Memorex 2011 Annual Report Download - page 28

restructuring plan as further implementation of our manufacturing strategy. In order to partially mitigate projected declines in
tape gross profits in future years, we ended manufacturing at our Camarillo plant and exited the facility during 2008. The 2008
cost reduction restructuring program also included our decision to consolidate the Cerritos, California business operations into
Oakdale, Minnesota. During 2009, we consolidated the previous Cerritos activities into a single headquarters location in order
to achieve better focus, gain efficiencies across brands and channels and reduce cost. We recorded $0.3 million of income
through the reversal of lease termination accruals related to previously announced programs.
Other
During 2011 we recorded additional pension settlement and curtailment losses of $2.5 million within restructuring and
other expense in the Consolidated Statements of Operations as a result of the downsizing associated with our domestic
restructuring activities. See Note 9 to the Consolidated Financial Statements for further information regarding pension
settlements and curtailments.
Our Camarillo, California manufacturing facility ceased operations on December 31, 2008 and the facility, comprised of a
building and property, was classified as held for sale. In an effort to increase the salability of the property, during the three months
ended June 30, 2011 we demolished the building which resulted in a $7.0 million loss on disposal during the period. The land
related to the facility continues to meet the criteria for held for sale accounting and, therefore, remains classified in other current
assets on the Consolidated Balance Sheet as of December 31, 2011 at a book value of $0.2 million. On October 7, 2011 we
entered into an agreement to sell the land for $10.5 million, contingent upon the change of certain zoning requirements for the
land as well as other standard conditions. If these conditions are met, the sale is expected to close in 2013.
Also during 2011 we recorded acquisition and integration related costs as a result of our acquisition activities of $2.6
million within restructuring and other expense in the Consolidated Statements of Operations. Also during 2011 we amended a
long-term disability benefit plan, resulting in a $2.0 million gain.
During 2010, other expenses included costs associated with the announced retirement of our former Vice Chairman and
Chief Executive Officer, including a severance related charge of $1.4 million and a charge of $0.8 million related to the
accelerated vesting of his unvested options and restricted stock.
During 2009 we incurred net asset impairment charges of $2.7 million and other charges of $0.3 million related mainly to
the abandonment of certain manufacturing and R&D assets as a result of our restructuring activities.
See Note 7 to the Consolidated Financial Statements for further information regarding our various restructuring
programs and other expenses.
Operating Loss
Years Ended December 31, Percent Change
2011 2010 2009 2011 vs. 2010 2010 vs. 2009
(In millions)
Operating loss ..................................... $(33.1) $(69.7) $(61.7) (52.5)% 13.0%
As a percent of revenue ............................ (2.6)% (4.8)% (3.7)%
Operating loss decreased in 2011 compared with 2010 primarily due to lower restructuring and other charges of $29.6
million and lower goodwill impairment charges of $21.9 million, partially offset by lower revenue resulting in lower gross profit
of $9.7 million as well as higher R&D expense of $4.6 million, each as discussed above.
Operating loss increased in 2010 compared with 2009 due to lower revenues resulting in lower gross profit of $37.6
million, higher restructuring and other expense of $24.5 million and goodwill impairment of $23.5 million, offset partially by
lower operating expenses of $31.2 million and lower litigation settlement expenses of $46.4 million, each as discussed above.
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