Baldwin announces strategic actions to optimize performance
Wednesday, April 06, 2011
Press release from the issuing company
Shelton, Conn. – Baldwin Technology Company Inc., a global leader in process automation technology for the printing industry, today announced a strategic reorganization of the Company's operations in Europe and a 9% reduction in global employment levels.
The Company estimates that the total cost of implementing this Q3 FY2011 restructuring plan will be approximately $2.4 million and will result in an annual savings of approximately $5 million. Coupled with actions taken earlier in the current fiscal year, the total impact of all restructurings is expected to result in savings of over $6.6 million annually.
As part of the above described plan, the Company will exit facilities in Egelsbach, Germany and Tranas, Sweden and consolidate engineering and production into existing Baldwin operations in Germany and the U.K. Baldwin will reorganize its sales and service structure in Southeast Asia, and the Company's Japan sales office will move to more efficient space in Tokyo.
Additionally, the Company announced the planned exit of its U.S. food blending and packaging business. The Company will classify its non-core food blending and packaging business (which currently represents approximately 3% of total annual revenues) as discontinued operations, which will result in a charge during the third quarter primarily related to the impairment of goodwill and other intangible assets associated with that business in the amount of approximately $2.5 million. During the fiscal fourth quarter ending June 30, 2011, the Company expects to incur an additional $3 million facility related charge and minor costs to reduce employment at its food blends operation.
Baldwin President and CEO Mark T. Becker said "Our management team has been working for several months on a strategic plan to better leverage our global platform and optimize our performance, with a goal of enhancing shareholder value. The facilities consolidation will lower our cost structure and improve our ability to service Baldwin's global customers. The headcount reduction right-sizes our employment costs for current sales levels and further growth expected in 2012. Finally, the toll-manufacturing food business acquired in 2006 as part of our purchase of the Oxy-Dry group of companies did not have the scale or structure to be competitive and risks diverting cash from core growth businesses. By exiting this business we will be able to focus our resources on profitable growth as part of our commitment to be an industry leader in equipment, consumables, parts and service for print media customers."
The Company will provide additional details on the restructuring and discontinued operations in its third quarter earnings release and conference call with investors scheduled for May 10th.
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