TORONTO -- Sirit Inc., a leading provider of radio frequency identification (RFID) technology, announced today that it is taking action to reduce expenses and consolidate certain organizational functions.
"Since taking control of Sirit, I have spent a great deal of time meeting with customers and partners, reviewing our operations as well as refining the go-forward strategy of the Company," said Norbert Dawalibi, President and CEO. "I believe it is imperative for us to align our expenditures with revenue streams as RFID technology is being adopted. We are taking concrete action to reduce our costs while continuing to invest in a market that we are convinced represents a significant opportunity for Sirit and our shareholders."
"In an effort to bring expenditures in-line with current revenue forecasts, the Company has taken cost cutting measures primarily focused on staff and discretionary expense reductions. Review of the organization determined areas where management is committed to achieving efficiencies without disrupting development activities until future revenue streams are secured," commented Anastasia Chodarcewicz, Chief Financial Officer, Sirit Inc. "As a result, Sirit has taken a headcount reduction of over 15% resulting in a one-time cost of approximately C$200,000 which will be recognized in the third quarter. These actions are expected to convert into annual cost savings of approximately C$1.3 million."
Sirit has named Don Bergeron, Vice President, Operations, who, in addition to overseeing manufacturing activities, will assume management of engineering and development responsibilities from Loek d'Hont, Chief Technology Officer, who has left the Company. Don joined Sirit in 1998 and brings over 25 years of experience managing product design, development strategies with 11 years focused in the RFID market. Don spent 18 years at Texas Instruments, where he held numerous managerial positions including North American Operations Manager for their RFID group.
Based on actual year-to-date results and current trends, the Company is providing 2005 financial guidance relating to its continuing operations for revenues of approximately 20-25% below previous year results.
In 2004, Sirit experienced unusually strong sales of electronic toll tags as customers offered promotional programs and took shipment of high volumes of tags. Although Sirit has not lost a single customer this year, agency consolidation and higher customer inventory levels built in the previous year have resulted in reduced or delayed toll tags orders in this fiscal year. Sirit believes that toll tag orders will experience growth in 2006 compared to 2005. Overall, Sirit anticipates that revenue will grow in all of its market applications in 2006.
"Focusing on our strengths, we have developed a clear strategy. Sirit will continue to develop and manufacture RFID-enabling hardware to remain a trusted OEM provider to leading suppliers of RFID solutions. We will enter new application markets with products that target all applications areas - electronic tolling, access control and supply chain are only a start," continued Norbert. "We will continue to grow our product offering and have built a product roadmap that is well underway as evidenced with the launch of our most recent UHF module, the INfinity 210. We will continue to address global markets through new distribution channels and with the introduction of new products aimed at these markets. We will also continue to look for acquisition opportunities that add value to our core technology offerings which speed our entrance into specific markets or application verticals. According to Venture Development Corporation, RFID represents in 2005 a $2.4 billion opportunity and Sirit intends to be a leader across a variety of applications in this emerging market."