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Delphax Technologies to Consolidate North American Operations

Thursday, December 05, 2002

Press release from the issuing company

MINNEAPOLIS, Dec. 4 -- Delphax Technologies Inc. today announced plans to consolidate its North American manufacturing and engineering operations at its Mississauga, Ontario, facility located outside of Toronto.  The operations are currently divided between Delphax's headquarters location in Minnetonka, Minnesota, and the Mississauga facility, which the company acquired last December. The company's worldwide headquarters and sales, marketing and customer service functions will continue to be based in Minnetonka. Delphax said it expects to incur approximately $1.0 million in restructuring expenses over the course of the consolidation, which is scheduled to be completed by the end of calendar 2003.  The consolidation will include the relocation of a small number of employees from Minnetonka to Mississauga, and a net reduction of approximately 30 manufacturing, engineering and support positions in North America.  This action is expected to eliminate annual operating expenses in excess of $1.6 million while improving the company's ability to provide customer service and fulfill current and future orders.  The cost savings could have an impact on results as early as Delphax's fiscal 2003 third quarter ending in June 2003, the company said. Delphax currently produces cut-sheet digital presses in its Minnetonka facility, and roll-fed digital presses in its Mississauga facility.  Both Delphax digital presses are based upon the company's exclusive Electron Beam Imaging (EBI) technology.  Its flagship products deliver industry-leading throughput for the high-speed, high-quality print industry. "As we stated when we made our Canadian acquisition a year ago, we would consider our integration opportunities over a 12-month period," said Jay Herman, chairman and chief executive officer.  "The acquisition brought together two highly complementary organizations, with highly complementary product lines.  It also gave us an outstanding Canadian manufacturing and design facility with untapped capacity and potential for expansion -- an important element in our plans for future growth. "Beyond the tangible benefits, this consolidation streamlines and simplifies the organization, improves our efficiency, and eliminates redundant costs.  More importantly, it allows our two North American operating units to do what each site does best -- engineering, research and development and manufacturing in Mississauga, and marketing, sales and customer service from Minnetonka." Delphax Technologies, formerly Check Technology Corporation, acquired the North American assets of Delphax Systems from Xerox Corporation in December 2001.  The company subsequently changed its name in April 2002 to reflect the increased breadth of its product line and expanded market opportunities. As previously announced, the company reduced its Canadian workforce by approximately 40 manufacturing and support positions in April of this year as an element of its ongoing integration plan.




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