Baldwin Announces Strategic Reorganization, Consolidation Plan
SHELTON, CT—April 5, 2011—Baldwin Technology Co. announced a strategic reorganization of the company’s operations in Europe and a 9 percent reduction in global employment levels.
The company estimates that the total cost of implementing this third-quarter 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, Baldwin will exit facilities in Egelsbach, Germany, and Tranas, Sweden, and consolidate engineering and production into existing Baldwin operations in Germany and the United Kingdom. The company will reorganize its sales and service structure in Southeast Asia, and its 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. Baldwin will classify its non-core food blending and packaging business (which currently represents approximately 3 percent 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,” Becker concluded.
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.
Baldwin Technology Co. is a leading international supplier of process automation equipment and related consumables for the printing, publishing and packaging industries. Baldwin offers its customers a broad range of market-leading technologies, products and systems that enhance the quality of printed products and improve the economic and environmental efficiency of the printing process.
Headquartered in Shelton, CT, the Company has operations strategically located in the major print media markets and distributes its products via a global sales and service infrastructure. Baldwin’s technology and products include cleaning systems, fluid management and ink control systems, web press protection systems and drying and curing systems and related consumables. For more information, visit www.baldwintech.com
Source: company release.