Thomson Gets a Reprieve
But the company's creditors are now giving it until June 16, the date of its annual general meeting, to sort out its balance sheet: Thomson's financial performance towards the end of 2008 meant it breached its terms of its long-term debt agreements. To give the company greater stability and help speed up decision-making, CEO Frederic Rose, the former Alcatel-Lucent (NYSE: ALU) executive who joined in 2008, has extended his role to become chairman, too. (See Thomson Nabs AlcaLu Exec for CEO Role.)
In addition, Thomson's first-quarter results showed signs of improvement in its core businesses. (See Thomson Reports Q1).
The news gave the company's share price a lift, sending it up nearly 5 percent to €1.10 on the Paris exchange on Tuesday.
Revenues of €915 million (US$1.2 billion) from the company's continuing operations were better than a year ago, while the company noted that its "overall profitability in 1Q 2009 showed a material improvement" due to a better mix of product sales and cost-cutting. Of the businesses that Thomson is retaining -- the company is in the process of selling some of its peripheral units -- operating cashflow was "close to breakeven."
"While our first quarter revenue growth is encouraging under the present market conditions, the significant improvement in both profitability and operating cash flow trends is even more important," noted Rose in the company's earnings press release.
Thomson Connect, the division that houses its set-top boxes, modems, home gateways, and Software Service Platform (IPTV middleware) activities, generating sales of €368 million ($484 million), more than 28 percent better than a year ago.
That leap was mainly attributable to higher shipments of cable set-top boxes to operators in North America and Europe, and "sustained demand" for home gateways from Europe and Latin America.
The company has a long way to go before it reaches stability, however. Thomson is still heavily in debt, with a cash position at the end of the first quarter of €586 million ($770 million) and net debt of nearly €2.6 billion ($3.4 billion).
— Ray Le Maistre, International News Editor, Light Reading