Tessera Technologies, Inc. (NASDAQ: TSRA) (the “Company” or “Tessera”) announced today that it is restructuring its DigitalOptics business (“DOC”) to cease its remaining manufacturing operations and refocus efforts on monetizing DOC technologies, including solutions for imaging and MEMS technologies. The changes announced today will enable the Company to return its focus to its core IP business, will substantially reduce the Company’s operating costs, and provide the Company with a path to improved financial performance and profitability.
These actions are the culmination of an in-depth review of strategic alternatives for DOC that was conducted in conjunction with the Company’s financial advisors, the newly reconstituted board of directors and the new senior management team. The Company expects to take restructuring, impairment and other exit charges of approximately $50 million to $55 million, with approximately 75% of that charge in the fourth quarter of 2013 and the remainder in the first half of 2014. As a result of the restructuring, the Company expects its quarterly DOC related operating expenses to be reduced by approximately $17 million, realized in full by the third quarter of 2014.
Tom Lacey, Tessera’s chief executive officer, commented, “After an exhaustive process of exploring multiple options, we have decided to cease DOC manufacturing operations and focus our resources in DOC on continuing to operate our image enhancement business, while also exploring new ways to realize value from our extensive DOC intellectual property portfolio, including a sale, licensing or other means. While the strategic process ultimately did not lead to a sale of the mems|cam business, we achieved solid proof of concept by demonstrating working mems|cam camera modules, including shipping pre-production units that generated substantial customer interest. We strongly believe that there is significant value in the related intellectual property that has been developed, including our camera module, MEMS, and image enhancement technologies. Additionally, we continue to believe our mems|cam technology is unique and novel and may be incorporated into mobile devices in the future. To that end, we intend to maintain a small team of MEMS engineers to further the mems|cam technology and pursue possible avenues to unlock the value of this powerful technology.”
Continued Lacey, “I wish to sincerely thank the many talented and passionate employees who have contributed towards the development of the DOC’s mems|cam technology and products. I look forward to continuing to drive our world-class image enhancement business to further develop and commercialize our market-leading imaging technology, intellectual property and products, many of which have been employed by leading smartphone manufacturers around the world. I remain optimistic about our future and the many opportunities ahead.”
Tessera will hold a conference call at 5:30 A.M. Pacific (8:30 A.M. Eastern) today. To access the call in the U.S., please dial (888) 723-9308, and for international callers dial (706) 643-3789, approximately 10 minutes prior to the start of the conference call. The conference call will also be broadcast live over the Internet and available for replay for 90 days at www.tessera.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial (855) 859-2056. International callers please dial (404) 537-3406. Enter access code 35876836.