Pixelworks (PXLW) Announces Corp. Streamlinig; Plans Workforce Reduction of ~24%; Offers Prelim. Q1 Results

Pixelworks, Inc. (NASDAQ: PXLW) announced a restructuring to streamline its product offerings and organization, including an approximately 24% reduction in workforce, in the areas of development, operations, sales and marketing. Pixelworks expects the restructuring to result in annualized savings of at least $5.0 million.

Stephen Domenik, Pixelworks’ interim CEO, commented, “The purpose of today’s announced restructuring is twofold: the first objective being to streamline the organization and our offerings, while also intensifying the Company’s focus and resources on opportunities with the largest potential impact. We remain fully committed to executing on our mobile strategy and maintaining our existing projector business. The actions we have taken today will provide for a significantly more optimized and targeted approach in each business going forward.”

“The second objective of today’s restructuring and workforce reduction is to more appropriately align the Company’s expenses with current revenue levels,” continued Mr. Domenik. “More specifically, we expect that our improved cost structure combined with revenue growth for the balance of the year will enable the Company to achieve cash flow breakeven by the fourth quarter. Collectively, I strongly believe these two objectives are essential to Pixelworks’ future success as well as generating the greatest value for its shareholders.”

The Company expects to incur total charges of approximately $4.4 million related to asset disposal costs and employee severance and benefits, which will largely be recorded in the first quarter of 2016. Pixelworks expects the restructuring to be substantially completed by the end of its third quarter ending September 30, 2016.

Preliminary First Quarter 2016 Results

The Company also reported preliminary first quarter 2016 results with revenue of approximately $11.1 million. First quarter GAAP net loss per share excluding anticipated charges of $4.2 million, or $0.15 per share, is expected to be within the Company’s original quarterly guidance range of a net loss between $0.16 and $0.23 per share. The Company notes, these results are preliminary and subject to adjustment during the standard accounting close process.

**** The Street sees Q1 revenue of $10.5 million and loss of $0.17 per share.

Pixelworks will report its complete first quarter 2016 results and provide additional details related to today’s announcement as part of its quarterly earnings conference call, which is currently scheduled for Thursday, April 28th at 2:00 p.m. Pacific Time.

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