AVCT » Topics » Third Quarter 2009 Outlook

This excerpt taken from the AVCT 8-K filed Jul 23, 2009.

Third Quarter 2009 Outlook

“Although there is anecdotal evidence of improvements in IT spending, we remain cautious on the outlook for our business over the next few months,” stated Avocent’s Chief Financial Officer, Edward Blankenship. “While we expect revenue from our government focused products to increase in the third quarter, an increase in enterprise IT spending is less certain. As a result, we are expecting third quarter 2009 revenues will be in the range of $135 to $143 million. We anticipate gross margins to be approximately 66% during the third quarter. We expect operating expenses to be within a range of $65 to $68 million, excluding anticipated stock compensation, restructuring costs and integration costs. We expect our operational EPS to be between $0.38 and $0.46. On a GAAP pre-tax basis, we anticipate approximately $2 million in restructuring costs, $12 million in amortization of intangibles from acquisitions and $5 to $6 million in stock compensation expense for the third quarter 2009.”

This excerpt taken from the AVCT 8-K filed Apr 23, 2009.

Second Quarter 2009 Outlook

“We continue to operate in a tough environment. While the economic forecasts for the second half of 2009 are showing some signs of slight strengthening, our outlook for the balance of the year remains guarded,” stated Avocent’s Chief Financial Officer Edward Blankenship. “In line with industry-wide reduced forecasts for technology spending and server shipments, we anticipate second quarter 2009 revenues will be in the range of $126 million to $134 million. We anticipate gross margins to be approximately 65% during the second quarter. We expect operating expenses to be within a range of $64 million to $66 million, excluding anticipated stock compensation, restructuring costs and integration costs. We expect our diluted weighted average shares to be approximately 44.5 million to 45 million in the second quarter, with resulting operational EPS of between $0.26 and $0.36. On a GAAP pre-tax basis, we anticipate approximately $2.0 million in restructuring costs, $15.0 million in amortization of intangibles from acquisitions and $4.0 million to $5.0 million in stock compensation expense for the second quarter 2009.

This excerpt taken from the AVCT 8-K filed Jan 28, 2009.

First Quarter 2009 Outlook

“We are operating in an environment of extremely limited visibility. Even now, the IT budgets and projects of many of our customers worldwide have yet to be finalized. Our outlook for 2009 is very guarded, recognizing the overall forecasted decline in IT spending and server shipments,” stated Avocent’s Chief Financial Officer, Edward Blankenship. “As a result, we continue to take measures to reduce our costs in line with our sales forecast. We took steps in the second half of 2008 to reduce headcount and consolidate certain operations. We have added to these actions in January 2009, to continue to rebalance our R&D investments toward higher growth opportunities and to increase our organizational efficiency.

“Earlier this month we announced internally an additional 8% workforce reduction, or roughly 170 positions. These reductions, which began on January 16, affected positions in the Americas, Europe, and Asia in sales, engineering and administration. We have also suspended merit increases across the company and will continue with the spending constraints we initiated during the fourth quarter of 2008.

“As a result of the workforce reduction action, we estimate we will record pre-tax restructuring charges for severance benefits of approximately $2.6 million and $1.5 million in the first and second quarters of 2009, respectively. We expect annual savings from the workforce reduction to approximate $13 million annually, with $2.4 million coming in Q1.”

Mr. Blankenship continued, “In line with industry-wide reduced forecasts for technology spending and server shipments, we anticipate first quarter 2009 revenues will be in the range of $138 to $146 million. We anticipate gross margins to be approximately 65% to 67% during the first quarter, and we expect operating expenses to be within a range of $73 to $76 million, excluding restructuring and integration expenses. We expect EPS of between 28 and 38 cents. At the midpoint, this would approximate a 6.5% EPS growth year over year.”


This excerpt taken from the AVCT 8-K filed Oct 21, 2008.

Fourth Quarter 2008 Outlook

“We expect fourth quarter revenue to be in the range of $175 million - $185 million, reflecting the current uncertain U.S. and global economic situation,” stated Avocent’s Chief Financial Officer Edward Blankenship. “We expect operational (non-GAAP) earnings per share of $0.55 - $0.63. These estimates include the expected operating results from our Pro A/V and Equinox serial product lines that we previously announced for divestiture,” continued Mr. Blankenship.

“Our third quarter’s results included approximately $5.4 million of restructuring and integration charges, gross of tax, related to our previously announced programs to improve efficiency and reduce our costs,” stated Mr. Blankenship. “During the quarter, we reduced headcount in R&D, consolidated certain R&D programs, and launched a series of actions designed to enhance Avocent’s competitiveness and intensify our focus on IT Operations Management. The third quarter amount included approximately $1.0 million related to integration expenses associated with the Touchpaper and Ergo acquisitions. We expect to record an additional $2.0 million - $3.0 million in restructuring charges excluding stock-based compensation, during the fourth quarter of 2008. We also expect to record less than $1.0 million in integration charges during the fourth quarter of 2008. We estimate that our restructuring actions will yield pretax savings of approximately $26 million - $28 million in 2009 as we work to improve our operating margins in 2009 to our longer term target range of 24% – 26%.”


This excerpt taken from the AVCT 8-K filed Jul 17, 2008.

Third Quarter 2008 Outlook

“We expect our revenue for the third quarter will be in the range of $175 million to $183 million, which includes the Touchpaper and Ergo acquisitions,” stated Mr. Blankenship. “We believe our operational operating expenses will increase to $80 million to $84 million, reflecting the two acquisitions and ongoing investments in R&D and marketing programs for higher growth product areas, offset by savings we expect to achieve from our recently announced restructuring program. These estimates result in an expected operational (non-GAAP) EPS range of $0.54 to $0.58. All of these estimates assume we will not yet have sold the Pro a/v or Equinox serial product lines which we have announced we intend to divest,” continued Mr. Blankenship.

“During the second quarter we incurred approximately $2.8 million of restructuring charges related to a series of actions designed to enhance Avocent’s competitiveness, intensify our focus on IT Operations Management, improve efficiency, and reduce our costs,” stated Mr. Blankenship. “We initiated workforce reduction and consolidation actions to focus on key growth areas and to improve our operating efficiency. We expect to book an additional $5 million to $6 million in restructuring charges, excluding stock-based compensation, during the second half of 2008, including approximately $4 million to $5 million in the third quarter. We estimate that our restructuring actions will yield pretax savings of approximately $5 million - $6 million in the second half of 2008 and $26 million - $28 million in 2009 as we work to accelerate revenue growth and improve our operating margins in 2009 to much closer to our target of 24% – 26%.”


This excerpt taken from the AVCT 10-K filed Mar 14, 2005.
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