STOCKHOLM (07/03/2000) - Business graphics software vendor Micrografx Inc.
Monday announced that it has laid off 74 of its 187 employees, primarily in the U.S., as part of an ongoing global restructuring effort aimed at restoring profitability at the financially troubled company.
The layoffs will result in lower operating costs designed to offset the seasonally weak international sales in the first fiscal quarter, although Micrografx said in a statement that it expects other changes to its business operations to result in charges that will be included in the results for its fourth fiscal quarter, planned to be announced in mid-August. The company did not disclose the size of the charges it expects to report.
For the first nine months of its fiscal 2000, which ended March 31, Micrografx posted a net loss of US$9.3 million, or 81 cents per share, on revenue of $28.1 million.
Despite the cost reductions it has already initiated, Micrografx warned that it could run into "severe operational difficulties" if it fails to secure additional external financing. The company's management, however, remains confident that it will be able to obtain "the necessary revenue levels and/or additional funding necessary to operate the company in the near term," Micrografx said.
Unimpressed investors, however, voted with their feet Monday. In mid-morning action on the Nasdaq exchange, Micrografx shares were down more than 36 percent, trading at $1.47.
As part of the restructuring effort, Micrografx plans to consolidate its enterprise process management business into an independent unit to be based in Portland, Oregon, and led by Ken Carraher, who currently serves as executive vice president of development.
The Allen, Texas-based company's technical graphics operations, meanwhile, will become an independent business unit with headquarters in Annapolis, Maryland.
It will be managed on an interim basis by Micrografx President and Chief Executive Officer Doug Richard.
Micrografx, in Allen, Texas, can be reached at +1-214-495-4000, or via the Web at http://www.micrografx.com/.