xG Technology, Inc. (NASDAQ:XGTI) has recently revealed that it can potentially generate annual cost savings of more than $2 million following its acquisition of Integrated Microwave Technologies (IMT).
Exceeding Guidance
The current projections already exceed the company’s expectations earlier this year when it completed the acquisition of IMT.
xG Technology will realize further savings in the rightsizing of staff levels, which includes the replacement of contractors and the integration of the engineering manpower of both companies— thereby reducing about $700,000 in annual costs; relocation of all xMax manufacturing processes to the New Jersey facility of IMT, reducing about $700,000 in annual costs; shrinking of the Fort Lauderdale facility, reducing about $150,000 in annual costs; integration of the sales operations of both companies, reducing about $175,000 in annual costs; continued operation savings from the rightsizing of staff levels, reducing up to $200,000 in annual costs; cost reductions in contracts, reducing about $50,000 in annual costs; and certain improvements in accounting functions.
Long-Term Benefits of IMT Acquisition
Acquiring IMT does not only allow xG Technology to maximize cost savings; it also enables the company to take advantage of potential growth opportunities in the long run. One good example is the recent funding it won from the government.
“We expect this trend to continue as we deliver on our goal of monetizing our technology assets and identifying new business opportunities,” said George Schmitt, xG Technology Chairman and CEO, of the positive implications of having IMT on board.
Earlier this month, the company, together with Southwest Research Institute (SwRI), has won a $3 million award from the Defense Information Systems Agency for Prototype Spectrum Sharing Systems for their 2025-2110 MHz Band.
This marks a significant milestone for xG Technology since spectrum sharing under the government is one of its key strategies.
John Coleman, xG Technology President of Federal Business Unit, has boasted that the company is well-equipped with the right solutions and competencies to deliver valuable innovations together with SwRI for government initiatives.
xG Technology is trading at $0.37 on late Tuesday morning.
