Dot Hill Announces Implementation of Restructuring Plan and Reiterates Fourth Quarter 2008 Guidance
10 December 2008 - 12:55AM
PR Newswire (US)
CARLSBAD, Calif., Dec. 9 /PRNewswire-FirstCall/ -- Dot Hill Systems
Corp. announced that its board of directors had completed its
review of potential restructuring and cost reduction opportunities
and decided to implement a restructuring plan that will include
severance costs and fees associated with facility reductions in the
range of $1.25 million to $1.75 million. The company's board of
directors also plans to consider additional restructuring measures
as needed. Included in the restructuring plan is a 10 percent
reduction in workforce, the majority of which will be completed in
the current quarter. While the company was originally planning to
consolidate most of its United States operations into Longmont,
Colorado by the middle of 2009, in light of the current macro
economic environment, it will now defer the facilities move until
2010 in order to preserve cash. Instead, the company currently
plans to shut down approximately 40 percent of its Carlsbad
facility by the end of the fourth quarter of fiscal 2008. "We
expect the restructuring measures we have taken to result in
savings of $2.5 million to $3.5 million in 2009," stated Hanif
Jamal, Dot Hill's senior vice president and chief financial
officer. "We will continue to consider additional expense reduction
opportunities throughout 2009. We are very focused on reducing our
operating losses and returning to profitability as soon as
possible." The company's president and chief executive officer,
Dana Kammersgard stated, "We have undertaken these cost-saving
initiatives in the context of the global recession and its
uncertain potential impact on the demand for our products. We
continue to remain focused on executing on programs for our Tier-1
and other customers, while improving gross margins through product
cost reductions and increased software sales. The actions we have
announced today serve to lower our breakeven point. We intend to
return to profitability and I remain cautiously optimistic about
2009." The company also reiterated the guidance it issued on
November 6, 2008 for fourth quarter 2008 net revenues in the range
of $70 million to $76 million and a net loss per fully diluted
share of $0.05 to $0.10 on a non-GAAP basis, which excludes the
effects of share-based compensation expense, severance and
restructuring charges and currency gains and losses. About Dot Hill
Systems Corp. Delivering innovative technology and global support,
Dot Hill (NASDAQ: HILL) empowers the OEM community to bring unique
storage solutions to market, quickly, easily and cost-effectively.
Offering high performance and industry-leading uptime, Dot Hill's
RAID technology is the foundation for best-in-class storage
solutions offering enterprise-class security, availability and data
protection. The company's products are in use today by the world's
leading service and equipment providers, common carriers, advanced
technology and telecommunications companies as well as government
agencies. Dot Hill solutions are certified to meet rigorous
industry standards and military specifications, as well as RoHS and
WEEE international environmental standards. Headquartered in
Carlsbad, Calif., Dot Hill has offices and/or representatives in
China, Germany, Japan, United Kingdom and the United States. For
more information, visit us at http://www.dothill.com/. Statements
contained in this press release regarding matters that are not
historical facts are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act. Because
such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by
such forward-looking statements. Such statements include statements
regarding anticipated costs and fees associated with the
restructuring plan; the timing of future facilities relocations;
the potential for additional expense reductions; and Dot Hill's
projected financial results for the fourth quarter of 2008. The
risks that contribute to the uncertain nature of the
forward-looking statements include, among other things: the risk
that actual financial results for the fourth quarter 2008 may be
different from the financial guidance provided in this press
release; the fact that Dot Hill does not have any minimum purchase
agreements with any of its customers; the risk that Dot Hill's
customers may cancel or reduce orders, not order as forecasted or
terminate their agreements with Dot Hill; the risk that Dot Hill's
new products may not be accepted by end-users; the risk that one or
more of Dot Hill's suppliers or subcontractors may fail to perform
or may terminate their agreements with Dot Hill; unforeseen
technological, intellectual property, personnel or engineering
issues; and the additional risks set forth in the forms 8-K, 10-K
and 10-Q most recently filed by Dot Hill. All forward-looking
statements contained in this press release speak only as of the
date on which they were made. Dot Hill undertakes no obligation to
update such statements to reflect events that occur or
circumstances that exist after the date on which they were made.
DATASOURCE: Dot Hill Systems Corp. CONTACT: Hanif Jamal, Chief
Financial Officer of Dot Hill Systems Corp., +1-760-931-5500, Web
Site: http://www.dothill.com/
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