Feeling the effects of a fragmented, emerging market, RF Monolithics Inc., a maker of machine-to-machine (M2M) network technology, is exiting the software and services business to focus its product strategy on hardware components and modules for OEMs and systems integrators.
The news, announced today, will result in impairment and restructuring charges of approximately $3 million in the current quarter and a 17% reduction in workforce, the company said. However, RFM anticipates that its actions will result in a savings of approximately $3 million in fiscal 2009.
The strategy is an attempt to put the company back on track financially. In the first nine months of fiscal 2008, ended May 31, 2008, the company reported a net loss of $1.4 million on sales of $43.5 million. While not favorable, the results represent a positive step forward compared with the same period last year, when RFM reported a net loss of $5.7 million on sales of $41.6 million.
The company cited economic pressure as the primary culprit in project delays and the poor performance. It also singled out its Wireless Solutions business — which delivers turnkey solutions by integrating hardware and software — as not growing at a desirable pace.