Company remains focused on core technology offerings and key markets
Sirit Inc., a leading provider of radio frequency identification (RFID) technology, announced today that with the goal of being cash flow neutral in the fourth quarter of fiscal 2007, the Company has undertaken action to align its organizational structure with expected revenue levels and market opportunities.
"Earlier this year, the Company indicated that we anticipated higher cash burn over a couple of quarters while we integrated two acquired operations and completed development of certain key products," said Norbert Dawalibi, President and CEO, Sirit Inc. "With Sirit's line of plug-n-play products and the INfinity 510 UHF fixed reader now in full production, we believe it is possible for us to realign our expenditures in order to meet our objective of being cash flow neutral by the end of next year."
Sirit is taking a headcount reduction of over 25%, will close 2 locations and will streamline its development efforts to focus on revenue generating opportunities. These actions will result in severance and related non-recurring costs of approximately $400,000 which will be expensed primarily in the fourth quarter of 2006. These actions along with associated cost savings are anticipated to bring the quarterly expenditure run rate for 2007 to levels that will allow us to reach our corporate goals.
"We are confident that these efforts along with continued revenue growth will enable us to reach our goal of cash flow neutrality by the end of 2007," commented Anastasia Chodarcewicz, Chief Financial Officer, Sirit Inc. "We have a very strong portfolio of products along with recurring revenue and profits from our AVI vertical which we believe uniquely position Sirit within the RFID market."
"Focusing on our core technological strengths, we have a clear strategy and now a fully rationalized organizational structure and skill set that are appropriate for where the addressable RFID market is today," continued Mr. Dawalibi. "While our AVI related operations - parking and access control and tolling - as well as closed loop opportunities continue to thrive, we have not seen indicators to suggest that the supply chain market will materially grow in the near term. We believe our strategic and OEM partnerships will position us well when this market does in fact expand."
In addition, Sirit welcomes Mr. Tony Sabetti to the role of Vice President, Sales RF Solutions, who assumes the role from Mr. Mike Allocco, who has left the Company. Tony joins Sirit after 21 years at Texas Instruments, where he served as a senior executive within their global RFID group. Tony's experience includes marketing, business development and operational execution of multi-million dollar, high growth businesses throughout North America, Europe and Asia.
"Tony brings a wealth of expertise in both the RFID market and operational excellence. We are very pleased to have him as part of our team," commented Mr. Dawalibi. "Tony will lead our sales efforts, leveraging his extensive network to develop and expand our network of OEM and channel partners to drive new revenue opportunities into closed loop markets while the supply chain market continues to mature."
About Sirit Inc.
Sirit Inc. (TSX: SI) is a leading provider of Radio Frequency
Identification (RFID) reader technology to OEMs and solution providers
worldwide. Harnessing the power of Sirit's enabling-RFID technology, customers
are able to more rapidly bring high quality RFID solutions to the market with
reduced initial engineering costs. Sirit's products are built on more than
12 years of RF domain expertise addressing multiple frequencies (LF/HF/UHF),
multiple protocols and are compliant with global standards. Sirit's broad
portfolio of products and capabilities are easily customized to address new
and traditional RFID market applications including Supply Chain & Logistics,
Cashless Payment, Access Control, Inventory Control & Management, Asset
Tracking and Product Authentication. For more information on Sirit, visit
Cautionary Note Regarding Forward Looking Statements
Safe Harbor Statement under the United States Private Securities
Litigation Reform Act of 1995: Except for the statements of historical fact
contained herein, the information presented constitutes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievement of Sirit to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements. Actual results may differ materially from
those indicated by these forward-looking statements as a result of risks and
uncertainties impacting Sirit's business which are discussed in the section
entitled "Description of the Business - Risks Factors" in Sirit's Initial
Annual Information Form dated March 22, 2005 as filed with the securities
regulatory authorities in Canada via SEDAR. Although Sirit has attempted to
identify important factors that could cause actual results to differ
materially, there may be other factors that cause results not to be as
anticipated, estimated or intended.