The chip designer and flash memory brand has ended a strategic review without selling company; and has indicated that more job cuts are on the way. In its Q4 results, it reported sales of just under $11m, down 46% yr/yr and lower than the previous quarter's $12.5m. It will have to lose around a quarter of its staff to get its cash burn rate down.
"The review of strategic alternatives, which Violin conducted with investment bankers Jefferies, has produced multiple strategic go-to-market and technology relationship opportunities, which we intend to pursue," says CEO Kevin DeNuccio in Violin's FQ4 report. "We have also concluded the formal review process, thereby returning the company's focus to growth and profitability."
Violin originally announced a strategic review in December within its FQ3 report. With no buyer apparently found, the flash array vendor is launching a new restructuring that it promises will provide "a pathway to profitability over the next 18-24 months without the need to raise additional capital." Headcount has been reduced by 25% from where it stood as of the end of October.
FQ4 details are that product revenue fell by $2m yr/yr to $4.3m; service revenue rose by $0.4m to $6.6m. Non-GAAP gross margin fell to 48% from 56% a year ago. GAAP operating expenses (about to drop due to the job cuts) rose by $0.2m to$27.8m. Violin ended FQ4 with $76M in cash (down from $95.9m at the end of FQ3) and $133.4m in debt.