THQ announced that it has substantially completed the actions necessary to achieve its previously announced plan to reduce fiscal 2010 budgeted annual spending by $220 million.
“We have executed on our previously announced business realignment actions,” said Brian Farrell, THQ president and CEO. “Our goal is to return to profitability and generate positive cash flow in fiscal 2010, and to position THQ for long-term sustainable and profitable growth.
“We are confident in achieving these goals based on our focus on key market opportunities, our robust franchise portfolio and our dedicated and talented employee base,” said Farrell. “We look forward to demonstrating success with our upcoming fiscal 2010 releases, including UFC 2009: Undisputed, Red Faction Guerrilla and Darksiders.”
During the fiscal 2009 fourth quarter, the company expects to report approximately $45 million in non-GAAP business realignment expenses, which includes cash costs of approximately $4 million, including severance and other employee-related costs, and lease and other contract termination costs; and approximately $41 million in non-cash impairment charges related to the cancellation of titles and long-lived assets associated with studio closures. The company expects to record additional charges of up to $10 million in fiscal 2010 as certain projects are completed and facilities are vacated. The charges will be excluded from the company’s non-GAAP results.