TIR sees losses widen, as customers introduce Lexel products
TIR Systems has incurred a big loss as it restructures to align itself with its lighting partners.
The increased loss was due primarily to restructuring charges of $2.8 million. A further $2.6 million will be charged in future quarters, and 42 jobs have been eliminated.
Following the restructuring, TIR's manufacturing partners will now lead the development of new, finished lighting products based on the Lexel technology, and distribute such products under their brands and through their global distribution networks. TIR will continue manufacturing, selling and supporting its existing lighting products with a smaller, more efficient and highly skilled team, but will discontinue the development of finished luminaires.
The loss also reflects increased legal expenses of $561,600 relating primarily to ongoing litigation, with the company stating that it is continuing to vigorously defend itself in the lawsuit with Color Kinetics, which remains in the discovery stage.
The company also incurred increased net research and development expenses of $497,200, relating primarily to heightened activity associated with the commercialization of the Lexel technology. During the quarter, TIR signed its fourth lighting manufacturing partner Spectral GmbH, and three of its partners - Zumtobel, Lighting Service Inc. and Spectral - launched lighting products based on Lexel technology.
Revenue for the quarter was $2.7 million compared to $3.5 million for the year-ago period, representing a decrease of 22.5%. The decrease was observed in both Architectural segments (Light Pipe and SSL) with a nominal increase in revenue observed in the Corporate Identity market.
The company expects to realize annual cost savings of $5 million as a result of the restructuring. This is comprised of $2.5 million in salary and related benefits, $2.0 million of product development costs and $500,000 in marketing, travel and other general expenses.