ACT Networks Announces Plan for Restructuring

ACT Networks Inc. in Camarillo has announced a major restructuring program on the heels of the fourth quarter ended June 30 that saw a net loss of more than $13 million, or $1.43 per share.

Fourth-quarter revenues were $13.6 million, compared to $13.4 million in the comparable quarter last year. A year ago, the company reported net income of $113,000, or 1 cent per share.

Included in the fiscal 1998 net loss were restructuring and impairment charges of $3.3 million to revalue certain assets from previous acquisitions. In addition, discontinuation or de-emphasis of product lines required charges of $3.6 million to write down the value of inventory.

Officials said the remainder of the fourth-quarter loss was due to additional restructuring costs, lower-than-anticipated revenues, increased operating expense and more reserves for bad debt and slow-moving inventory.

For the year ended June 30, revenues grew 11.8% to $54.9 million from $49.1 million last year. Net loss was $19.3 million or $2.11 per share, versus net income of $1.4 million or 15 cents per share in fiscal 1997.

As part of the restructuring, the company will concentrate on two product lines it considers to have the most growth potential--NetPerformer products for the wide area network market, and the ServiceXchange platform. ACT plans to reduce its work force by approximately 25%.

Officials said the restructuring program will eliminate more than $8 million in current costs. ACT expects to take additional charges of $2 million to $3 million in fiscal 1999 to cover the costs of completing the program.