Adaptec 2002 Annual Report Download - page 66

Download and view the complete annual report

Please find page 66 of the 2002 Adaptec annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

NOTE 3. Restructuring and Other Costs
On January 16, 2003, the Company announced that it was undertaking a corporate restructuring to further
reduce operating expenses. The restructuring plan includes the termination of approximately 175 employees
and the closure of design centers in Maryland, Ireland and India. PMC will record a restructuring charge for
workforce reduction, facility lease costs and related asset impairments as these liabilities will be
incurred in the first and second quarters of 2003.
During 2002, the Company paid out $27.5 million in connection with October 2001
restructuring activities.
Cash payments made in 2002 for restructuring activities related to the March
2001 restructuring plan were $2.7 million.
There were no additional restructurings in 2002 nor were there any changes in estimates related to 2001
restructurings that affected the Statement of Operations.
Restructuring − October 18, 2001
Due to a continued decline in market conditions, the Company implemented a restructuring plan in the fourth
quarter of 2001 to reduce the operating cost structure. This restructuring plan included the termination of
341 employees, the consolidation of additional excess facilities, and the curtailment of additional research
and development projects. As a result, PMC recorded a second restructuring charge of $175.3 million in the
fourth quarter of 2001.
The following summarizes the activity in the October 2001 restructuring
liability:
Write−down of
Facility Lease Software Licenses
and and
Workforce Contract Settlement Property and
(in thousands) Reduction Costs Equipment, Net Total
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Total charge − October 18, 2001 $ 12,435 $ 150,610 $ 12,241 $ 175,286
Noncash charges − − (12,241) (12,241)
Cash payments (5,651) (400) − (6,051)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Balance at December 31, 2001 6,784 150,210 − 156,994
Adjustments (3,465) 3,465 − −
Cash payments (3,319) (24,176) − (27,495)
−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−−
Balance at December 31, 2002 − 129,499 − 129,499
======================================================================
The Company has completed the restructuring activities contemplated in the
October 2001 plan, but have not yet disposed of all of our surplus leased
facilities
Restructuring − March 26, 2001
64