Advanced ID Restructuring to Affect UK Operations

A letter to shareholders in Advanced ID Corporation, sent by company chairman Seymour Kazimirski on February 9, indicates that changes to the firm’s UK operations are afoot. Specific details of these changes and what they mean to the company’s Derbyshire based Pneu-Logic subsidiary, however, were not set out.

“As we enter the New Year, I would like to take this opportunity to summarise the goals we have established for 2009,” began Kazimirski. “You are all well aware of the challenges we faced in 2008 with the systemic breakdown of the capital markets worldwide. More specific to Advanced ID, we experienced the meltdown of the auto industry, which has greatly impacted the tyre industry. Estimates of decreased global tyre production are upwards of 40 per cent. We are working to meet these challenges.”

To meet these challenges, Kazimirski continued, Advanced ID’s Board of Directors has approved a number of measures, which the chairman outlined: “We are restructuring our UK and China operations. This has been done due to the overwhelming legal, accounting and compliance costs involving the management of our foreign operations. We are no longer pursing the acquisition of DDCT (Shenzhen DDCT Technology) and we are presently in preliminary negotiations for cross licenses and exclusivity to benefit both parties. We believe we can achieve a comparable economic benefit to completing such a transaction through exclusive licenses.”

The company has also, Kazimirski explained, embarked on a cost reduction programme intended to lead to significantly lower expenses in 2009. “Included in that programme is a new plan that has all of our sales managers and sales organisations compensation plans more closely aligned with sales results,” he said. “Our revised salary and commission structure will result in a reduction of overhead and increased revenue.” He added that, in view of the adverse economic conditions impacting both shareholders and the company, Board members have handed back stock they received for services in 2008.

The chairman’s letter also delivered news of the departure of a company director. “Hubert Meier, our Asia based Director, has resigned effective February 1, for personal reasons,” Kazimirski explained. “Hubert has agreed to continue as a consultant to Advanced ID.” Meier, who is recognised as a pioneer and leader in the RFID market and credited with introducing the world’s first RFID ASIC, joined the Board of Advanced ID in February 2003.

Regarding the company’s immediate future, Kazimirski said: “Looking ahead, we believe our two core businesses, pet recovery and tyre management for fleet owners, operate in markets that are relatively recession-resistant. We see strong opportunities to increase market share both internally and through the introduction of new products in coming months.”

Kazimirski also hinted at employee wage cuts. “Accordingly, we are taking a number of other measures in order to conserve resources, including some in the area of employee compensation,” he said. “We will continue to look for other areas in the company’s operations where costs can be reduced, without impairing the core strengths of the company.”

In closing, Kazimirski said that increased revenue will be the best way to strengthen shareholder equity. “The results of our restructuring efforts will become evident in coming quarters in the form of stronger cash flow results,” he said. “In spite of the uncertain economic environment, we remain cautiously optimistic.”