Summary
Fair Isaac Corporation (FICO) has announced further cost-reduction measures as part of its ongoing reengineering program, originally initiated in April 2008. These new actions, committed by management on February 15, 2011, are designed to streamline operations and improve efficiency. The company anticipates a pre-tax restructuring charge of approximately $10 million in the second quarter of fiscal year 2011, all of which is expected to involve future cash outflows. These cost-saving initiatives primarily involve a reduction in headcount, consolidating facilities, and scaling back certain marketing and discretionary spending. Specifically, FICO is eliminating approximately 200 positions, leading to an estimated $6.5 million in severance charges, and vacating portions of its facilities, which will result in approximately $3.5 million in charges related to lease obligations. These actions indicate a focus on improving the company's cost structure and operational efficiency.
Key Highlights
- 1FICO is implementing additional cost-reduction measures under its existing reengineering program.
- 2The new actions were committed by management on February 15, 2011.
- 3An aggregate pre-tax restructuring charge of approximately $10 million is expected in Q2 fiscal 2011.
- 4All restructuring charges are anticipated to result in future cash expenditures.
- 5Approximately 200 positions are being eliminated, contributing $6.5 million in severance charges.
- 6Facility consolidation is expected to result in approximately $3.5 million in charges related to lease obligations.
- 7Actions also include reductions in marketing and discretionary spending.