Creo has announced a programme to streamline operations, strengthen its competitive cost position and provide a strong platform for earnings growth. The plan is to cut more than 200 jobs - five per cent of the total workforce – and reduce expenses by an annualized rate of approximately $24M by the start of the fiscal third quarter of 2005. It is expected to reduce operating expenses and cost of goods sold equally.
Creo estimates total pre-tax charges of about $6M will result from the programme, all to be taken in the fiscal fourth quarter ended September 30, 2004.
CEO Amos Michelson says: "We are committed to building shareholder value and profitability from our core business and through the execution of the digital media strategy announced a year ago. We have systematically examined all parts of the business for both cost and contribution. The result is a set of initiatives that will deliver increasing earnings through fiscal 2005.
"We have grown to become the fourth largest digital plate vendor in the world. However, we have not generated the bottom line performance we forecast this year. In fiscal 2005 we expect to continue similar top line growth while again increasing consumables revenue by more than 50 per cent. More importantly, we are committed to do what is necessary to deliver on the bottom line. These measures will allow us to achieve quarterly earnings before tax of at least eight per cent of revenue by the fiscal fourth quarter of 2005."
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