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Xionics to sell imaging division

Nearly one year after purchasing Seaport Imaging, Xionics is selling its entire imaging division, including the Seaport business. As part of a restructuring move, Xionics is also reporting a one-time charge of $9 million against Q4 '98 financial results, and will lay off about 10% of its work force. The charges include provisions for future development costs related to a current contract with Ricoh for an MFP device, scheduled to be shipped later this year.

Citing the growing difference between Xionics' core OEM business and the imaging business, Gary Ambrosino, VP and general manager of Xionic's Digital Document Products Division said "the markets have become so different...the sales channels are completely different."The option to sell the imaging business will allow both to grow, according to Ambrosino.

While a buyer is being solicited, Ambrosino said it is pretty much business as usual for his division including launching new products SCSI scan kit and a Web server for imaging applications called Destination Server.

"The Digital Documents Product Division has succeeded in selling print and scan accelerators in the production scanner market," according to Pete Simone, Xionics president and CEO. "However, this business is not synergistic with our core business of software for the printer and MFP OEM markets. Our objective is to achieve profitability by focusing on our core business strengths, which doesn't allow us to exploit this business opportunity and expand its market penetration via additional investments in technology and sales and marketing."

Simone expects the company to reduce its cost structure and position itself towards achieve profitability beginning in Q1 '99.

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