DRYPERS CORPORATION ANNOUNCES OPERATIONS RESTRUCTURING.HOUSTON--(BUSINESS WIRE)--June 6, 1995--Drypers Corporation (Nasdaq:DYPR) announced today a consolidation of its U.S. diaper production operations from three plants to two, a move intended to improve profitability through the elimination of excess capacity. The consolidation includes the elimination of diaper production at Drypers' Houston plant location. The Company believes this move will substantially reduce its ongoing cost of production through the reduction of overhead. Prior to this consolidation, Drypers had been operating at about two-thirds of its total domestic capacity. The Company's headquarters will remain in Houston, where it will also continue to produce disposable disposable Nursing adjective Referring to that which is discarded or disposed of noun An item used in health care-related Pt contact which is discarded after use–eg masks, gloves, gowns, needles, paper products, syringes, wipes. See Biohazardous waste. training pants. Drypers will also continue to utilize its Houston facilities as a distribution center to ensure that customer service is not affected. Drypers' Chairman and Co-Chief Executive Officer, Walter V. Klemp, stated, "We determined that we can supply the entire U.S. more efficiently from two domestic plants than from three, thereby cutting costs and increasing profitability. This is especially significant as price competition heats up in the diaper category. At the same time, we free up machinery that may be put to better use in some of our growing international markets." Mr. Klemp continued, "The ability to consolidate production operations was facilitated by our unification (programming) unification - The generalisation of pattern matching that is the logic programming equivalent of instantiation in logic. When two terms are to be unified, they are compared. of the Company's four brands into the Drypers brand in February, 1995. Prior to that, each of Drypers three domestic plants produced different diaper brands. With the unification, we gained the ability to shift production." Mr. Klemp concluded, "We estimate this move will improve our ongoing operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. by roughly $2 million per year, however, it will result in a second quarter non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of between $2 and $3 million relating primarily to the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of certain diaper producing equipment to recoverable value. Also, with our programs to increase average diaper line speed in our other facilities, we will have ample capacity to supply potential new customers as they come on board. This is an important move that should make us significantly stronger and more competitive." Drypers' management indicated that the shut-down will necessitate ne·ces·si·tate tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates 1. To make necessary or unavoidable. 2. To require or compel. the lay-off of 26 employees, approximately 23% of the Company's Houston work force. Drypers Corporation manufactures and markets disposable baby diapers and related products under the Drypers brand name. The Company's products are sold through grocery stores and mass merchants throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and other international markets. The Company currently has production operations in the U.S., Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and Argentina. CONTACT: Drypers Corporation Walter Klemp, 713/682-6848 or Morgen-Walke Associates IR CONTACT: Lynn Morgen/Howard Zar/Melissa Garelick PRESS CONTACT: Lisa Bradlow, 212/850-5600 |
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