Jacuzzi Brands Announces U.K. Bath Products Plant Consolidation; Action Anticipated to Generate $3.0 Million Improvement in Operating Income in Fiscal 2007.WEST PALM BEACH, Fla. -- Jacuzzi Brands, Inc. (NYSE NYSE See: New York Stock Exchange : JJZ), a leading global producer of branded bath and plumbing products for the residential, commercial and institutional markets, today announced that it would consolidate its Bradford, U.K. ceramics production into its Newcastle-Under-Lyme, U.K. facility and its outsourcing partners. The Bradford facilities manufacture bath products including shower enclosures, sanitary sanitary /san·i·tary/ (san´i-tar?e) promoting or pertaining to health. san·i·tar·y adj. 1. Of or relating to health. 2. ware ware See Groupware, Hardware, Shareware, Software. and acrylic baths. This action, which was not included in our previously issued earnings guidance for fiscal 2006, is part of Jacuzzi Brands' ongoing initiatives to improve the overall operating performance of its Bath Products business segment to meet its long term operating goals. The Company does not anticipate any customer service disruptions during this period. The Company further stated that the costs of this consolidation are expected to approximate $3.1 million or $0.02 per share, including $1.3 million for anticipated severance and other cash expenses to be classified as restructuring and $1.3 million in accelerated depreciation Accelerated Depreciation Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years of the life of an asset. Notes: The straight-line depreciation method spreads the cost evenly over the life of an asset. and $0.5 million in inventory write-offs to be included in cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold . These non-recurring charges will be taken during the second, third and fourth quarters of fiscal 2006. Management plans to complete this plant consolidation and integration by fiscal year end. This action is not expected to have any effect on the Company's 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. in fiscal 2006 after excluding the non-recurring charges but is expected to improve operating income beginning in fiscal 2007 by approximately $3.0 million per year. Approximately 100 employees will be affected by this action. Al Marini, President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Jacuzzi Brands, Inc., said, "Jacuzzi Brands is committed to delivering maximum value to shareholders, while at the same time delivering excellent design and quality to our customers. While we regret the disruption to the Bradford workforce, this consolidation is part of our ongoing plan to remain competitive in the market place, improve efficiencies, and mitigate the impact of rising raw material and energy costs." Jacuzzi Brands, Inc., through its subsidiaries, is a global manufacturer and distributor of branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths whirlpool bath see whirlpool bath. , spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. Our products are marketed under our portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ZURN(R) and ASTRACAST(R). Learn more at www.jacuzzibrands.com. Disclosure Concerning 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. Any forward-looking statements made within this release including the Company's current expectations with respect to future market conditions, future operating results and other plans, represent management's best judgment as to what may occur in the future and are intended to fall within the meaning of 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. Words such as "expects," "intends," "plans," "projects," "believes," "estimates," "may," "will," "should," "shall," and similar expressions typically identify such forward-looking statements. Even though the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. In particular, various economic and competitive factors, including those outside our control, such as interest rates, foreign currency exchange rates, inflation rates, instability in domestic and foreign financial markets, terrorist acts, consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. patterns, energy costs and availability, freight costs, availability of consumer and commercial credit, adverse weather, levels of residential and commercial construction, and changes in raw material and component costs, and the credit worthiness of our customers, insurers, and investees, and other factors contained in the Company's filings with the Securities and Exchange Commission could cause our actual results during the remainder of 2006 and in the future years to differ materially from those expressed in this press release. |
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