Wed, Nov 06, 2013 - Page 13 News List

Acer chairman and CEO announces resignation amid company struggles

By Kevin Chen  /  Staff reporter

With its shares still falling and losses continuing to pile up, PC brand Acer Inc (宏碁) yesterday announced that Wang Jeng-tang (王振堂) has tendered his resignation as chairman and CEO.

The resignation was approved at a board of directors’ meeting yesterday, Acer said in an e-mailed statement.

The world’s fourth-largest PC vendor said Wang would remain in the chairmanship position until his tenure ends in June next year, but president Jim Wong (翁建仁) will take over the CEO position on Jan. 1.

The company said it would move forward on an internal restructuring plan for corporate transformation and has set up an advisory committee within the board to propose changes to the company’s vision, strategy and execution plans, with company founder Stan Shih (施振榮) as the committee’s chairman.

In addition, the board has approved the issue of 136 million new common shares for a capital increase in cash, the company said.

Wang took over as Acer chairman and CEO in 2005 and left the CEO position to Gianfranco Lanci in 2008. He retook the position in April 2011 after Lanci resigned.

“Acer has encountered many complicated and harsh challenges in the past few years. With the consecutive poor financial results, it is time for me to hand over the responsibility to a new leadership team to pave the way for a new era,” Wang said in the statement.

In the July-to-September quarter, Acer reported operating losses of NT$2.57 billion (US$86.61 million), bigger than the NT$613 million operating losses recorded in the previous quarter, which the company attributed to inventory adjustments ahead of the launch of Windows 8.1-powered devices.

The widening operating losses were also due to the conclusion of a litigation concerning its eMachines brand business, which resulted in a one-time charge for consumer compensation, the company said.

Due to a non-cash related intangible asset impairment of NT$9.94 billion, the company’s net losses expanded to NT$13.12 billion last quarter, from NT$343 million the previous quarter. As a result, losses per share were NT$4.82 last quarter, compared with a loss per share of NT$0.13 in the second quarter, Acer said yesterday.

For this quarter, the company forecast shipments for notebooks, tablets and Chromebooks would decrease by 10 percent sequentially, but expected gross margin to improve from last quarter.

However, Acer said its fourth-quarter balance sheet is expected to be dented by a one-time charge of US$150 million to cover costs associated with its personnel and business restructuring plans — including job cuts, product changes and legal fees.

The company plans to slash about seven percent of its global workforce, which would help it save operating expense of US$100 million annualy from next year, according to the statement.

Shih, who retired from Acer in 2004 but still sits on the board, said he aims to ensure a smooth transition at this point in time.

"After making structural adjustments, we will introduce more competitive products within the existing PC, tablet, and smartphone business and stabilize our market share," Shih said in the statement. "This will be the basis of our transformation and for developing new business opportunities."

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