ImageX.com Announces Major Cost Savings Measures, To Reduce Staff by 17%
Press release from the issuing company
KIRKLAND, Wash., Friday, March 30, 2001 - Reiterating its intense focus on profitability, ImageX.com Inc. (Nasdaq: IMGX), the technology market leader in Web-enabled design and printing services, today announced a series of initiatives aimed at reducing operating expenses in the first quarter and for the remainder of 2001.
These initiatives include a 17% reduction in staffing across all areas of the company as well as corresponding non-staff cost reductions and consolidation of operational activities to both reduce cash operating expenses as well as better serve the company's growing customer base.
ImageX.com cited weakening general economic conditions and the announcement of scaled-back print e-procurement activities by several of the company's major customers as the major factors behind its latest cost-cutting initiatives. These measures, when added to the closure of the marketplace operations of PrintBid.com earlier in the quarter, are expected to reduce the ImageX.com's cash operating costs by over $10 million during 2001.
"We believe that these actions will assure the company's continued success and long-term viability," said Rich Begert, president and chief executive officer. "We are encouraged by the continued acceptance of our product offering by blue-chip corporations and the continued addition of new customers during the first quarter. We are taking swift, decisive action to address the current economic environment and simultaneously provide excellent service to our customers."
ImageX.com also announced that it expects to report first quarter 2001 revenues of $14 million to $15 million, less than expectations set during its fourth quarter 2000 conference call. Revenue for full-year 2001 is also expected to be less than previously expected. The company also anticipates that based on the cost reduction initiatives implemented during the quarter, first quarter cash operating expenses will be approximately $15 million, or 8% below fourth quarter 2000 and below previous estimates. The company noted that the full effect of the cost reduction initiatives will not be felt until the second quarter of 2001.
ImageX.com reported that it expects to post a cash loss of approximately $10 million, or $0.38 per share, for the quarter ending March 31, 2001, which reflects current estimates of one-time charges related to the reduction in staffing and other cost reduction measures implemented during the quarter. The company continues to believe that current cash reserves are sufficient to achieve cash flow breakeven.
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