PRESS RELEASE. WATERLOO, Ontario, Feb. 12, 2024 /PRNewswire/ - BlackBerry Limited today provided an update on the previously announced process to separate its IoT and Cybersecurity businesses as standalone divisions, and drive the Company towards profitability and positive cash flow.
As previously outlined, in the prior quarter BlackBerry took actions that, once fully realized, will reduce the annual cost run rate by approximately $50 million.
These actions were largely focused on the Cybersecurity business and included approximately 200 headcount reductions.
During the current quarter, BlackBerry is taking further actions to streamline its cost structure.
Within the Cybersecurity business, additional headcount reductions are expected to generate annualized savings of approximately $27 millionand non-headcount actions an incremental $8 million.
Within G&A functions, actions are being taken during the current quarter to realize annualized run rate savings of approximately $20 million.
As part of these savings, BlackBerry has exited 6 of its 36 global office locations, including San Ramon, California, which are expected to realize annualized savings of approximately $7 million.
Other reductions in force are expected to realize annualized savings of approximately $13 million.
Costs associated with these actions in the current quarter are expected to total approximately $12 million.
In the current fiscal year, operating cash usage in Q2 was $56 million and improved significantly to $31 million in Q3. As previously outlined, BlackBerry expects a further sequential reduction in operating cash usage for the current, fourth quarter.
Given the cost-reduction actions taken, as outlined above, and anticipated further operating efficiencies during FY25, BlackBerry expects to maintain a positive net cash position throughout the coming fiscal year, despite the first fiscal quarter being a seasonal low for cash, and to be operating cashflow positive by Q4 FY25.
BlackBerry has made material progress towards establishing both the IoT and Cybersecurity business units as fully standalone divisions.
The Company has established a Project Management Office, and appointed leading management consultants, Alvarez & Marsal, to assist with the process.
As previously disclosed, BlackBerry secured long-term financing last month through the issuance of convertible senior notes in the aggregate principal amount of $200 million.
The Board was pleased by the significant level of interest in the offering and the Company will use the net proceeds primarily to repay $150 million of short-term debentures due on February 15, 2024.
Following this repayment, BlackBerry will have reduced its debt by 45% compared to November 2023and, with the planned return to positive operating cash flow, expects to be well-positioned with a solid balance sheet.
An investor briefing conference call and live webcast will be held tomorrow, Tuesday February 13, 2024, beginning at 8:00 a.m. ET, which can be accessed using the following link or through the Company's investor webpage or by dialing toll free +1 512-2926 and entering Elite Entry Number 6312676.
BlackBerry provides intelligent security software and services to enterprises and governments around the world.
Based in Waterloo, Ontario, the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy, and is a leader in the areas of endpoint security management, encryption, and embedded systems.
BlackBerry's vision is clear - to secure a connected future you can trust.
This Cyber News was published on www.darkreading.com. Publication date: Tue, 13 Feb 2024 21:35:08 +0000