Loudeye Restructures Operations
Loudeye Restructures Operations to Support New Initiatives, Consolidate Core Business Infrastructure and Integrate Recent Acquisitions
SEATTLE, WA - April 11, 2001
Loudeye Technologies, Inc. (NASDAQ: LOUD), a leading provider of services and infrastructure for the authorized delivery of digital content, today announced it is restructuring operations to consolidate its core media services infrastructure, integrate recent acquisitions and support new business initiatives under development.
Having substantially completed the development of its advanced digital music archive and related distribution technology, Loudeye will focus its resources on aggressively exploiting these assets and supporting new business initiatives that directly enable the authorized delivery of digital music. Those initiatives, which the Company will begin rolling out in the weeks ahead, may include new product offerings, key strategic alliances and acquisitions, as well as the reduction or outsourcing of non-core business operations. Additionally, Loudeye is integrating the recent acquisitions of DiscoverMusic, currently the largest purveyor of music samples on the Internet, and certain technology assets of OnAir Streaming Networks, a leading developer of online radio applications.
As a result, Loudeye's permanent work force of approximately 300 is being reduced by 45 percent. The Company's Seattle-based operations, presently located in four separate facilities, will be consolidated into the corporate headquarters. Upon its completion later in the second quarter, the operational restructuring is anticipated to produce annualized cash savings of approximately $12 million. Loudeye expects to record a cash charge of approximately $2.5 million in the second quarter related to these changes as well as a substantial non-cash charge for related asset write-downs that will be discussed in the Company's announcement of first quarter results later this month.
"As the emerging market for digital music distribution begins to unfold, Loudeye is focused on developing sustainable, scalable revenue streams," said John T. Baker, Loudeye chief executive officer. "I am confident that Loudeye, with the resources to move aggressively and opportunistically, is well positioned for success."
"Although this restructuring produces significant cost savings and strengthens our financial position, it was engineered to maximize operating efficiency and align resources with a refocused business plan that leverages Loudeye's technology, expertise and customer knowledge," Baker added.
About Loudeye Technologies, Inc.
Loudeye is a leading provider of services and infrastructure for the authorized delivery of digital content that empower today's top media, entertainment and Fortune 1000 companies to transform traditional media assets into dynamic digital content. Through its Digital Media Centers in Seattle (headquarters), New York and London, Loudeye is building the infrastructure to support the next generation of digital media businesses. To learn more, visit www.loudeye.com.
