Gennum Announces Plans to Align Investment to Better Capitalize on Future Growth Opportunities



    
    Announced Changes, Improving Visibility and Increased Order Flow Point to
    Improved Profitability and Cash Flow in 2009 and Beyond
    

    BURLINGTON, ON, Aug. 5 /CNW/ - Gennum Corporation (TSX: GND) today
announced more details on its previously disclosed plans to improve
profitability and cash flow to help achieve its business model targets. The
company's plans include realigning its investment to maintain its R&D programs
while reducing corporate infrastructure and business operations costs and
capital expenditures. Additionally, Gennum is focusing its marketing, sales
and administrative investment on short and mid-term customer revenue
generation activities and new product development.
    These actions have resulted in an approximate 10 percent reduction of the
company's workforce primarily impacting corporate infrastructure, business
operations and support functions. It is estimated the company will incur a
charge in the third quarter of fiscal 2009 of approximately US$3.5 million
consisting of severance and related costs along with an approximate US$2
million non-cash asset impairment charge resulting from the realignment of
company investments.
    "I believe our collective actions will allow us to improve profitability
and cash flow in 2009. Looking into 2010, I believe these initiatives, coupled
with improvements in our market segments and early volume ramps of new
products should result in us achieving operating returns in line with our 2008
performance," said Dr. Franz Fink, President and CEO of Gennum.
    "We are encouraged by improving visibility. This is a function of
continued reduction of customer inventory levels and improvement in end market
demand for our products as well as modest improvements in our fiscal third
quarter orders," continued Dr. Fink. "I remain confident in our long-term
strategy to deliver more new products to the market place, capitalize on new
customer opportunities and grow our leadership in target markets."
    The company also announced today plans to provide a business update via
conference call to the investment community on Monday, August 10th at 8:30 am
Eastern Time.
    "Today's actions result in a number of positive changes for Gennum,
operationally, organizationally and financially as we will be able to achieve
better leverage moving into 2010," said Mr. Gordon Currie, Senior
Vice-President, Finance & Administration and Chief Financial Officer. "To
better communicate these changes, and provide more detail on the impact of
today's announcement on our business model moving forward, we are holding a
call on Monday to update the financial community. Following our normal
schedule, we expect to be reporting our third quarter financial results the
week of September 21st."

    Conference Call Details

    Management will hold a conference call on Monday, August 10, 2009 at 8:30
a.m. (ET). To access the call, participants should dial 1-800-590-1508 or
416-644-3428. The conference call will also be Webcast live at www.gennum.com
or www.newswire.ca/en/webcast and subsequently archived on the Gennum site. A
rebroadcast of the call will be available until midnight on September 10,
2009. To access the rebroadcast, dial 1-877-289-8525 or 416-640-1917 and enter
the passcode 21312789 followed by the number sign.

    About Gennum

    Gennum Corporation (TSX: GND) designs innovative semiconductor solutions
and intellectual property (IP) cores for the world's most advanced consumer
connectivity, enterprise, video broadcast and data communications products.
Leveraging the company's proven optical, analog and mixed-signal products and
IP, Gennum enables multimedia and data communications products to send and
receive information without compromising the signal integrity. An award winner
for advances in high definition (HD) broadcasting, Gennum is headquartered in
Burlington, Canada, and has global design, research and development and sales
offices in Canada, Mexico, Japan, Korea, Germany, United States, Taiwan, India
and the United Kingdom. www.Gennum.com.

    Caution Regarding Forward-Looking Information

    This news release contains statements which constitute forward-looking
statements. These forward-looking statements are not descriptive of historical
matters and refer to management's expectations or plans. These statements
include but are not limited to statements concerning: Gennum's plans and
expectations relating to improvements in profitability and cash flow and the
achievement of business model targets and levels, the reduction of corporate
and operations costs and capital expenditures and marketing, sales and
administration expenses; expected operational expense savings and estimated
severance and related costs, and the estimated charges relating thereto and to
impairments; and Gennum's business objectives and future financial performance
and prospects. Inherent in forward-looking statements are risks and
uncertainties beyond Gennum's ability to predict or control including but not
limited to risks associated with: Gennum's ability to complete the actions
referred to in this news release within anticipated timeframes and to
successfully realize the expected improvements therefrom; compliance with
local employment legislation and requirements and the possible initiation and
outcome of legal proceedings; and other risks facing Gennum's business
including competitive and pricing pressures and economic cycles in the
semiconductor industry, fluctuations in foreign exchange rates and their
potential adverse impact upon Gennum's financial results, and Gennum's ability
to attract and retain key personnel necessary for its business. Please also
refer to the sections entitled "Risks and Uncertainties" in Gennum's 2008
annual report and "Risk Factors" in Gennum's annual information form dated
February 23, 2009. Actual results and developments are likely to differ, and
may differ materially, from those expressed or implied by the forward-looking
statements contained in this news release. Such statements are based on a
number of assumptions which may prove to be incorrect including but not
limited to the following assumptions: Gennum is able to successfully complete
the actions referred to herein within the timeframe and with associated
expense savings generally as anticipated and without unforeseen significant
costs or delays; assumptions relating to severance and related costs and to
charges; customer demand for Gennum's products remains generally as
anticipated; Gennum's is able to execute its product roadmap without delays or
disruptions having a material impact on Gennum; Gennum's expectations relating
to competitive pressures, including pricing pressures, are not materially
incorrect; significant fluctuations in foreign exchange rates which
significantly adversely affect Gennum's financial results do not arise; and
Gennum is able to continue to retain and attract technical and other key
employees. Readers are cautioned that the foregoing list of important factors
and assumptions is not exhaustive. Forward-looking statements are not
guarantees of future performance. Events or circumstances could cause Gennum's
actual results to differ materially from those estimated or projected and
expressed in, or implied by, these forward-looking statements. Consequently,
readers should not place any undue reliance on these forward-looking
statements. Forward-looking statements are provided for the purpose of
providing information about management's current expectations and plans
relating to the future. Readers are cautioned that such information may not be
appropriate for other purposes. In addition, these forward-looking statements
relate to the date on which they are made. Gennum disclaims any intention or
obligation to update or revise any forward-looking statements or the foregoing
list of factors, whether as a result of new information, future events or
otherwise, except to the extent required by law.







For further information:

For further information: Gennum Media Contact: Robin Vaitonis, Director
of Corporate Communications, Gennum Corporation, (905) 632-2999 x2110,
vaitonis@Gennum.com, www.gennum.com; Gennum Investor Relations Contact: Gord
Currie, Senior Vice-President, Finance & Administration and CFO, Gennum
Corporation, (905) 632-2999 x3060, Gord.Currie@gennum.com

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