BREED Announces Global Restructuring Program, Plans to Offer $250 Million of Convertible Preferred Securities, Anticipates First Quarter Loss.LAKELAND, Fla.--(BUSINESS WIRE)--Nov. 6, 1997--BREED Technologies, Inc. (NYSE NYSE See: New York Stock Exchange :BDT BDT In currencies, this is the abbreviation for the Bangladesh Taka. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ), an emerging worldwide leader in automotive occupant safety systems, is announcing a global restructuring program to lower its cost structure and fully realize the synergies of its recently completed acquisition of AlliedSignal's Safety Restraint Systems business (SRS SRS, SRS-A see slow-reacting substance. ). The company is taking a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. for the first time in its history, following two years of significant acquisition activity. The program includes a reduction of the company's global workforce; the consolidation of manufacturing, engineering and sales facilities in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Europe and Asia; the write-down of goodwill, equipment, tooling and certain other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. associated with businesses acquired in prior years; as well as a charge for in-process research and development at SRS. To cover the cost of this program, BREED expects to announce restructuring and other charges of between $250 million and $330 million pretax in the second quarter ended Dec. 31, 1997, of the current fiscal year. The program is expected to generate cash savings of approximately $800 million over the next five years. "This comprehensive restructuring program, along with our recent acquisition of SRS and the strategic alliance with Siemens AG Siemens AG German electrical-equipment manufacturer. The first Siemens company, Siemens & Halske, was founded in Berlin in 1847 to build telegraph installations. , will provide BREED with the operational efficiency necessary to maintain our cost leadership and establish a strong platform for our growth in the industry," said Johnnie Cordell Breed, Co-Chairman and Chief Executive Officer. To partially finance the SRS acquisition and reduce debt, the company plans to offer $250 million of convertible trust preferred securities in a transaction under Rule 144A Rule 144A A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves. of the Securities Act of 1933, as amended. The securities will not be registered under the Securities Act or applicable state securities laws and may not be offered or sold absent registration under the Securities Act. BREED also announced that based on preliminary results it expects to report a loss of between 12 cents and 15 cents per Common share for the first quarter ended Sept. 30, 1997, of fiscal year 1998, which is in line with current analysts' expectations. The company's first quarter revenues are historically lower due to the European auto industry's holiday schedule, as more than half of BREED's revenues are generated in Europe. Also contributing to the loss are higher interest expense, a changing product mix, and business disruption costs resulting from ongoing manufacturing plant rationalization programs. As another means to assist the company in financing its future growth, BREED's Board of Directors passed a resolution suspending the issuance of cash dividends on Common stock. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Johnnie Breed said the cessation of cash dividends is "an important and necessary measure required to ensure that the company directs its cash resources towards capitalizing on growth opportunities that will enable us to achieve our goal of becoming the leading supplier of complete integrated occupant protection systems. We think the SRS acquisition along with increasing demand for safety and crash protection presents the company with future growth opportunities which the company is positioning itself to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. ." BREED's Board of Directors will consider reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. of the regular quarterly dividend at a later date. Headquartered in Lakeland, BREED is rapidly emerging as one of the world's most fully integrated suppliers of complete automotive occupant safety systems. The company supports its growing list of automotive customers with advanced engineering, testing and manufacturing facilities located in 13 countries around the globe. Information about BREED and its products is available on the Internet at http://www.breedtech.com . Certain of the statements in this press release are not historical facts and are "forward-looking statements" which are subject to risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties may include future economic and competitive conditions, the impact of competitive products, services and pricing, research and development, commercialization and technological difficulties, the availability and cost of financing, the company's strategy for dealing with its real estate, environmental matters, the effect of the company's accounting policies, the course and results of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. affecting the company and a number of other risks. -0- NOTE TO EDITORS: In the Internet/email address noted in this news release, there is an "at" symbol between weirt and breedtech.com. In the World Wide Web address noted in this news release, there is a double slash between http: and www.breedtech.com. These symbols may not appear properly in some systems. CONTACT: BREED Technologies, Inc., Lakeland Media Relations Timothy Weir, 941/668-6464 weirt@breedtech.com or Investor Relations Investor relations The process by which the corporation communicates with its investors. Bob Fincher, 941/668-6049 |
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