Summary
Cadence Design Systems, Inc. (CDNS) announced on January 14, 2010, the commencement of a significant restructuring plan. This initiative is designed to achieve substantial annual operating expense savings, estimated at approximately $19 million. The cost reductions are primarily driven by workforce reductions, involving the elimination of around 120 full-time positions, and other expense control measures. Investors should note that this restructuring will result in a pre-tax restructuring charge between $11 million and $15 million. A significant portion of this charge, estimated at $10 million to $12 million, was recognized in the fourth quarter of 2009. The company anticipates that the full realization of these workforce reductions will extend through fiscal year 2010 due to varying international regulations. Importantly, Cadence also cautioned that a substantial portion of the expected operating expense savings may be offset by increased investments in product technology development and enhancement.
Key Highlights
- 1Commencement of a company-wide restructuring plan as of January 14, 2010.
- 2Expected annual operating expense savings of approximately $19 million upon completion.
- 3Involves the elimination of approximately 120 full-time positions.
- 4Anticipated pre-tax restructuring charge of $11 million to $15 million.
- 5A majority of the restructuring charge ($10 million to $12 million) recognized in Q4 2009.
- 6Restructuring completion expected by the end of fiscal year 2010, subject to jurisdictional regulations.
- 7Potential for expected savings to be offset by increased investments in product technology.