DULUTH, Ga.-Glenayre Technologies Inc. released its second-quarter earnings, showing the drastic results and continued restructuring moves associated with the company’s escape from the flailing paging industry.
Glenayre posted revenues from its continuing unified messaging operations of $26.5 million for the second quarter, ended June 30, down from the $28.9 million during the same period last year and the $26.9 million in the previous quarter. Even worse, Glenayre said its loss was $37 million on its unified messaging operations, and its total net loss-which includes its discontinued paging business-was $265 million.
Glenayre also announced it will cut an additional 60 employees, thereby bringing its total work force down from 1,300 to 500 by year end.
On the bright side, Glenayre said it continues to carry no debt and expects to reach free cash flow positive by the first quarter of next year.
In late May, Glenayre announced a massive restructuring plan that included eliminating 700 positions and completely dismantling its wireless messaging infrastructure division. At the time, the company said the restructuring moves could cost up to $250 million, accounting for severance pay, lost revenue from discontinued operations and drops in asset values.
Glenayre blamed the move on the rapidly deteriorating paging market, which in the past year has forced several major consolidations and bankruptcies. As a result, Glenayre’s infrastructure revenue declined more than 27 percent last year compared with 1999. Glenayre said it expects its infrastructure business to continue to decline a staggering 70 percent this year compared with last year.
Glenayre’s stock jumped at the news from about 90 cents per share to a little over a dollar.
