Geday Resigns, Conexant Reappoints Decker to CEO
Online staff -- EDN, November 10, 2004
Returning to the position he held from the time of Conexant Systems Inc.’s spin-off from Rockwell International in 1999 through the company’s merger with GlobespanVirata Inc. in February, Dwight W. Decker was re-appointed CEO yesterday, and remains chairman.
At the time of Conexant’s merger with GlobespanVirata, Armando Geday, CEO of the company, became CEO of the combined company, with Decker assuming the role of non-executive chairman. Geday has since resigned for personal reasons.
In a statement, Decker thanked Geday, “for his commitment and dedication under difficult circumstances.”
Newport Beach, Calif.-based Conexant also revealed plans to reduce pro forma operating expenses from the current quarterly level of $95 million to $80 million following its September-ending fiscal year.
From a financial performance perspective, Decker also said the plan to reduce operating expenses would be a reduction of more than 25 percent from its combined expense level prior to the merger, and would represent approximately $120 million in annual savings. Primary drivers of the expense reductions include increasing product development resources to lower-cost regions with a continued merger-related SG&A consolidation.
“We expect to maintain gross margins of at least 40 percent, and with these operating expense reductions, our pro forma net income breakeven revenue level will be reduced to $220 million per quarter. We anticipate that we will achieve this new revenue breakeven level no later than the end of calendar 2005. If we execute according to our plan, I am confident that we will have a focused and effective product development engine, and that we will steadily improve financial performance and systematically rebuild shareholder value,” Decker concluded.
