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Communications Systems Inc. Announces Year End Corporate Restructuring and Reduction of Its Quarterly Dividend
Communications Systems, Inc. (NASDAQ: JCS) (“CSI” or the “Company”), a global provider of connectivity infrastructure and services for deployments of broadband networks, today announced it will initiate a series of restructuring measures by year end that will materially reduce expense levels in its corporate operations and in its Suttle business. These moves, which will include job eliminations, will better position the Company to compete in the rapidly changing telecommunications industry. The restructuring is expected to achieve approximately $2.5 million in annual cost savings, excluding one-time costs to be largely expensed in the 2018 fourth quarter. The resulting savings will allow CSI to focus its resources on growth opportunities and better utilize its capabilities across the organization. These moves, together with earlier measures taken over the last two years, are expected to provide CSI with a cost structure that will enable it to return to profitability.
CEO Roger Lacey commented: “While adjustments of this type are always very difficult, especially amongst long service and loyal personnel, they are essential to support the drive to returning CSI to robust financial health. The sales declines we have seen, largely driven by market forces, appear to have stabilized, and we are optimistic that these moves, coupled with the success of some of our newer technology and service programs, will provide us with a solid platform for growth and profitability in 2019.
Mr. Lacey continued: “The Special Committee of the Board, assisted by Northland Capital, continues its strategic review of portfolio options. Further moves emanating from this effort will be announced as appropriate.”
CSI also today announced that its Board of Directors has declared a cash dividend of $0.02 per common share. The dividend is payable on January 14, 2019, to shareholders of record as of December 26, 2018. The quarterly dividend announced today, which is the Company’s 65th consecutive quarterly dividend, represents a reduction of $0.02 per share from the dividend of $0.04 last paid on October 1, 2018, and reflects the Company’s desire to conserve capital for growth projects, an approach to dividend policy that we believe is more in line with other similar technology companies.