Vitesse Posts, Cuts & HiresVitesse Posts, Cuts & Hires

Vitesse reports second-quarter results; will reduce workforce by approximately 12%; appoints new executives

April 21, 2005

4 Min Read

CAMARILLO, Calif. -- Vitesse Semiconductor Corporation (NASDAQ:VTSS) ("Vitesse" or the "Company") today reported results for the second quarter of fiscal 2005 ended March 31, 2005. Revenues in the second quarter of fiscal 2005 were $47.2 million, compared to $56.0 million in the second quarter of fiscal 2004, and $44.5 million in the first quarter of fiscal 2005. Revenues for the six months ended March 31, 2005 were $91.6 million, compared to $106.3 million in the six months ended March 31, 2004.

On a generally accepted accounting principles (GAAP) basis, net loss for the second quarter of fiscal 2005 was $28.9 million or $0.13 loss per share compared to net loss of $17.5 million or $0.08 loss per share in the second quarter of fiscal 2004 and net loss of $17.2 million or $0.08 loss per share in the first quarter of fiscal 2005. Net loss for the six months ended March 31, 2005 was $46.1 million or $0.22 loss per share, compared to net loss of $25.4 million or $0.12 loss per share for the six months ended March 31, 2004.

Non-GAAP net loss for the second quarter of fiscal 2005 was $9.4 million or $0.04 loss per share, compared to non-GAAP net income of $1.4 million or $0.01 income per share in the second quarter of fiscal 2004, and non-GAAP net loss of $9.5 million or $0.04 loss per share in the first quarter of fiscal 2005. Non-GAAP net loss for the six months ended March 31, 2005 was $18.9 million or $0.09 loss per share, compared to non-GAAP net income of $1.6 million or $0.01 income per share for the six months ended March 31, 2004. Non-GAAP results for all periods presented exclude amortization of intangible assets, acquisition-related deferred stock-based compensation, other acquisition-related compensation expense, employee stock purchase plan compensation, investment impairment charges, restructuring charges, fixed asset impairment charges, and include an adjustment to income taxes.

In the second quarter of fiscal 2005, in an effort to reduce operating costs and lower its break-even level, the Company implemented a restructuring program that included a reduction in workforce, and the closure of certain facilities. The workforce reduction, which began in February and will be completed in April, will reduce headcount by approximately 12%.

The Company also recorded a charge in the amount of $2.3 million for the impairment of certain long-term investments. Additionally, the Company recorded a restructuring charge of $0.2 million related to adjustments to estimated sublease income from a previous restructuring program.

Vitesse's President and CEO, Lou Tomasetta, said, "I am encouraged to see our revenues rebounding after going through a steep decline in the second half of calendar 2004. Storage revenues were particularly strong in the March quarter, growing 18% sequentially. Additionally, our Ethernet business continued to grow with some key products entering a production ramp. We expect that both these businesses will continue to grow in the current quarter. While our cost cutting efforts have reduced our operating costs going forward, the actions we took did not occur until later on in the quarter and so we did not see the full impact of these measures in the March quarter."

---In a separate release---

CAMARILLO, Calif. -- Vitesse Semiconductor Corporation (NASDAQ:VTSS) ("Vitesse" or the "Company") today announced that Yatin Mody has been appointed Chief Financial Officer of the Company. Mr. Mody has been with Vitesse since March 1992, most recently as Vice President, Finance. Prior to that, he spent five years at Deloitte & Touche. Mr. Mody holds a Bachelor of Technology degree in electrical engineering from the Indian Institute of Technology, Madras and an M.B.A. degree from the University of California, Los Angeles.

Gene Hovanec was appointed Executive Vice President reporting to Lou Tomasetta, President and CEO. Mr. Hovanec will be responsible for legal and administrative affairs, investor relations and strategic customer relationships.

"I am very pleased with Yatin's promotion to CFO," said Gene Hovanec. "He is well prepared to be a CFO of a public company. I felt that it was essential for Vitesse to provide Yatin this opportunity before others offered it to him."

Lou Tomasetta added, "It has been my privilege to work with Gene and Yatin over the past 10 years. They make a great team that has served the Company well during some tumultuous times. I am glad that we can keep this team together for Vitesse."

Vitesse Semiconductor Corp.

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