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ARC is up for reorganization

Posted: 24 Sep 2008 ?? ?Print Version ?Bookmark and Share

Keywords:reorganization operations? consumer electronics? multimedia?

ARC International will be reorganizing its operations, enhancing and accelerating the deployment of its new multimedia product range to high-growth consumer electronics markets. The reorganization comprises a number of key elements, which streamline the company's execution of its market strategy with improved operational efficiencies and a significantly reduced cost base. The plan builds on a new company structure reporting directly to CEO Carl Schlachte and includes the ff:

? A new integrated worldwide sales and field organisation
? The formation of a multimedia software business unit
? A new SoC business unit
? The streamlining of the office of the chief technology officer into a single function
? An increased focus on vertically integrated multimedia solutions
? The transfer of certain product development to ARC's engineering centers in Russia and India

Execution of the reorganization plan will commence this month and is expected to be substantially completed this year, with the full benefits being generated from the beginning of 2009.

The reorganization plan is expected to necessitate a one-time charge of 3 million pounds in 2H 08, comprising a cash cost of 1.5 million pounds and provisions for future costs, principally relating to surplus property lease obligations of a further 1.5 million pounds. Full year savings are expected to be in excess of 2 million pounds. While a small impact on revenue is expected over the remainder of 2008, fundamental trading conditions remain unchanged. These actions are expected to accelerate profitability and positive cash flow.

Carl Schlachte, president and CEO, said, "The strategically targeted acquisitions that ARC has successfully executed and integrated, together with continued investment in new lower cost development capabilities, have enabled the company to significantly reposition itself. ARC has an exciting range of multimedia solutions, which are attracting strong and growing interest from OEM and chip customers around the world. The proposed restructuring announced today will enable ARC to more effectively and rapidly deploy these products to high volume consumer markets, reduce our cost base, improve margins, and accelerate our transition to profitability and positive cash flow."

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