Restructuring Charges And Accruals

6 Months Ended

Jul. 31, 2011

Restructuring Charges And Accruals

Restructuring Charges And Accruals

(3) Restructuring Charges and Accruals

In February 2011, in response to the general weakening of the worldwide economy, an expected continued slowdown in IT spending and a decline in the Company's license revenue, the Company announced and began to execute plans to reduce its workforce by approximately 5%, or 28 positions, affecting all parts of the organization. The Company has realized and expects to continue to realize cost savings going forward as a result of this restructuring and other cost saving initiatives. This restructuring is substantially complete, and in connection with these actions, the Company recorded restructuring charges in the three months and six months ended July 31, 2011 related to a facility closure totaling $0.0 million and $0.2 million, respectively. The nature of the restructuring charges and the amounts paid and accrued as of July 31, 2011 are summarized as follows (in thousands):

	Severance, payroll  taxes and other employee benefits			Facilities closures, legal and other miscellaneous(1)			Total restructuring charges  and accruals
Balances as of January 31, 2011	$	1,347		$	463		$	1,810
Accrued		—			163			163
Paid		(1,178	)		(372	)		(1,550	)
Balances as of July 31, 2011	$	169		$	254		$	423

(1) As of July 31, 2011, contract termination costs accrued related to abandoned facility leases totaled $0.3 million and will be paid out over the remaining lease terms ranging from 7 months to 12 months.

Restructuring accruals are reflected in accrued expenses in the Company's unaudited condensed consolidated balance sheets.

The agreements underlying the Company's senior subordinated notes and the credit facility include financial covenants based on Adjusted EBITDA and restructuring, acquisition and other charges are a component of that computation. These charges have been included as a separate line within operating expenses in the Company's unaudited condensed consolidated statements of operations and are categorized as follows for the three months and six months ended July 31, 2011 and 2010 (in thousands):

	Three Months Ended July  31,					Six Months Ended July  31,
	2011		2010			2011		2010
Sponsor fees, administration fees and other costs related to the Merger and the issuance of debt	$	313	$	310		$	622	$	620
Restructuring charges consisting principally of severance, payroll taxes and other employee benefits, facilities closures and legal and other miscellaneous costs		—		(225	)		163		925
Other redundancy costs not related to our restructuring plans including severance and other employee related costs, costs to establish or liquidate entities, and other miscellaneous costs not part of ongoing operations		744		367			885		1,077
Total restructuring, acquisition and other charges	$	1,057	$	452		$	1,670	$	2,622