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New England Business Service Announces Restructuring, To Save $4.5 Million

Press release from the issuing company

GROTON, Mass.--May 15, 2001--New England Business Service, Inc. (NYSE: NEB) today announced a plan to restructure certain of its operations to reduce operating costs. The plan includes a net reduction in its workforce of approximately 3% through a combination of attrition and severance, along with the elimination of excess capacity principally by consolidating its Ogden, Utah manufacturing plant and a portion of its warehouse and distribution operation in Sudbury, Massachusetts into existing operations. The Company stated that it expects to record a charge of approximately $3.3 million, or $.16 per share, in the fourth quarter ending June 30, 2001, to reflect the financial impact of the plan. Related charges of approximately $1.3 million, or $.06 per share, principally for training, relocation and asset impairments, will be incurred during fiscal 2002. The Company also anticipates recording a charge in the current quarter of approximately $530 thousand, or $.03 cents per share, to reflect the write-off of its investment in a privately owned web hosting company. The announced plan is expected to reduce annual operating costs by approximately $4.5 million, or $.22 per share, of which approximately $4.0 million, or $.19 per share, will be realized in fiscal year 2002. Mr. Robert J. Murray, Chairman and CEO, commented, "This restructuring focuses principally on reducing costs in response to both weakened economic conditions, which have significantly impacted our business in recent months, and the greater productivity we are realizing from our investments and business unit integration actions already taken. Though difficult for the organization, these actions are necessary for us to continue to be a strong, vibrant company and to realize our objective of achieving earnings growth of 10% to 15% in fiscal 2002 and beyond."