SAN JOSE, Calif. In what appears to be a cost-cutting measure, Applied Materials Inc. on Friday (Jan. 27) said that it plans to take a charge of $212 million for selling and disposing select real estate assets.
The company expects to sell or otherwise dispose of certain owned or leased facilities located in Hayward, Calif.; Hillsboro, Ore.; Danvers, Mass.; Chunan, South Korea; and Narita, Japan.
These facilities were acquired either as part of a merger or under business conditions that have changed, according to Applied (Santa Clara, Calif.). Average savings associated with these actions are projected to be approximately $29 million annually through 2014.
This action is not expected to adversely impact the company's ability to serve its customers or execute its business strategies. Applied intends to complete this action as soon as feasible.
Applied expects to record pre-tax asset impairment and restructuring charges of approximately $212 million in its first fiscal quarter ending Jan. 29, consisting of approximately $122 million for asset write-offs and impairments and approximately $90 million for restructuring of lease obligations.
The company anticipates that the amount of future cash expenditures as a result of implementing this action will total approximately $109 million, which will be offset in part by projected cash proceeds from the sale of the properties.
In its most recent quarter, Applied, the world's largest supplier of semiconductor equipment, met Wall Street’s expectations despite a down period in terms of sales. And the company’s outlook remains mixed amid ongoing sluggish orders from the silicon foundries and in China.