C-COR Announces Restructuring Plan

Digital TV and communications technology provider, C-COR, says that it is streamlining its corporate structure and key manufacturing operations into functionally aligned groups, "aimed at better serving the rapidly changing global marketplace." The company--which in December, 2004 acquired VOD technology provider, nCUBE--is combining its sales, marketing and business strategy operations into a new Global Strategies group, presided over by nCUBE's founder and ex-president and CEO, Mike Pohl, who was previously president of C-COR's Solutions business unit. It has also established an Operations group, responsible for product development, manufacturing and support, and has named John Caezza--who was formerly president of its Access & Transport business unit--as the new group's president. C-COR's Network Services unit, meanwhile, will continue to operate as a standalone business unit under the leadership of its president, David Levitan. According to C-COR, one of the goals of the streamlining of its corporate structure is to allow it to better focus on IP-related products: "These new group responsibilities, to be executed by some of the industry's most experienced executives, will allow us to more optimally focus resources on IP-oriented product lines already prioritized in our strategic business plan and on profitable growth opportunities," C-COR chairman and CEO, Dave Woodle, said in a prepared statement."

In a bid to reduce expenses, C-COR says that it will relocated certain processes from Wallingford, Connecticut to its Tijuana, Mexico facility, and that it will also close its Sunnyvale, California offices. The company says that the restructuring will be complete by June 30th, and will result in the reduction of its workforce by approximately 225 employees. It anticipates that the restructuring will result in an operating expense level of between $25 million and $27 million per quarter by the first quarter of its fiscal year 2007, which begins July 1st (note: these projections include approximately $1 million related to amortization of intangible assets and approximately $1 million of stock compensation expense). It says that the reduction in operating expenses is expected to be phased in over the next six months, with a "modest" reduction in the third quarter of its current fiscal year, and "greater" reductions in the fourth quarter. It expects to record non-cash asset impairment charges of between approximately $7 million and $9 million in the second quarter of the current fiscal year, and restructuring charges of approximately $5 million to $6 million through the remainder of the fiscal year.

(Note: this article was published in the January 18th issue of the InteractiveTV Today [itvt] email newsletter.)