Sigma Designs Announces Corporate Restructuring

Sigma Designs Announces Corporate Restructuring 
Expects $45 Million in Annual Expense Reduction 
MILPITAS, CA -- (Marketwire) -- 10/31/12 --  Sigma Designs(R)
(NASDAQ: SIGM), a leading provider of System-on-Chip (SoC) solutions
for home entertainment, connectivity and control, announced the
beginning of a broad corporate restructuring plan with the goal of
returning to profitability on a non-GAAP basis in the first quarter
of the next fiscal year beginning February 3, 2013. Sigma also
confirmed its revenue guidance for the third quarter provided in its
earnings conference call on September 5, 2012. 
The currently estimated impact of the restructuring plan is an
aggregate cost savings of approximately $45 million in fiscal year
2014. Key elements of the restructuring plan include: 


 
--  Reduction of approximately $26 million in annual labor costs through
    headcount reduction and other related actions;
--  Reduction in other operating expenses by approximately $14 million to
    be recognized across fiscal year 2014; and
--  Migration to lower cost manufacturing components and processes with
    estimated annual savings of approximately $5 million.

  
This plan would result in non-GAAP profitability on a quarterly basis
assuming a quarterly revenue rate of $56 million and begin generating
cash from operations at a quarterly revenue rate of $52 million. The
Company expects to incur an initial restructuring charge of $1
million in the third fiscal quarter, primarily as a result of
headcount reduction, and additional charges in the fourth fiscal
quarter as it executes on the remainder of the restructuring plan.  
"Over the last few months management has worked closely with the
board of directors to conduct a thorough analysis of our global
business opportunities by product line. Our top priority is
establishing sustainable profitable growth. This analysis resulted in
difficult decisions which are necessary to regain profitability,"
said Thinh Tran, Sigma Design's chief executive officer. "Our
restructuring efforts, which have already begun and which we
anticipate will be completed by the end of the current fiscal year,
are designed to align and scale our workforce and our other expenses
with our markets, products and financial plans. We have developed a
meaningful restructuring plan that is comprehensive and includes
adjustments in all functional areas of our company and regions in the
world," added Mr. Tran. 
Sigma expects to execute the restructuring plan in several phases,
all of which it anticipates will be implemented by the end of this
fiscal year. The initial phase, which consisted primarily of
headcount reduction in the Company's North American operations and
the implementation of expense management measures across worldwide
operations, has been completed. Sigma is also investigating strategic
alternatives for several research and development programs. 
Mr. Tran continued, "Although we have taken and will take significant
actions to reduce our expense levels, we believe our core strengths
remain intact and poised to capitalize on opportunities in the major
markets that we target, including IPTV and DTV, home connectivity,
and home control and automation."  
The Company plans to discuss the corporate restructuring plan in more
detail at its next earnings call currently scheduled for December 5,
2012. 
Safe Harbor Statement  
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934, including statements about
the anticipated cost savings from the restructuring plan, the timing
of the implementation of the restructuring plan, the ability of Sigma
to capitalize on opportunities in its major markets, the ability of
Sigma to become profitable on a non-GAAP basis and to generate cash
from operations at a specified revenue rate, the amounts of the
restructuring charges to be incurred by Sigma as a result of the
restructuring plan and the expected range of revenue for the third
quarter of fiscal 2013. Actual results may vary materially due to a
number of factors including, but not limited to, the risk that,
unanticipated additional costs are incurred as a result of the
restructuring plan, the anticipated efficiencies in Sigma's
operations as a result of the actions to be taken as part of the
restructuring plan are not as large as anticipated or do not occur,
unanticipated expenses or costs that arise in the future, and other
risks detailed from time to time in Sigma's SEC reports, including
Sigma's quarterly report on Form 10-Q as filed with the SEC on
September 10, 2012. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date
hereof. Sigma undertakes no obligation to publicly release or
otherwise disclose the result of any revision to these
forward-looking statements that may be made as a result of events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. 
About Sigma Designs, Inc. 
Sigma Designs, Inc. (NASDAQ: SIGM) is a leader in connected media
platforms. The company designs and builds the essential semiconductor
technologies that serve as the foundation for the world's leading
IPTV set-top boxes, connected televisions, connected media players,
residential gateways, home control systems and more. For more
information about Sigma Designs, please visit www.sigmadesigns.com. 
For Sigma Designs Investor Relations Contact: 
Thomas Gay
CFO
Sigma Designs 
+1 (408) 262-9003
IR@sdesigns.com 
 
 
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