Support.com 2009 Annual Report Download - page 67

Table of Contents
SUPPORT.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
In the first quarter of 2009, we implemented a reduction in our workforce and closed certain facilities worldwide in order to reduce our ongoing cost
structure. We reduced our workforce by 17 employees, or approximately 6% of our non-agent headcount. All of the affected employees were terminated as of
March 31, 2009. As a result, we recorded a restructuring charge of $896,000 in the first quarter of 2009. The restructuring charge was primarily comprised of
employee termination costs, professional services costs and facilities impairment costs. Restructuring and impairment expenses included in the consolidated
statement of operations totaled $821,000 in discontinued operations and $75,000 in continuing operations, including $6,000 for sales and marketing and $69,000
for general and administrative. As of December 31, 2009, the remaining balance of the restructuring obligation was $356,000, related to one facility in the United
Kingdom, which we expect to pay through 2011.
In the second quarter of 2009, we implemented a reduction in our workforce in order to align our on-going cost structure with the scale of our revenue
following the sale of our Enterprise business. We reduced our workforce by 23 employees, or approximately 19% of our non-technology support agent
workforce. All of the affected employees were terminated as of June 30, 2009. In addition, we terminated the lease for our Canadian facility, which we had
previously impaired as of December 31, 2008. We reversed the remaining impairment balance accrued for this facility’s lease payments, in the amount of
$219,000. As a result of these actions, we recorded a restructuring charge of approximately $345,000 in the second quarter of 2009. The restructuring charge was
primarily comprised of employee terminations costs and professional services costs. Restructuring expenses included in the consolidated statement of operations
were $62,000 for cost of service, $187,000 for research and development, $315,000 for sales and marketing and $(219,000) for general and administrative due to
the reversal of the Canadian facility lease accrual. As of December 31, 2009, there was no remaining balance related to this restructuring obligation.
In the third quarter of 2009, we ceased using a portion of our headquarters office in order to align our facilities usage with our current size. As a result, we
impaired approximately 46% of our Redwood City facility. We recorded a restructuring charge of approximately $1.3 million, which related to the facility
impairment and is included in our general and administrative expenses in our consolidated statement of operations. As of December 31, 2009, the remaining
balance on this restructuring obligation was $886,000, which we expect to pay through 2012.
The following table summarizes activity associated with the restructuring and related expenses incurred for the years ended December 31, 2009 and 2008
(in thousands):
Severance (1) Facilities (2) Impairment (3) Total
Restructuring costs incurred $ 731 $ 360 $ 105 $ 1,196
Cash payments (111) (28) — (139)
Non-cash charges — — (105) (105)
Restructuring obligations, December 31, 2008 620 332 — 952
Restructuring costs incurred 640 1,299 259 2,198
Cash payments (1,260) (389) — (1,649)
Non-cash charges — — (259) (259)
Restructuring obligations, December 31, 2009 $ — $ 1,242 $ — $ 1,242
(1) Severance costs include those expenses related to severance pay and related employee benefit obligations.
(2) Facilities costs include obligations under non-cancelable leases for facilities that we will no longer occupy, as well as penalties associated with early
terminations of leases and disposal of fixed assets. The related leases are short term in nature expiring in less than one year. No sublease income has been
included.
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Source: Support.com, Inc., 10-K, March 12, 2010 Powered by Morningstar® Document Research℠