a net loss of $8.9 million, or 38 cents per share, a year earlier.
Telular said its success has been confounded in recent years by the slow development of the WLL market. While governments in some developing nations have moved quickly to make telecom reform changes, they still can take a great deal of time to settle equipment contracts, Telular noted.
“The trend in telecom of privatization is happening quickly, but in business terms, it’s moving slowly,” said Timothy Walsh, Telular treasurer and vice president. “Poland has been over three years, and we’re still working on it.”
Deployment of a Motorola WiLL system in Hungary recently was delayed due to changes in customer specifications, the company said. Telular has a $19 million contract to provide its PhoneCell product for that system.
Such lessons in recent years led Telular to alter its business plan. During the second quarter, Telular closed the manufacturing plants it leased and operated in Buffalo Grove, Ill., and Puerto Rico. Half of the company’s 250 employees have been laid off. Inventory and fixed asset write offs as well as severance payments came to $2.5 million. Production is being shifted to Telular’s Atlanta plant and some assembly work is being outsourced.
General restructuring charges totaled about $6.1 million, less than the original estimated $7 million to $9 million, because some inventory write-offs were reclassified as sales costs rather than restructuring charges, the company said.