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."