After review ARC opts to return cash to shareholders

After review ARC opts to return cash to shareholders
By Peter Clarke, Semiconductor Business News
November 22, 2002 (7:19 a.m. EST)
URL: http://www.eetimes.com/story/OEG20021122S0002

ELSTREE, England -- Configurable processor licensor ARC International plc said today (November 22, 2002) that it intends to return £50 million (about $80 million) to shareholders during the first half of 2003.

The company enjoyed a successful initial public offering of shares in 2000 providing the company with a cash pile but the company subsequently suffered a reversal of fortunes and went through major changes within its senior management.

The decision to make a cash payment to shareholders is a result of a strategic review of options for the company, including an analysis of the group's capital structure, business plan and future cash requirements, that was announced on November 1st 2002 (see November 1 story).

ARC said that its strategy remains to grow organically, increasing revenues through licensing, royalties and maintenance, while reducing costs across the busin ess, forming alliances and diversifying into new product areas. The mechanism by which cash would be returned to shareholders has yet to be decided, the company said.

The company added that significant progress had been made during the year in growth of sales, reduction of costs and the integration of companies acquired previously.

On November 4, 2002, ARC announced the appointment of Jez San, a founder of ARC and the largest individual shareholder, to the board of directors. San is chief executive officer of games software developer Argonaut Games plc, the original parent of ARC, and retains a 17% shareholding in ARC through a family trust.

“We have made good progress this year in our drive towards profitability and this remains our focus. We have won many important new customers and the recent addition of the ARC processor to the Intel Microelectronics Services library further endorses the strength of our technology. On the basis of these achievements I am very optimistic about ARC's future,” said Mike Gulett, ARC's chief executive officer, in a statement.

In the company's third quarter results, reported on October 24, sales revenue was up 37% year-on-year to about $4.4 million but down 2% sequentially at constant exchange rates excluding 6% currency impact, the company said. The net loss for the period was about $11.7 million reduced from about $17.5 million in the same period a year earlier.