TranSwitch Corporation Issues Corporate Update in Anticipation of its Pending Merger with Centillium Communications, Inc.
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TranSwitch now expects revenues to be in the range of $10.3 million to $10.5 million for the third quarter ended September 30, 2008. The Company’s previous outlook for third quarter revenues, as announced on its July 29, 2008 conference call, was to be around $10.2 million.
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The Company is also revising its expectations for potential expense savings, assuming the completion of the merger, from at least $10.5 million annually to around $14 million, compared to the two companies’ current expenses. In addition to $10.5 million of previously identified expense savings at Centillium, TranSwitch has identified an additional $3.5 million of potential annual savings for 2009 through restructuring of its current operations along with other expense reduction steps already initiated.
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Pending approval of Centillium’s Shareholders, TranSwitch anticipates closing this transaction on or about October 24, 2008.
The new TranSwitch, resulting from the combination of the two companies, will have a broad portfolio of best-in-class communications products for next-generation broadband access, transport, carrier Ethernet and VoIP applications with important design wins in the next-generation projects of major carriers in the UK, Japan, China, Korea and India.
“We are well-positioned with strong footprints in the UK’s upgrade to an all-IP network, Japan’s Fiber-to-the-Home initiative, and China’s 3G network deployment, along with other initiatives,” said Dr. Santanu Das, CEO of TranSwitch.
“These projects are just beginning to ramp and we expect them to contribute a growing stream of high-margin revenue for many years to come.”
“TranSwitch has invested heavily over the past years in anticipation of the architectural change that is occurring now as carriers transition from legacy to Ethernet and IP technologies. While we will continue to invest systematically in the communications space, it will be measured and consistent with the long cycle nature of the business,” stated Das.
“Going forward, TranSwitch has a unique opportunity to become a leader in the large and rapidly growing field of digital video transport, which complements the Company’s traditional communications business. The Company has just begun to license its HDMI™ and DisplayPort intellectual property, which offers industry leading performance and functionality. We believe that the video transport business presents an opportunity for faster return on investment. Our plan is to increase investment in this area to take advantage of our technology leadership with the goal of developing a rapidly growing revenue stream,” added Dr. Das.
“We will continuously re-evaluate our investment decisions with the objective of maximizing shareholder value,” concluded Dr. Santanu Das.
Additional details on TranSwitch’s third quarter results will be discussed during a conference call that will be scheduled in October. A formal announcement for the date of the conference call will be made by TranSwitch.
About TranSwitch Corporation
TranSwitch Corporation (Nasdaq: TXCC) designs, develops and markets innovative semiconductors that provide core functionality and complete solutions for voice, data and video communications network equipment. As a leading supplier to telecom, datacom, cable television and wireless markets, TranSwitch customers include the major OEMs that serve the worldwide public network, the Internet, and corporate Wide Area Networks (WANs). TranSwitch devices are inherently flexible, many incorporating embedded programmable microcontrollers to rapidly meet customers’ new requirements or evolving network standards by modifying a function via software instruction. TranSwitch implements global communications standards in its VLSI solutions and is committed to providing high-quality products and services. TranSwitch, Shelton, CT, is an ISO 9001:2000 registered company. Additional information is available at www.transwitch.com.
About Centillium Communications Inc.
Centillium Communications, Inc. (Nasdaq: CTLM) delivers highly innovative communications processing technology for global systems vendors targeting service provider, enterprise and consumer markets. Centillium's high performance Systems-on-Chip (SoC) products power leading edge optical, Voice- over-Internet Protocol (VoIP), security and data systems requiring top quality, highly integrated, very low power processing solutions that help minimize the energy footprint of communications networks. With a long heritage of technology leadership and first-to-market product development, Centillium provides semiconductor solutions that keep customers and end users at the forefront of the communications evolution. Centillium is a global company with headquarters in Fremont, CA. Additional information is available at http://www.centillium.com.
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