High-Tech Chatsworth Firm Plans to Relocate
StreamLogic Corp., a supplier of data and video-storage systems with a rocky financial history, announced plans to relocate to Silicon Valley and cut 50 workers from its payroll.
The company said the moves would help shave $700,000 to $800,000 from its quarterly operating expenses.
In the quarter ended June 28, StreamLogic lost $5.55 million on net sales of $11.2 million.
About 155 of StreamLogic’s 220 employees are now based in Chatsworth. The rest are at a facility in Menlo Park that StreamLogic acquired in July as part of its purchase of FWB Hammer, a supplier of computer storage products.
The company said it will move both operations to a new facility in the Menlo Park area, where some of StreamLogic’s largest customers are also situated.
After the move, which is expected to be completed by early April, only about 20 employees--mostly engineers--will remain in Chatsworth.
“These cost-control measures and a number of new products will substantially improve our business prospects,” said J. Larry Smart, president and chief executive of StreamLogic.
The new products include data storage devices and video servers aimed at high-end media graphics applications, and a browser for the Internet and video-production markets, Smart said.
The relocation, layoffs and product shift are part of the company’s plan to turn itself around after narrowly avoiding bankruptcy.
In April, StreamLogic, formerly known as Micropolis, sold its flagging computer disk-drive business and changed its name. Now it hopes to capture part of the expanding market for storage capacity being driven by the Internet and video-on-demand.
StreamLogic announced earlier this month a proposed agreement with bondholders to restructure its debt. Smart said he expects that deal to close Nov. 4.
If it goes through, it would increase StreamLogic’s net tangible assets by more than $50 million. That would return the company to good standing with the Nasdaq National Market, where its stock trades.
The company’s stock closed Thursday at $1.44 a share, down 25 cents.
But StreamLogic’s battle to return to profitability isn’t over. Earlier this month the firm said its results for the fiscal second quarter ended in September were hurt by disappointing shipments during the last week of the month.
“I think that the company has been through a lot,” Smart said. “We’re now into an execution phase, executing the plan we have. Our success will depend on how well we do that.”
