Hypercom Corporation Annual Report - CiteSeer

The following table summarizes these charges and activities during the year ended December 31, 2009 (dollars in thousands):
Balance at December 31, 2008 $ —
Additions 3,000
Cash payments (2,045 )
Currency translation adjustment 55
Balance at December 31, 2009 $ 1,010
The Company expects to pay the accrued severance and benefits related charges in 2010. The Company also expects to incur
additional restructuring charges of approximately $1.1 million. The amounts recorded and the additional restructuring charges the
Company expects to incur are subject to change based on the negotiation of severance with employees and related work groups.
Thales e-Transactions Restructuring
On April 1, 2008, the Company completed the acquisition of TeT and began formulating a restructuring plan. At the
acquisition date, the Company accrued into the purchase price allocation restructuring costs related to reduction in workforce and
future facilities lease obligations of approximately $9.1 million. The balance at December 31, 2009 is $7.3 million.
Activities of the restructuring balance related to the TeT acquisition are as follows (dollars in thousands):
Facilities Severance Total
Balance at December 31, 2007 $ — — —
Additions 409 8,677 9,086
Cash Payments (383 ) — (383 )
Currency translation adjustment (26 ) (953 ) (979 )
Balance at December 31, 2008 $ — $ 7,724 $ 7,724
Additions — 124 124
Cash Payments — (845 ) (845 )
Currency translation adjustment — 252 252
Balance at December 31, 2009 $ — $ 7,255 $ 7,255
Based on the Company’s current negotiations with workers councils in Europe, the Company expects the remaining amounts
accrued to be paid in 2010. The amounts recorded are subject to change based on further negotiation of severance amounts to be paid.
2007 and 2008 Business Restructuring
During the second quarter of 2007, the Company initiated a reconfiguration of its global sales and marketing organizations. In
addition, the Company announced its intention to outsource its manufacturing and consolidate its software, repair and maintenance
functions globally. Pursuant to this restructuring plan, the Company undertook the following initiatives:
• Outsourced the Company’s entire manufacturing requirements to third-party contract manufacturers, including supply chain,
production, assembly, and testing performed in Shenzhen, China and Atibaia, Brazil. Transition of the Company’s manufacturing
operations commenced in 2007 and was completed in 2008;
• Shut down of manufacturing operations in Atibaia, Brazil in accordance with the Company’s plans to cease negative margin
terminal sales. This activity was completed during 2007;
• Consolidated global software development activities to Singapore, Latvia, and India, and reduced similar activities performed
in the U.S. and Sweden. The consolidation of global development activities was completed in 2007;
• Relocated the U.S. service and repair operations from Phoenix, Arizona to Hermosillo, Mexico. This activity was completed in
2007; and
• Reorganized and reduced the manufacturing and operations management team in Phoenix, Arizona consistent with the move to
third-party contract manufacturing, which commenced in 2007 and was completed in 2008.
- 64 -