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Saturday, Aug 13, 2022

Broadcom is upbeat about the second half, in the Technology column

Broadcom Sees Signs of Light in Second Half Odetics Unit Iteris Lands Financing, Credit; QLogic CFO Retiring

Broadcom Corp. may finally have come over the hump.

As the Irvine chipmaker posted a $41.1 million loss for the second quarter before charges, Broadcom also said it is seeing signs its business soon could go into recovery mode. As the Business Journal reported two weeks ago, it seems the second half of 2001 could be much better than the first.

“We are continuing to see signs that business is stabilizing for the second half of the year,” said Broadcom Chief Executive Henry Nicholas in a statement. “Having a diversified portfolio of products within the broadband communications sector should position us well as these markets begin to improve.”

Broadcom’s tone is much different than it was in February, when Nicholas let it slip at an investor conference that company’s customers had delayed ordering. Since then, the company has grappled with slower sales and, as a result, had to streamline the company’s operations. In the second quarter, Broadcom laid off about 200 employees.

The debate du jour among industry insiders is when chip companies will see their sales come back in the current chip cycle,a period marked by steep growth followed by the current market correction. The San Jose-based Semiconductor Industry Association, the chip business’ main research group, predicts that revenue growth in the chip industry could reach 20.5% in the next year and 25% in 2003.

At least one brokerage took notice of Broadcom’s new attitude. For what it’s worth, Goldman Sachs Group Inc. upgraded Broadcom shares to “market outperform” from “market perform” after Broadcom’s earnings conference call.

“As we have said for some time, we have a positive bias toward Broadcom and as such believe it is prudent to raise our rating to be consistent with such a viewpoint,” Goldman analyst Nathanial Cohn said in a statement.

Iteris Gets Financing

Iteris, a unit of Anaheim-based technology incubator Odetics Inc., signed a financing agreement that the company says will “fully fund its current business plan.”

Under the pact, two undisclosed institutional investors are set to receive Iteris preferred stock and Iteris common shares in exchange for $5.5 million in cash plus the conversion of $4.2 million in debt.

Along with the financing, Iteris also got its hands on a letter of intent from a lender for $5 million in credit, which is based on Iteris’ accounts receivable, inventory and equipment.

“This equity financing, led by an important strategic investor and a major international institutional investor, will enable Iteris to fully fund its current business plan. We are especially pleased to have accomplished this given current market conditions,” said Iteris Chief Executive Jack Johnson.

Odetics had hoped to spin off Iteris, which makes software and sensor parts for the transportation market, in March. The company postponed it as the market for new issues dropped off a cliff. While it may have saved Iteris an embarrassing show on its first day of trading, it also took away a much-needed infusion of cash.

“From our perspective,” said Odetics Chief Executive Joel Slutzky, “closing the financing is a major milestone. It validates the value of Iteris, and gives Odetics an infusion of capital.”

Executive Moves

After being with QLogic Corp. since before it went public in 1994, Chief Financial Officer Tom Anderson said he plans to retire after this year. A successor hasn’t been an-nounced, pending a review of internal and external candidates, the company said.

Anderson, who holds around $10 million in QLogic stock, cited personal reasons for his departure, but said he is proud of his record and that QLogic is well-positioned. Aliso Viejo-based QLogic makes chips and components for storage area networks.

“Tom has been an important contributor in successfully growing our business since we became an independent public company,” said QLogic Chief Executive H.K. Desai. “We are very appreciative of his leadership, dedication and expertise in helping us evolve into a highly profitable business.”

Israel’s Magic Software Enterprises Ltd., which has its U.S. headquarters in Irvine, recently appointed Steven P. Nohe, Sr. as the chief executive officer of its U.S. subsidiary. Nohe takes over after joining the company earlier this year as Magic’s chief operations officer.

“I am committed to turning the total Magic Americas organization into a highly cohesive and competitive force that is widely recognized for its technological and service excellence,” Bohe said in a statement. “I also intend to focus on using Magic’s high-level strategic business expertise to add strong value not only to its customers, but to all of the company’s stakeholders as well.”

FileNET Pays Bonuses

A week after Costa Mesa software maker FileNET Corp.’s board approved a plan to cut employee bonuses for the second quarter, it reversed its decision and awarded bonuses to employees. The board had approved a plan that called for bonuses to be paid only if companywide sales goals were met, Chief Executive Lee Roberts told employees. According to Roberts, because many employees weren’t notified of the change until after the quarter had ended, he decided to pay the bonuses for the quarter.


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