Ramtron International Corporation (Ramtron) has started restructuring and cost reduction actions to strengthen its operation during the current economic environment and position the company to execute on its key strategic objectives. As a result of the actions, the company expects to reduce its previously projected 2009 costs and operating expenses, excluding impairment related charges, by about $5.1 million.
In connection with the actions, Ramtron expects to record charges totaling $5.8 million during the first half of 2009, of which most will be taken during the first quarter. Around $4.8 million of the charges will be non-cash impairments of goodwill, long-term assets, and purchased IP associated with the company’s Canadian operation. The remaining $1 million is related to severance costs arising from a 17% reduction in the company’s workforce. In addition, the company has reduced salaries for all employees by 5% to 12%, eliminated variable compensation accruals for 2009, and taken other actions to reduce operating expenses. After the workforce reduction, the company employs 102 people throughout its worldwide operation.
“This restructuring preserves Ramtron’s financial stability and operational flexibility while we work toward establishing a new foundry at IBM, which is a key objective intended to enhance new product development and lower manufacturing costs,” said Bill Staunton, Ramtron’s chief executive officer. “In light of the uncertainty surrounding current economic conditions, we decided to take pre-emptive steps to align the company’s cost structure with a very conservative annual revenue level that is projected lower than our previously stated 2009 annual revenue guidance.”’
Ramtron is a US-based developer and supplier of nonvolatile ferroelectric random access memory and integrated semiconductor products.