Summary
Fair Isaac Corporation (FICO) filed an 8-K on January 7, 2009, detailing further actions under its existing reengineering program. These initiatives, committed to on December 31, 2008, are designed to reduce operating costs through a combination of headcount reductions, facility consolidations, and adjustments to employee compensation and benefits. The company anticipates a total pre-tax restructuring charge of approximately $8 million for the first quarter of fiscal year 2009. Approximately 75% of this charge is expected to result in future cash outlays, impacting liquidity in the near term. Key components of this restructuring include the elimination of approximately 170 positions, adding to 80 previously eliminated, resulting in estimated pre-tax severance charges of $5.8 million. Additionally, FICO plans to vacate portions of its facilities, leading to pre-tax charges of $2.2 million, primarily related to future lease obligations net of expected sublease income. These actions underscore FICO's commitment to optimizing its operational efficiency and managing expenses in the prevailing economic environment.
Key Highlights
- 1FICO announced additional cost-reduction actions under its ongoing reengineering program.
- 2These actions were committed to by management on December 31, 2008.
- 3The company expects a pre-tax restructuring charge of approximately $8 million in Q1 fiscal 2009.
- 4Around 75% of the restructuring charge is expected to result in future cash expenditures.
- 5Approximately 170 additional positions will be eliminated, in addition to 80 already eliminated in Q1 FY09.
- 6Severance and related charges are estimated at $5.8 million.
- 7Facility consolidations are expected to incur charges of $2.2 million related to future lease obligations.