TFS to Streamline Operations

TEMPE, Ariz., Jan 28 -- Three-Five Systems Inc. (TFS), a manufacturer of custom displays and display systems using LCD and LCoS microdisplay technology, announced this week it is planning a number of actions to reduce operating costs and excess manufacturing capacity.

TFS said it relocate its corporate headquarters from Tempe, Ariz., to Redmond, Wash., where the company currently conducts its low-volume electroinc manufacturing services (EMS) and prototype and medical manufacturing operations. All TFS corporate functions, including finance and accounting, human resources and information technology, will eventually be located in the Washington facility. The consolidations are expected to be underway for the next several months and will be completed during the second half of 2005. TFS said it will maintain several sales, marketing and engineering support centers throughout the US, including Arizona.

In conjunction with the planned move, James E. Jurgens was named interim CFO, effective Feb. 1, replacing Jeffrey D. Buchanan, who resigned as CFO and as a member of the board of directors in order to remain in Arizona.

Jurgens has worked with TFS since August on an interim basis to help resolve operational inefficiencies in the company's Washington facility. He was previously CFO at Ziatech Corp., a private developer of embedded computers for telecommunications applications that was purchased by Intel Corp. in 2001. He was previously European finance director for Advanced Micro Devices, in Dresden, Germany.

The company also announced it is exploring opportunities to consolidate its offshore operations. In a move to consolidate manufacturing operations and reduce excess factory capacity, TFS said, it is exploring the potential sale of its Manila, Philippines factory. It said it is working closely with its principal customer in that location to assure that support and product shipments remain uninterrupted.

"Our planned initiatives are all part of a highly focused strategy to grow our EMS and display business, achieve profitability as quickly as possible and drive increasing value to our stockholders," said Jack Saltich, president and CEO of TFS. "In today's EMS world, streamlining operations and driving costs to their lowest possible level are imperative to remaining competitive. These actions are a necessary step in that direction."

For more information, visit: www.threefive.com