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44
Q3 Fiscal 2008 Restructuring Action
In November 2007, we announced plans to close AEG’s manufacturing facility in Dongguan, China, shut down a related Hong Kong
research and development, sales and procurement office and consolidate procurement, research and development activities for AEG in
our Shenzhen, China site. The selling, general and administrative functions of AEG in China have been consolidated with those of
ACG throughout the Asia-Pacific region. These actions resulted in the elimination of all manufacturing operation positions in
Dongguan, China and certain related support functions. This restructuring plan is part of a strategic initiative designed to reduce fixed
costs by outsourcing the majority of AEG manufacturing to a network of qualified contract manufacturers already in place. In
November 2007, 730 employees were notified of their termination, 708 in manufacturing, 20 in research and development and 2 in
selling, general and administrative. As of December 31, 2008, all employees had been terminated. Restructuring and other related
charges of approximately $3.7 million related to this restructuring plan, of which $3.6 million was recorded in fiscal 2008 and $0.1
million recorded in fiscal 2009. The total restructuring charges of $3.7 million consist of $1.4 million for the write-off of facilities and
equipment and accelerated depreciation, $1.4 million for severance and benefits, and $0.9 million in professional and administrative
and other fees. All restructuring and other related charges under this plan have been recorded as of March 31, 2009 and all amounts
have been paid. Cost savings from this action, primarily consisting of reduced employee expenses in all function and lower facility
costs, was approximately $3.0 million for fiscal 2009 which is expected to remain at this level for fiscal 2010.
Q1 Fiscal 2009 Restructuring Action
In June 2008, we announced a reduction in force at AEG’s operations in Milford, Pennsylvania as part of the strategic initiative
designed to reduce costs. A total of 31 employees were notified of their termination, all of whom were terminated as of December 31,
2008. We recognized $0.2 million of restructuring charges related to this activity in fiscal 2009, consisting solely of severance, of
which substantially all costs have been recorded and paid as of March 31, 2009. Cost savings from this action were $2.2 million in
fiscal 2009 and we anticipate cost savings of approximately $2.6 million in fiscal 2010, consisting of reduced employee expenses in
all functions.
Q3 Fiscal 2009 Restructuring Action
In the third quarter of fiscal 2009, we had a reduction in force at AEG’s operations in Luxemburg and Shenzhen, China and ACG’s
operations in China as part of the strategic initiative designed to reduce costs. A total of 624 employees were notified of their
termination, all of whom had been terminated as of December 31, 2009. On January 14, 2009, we announced additional reductions in
force related to this restructuring plan which included an additional 199 employees located in ACG’s Tijuana, Mexico, U.S. and
global locations who were notified of their termination. A total of 823 employees, primarily in operations positions but also including
other functions, were notified of their termination under this restructuring action, all of whom, except ten employees, had been
terminated as of March 31, 2009. In fiscal 2009, we recorded $8.8 million of restructuring charges related to these activities, of which
$0.8 million related to the AEG segment and $8.0 million related to the ACG segment. These costs consisted of $8.1 million in
severance and benefits, $0.6 million for the write-off of leasehold improvements due to consolidation of facilities, and $0.1 million in
other associated costs. We believe that substantially all of the costs have been incurred as of March 31, 2009, $2.6 million of which
related to ACG had not been paid as of March 31, 2009 and is expected to be paid in the first quarter of fiscal 2010. We currently
expect cost savings as a result of the restructuring plan, including the actions announced in January 2009, to be approximately $16.3
million in fiscal 2010 consisting of employee related costs in all functions and reduced facility and related costs in operations due to
consolidation of facilities.