Ceradyne, Inc. In Cost Cutting Measure Will Close Manufacturing Plant in France
May 19 2009 - 7:30AM
Business Wire
Ceradyne, Inc. (Nasdaq:CRDN) announced today that, in accordance
with the French legal process, its ESK Ceramics France subsidiary
(�ESK France�) is presenting to the local employees�
representatives a plan for closing its manufacturing plant in
Bazet, France, effective later this year. As a result, it is
anticipated that ESK France will reduce its workforce by
approximately 95 employees, primarily composed of manufacturing,
production and additional support staff at the plant. This action
is being implemented as a cost-cutting measure to eliminate losses
that were incurred at this facility due to the recent severe
economic contraction and is consistent with Ceradyne�s ongoing
objective to lower the costs of its manufacturing operations.
This manufacturing facility is an 88,000 square foot building
owned by ESK France that has been used to support the production of
various industrial ceramic products. Production of these products
will be transferred to its German subsidiary, ESK Ceramics GmbH
& Co. KG (�ESK Ceramics�) in Kempten, Germany.
Affected employees will be eligible for a severance package that
includes severance pay, continuation of benefits and outplacement
services. Pre-tax charges relating to this corporate restructuring
will also include various other costs to close the plant. The total
pre-tax charges are estimated to be in the range of approximately
$11.0 to $13.0 million, including non-cash pre-tax charges of
approximately $2.2 million relating primarily to assets that will
be written off or disposed of in connection with the closure of the
facility. The majority of these pre-tax charges will be accrued
during the second quarter of 2009. Although discussed in the April
28, 2009 teleconference, these non-recurring pre-tax charges were
not included in the updated earnings guidance provided during that
teleconference.
Joel P. Moskowitz, Ceradyne president and chief executive
officer, commented: �The contributions made by all members of the
team at Bazet are sincerely appreciated. This strategic decision
was difficult but necessary to ensure that ESK Ceramics in Germany
focuses its resources and invests appropriately in the production
and marketing of products that represent significant value to its
customers.
�Our entire ESK Ceramics management team as well as the rest of
the Ceradyne organization is focused on the challenges of the
global economic downturn. Our plan is to continue to 'right-size'
our company without compromising our dedication to manufacturing
high-quality products at the lowest possible costs and emerge from
this recession as a more efficient company.�
Ceradyne develops, manufactures and markets advanced technical
ceramic products and components for defense, industrial,
automotive/diesel and commercial applications. Additional
information can be found at the Company�s web site:
www.ceradyne.com.
Except for the historical information contained herein, this
press release contains forward-looking statements regarding future
events and the future performance of Ceradyne that involve risks
and uncertainties that could cause actual results to differ
materially from those projected. Words such as "anticipates,"
"believes," "plans," "expects," "intends," "future," and similar
expressions are intended to identify forward-looking statements.
These risks and uncertainties are described in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2008,
and its Quarterly Reports on Form 10-Q, as filed with the U.S.
Securities and Exchange Commission. Readers are cautioned not to
place undue reliance on the forward-looking statements, which speak
only as of the date thereof.
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