Brown & Sharpe Manufacturing Company Announces New Cost Reduction Initiatives.NORTH KINGSTOWN North Kingstown (kĭng`stən, kĭngz`toun'), town (1990 pop. 23,786), Washington co., S central R.I., on Narragansett Bay; inc. as Kings Towne 1674, divided into North Kingstown and South Kingstown 1723. , R.I.--(BUSINESS WIRE)--July 1, 1999-- Brown & Sharpe Manufacturing Company announced the second in a series of cost reduction initiatives to be implemented throughout the Company in 1999. The current restructuring affects its Measuring Systems Division, the Company's largest Division. This initiative follows a restructuring of its Precision Measuring and Custom Metrology businesses in the United Kingdom announced on March 30, 1999. The Measuring System Division's restructuring provides for focused factory missions to accelerate the rationalization rationalization, in psychology: see defense mechanism. of product lines and eliminate overlaps in selling, R&D, manufacturing, and service. The plan calls for the elimination of 125 positions worldwide, bringing the total workforce reduction in 1999, including the reduction in the United Kingdom mentioned above, to 355 positions. The Company will incur an estimated $11 million pre-tax 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. , with approximately $9 million being recorded in the second quarter of 1999. Approximately $8 million of the $11 million charge represents cash payments which will be paid in 1999 and 2000. The Company expects to realize annual savings of about $10 million per year when the program is fully implemented. This latest restructuring action will cause the Company to breach certain financial covenants in loan agreements with its principal senior lenders and, therefore, be in technical default under such agreements. The Company is currently in discussions with such lenders to amend appropriate provisions of these loan agreements to cure these defaults. Management believes the Company will be successful in obtaining these amendments and is taking steps to ensure that the Company's working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. are met. The Company also announced that it expects sales in the second quarter to be flat or below that of the second quarter of 1998, and earnings for the quarter to be substantially less than that of the comparable period in 1998. Management also expects sales and earnings for the year to be below that of 1998 due to a continuing softening in the precision measuring tools Because human senses - like vision, hearing, touch, heat/cold receptors are subjective - which means that they are not very accurate nor reliable - science do not use them in measurements. Instead, measuring tools are used. markets as well as reduced demand for the smaller coordinate measuring machines ("CMM (Capability Maturity Model) A process developed by SEI in 1986 to help improve, over time, the application of an organization's supporting software technologies. ") and certain of the more highly configured con·fig·ure tr.v. con·fig·ured, con·fig·ur·ing, con·fig·ures To design, arrange, set up, or shape with a view to specific applications or uses: CMMs. Frank T. Curtin, Chairman, President, and Chief Executive Officer, said, "The softer market outlook means that we must accelerate our programs to focus our factories, rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear product lines, and reduce costs. We expect that further restructuring initiatives will be implemented during the year." This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements involve a number of assumptions, risks, and uncertainties that could cause actual results of the Company to differ materially from those matters expressed in or implied by such forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are in some cases beyond the control of the Company and may cause the actual results, performance, or achievements of the Company to differ materially from anticipated future results, performance, or achievements expressed or implied by such forward-looking statements. Additional information regarding this risk factor and uncertainties is detailed from time to time in the Company's SEC filings. |
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