Jacuzzi Brands Announces U.K. Bath Products Plant Consolidation; Action Anticipated to Generate $3.0 Million Improvement in Ope
March 10 2006 - 8:22AM
Business Wire
Jacuzzi Brands, Inc. (NYSE: JJZ), a leading global producer of
branded bath and plumbing products for the residential, commercial
and institutional markets, today announced that it would
consolidate its Bradford, U.K. ceramics production into its
Newcastle-Under-Lyme, U.K. facility and its outsourcing partners.
The Bradford facilities manufacture bath products including shower
enclosures, sanitary ware and acrylic baths. This action, which was
not included in our previously issued earnings guidance for fiscal
2006, is part of Jacuzzi Brands' ongoing initiatives to improve the
overall operating performance of its Bath Products business segment
to meet its long term operating goals. The Company does not
anticipate any customer service disruptions during this period. The
Company further stated that the costs of this consolidation are
expected to approximate $3.1 million or $0.02 per share, including
$1.3 million for anticipated severance and other cash expenses to
be classified as restructuring and $1.3 million in accelerated
depreciation and $0.5 million in inventory write-offs to be
included in cost of goods sold. These non-recurring charges will be
taken during the second, third and fourth quarters of fiscal 2006.
Management plans to complete this plant consolidation and
integration by fiscal year end. This action is not expected to have
any effect on the Company's operating income in fiscal 2006 after
excluding the non-recurring charges but is expected to improve
operating income beginning in fiscal 2007 by approximately $3.0
million per year. Approximately 100 employees will be affected by
this action. Al Marini, President and Chief Operating Officer of
Jacuzzi Brands, Inc., said, "Jacuzzi Brands is committed to
delivering maximum value to shareholders, while at the same time
delivering excellent design and quality to our customers. While we
regret the disruption to the Bradford workforce, this consolidation
is part of our ongoing plan to remain competitive in the market
place, improve efficiencies, and mitigate the impact of rising raw
material and energy costs." Jacuzzi Brands, Inc., through its
subsidiaries, is a global manufacturer and distributor of branded
bath and plumbing products for the residential, commercial and
institutional markets. These include whirlpool baths, spas,
showers, sanitary ware and bathtubs, as well as professional grade
drainage, water control, commercial faucets and other plumbing
products. Our products are marketed under our portfolio of brand
names, including JACUZZI(R), SUNDANCE(R), ZURN(R) and ASTRACAST(R).
Learn more at www.jacuzzibrands.com. Disclosure Concerning
Forward-Looking Statements Any forward-looking statements made
within this release including the Company's current expectations
with respect to future market conditions, future operating results
and other plans, represent management's best judgment as to what
may occur in the future and are intended to fall within the meaning
of the Private Securities Litigation Reform Act of 1995. Words such
as "expects," "intends," "plans," "projects," "believes,"
"estimates," "may," "will," "should," "shall," and similar
expressions typically identify such forward-looking statements.
Even though the Company believes the expectations reflected in such
forward-looking statements are based on reasonable assumptions, it
can give no assurance that its expectations will be attained. In
particular, various economic and competitive factors, including
those outside our control, such as interest rates, foreign currency
exchange rates, inflation rates, instability in domestic and
foreign financial markets, terrorist acts, consumer spending
patterns, energy costs and availability, freight costs,
availability of consumer and commercial credit, adverse weather,
levels of residential and commercial construction, and changes in
raw material and component costs, and the credit worthiness of our
customers, insurers, and investees, and other factors contained in
the Company's filings with the Securities and Exchange Commission
could cause our actual results during the remainder of 2006 and in
the future years to differ materially from those expressed in this
press release.
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