FileNET Plans One-Week Shutdown
By ANDREW SIMONS
A slower-than-expected fourth quarter is prompting Costa Mesa-based business software maker FileNET Corp. to send employees off on vacation.
FileNET plans to close all of its offices for the week of New Year’s Day, according to a company spokeswoman. FileNET also shut down operations during the Thanksgiving week.
“We’re trying to save all the money we can,” FileNET’s Kim Evans said. “This came out as a result of third quarter earnings.”
FileNET reported a $2.2 million loss on sales of $80.1 million for the third quarter. The results surprised analysts who had expected a bigger loss. But the numbers were a far cry from FileNET’s performance a year earlier when the company posted $10.2 million in profit on $99.1 million in sales.
The mandatory vacation time comes after October’s announcement that FileNET planned to cut up to 7% of its work force. At the time, company officials said they hoped to see a fourth-quarter turnaround with sales of $82 million,down from an already-lowered July projection of $99.2 million.
“Given the major changes in the global economy and the fact that a turnaround may be several quarters away, we believe it is prudent to take selective actions to reduce our on-going annual expenses,” Chief Executive Lee Roberts said in a statement earlier this year.
FileNET has started laying off some employees, according to Evans. All of the cuts are slated for its European facilities. The mandatory vacations are designed to prevent layoffs in North America, she said.
“That’s the intention.”
Workers are set to be paid for their time off. But they’ll have to use any existing vacation days or borrow against next year, Evans said.
Earlier this year, company officials said they planned to explore all ways of saving money. The company tried to cut bonuses for the June quarter but backtracked after workers complained.
In the past year, FileNET introduced a new version of its Web-based Panagon software, which culls data from software programs, e-mails and databases to manipulate business information. Under Roberts, FileNET has shifted its focus from document imaging,scanning and managing paper-based information,to managing data online.
The company still has plenty of cash on its balance sheet,$162.3 million as of Sept. 30,and no long-term debt.
“Our strong financial position enables us to continue to invest and manage our business through an extended period of economic uncertainty,” Roberts said.
