ADI » Topics » Reduction of Overhead Infrastructure Costs

These excerpts taken from the ADI 10-K filed Nov 24, 2009.
Reduction of Overhead Infrastructure Costs
 
During the fourth quarter of fiscal 2007, we recorded a special charge as a result of our decision to either deemphasize or exit certain businesses or products and focus investments in products and end markets where we have better opportunities for profitable growth. In September 2007, we entered into a definitive agreement to sell our Baseband Chipset Business. As a result, we decided to reduce the support infrastructure in manufacturing, engineering and SMG&A to more appropriately reflect our required overhead structure. We terminated the employment of all employees associated with this action and have paid all amounts owed to employees for severance. We do not expect to incur any further charges related to this action. These cost reduction actions, which were substantially completed in the second quarter of fiscal 2008, resulted in annual savings of approximately $15 million. We realized these savings as follows: approximately $7 million in R&D expenses, approximately $6 million in SMG&A expenses and approximately $2 million in cost of sales.
 
Reduction of Overhead Infrastructure Costs
 
During the fourth quarter of fiscal 2007, the Company recorded a special charge as a result of its decision to either deemphasize or exit certain businesses or products and focus investments in products and end markets where it has better opportunities for profitable growth. In September 2007, the Company entered into a definitive agreement to sell its Baseband Chipset Business. As a result, the Company decided to reduce the support infrastructure in manufacturing, engineering and SMG&A to more appropriately reflect its required overhead structure. The Company terminated the employment of all employees associated with this action and has paid all amounts owed to employees for severance as income continuance. The Company does not expect to incur any further charges related to this action.
 
These excerpts taken from the ADI 10-K filed Nov 25, 2008.
Reduction of Overhead Infrastructure Costs
 
During the fourth quarter of fiscal 2007, the Company decided to either deemphasize or exit certain businesses or products and focus investments in products and end markets where it has better opportunities for profitable growth. In September 2007, the Company entered into a definitive agreement to sell its Baseband Chipset Business. As a result, the Company decided to reduce the support infrastructure in manufacturing, engineering and SMG&A to more appropriately reflect its required overhead structure. Consequently, during the fourth quarter of fiscal 2007, the Company recorded a special charge of $12.3 million, of which $10.7 million was for severance and fringe benefit costs recorded pursuant to SFAS 88 under the Company’s ongoing benefit plan or statutory requirements at foreign locations for 25 manufacturing employees and 127 engineering and selling, marketing, general and administrative employees associated with this action. The remaining $1.6 million was for contract termination costs related to a license agreement associated with products the Company will no longer develop and for which there is no future alternative use. As of November 1, 2008, 6 of the 152 employees included in this cost reduction action


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ANALOG DEVICES, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
were still employed by the Company. These employees must continue to be employed by the Company until their employment is involuntarily terminated in order to receive the severance benefit.
 
Reduction
of Overhead Infrastructure Costs



 



During the fourth quarter of fiscal 2007, the Company decided to
either deemphasize or exit certain businesses or products and
focus investments in products and end markets where it has
better opportunities for profitable growth. In September 2007,
the Company entered into a definitive agreement to sell its
Baseband Chipset Business. As a result, the Company decided to
reduce the support infrastructure in manufacturing, engineering
and SMG&A to more appropriately reflect its required
overhead structure. Consequently, during the fourth quarter of
fiscal 2007, the Company recorded a special charge of
$12.3 million, of which $10.7 million was for
severance and fringe benefit costs recorded pursuant to
SFAS 88 under the Company’s ongoing benefit plan or
statutory requirements at foreign locations for 25 manufacturing
employees and 127 engineering and selling, marketing, general
and administrative employees associated with this action. The
remaining $1.6 million was for contract termination costs
related to a license agreement associated with products the
Company will no longer develop and for which there is no future
alternative use. As of November 1, 2008, 6 of the
152 employees included in this cost reduction action





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Table of Contents





 




ANALOG
DEVICES, INC.



 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



were still employed by the Company. These employees must
continue to be employed by the Company until their employment is
involuntarily terminated in order to receive the severance
benefit.


 




This excerpt taken from the ADI 10-K filed Nov 30, 2007.
Reduction of Overhead Infrastructure Costs
 
During the fourth quarter of fiscal 2007, we decided to either deemphasize or exit certain businesses or products and focus investments in products and end markets where we have better opportunities for profitable growth. In September 2007, we entered into a definitive agreement to sell our Baseband Chipset Business. As a result of these decisions, we decided to reduce the support infrastructure in manufacturing, engineering and SMG&A to more appropriately reflect our required overhead structure. Consequently, we recorded a special charge of $12.3 million, of which $10.7 million is for severance and fringe benefit costs recorded pursuant to SFAS 88 under our ongoing benefit plan or statutory requirements at foreign locations for 25 manufacturing employees and 127 engineering and selling, marketing, general and administrative employees. The remaining $1.6 million is for contract termination costs related to a license agreement associated with products we will no longer develop and for which there is no future alternative use. As of November 3, 2007, 77 of the 152 employees included in this cost reduction action were still employed by us. These employees must continue to be employed until their employment is involuntarily terminated in order to receive the severance benefit. These cost reduction actions are expected to result in savings of approximately $15 million per year once substantially completed in the second quarter of fiscal 2008. These savings are expected to be realized as follows: approximately $7 million in R&D expenses, approximately $6 million in SMG&A expenses and approximately $2 million in cost of sales.
 
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