AUGUST 12, 2009 -- ADC (NASDAQ: ADCT) has announced that, as part of the company's ongoing efforts to streamline its global operations and reduce costs, it is expanding the scope of a previously announced restructuring initiative in the Europe, Middle East, Africa (EMEA) region to include the United States, Latin America, and the Asia Pacific region.
This expanded initiative is intended to better align ADC's business with changing macro-economic and market conditions and enable the company to meet the needs of its global customer base more efficiently and effectively. The initiative is designed to reduce ADC's operating cost structure and improve organizational efficiency through additional changes to the company's manufacturing operations, supply chain, Global Go-to-Market organization, and general and administrative support areas, as well as taking further advantage of its presence in countries with lower costs of operations.
"Today's announcement is a reflection of our ongoing strategic commitment to managing through the global recession, taking actions to transform our business and strengthening our competitive position," said Robert E. Switz, chairman, president, and CEO of ADC. "While not always easy, the efforts we have made over the past year to realign our business operations are expected to continue improving our near-term financial performance and create the operational leverage to increase our long-term earnings potential. I'm confident that ADC will continue to take the necessary measures to compete and win as we look to extend our market-leading positions in fiber-based and wireless telecommunications networks worldwide."
Expanded restructuring initiative
On June 3, 2009, ADC announced a restructuring initiative in the EMEA region. Through both the expansion of the initiative beyond the EMEA region as well as revised estimates of the amount of charges associated with the company's actions in EMEA, ADC estimates that it will incur approximately an additional $9 million of restructuring charges beyond those previously announced. These additional estimated charges bring the total estimated restructuring charges associated with the global initiative within the range of $24 million to $34 million. The significant majority of these additional charges are expected to represent cash paid for severance and pension plan payments associated with workforce reductions. ADC expects to complete the actions associated with the expanded restructuring during fiscal 2010.
Third-quarter outlook
While the quarterly closing process is not complete, ADC currently expects the following financial results for its third quarter ending July 31, 2009:
- GAAP diluted earnings per share within the range of $0.05 to $0.10, which includes non-cash amortization expense of $0.06 per share and excludes potential non-cash charges or restructuring that we cannot presently estimate.
- Non-GAAP earnings per share within the range of $0.11 to $0.16 cents.
- Revenue results for the third quarter of around $280 million.
ADC will report its third quarter fiscal 2009 financial results on September 1, 2009 at approximately 4:00 PM Eastern/3:00 PM Central Time.
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