Investors Applaud Pixelworks' Restructuring Announcement

Pixelworks, Inc. (NASDAQ: PXLW), a developer of pixel processing semiconductors, announced after Thursday's market close a restructuring plan with the objective of achieving a break-even cash flow.Investors and traders initially applauded the announcement as Pixelworks' stock gained more than 4 percent during Thursday's after hours trading session.Pixelworks stated that its restructuring program will focus on streamlining its product offerings and organization, including an approximate 24 percent reduction in its workforce in development, operations, sales and marketing divisions.Pixelworks expects its plan to result in an annualized savings of at least $5.0 million. The company will also incur a $4.4 million charge related to the announcement and expects the restructuring to be completed by the end of September, 2016.Stephen Domenik, Pixelworks' interim CEO, commented, "The purpose of today's announced restructuring is twofold: the first objective being to streamline the organization and our offerings, while also intensifying the Company's focus and resources on opportunities with the largest potential impact. We remain fully committed to executing on our mobile strategy and maintaining our existing projector business. The actions we have taken today will provide for a significantly more optimized and targeted approach in each business going forward.""The second objective of today's restructuring and workforce reduction is to more appropriately align the Company's expenses with current revenue levels," continued Mr. Domenik. "More specifically, we expect that our improved cost structure combined with revenue growth for the balance of the year will enable the Company to achieve cash flow breakeven by the fourth quarter. Collectively, I strongly believe these two objectives are essential to Pixelworks' future success as well as generating the greatest value for its shareholders."Pixelworks also announced changes to its Board of Directors in conjunction with the planned restructuring. Todd DeBonis, the company's current Chief Operating Officer, will be added to the board. Mark Christensen and Barry Cox both notified the board that they will not stand for re-election at the upcoming annual shareholders meeting.