Consistent with the company’s strategies to delever its balance sheet, streamline its business operations, and focus on its core competencies in each of its network, power, and wireless segments, the company has identified a number of non-strategic assets within these three segments, and has engaged a financial advisor to direct the possible sale of certain of these non-strategic assets. The company entered into a definitive agreement to complete the first of these sales on February 29, 2012. This transaction includes the sale of two manufacturing plants and related equipment in China and the encapsulated transformer product line. The company is also currently engaged in the process of potentially selling additional non-strategic assets. Additionally, the company took a series of actions in 2011 to improve its liquidity and cash available from operations, including factory consolidation and cost and expense reductions, and the company intends to continue prudent management of its expenses and cash balances in 2012. In addition, the company is projecting lower capital spending in 2012. The cash generated through these actions is expected to enable the company to significantly reduce its outstanding debt in 2012.
First Quarter 2012 Outlook and 2012 Initiatives
“As we look to the first quarter, we are beginning to see signs that economic and market headwinds we experienced last year are abating,” said Faison. “However, in the first quarter we expect flat to only modest growth on the top line.”
The company expects first quarter 2012 net sales to range from $88 million to $93 million and non-GAAP operating profit to range from a loss of $2 million to breakeven.“The progress we made on our strategic turnaround plan in 2011 to lower our cost structure, improve business processes and increase efficiency, and improve the wireless business have been important for us to attain the stronger growth we hope for later in 2012. That operating performance improvement along with a stronger balance sheet from our delevering actions will position Pulse to achieve its long-term objectives of profitable growth and increasing shareholder value,” Faison continued.