Aviat Networks (AVNW)

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Aviat Networks Announces Restructuring Plan

Mar 03, 2015 09:01:00 (ET)

SANTA CLARA, Calif., March 3, 2015 /PRNewswire/ -- Aviat Networks, Inc. (NASDAQ: AVNW), the leading expert in microwave networking solutions, will implement further restructuring initiatives to optimize its business model. The restructuring plan is part of Aviat Networks' ongoing efforts to lower fixed overhead costs and operating expenses, and generate cash. In addition to these restructuring actions, Aviat expects to achieve additional savings from non-headcount cost reductions.

These actions are expected to result in cost and expense savings of approximately $4 million to $5 million by the end of fiscal year 2015 with an incremental cost savings of approximately $10 million to $12 million in fiscal year 2016. These actions augment the ongoing efforts to optimize Aviat Networks' overall cost structure with the near term dynamics of the microwave radio and telecommunications markets and are expected to return Aviat Networks to profitability. The comprehensive restructuring program includes:

-- Reducing the global workforce through the consolidation of functions and
simplification of operational processes, and

-- Selectively focusing on market verticals and geographies where management
sees the highest potential for profitable growth.
Aviat Networks expects to incur between $6 million and $7 million of cash payments to implement these cost reduction initiatives, primarily for severance and employee-related charges. Cash payments in fiscal 2015 are expected to be approximately $6 million with the remaining cash payments occurring in the first half of fiscal 2016.

"We have made significant improvements to our cost structure over the last several quarters," says Michael Pangia, President and CEO, Aviat Networks. "While the long-term outlook for microwave and millimeter wave wireless transport remains positive, management is committed to running Aviat Networks as a profitable, cash generating business and these restructuring actions are a critical step in accomplishing these objectives. These additional efforts have been carefully selected to have minimal impact on the introduction of our new products and allow us to maintain our strong service offerings to support key customers around the globe."