Restructuring, Acquisition and Other Charges

6 Months Ended

Jul. 31, 2013

Restructuring, Acquisition and Other Charges [Abstract]

RESTRUCTURING, ACQUISITION AND OTHER CHARGES

5. RESTRUCTURING, ACQUISITION AND OTHER CHARGES

Restructuring, acquisition and other charges consisted of the following (in thousands):

	Three Months Ended July 31,					Six Months Ended July 31,
	2013			2012		2013		2012
Restructuring	$	5,205		$	480	$	8,337	$	480
Acquisition and Other Charges:
Acquisitions and costs related to issuance of debt		46			30		63		122
Sponsor and administration fees paid to Silver Lake		(66	)		281		131		500
Severance, facility and other charges not part of restructuring and not part of ongoing operations		73			826		334		907
Total	$	5,258		$	1,617	$	8,865	$	2,009

In February, 2013, the Company initiated a restructuring plan in response to a decline in license revenues and to better align its business operations to market opportunities. In June, 2013, the Company initiated a significant restructuring plan to re-focus the Company’s strategy on its core mainframe and distributed system products and new release management products, re-organize and enhance the geographical focus of the Company’s sales organization and re-align the cost structure of the Company based on these actions.

As part of these restructuring plans, the Company reduced its workforce by approximately 8% (55 employees) in the three months ended April 30, 2013 and approximately 24% (120 employees) in the three months ended July 31, 2013. These actions affected all parts of the organization through workforce reductions worldwide and facility closures and reductions in North America, Europe and Asia. Additional facility reductions are currently in process and are expected to be completed during the quarter ending October 31, 2013.

The Company has realized, and expects to continue to realize, cost savings going forward as a result of these restructurings. In connection with these actions, the Company recorded net restructuring charges of $8.3 million during the six months ended July 31, 2013 consisting principally of severance, payroll taxes, employee benefits, facilities and related restructuring charges. Restructuring charges were based on the Company’s restructuring plans that were committed to by management. Any changes in the cost estimates of executing the approved plans are reflected in the Company’s results of operations. Restructuring liabilities are reported within other accrued expenses in the condensed consolidated balance sheets.

The following table summarizes restructuring charges accrued and paid/written-off as of July 31, 2013 by category (in thousands):

	Severance, payroll taxes and other employee benefits			Facilities closures, legal and other miscellaneous			Total restructuring charges and accruals
Balances as of January 31, 2013	$	—		$	—		$	—
Activity during the six months ended July 31, 2013:
Accrued	$	6,935		$	1,402		$	8,337
Paid/written-off		(5,506	)		(381	)		(5,887	)
Balances as of July 31, 2013	$	1,429		$	1,021		$	2,450