Champion announces restructuring charge.WATERLOO, Ontario--(BUSINESS WIRE)--Dec. 9, 1996--Champion Road Machinery Ltd. Monday announced that it will take a $2.5 million 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. against its fourth quarter earnings resulting in a negative impact on Earnings Per Share of 22 cents. The charge relates to the significant downsizing (1) Converting mainframe and mini-based systems to client/server LANs. (2) To reduce equipment and associated costs by switching to a less-expensive system. (jargon) downsizing and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of the Cambridge Snow and Ice Control equipment business, and the streamlining of the Pro-Pav paving equipment product offering. Amounts provided will be used to write down the inventory of discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: products and for the cost of staff reductions totaling 75 people. "In the last few years we have grown the business through five acquisitions of varying sizes" said Arthur Church president, and chief executive officer of Champion. "Some of these new acquisitions have not met our expectations and after a detailed review we have decided to significantly reduce the product offerings and staffing levels in our Cambridge and Pro-Pav operations to ensure a profitable base for future growth. "At our Pro-Pav division in Chambersburg, Pa., we will focus on the larger classes of paving equipment where we have very competitive and technologically advanced products. This will significantly reduce the complexity of this business and the corresponding overhead structure required to support it." "In Cambridge, we have been unsuccessful since purchasing the Frink Canada line “RAV” redirects here. For other uses, see RAV (disambiguation). The Canada Line, formerly known as the Richmond-Airport-Vancouver Line ("RAV Line"), is a new rapid transit line of the Greater Vancouver Transportation Authority (TransLink) currently under of Snow and Ice Control equipment out of bankruptcy in early 1995. Our own internal problems have been compounded by a fifty percent reduction in the Ontario demand for this type of equipment, and the resulting price pressures that inevitably occur in a down market. "We will be significantly reducing our Snow and Ice Control product line focusing on only those products that will ensure acceptable profit levels. In addition, we have also started manufacturing our Motor Grader attachments which were previously supplied by an outside vendor. These products are well designed and can be efficiently produced in this facility. "With the restructuring reserve we will report a fourth quarter loss but will still be profitable in 1996 with full year Earnings Per Share expected to be in the $0.10 to $0.20 range. Our core businesses, which include Motor Graders and our Retail operation in Ontario, were off during 1996, but will still generate Earnings Per Share of approximately $0.65. "We expect that with the actions taken, our new businesses will return to profitability by the second quarter of 1997," said Church. "As a result of our recruiting efforts during 1996, we now have strong management in each of our operating divisions. We are looking forward to 1997, and we expect our first half results to be consistent with 1996 performance, while our second half will improve dramatically year over year. "Our Motor Grader business continues to strengthen and with the many cost reduction initiatives completed we expect stronger results. The management teams for the Cambridge and Pro-Pav divisions are excited about the prospects for the future, based on our new, focused approach. With a good foundation put in place for 1997, we will be able to re-establish our profitable growth." Champion Road Machinery Ltd. designs, manufactures and markets graders, compactors, asphalt asphalt (ăs`fôlt, –fălt), brownish-black substance used commonly in road making, roofing, and waterproofing. Chemically, it is a natural mixture of hydrocarbons. pavers, and other related equipment used in the construction and maintenance of roads by government authorities and private contractors in more than 95 countries. -0- Stock Exchanges: Toronto Ticker Symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors : TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). & ME - CHN CHN China CHN Chain CHN Canadian Health Network CHN Coalition on Human Needs CHN California Homeschool Network CHN Cleveland Housing Network CHN Center for Human Nutrition CHN Carbon, Hydrogen, Nitrogen CHN Community Health Nurse Montreal Nasdaq - CRMLF Nasdaq CONTACT: Champion Road Machinery Ltd. Scott E. Hall, VP/Finance - CFO See Chief Financial Officer. , 519/884-6000 |
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