Glu Mobile Inc. (NASDAQ:GLUU) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05 Costs Associated with Exit or Disposal Activities.
As part of its efforts to align its operations with evolving
business needs, on January 10, 2017, Glu Mobile Inc. (Glu)
committed to a restructuring plan consisting of the following:
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the elimination of approximately 107 positions, |
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the discontinuation of all operations at Glus Bellevue, |
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the potential elimination of approximately an additional |
This restructuring plan is consistent with the actions Glu took
during 2016 to streamline its operations, including the closing
of game development studios in Beijing, China and San Mateo,
California, as well as a separate studio in Bellevue,
Washington.However, Glu intends to add headcount in its existing
San Francisco Bay Area and Hyderabad, India locations to support
its successful evergreen titles and develop additional titles.As
a result, Glu expects that its overall headcount and research and
development expenses will be at approximately the same level at
the end of 2017 as it was before implementation of this
restructuring plan.
As part of this restructuring plan, Glu will immediately begin
transitioning game development and live operations for its Racing
Rivals title from Glus Long Beach, California studio to
Carbonated Inc. (Carbonated). Carbonated is a mobile game studio
that is managed by game industry veteran Travis Boatman and
includes members of the team that created the mobile version of
Madden Football for Electronic Arts.Glu has agreed to provide
Carbonated with development funding and a percentage of the
profits generated by the Racing Rivals title to the extent that
Carbonated is able to increase the net revenues from this
title.The development funding is fully recoupable by Glu, along
with user acquisition, hosting and certain other game-related
costs, before Glu is obligated to make any profit sharing
payments to Carbonated.As a result of the structure of this
relationship, Glu will be required to consolidate Carbonateds
financial results into Glus financial statements beginning in the
first quarter of 2017.
Glu expects to incur pre-tax charges of approximately $3.2
million to $3.5 million related to the restructuring plan if the
Contingent Portion of the plan is not triggered, and
approximately $4.9 million to $5.4 million if the Contingent
Portion of the plan is triggered.If the Contingent Portion of the
plan is not triggered, Glu estimates that approximately $2.0
million of such charges will be related to employee severance and
benefits and approximately $1.2 to $1.5 million will be related
to lease, contract termination and other costs.If the Contingent
Portion of the plan is triggered, Glu estimates that
approximately $2.6 million of such charges will be related to
employee severance and benefits and approximately $2.3 to $2.8
million will be related to lease, contract termination and other
costs.If the Contingent Portion of the plan is not triggered, Glu
expects to recognize substantially all of the
restructuring-related costs during the first quarter of 2017.If
the Contingent Portion of the plan is triggered, Glu expects to
recognize the restructuring-related costs attributable to the
Contingent Portion in the second quarter of 2017.Glu expects
substantially all of the severance and benefit charges, and a
majority of the lease, contract termination and other costs, to
entail cash expenditures.The actions associated with the
restructuring plan are expected to be substantially completed by
the end of the second quarter of 2017 and fully completed by the
end of the fourth quarter of 2017.
Item 2.05 of this Report contains forward-looking statements
within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act, which are identified by words
such as plans, expects, estimates or estimated, and other similar
words, expressions, and formulations.These forward-looking
statements are based upon current expectations and involve risks
and uncertainties that could cause the actual amounts to differ
materially from those described in this report.Factors that could
contribute to such differences include: Glus ability to implement
the restructuring in various jurisdictions; whether the
Contingent Portion of the restructuring plan is triggered,
possible changes in the size and components of the expected costs
and charges associated with the restructuring; risks associated
with Glus ability to achieve the benefits of the restructuring;
possible expansion of the restructuring plan; expectations and
results of current and future titles; and the risks detailed in
Glus periodic reports filed with the Securities and Exchange
Commission. By making these forward-looking statements, Glu
undertakes no obligation to update these statements for revisions
or changes after the filing of this Form 8-K.
About Glu Mobile Inc. (NASDAQ:GLUU)
Glu Mobile Inc. develops, publishes and markets a portfolio of games. The Company’s games appeal to a cross section of the users of smartphones and tablet devices who download and make purchases within its games through direct-to-consumer digital storefronts. It operates through mobile games segment. It operates in various geographical regions, including the United States; Americas, excluding the United States; Europe, the Middle East and Africa (EMEA), and Asia Pacific. It creates games in various genres, such as action, celebrity, sports and simulation that are based on its brands, including Contract Killer, Cooking Dash, Deer Hunter, Diner Dash, Eternity Warriors, Frontline Commando, Gun Bros and Heroes of Destiny. The Company also creates games based on third-party licensed brands, including Kim Kardashian: Hollywood, Kendall and Kylie, Katy Perry Pop, James Bond: World of Espionage, Mission Impossible: Rogue Nation and Sniper X With Jason Statham. Glu Mobile Inc. (NASDAQ:GLUU) Recent Trading Information
Glu Mobile Inc. (NASDAQ:GLUU) closed its last trading session up +0.06 at 2.24 with 3,150,232 shares trading hands.