January 2009
Autodesk is restructuring to reduce annual operating expenses. Through this move, it expects to arrive at annual pre-tax cost savings of approximately $130 million annually starting in fiscal 2010.
As part of the plan, Autodesk plans to reduce its workforce by approximately 750 employees, representing approximately 10 percent of the company's global workforce. It also plans to consolidate certain facilities.
The actions announced are in addition to the ongoing cost reduction initiatives previously announced, which include a hiring freeze, business travel restrictions, and other reductions in its operating expenses.
As a result of this restructuring, Autodesk anticipates taking a pre-tax charge in the range of $65 million to $75 million. Approximately $45 million to $50 million in pre-tax charges will be taken in the fourth quarter of fiscal 2009. Most of the remaining charge will be taken in the first quarter of fiscal 2010.
According to forward-looking statements based on current expectations while involving risks and uncertainties, net revenue for the fourth quarter of fiscal 2009 is now expected to be in the range of $475 million and $500 million. GAAP loss per diluted share is now expected to be in the range of $0.12 and $0.05. Non-GAAP earnings per diluted share are now expected to be in the range of $0.18 and $0.24 and exclude $0.15 to $0.16 related to restructuring charges, $0.07 related to stock-based compensation expense and $0.07 for acquisition related charges.
In addition, although a final determination has not yet been made, Autodesk may take an impairment charge of up to $125 million net of taxes in the fourth quarter of fiscal 2009. This impairment charge would reduce the value of goodwill related to the company's Media and Entertainment business segment. This potential impairment charge is not included in the forecast provided above.
"Global economic conditions continue to impact our end-user demand," said Carl Bass, President and Chief Executive Officer.
"Given the current uncertainty of the economic environment, the cost savings initiatives we are implementing are prudent. Autodesk has a strong cash position and leadership across multiple product sectors and geographies. The company has experienced several economic downturns during its 26-year history, and like before, we fully expect to emerge from the downturn stronger, more efficient, and more competitive."
In addition to the restructuring, Autodesk has also signed a definitive agreement to spin out its Location Services business to Hale Capital Partners, a private equity firm.Autodesk believes this move will help position the Location Services business for greater success in the wireless industry, while allowing it complete focus on core business. Details of the transaction were not disclosed.
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