Ikanos Cuts Staff
The layoffs were part of a restructuring launched Nov. 30, that will cost $1.2 million to $1.6 million, according to the 8-K filing. Ikanos declined to comment beyond what's in the 8-K. The company's stock was up 1 cent (0.1%) at $8.39 by early afternoon.
Ten percent probably amounts to fewer than 20 people -- Ikanos employed 178 as of Dec. 31, according to another SEC filing. And the price tag isn't big next to Ikanos's revenues -- $36.7 million in the third quarter, which ended in September. Still, the layoffs continue what hasn't exactly been a feel-good story.
Ikanos stock took a 30 percent hit in October after the company was stung by low yields and high inventories, the latter particularly in Japan. And that was after Ikanos had shrunk expectations by handing out a disappointing forecast in July. (See Ikanos Catches VDSL Blues and Ikanos, Mindspeed Feel the Pain.)
Some analysts were further concerned after hearing Ikanos's explanation. "We are concerned that Ikanos might not have a firm grip on its issues, as some comments contradicted guidance," Charlie Glavine of Needham & Co. wrote at the time. For example, he pointed out that Ikanos claimed to have short-term fixes for its yield problems but still cited yields as a problem for its December quarter.
"While we are bullish on the long-term prospects of VDSL and Ikanos's leading position, we are concerned that Ikanos is now forced into a reactive strategy until 1Q07," Glavine wrote in that report.
After announcing the earnings shortfall, CEO Rajesh Vashist departed, with chief financial officer Daniel Atler taking the helm temporarily. (See Ikanos CEO Steps Down.)
Meanwhile, the company has been hit with at least four shareholder lawsuits claiming Ikanos officials weren't honest about the company's condition at the time of its IPO. Ikanos went public in Septemer 2005 at $12 a share.
What should be the company's next step? Well, analyst Anton Wahlman of ThinkEquity LLC thinks Ikanos is likely to make another acquisition, possibly in the PON area. Possible candidates would be BroadLight Inc. and Teknovus Inc. , or publicly held Centillium Communications Inc. , he wrote in October. Centillium shares, by the way, were mysteriously up 20 percent this morning; the stock had settled to being up 20 cents (10.2%) at $2.16 by press time.
— Craig Matsumoto, Senior Editor, Light Reading