This write off dwarfs the company’s previous announcement that it would incorporate a $124.8 million charge in Q1 for restructuring and asset write-offs.
Terayon (Nasdaq: TERN)
announced that an evaluation of the carrying values of certain long-lived assets has resulted in additional charges of $449.9 million to the first quarter 2001. Including the previously announced $124.8 million charge for restructuring (severance and facility consolidation costs) and asset write-offs (Combox and Ultracom acquisitions), the first quarter 2001 charge for restructuring costs and asset write-offs totaled $574.7 million.
Terayon CEO Zaki Rakib said, “The downturn in the broadband and telecommunications markets has negatively impacted our outlook for revenues and cash flow from acquired businesses. In accordance with accounting rules for valuation of intangible assets, company policy requires that we adjust the carrying amount of these assets.”
Rakib concluded, “In light of these challenging economic conditions, as previously announced, we continue to focus on our three core businesses, cable, telecom and chipsets, to provide voice, video and data solutions to our customers.”
Published by Israel's Business Arena on 16 May, 2001