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Danka Reports 3Q Rev $331.1 Million
Restructuring Charges widened Danka Business Systems PLC’s third-quarter loss, and the company plans to further reduce costs by cutting another 5% of its work force.
In a press release Wednesday, the provider of office imaging equipment said its third-quarter loss per share widened to 35 cents from 2 cents a year ago.
The latest quarter included a $20 million restructuring charge related to the elimination of about 675 jobs and the consolidation and elimination of surplus real-estate facilities.
Before the payment of dividends on participating shares, the third-quarter net loss was $16.9 million compared with net income of $3.28 million, a year ago.
Revenue for the quarter ended Dec. 31 fell 6.2% to $331.1 million from $353.1 million last year.
Danka Business Systems said its long-term goal is to reduce selling, general and administrative expenses to 30% of revenue. Its third-quarter SG&A costs of $ 108.7 million reflect 32.8% of revenue, down from 34% a year ago.
The company launched a restructuring plan in December to cut annual costs by about $40 million to $45 million. At the time, the plan was expected to result in a charge of $25 million to $35 million that would be recorded over the third and fourth quarters.
Danka now plans to further reduce its work force by about 5%, or 375 employees, in order to save an additional $11 million a year.
The latest job cuts will result in an additional restructuring charge estimated at $20 million to $25 million.
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