Telecommunications gear-maker Tekelec is consolidating two of its business units, but whether the move will lead to layoffs is not yet known, a company executive said Friday.
In announcements made before the markets opened, Tekelec (Nasdaq: TKLC) said it was consolidating its Network Signaling Group and Communications Software Solutions Group.
Tekelec also said it would launch a $50 million stock repurchase plan.
“It’s too early to tell,” said Jim Chiafery, Tekelec’s director of investor relations, when asked if there would be layoffs as a result of the consolidation.
“We don’t have a formal restructuring plan, which we would be required to disclose,” he added. “The realignment is just beginning.”
In a statement, Tekelec said the “organizational realignment” would “form a functional organizational structure” that is “designed to speed decision-making and increase the focus on delivering solutions that support the company’s direction of product integration.”
Ronald de Lange, the president and general manager of the network signaling group, will run the new group’s development and marketing efforts. Eric Gehl, the head of the software group, will “support the immediate realignment of the new organization in a transitional role,” the company said.
The stock repurchase plan will be funded from working capital. As of June 30, Tekelec had cash, cash equivalents and short-term investments of $464.8 million.
Tekelec shares traded Friday at $11.39, down 18 cents. Its 52-week low is $11.20. The high over the past year was $16.50.
“After a review of Tekelec’s financial position and cash-flow projections, our board concluded that a stock repurchase program is consistent with our commitment to deliver value to our shareholders,” Chief Executive Officer Frank Plastina said in a statement.
Chiafery described the buyback plan as a “measured response” to “satisfy the demands of shareholders … while preserving our options for the future.”
