AKRON, Ohio, Aug. 31 /PRNewswire-FirstCall/ -- A. Schulman, Inc. (Nasdaq-GS: SHLM) today announced that it is streamlining manufacturing operations at its Crumlin, South Wales (U.K.) production facility, and moving part of the plant's capacity to two other, larger plants in Europe.
As a result of the realignment, several production lines at the 74,000-square-foot U.K. facility will be shut down and approximately 30 jobs will be eliminated. Approximately 10,000 tons of masterbatch production will be moved from Crumlin to more cost-efficient, higher-capacity A. Schulman production lines in Bornem, Belgium (147,000 square feet) and Givet, France (243,000 square feet). At the same time, A. Schulman will continue to enhance the capabilities of the Crumlin plant to produce smaller lots of colors and other specialty compounds for the local market. As part of this effort, the Company recently invested approximately $1.2 million in a versatile continuous mixer for specialized products at the Crumlin facility.
"Our focus on continuous improvement and manufacturing redistribution is essential for enhancing the competitiveness of our European operations," said Bernard Rzepka, A. Schulman General Manager and Chief Operating Officer, Europe. "By moving some production out of Crumlin, we are consolidating capacity to our larger, more efficient Bornem and Givet facilities. At the same time, we are able to refine our Crumlin operations to focus on local demand for smaller lots of colors and other specialty compounds."
The Company anticipates a total annual after-tax benefit of approximately $0.8 million to $1.0 million from the production moves announced above. The Company anticipates taking the following estimated after-tax charges related to the activities outlined above:
Approximately $400,000 in cash for termination benefits and other employee costs to be taken during the Company's fiscal 2010 fourth quarter.
Approximately $200,000 from impairment of assets to be taken over the next few quarters.
These items are expected to result in a restructuring cost of approximately $600,000.
A. Schulman also announced two personnel moves in Europe that are consistent with the Company's ongoing integration of operations from its ICO Polymers acquisition. In the U.K., Robert Stanworth, who heads A. Schulman's U.K. operations, assumes responsibility for the ICO Polymers facility in Gainsborough, England. In France, Heinrich Lingnau, business unit leader for ICO Polymers in Europe, becomes responsible for managing ICO Polymers' three production facilities in France, in addition to managing A. Schulman's operations in France.
About A. Schulman, Inc.
Headquartered in Akron, Ohio, A. Schulman is a leading international supplier of high-performance plastic compounds and resins. These materials are used in a variety of consumer, industrial, automotive and packaging applications. The Company employs about 2,900 people and has 37 manufacturing facilities in North America, South America, Europe and Asia. On April 30, 2010, the Company completed its acquisition of ICO, Inc., a global manufacturer of specialty resins and concentrates for rotomolding and a provider of specialty polymer services. A. Schulman reported revenues of $1.3 billion for the fiscal year ended August 31, 2009, and ICO reported revenues of $300 million for the fiscal year ended September 30, 2009. Additional information about A. Schulman can be found at www.aschulman.com.
Cautionary Note on Forward-Looking Statements
A number of the matters discussed in this document that are not historical or current facts deal with potential future circumstances and developments and may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historic or current facts and relate to future events and expectations. Forward-looking statements contain such words as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. Forward-looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which management is unable to predict or control, that may cause actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements, and that could adversely affect the Company's future financial performance, include, but are not limited to, the following:
- worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company's major product markets;
- the effectiveness of the Company's efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
- competitive factors, including intense price competition;
- fluctuations in the value of currencies in major areas where the Company operates;
- volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company's products, particularly plastic resins derived from oil and natural gas;
- changes in customer demand and requirements;
- effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions and restructuring initiatives;
- escalation in the cost of providing employee health care;
- uncertainties regarding the resolution of pending and future litigation and other claims;
- the performance of the North American auto market; and
- further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products.
The risks and uncertainties identified above are not the only risks the Company faces. Additional risk factors that could affect the Company's performance are set forth in the Company's Annual Report on Form 10-K and the most recent Form 10-Q. In addition, risks and uncertainties not presently known to the Company or that it believes to be immaterial also may adversely affect the Company. Should any known or unknown risks or uncertainties develop into actual events, or underlying assumptions prove inaccurate, these developments could have material adverse effects on the Company's business, financial condition and results of operations. This document contains time-sensitive information that reflects management's best analysis only as of the date of this document. The Company does not undertake an obligation to publicly update or revise any forward-looking statements to reflect new events, information or circumstances, or otherwise. Further information concerning issues that could materially affect financial performance related to forward-looking statements can be found in the Company's periodic filings with the Securities and Exchange Commission.
SOURCE A. Schulman, Inc.