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Motorola Provides Update on Cost-Reduction Initiatives
Schaumburg, Ill., 30 May, 2007 – Motorola, Inc. (NYSE: MOT) today provided an update on its cost-reduction initiatives that the company committed to during the first quarter of 2007. The company said it is on target to achieve the $400 million in annualized cost savings that it announced in January. The company noted that its previously announced workforce reduction of 3,500 will be completed on schedule by June 30.
In addition, after a comprehensive business review by the senior management team, the company expects to achieve another $600 million in annualized cost savings in 2008 through a combination of an additional workforce reduction of approximately 4,000, prioritization of investments, continuing discretionary-spending controls, general and administrative expenses and site rationalization.
"Long-term, sustainable profitability is – and always has been – Motorola’s top priority,” said Tom Meredith, chief financial officer, Motorola, Inc. “Today’s actions are an update to the commitment we made during our first-quarter earnings conference call – to drive out additional costs – and a continuation of the plan we announced in January. We are confident that the steps we are announcing today, together with the actions that we have outlined previously, will further improve the company’s financial and operational performance and create value for our stockholders.”
“We are taking steps to ensure that, as these cost reductions are implemented, there will be no adverse impact on customer service and support, product quality and those research and development programs that are expected to contribute meaningfully to Motorola’s revenues, profits and cash flow in 2008 and beyond,” said Greg Brown, president and chief operating officer, Motorola, Inc.
In connection with today’s announcement, the company expects to record additional restructuring charges of approximately $300 million, or approximately $0.08 per share. The charges are expected to be incurred over the remainder of 2007 and will consist primarily of severance and related expenses resulting from the workforce reductions.
About Motorola
Motorola is known around the world for innovation and leadership in wireless and broadband communications. Inspired by our vision of seamless mobility, the people of Motorola are committed to helping you connect simply and seamlessly to the people, information, and entertainment that you want and need. We do this by designing and delivering "must have" products, "must do" experiences and powerful networks -- along with a full complement of support services. A Fortune 100 company with global presence and impact, Motorola had sales of US $42.9 billion in 2006. For more information about our company, our people and our innovations, please visit www.motorola.com.
Business Risks
This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to Motorola’s cost savings plans and the impact of such actions and expected restructuring charges. Motorola cautions the reader that the risk factors below, as well as those on pages 16 through 24 in Item 1A of Motorola’s 2006 Annual Report on Form 10-K and in its other SEC filings, could cause Motorola’s actual results to differ materially from those estimated or predicted in the forward-looking statements. Factors that may impact forward-looking statements include, but are not limited to: (1) the company’s ability to return to profitability and increase market share in its wireless handset business; (2) the company’s ability to execute the cost reduction program in a timely fashion and to generate the projected cost saving; and (3) unexpected negative consequences from the company’s restructuring and cost-reduction activities such as significant disruption to our business as a result of these actions. Motorola undertakes no obligation to publicly update any forward-looking statement or risk factor, whether as a result of new information, future events or otherwise.
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Media Contact:
Jennifer Erickson
Motorola, Inc.
+1-847-435-5320
Jennifer.Erickson@motorola.com
Investor Contact:
Dean Lindroth
Motorola, Inc.
+1-847-576-6899
Dean.Lindroth@motorola.com
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