UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 28, 2012
Commission File No. 0-14225
EXAR CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 94-1741481 | |
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
48720 Kato Road, Fremont, CA 94538
(Address of principal executive offices, Zip Code)
(510) 668-7000
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On March 28, 2012, Exar Corporation (the “Company”) implemented a reduction in force of approximately 120 employees. The Company determined to effect the reduction in force in order to reduce its operating costs and improve profitability. The Company estimates that the reduction in force will result in a reduction in annual operating expenses of approximately $12 million, not including charges associated with the reduction in force.
The Company will incur material charges under generally accepted accounting principles as a result of the reductions in force on March 28, 2012. The Company estimates that such charges will be in an aggregate amount of between $10.4 and $10.9 million, of which between $8.0 and $8.1 million are expected to result in cash expenditures. The foregoing estimated charges include between $3.7 and $4.0 million for one-time termination benefits, approximately $6.5 million for the exit of electronic design automation tool related leases and between $0.2 and $0.4 million for other costs.
On March 28, 2012 the Company issued a press release announcing the reduction in force and detailing the Company’s restructuring activities in the March 2012 quarter, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Certain statements in this Current Report on Form 8-K may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. The Company intends that all such statements be subject to the “safe-harbor” provisions of that Act. Such statements include those pertaining to anticipated accounting charges, cash expenditures and operating expense cost savings. Many factors may cause the Company’s actual results to differ materially from those discussed in any such forward-looking statements, including risks and uncertainties described in the Company’s filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| 99.1 | Press Release |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: March 29, 2012 | EXAR CORPORATION | |||||
| By: | /s/ Kevin Bauer | |||||
| Kevin Bauer Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||
EXHIBIT INDEX
| Exhibit No. |
Description of Exhibit | |
| 99.1 | Press Release |
Exhibit 99.1
Press Release
Contacts:
| Kevin Bauer, SVP and CFO (510) 668-7119 |
For Release 5:30 p.m. EDT March 28, 2012 |
Exar Corporation Announces
Continuation of Aggressive Restructuring Program
Company Confirms March Quarter Revenue Guidance
Fremont, California, March 28, 2012 - Exar Corporation (Nasdaq: EXAR) today announced that it has taken additional substantive steps to reduce overall operating expenses and cost of goods sold. The Company also confirmed revenue guidance provided in the Company’s earnings conference call on February 1, 2012.
Company President and CEO Louis DiNardo commented, “In support of our goal to achieve consistent profitable growth we continue to align and scale our workforce with our market, product and financial plans. We have taken meaningful action today that is comprehensive and includes adjustments in all functional areas of our company and regions of the world. We eliminated approximately 120 positions, or 30% of our worldwide headcount. This action is estimated to be $12 million in annual gross savings of which approximately 30% are in operations functions and 70% are in R&D and SG&A.”
“Coupled with our actions in February 2012, which eliminated 53 positions and an estimated $9.7 million in annual gross spending, the total impact of our restructuring actions in the March quarter represent a significant reduction in headcount and spending while fostering focus on new product development and growth.”
Estimated Aggregate Actions in the FY’12 March Quarter
| • | 169 Total Positions Eliminated |
| • | 40% of Worldwide Headcount |
| • | $21 Million in Annual Gross Savings |
“We believe that our remaining headcount of approximately 270 people is adequate and appropriate to support our needs in sales, marketing, product development, finance, human resources and other functional disciplines while we drive growth in our target markets. Our basic cost structure is sound; we have a major design center in China, a majority of test operations offshore and we are now a lean organization. Our goal is to provide appreciation in shareholder value through growth and profitability. We will continue to add key resources as necessary to support our growth plan. We are very comfortable with our ability to recruit and retain top talent to support market and product development in our areas of focus,” added Mr. DiNardo.
Focus Products and Markets
| • | Power Management and Control – Networking, Communications, Computing and Industrial |
| • | Data Compression and Security – Networking, Storage, Data Warehousing and Data Analytics |
| • | Connectivity and Interface – Industrial, Consumer and Computing |
| • | High Performance Analog Mixed-Signal – Industrial, Communications and Consumer |
Mr. DiNardo concluded, “We are on track to support the range of revenue guidance we provided in our fiscal year 2012 third quarter earnings call. Our bookings have improved quarter-over-quarter and we see positive signs in sales through our channel partners.”
About Exar
Exar Corporation designs, develops and markets high performance analog mixed-signal integrated circuits and advanced sub-system solutions for data communication, networking, storage, consumer and industrial applications. Exar’s product portfolio includes power management and connectivity components, communications products, network security and storage optimization solutions. Exar has locations worldwide providing real-time customer support to drive rapid product development. For more information about Exar, visit http://www.exar.com.
Forward Looking Statements
Certain statements and the financial table in this press release are forward-looking statements. The Company intends that all such statements be subject to the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995 to the extent available. Such statements include those pertaining to annual gross cost savings, the sufficiency of our going-forward headcount to support our business plans, our ability to hire additional personnel and our financial performance for the FY’12 March quarter. Many factors may cause the Company’s actual results to differ materially from those discussed in any such forward-looking statements, including risks and uncertainties described in the Company’s periodic filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Estimated Aggregate Cost of Actions in the FY’12 March Quarter
| Estimate Range | ||||||||||||||||
| ($ Millions) |
Low | High | Cash* | Non-Cash | ||||||||||||
| One-time termination benefits |
$ | 5.2 | $ | 5.2 | $ | 5.5 | $ | — | ||||||||
| Exit of facility related leases |
1.2 | 1.2 | 1.2 | — | ||||||||||||
| Exit of EDA related leases |
6.5 | 6.5 | 3.9 | 2.6 | ||||||||||||
| Accelerated amortization of tangible & intangible assets |
2.1 | 2.1 | — | 2.1 | ||||||||||||
| Other |
0.8 | 1.0 | 0.6 | 0.4 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| $ | 15.7 | $ | 16.2 | $ | 11.2 | $ | 5.0 | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| *Cash | payments within 12 months approximately $6.5M |
# # #