Spectrum Signal Processing stays independent; lays off 40 staffers

Spectrum Signal Processing Inc. recently conducted a strategic review, and decided to remain independent, while tightening its focus and restructuring its operations to achieve profitability. Spectrum had talked with several companies interested in acquiring part or all of the company, but none of the offers were better than its own standalone plan.

Under its standalone strategy, Spectrum will restructure its business to focus on its wireless systems product line, which generated approximately $16.1 million in revenue during 2003. Investment in the company’s voice-over-packet product line will be suspended, and Spectrum will continue seeking to divest this business group. Finally, the company is implementing plans to reduce annual operating costs, excluding depreciation, restructuring, and other charges, by approximately 27% or $4 million compared to 2003. These cost reductions will allow Spectrum to achieve positive operating earnings in 2004, excluding amortization, restructuring and other charges, with wireless product revenue levels comparable to 2003.

As part of its restructuring, Spectrum will reduce its staff by approximately 40 people, including four VPs in its business groups. Senior management positions in the new organization will be filled internally. The company expects to incur $2.5 million to $3.5 million in restructuring and other costs, including non-cash items over the next six to 12 months. Spectrum intends to pursue an equity financing in the near term to fund its restructuring activities.

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