Item 2.05. Costs Associated with Exit or Disposal Activities.
On
The Strategic Actions are part of a broader plan by the Company to take meaningful actions to improve the alignment between the Company's organizational structure and its long-term business strategy, drive cost efficiencies enabled by the Company's technology and other competitive advantages, and continue to drive toward profitability and positive free cash flow ("Transformation Plan"). In addition to the Strategic Actions, the Transformation Plan is expected to include, but not be limited to, a series of actions such as a reduction in US hiring and backfills resulting from attrition occurring both in the first half of 2022 and anticipated for the remainder of the year; a review of occupancy costs with a view to consolidating offices and reducing related costs; and a planned pause in M&A activity and new market expansion for the remainder of 2022.
The Company currently estimates it will incur total pre-tax charges of
approximately
The charges that the Company expects to incur in connection with the Strategic
Actions are subject to a number of assumptions, and actual expenses and results
may differ materially from the Company's estimates disclosed above. Additional
charges and adjustments to the charges described above will occur in the quarter
ending
The Company is unable to make a good faith determination of an estimate or range of estimates for any additional charges that it will incur in connection with the broader Transformation Plan, required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K, including charges related to the consolidation or elimination of real estate leases outside of the leases specifically related to Modus. The Company will file an amendment to this report after it makes a determination of such estimates or range of estimates, if any. The Company expects that implementation of the Transformation Plan including cash payments, will be substantially complete in the second half of 2022. The Company intends to exclude the charges associated with the Transformation Plan from its non-GAAP financial measures, including Adjusted EBITDA.
This Item 2.05 contains forward-looking statements, including, but not limited
to, statements related to the expected costs associated with the Strategic
Actions referenced here. These forward-looking statements are based on the
Company's current expectations and inherently involve significant risks and
uncertainties. The Company's actual results and the timing of events could
differ materially from those anticipated in such forward-looking statements as a
result of these risks and uncertainties, which include, without limitation,
risks related to cost reduction efforts. A further description of the risks and
uncertainties relating to the business of the Company is contained in the
Company's Annual Report on Form 10-K for the year ended
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