Elcom shaves costs in restructure
But will it be any more profitable?
Posted in Business, 12th October 1998 17:27 GMT
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US-owned reseller Elcom International will embark on a major restructure in an attempt to exorcise the takeover demons of the past few months and make the company more focused and profitable. Its e-commerce subsidiary Elcom Systems will become an e-commerce systems integration arm of the Elcom Services Group (ESG). This will, according to Elcom, help "reduce expenses", although the company has not confirmed whether or not this would entail substantial job losses. According to company chairman and CEO Robert Crowell, merging ESI into ESG was Elcom's only alternative as "ESI cannot support an initial public offering or support itself as a standalone entity if it were spun-off to stockholders." The company has also "restructured and consolidated" its government and educational sales operations and will also take a pre-tax charge of $12m in its Q3 financials relating to the restructure. Valued at around $100m, Elcom has issued a warning that it will report a loss for its Q3 of approximately $2.5m. Revenues for Q3 were, according to Crowell, $195m. The company has also revealed that it will continue its stock buy-back programme.
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