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Post Holdings, Inc.
, a consumer packaged goods holding company, today announced it
will close its Dymatize manufacturing facility in Farmers Branch, Texas and
permanently transfer production to third party facilities under
co-manufacturing agreements. The decision will impact approximately 115
employees. Post has committed to providing severance and transition
assistance to all affected employees.
"We have determined that the cost and effort to bring this facility to an
acceptable reliability and margin level is better deployed in brand building
and sales infrastructure," said Rob Vitale, Post's President and CEO. "This
decision enables us to focus on rapidly changing consumer trends, developing
innovative products and building upon the strong Dymatize brand."
As a result of plant operational and quality issues, the manufacturing
facility has ceased production, resulting in a write-off of approximately
$9.2 million of unsalable inventory. Final closure of the facility is
expected to be completed by December 1, 2015, and through Dymatize's strong
relationships with certain co-manufacturers, production of the Dymatize
products by third parties has begun.
In connection with the closure, Post expects to incur pretax charges of
approximately $11 million to $16 million, which will be treated as
adjustments for purposes of calculating Adjusted EBITDA and other non-GAAP
measures. These charges include approximately $4 million to $6 million for
severance, retention and other plant closure costs and a reserve of
approximately $7 million to $10 million for usable inventory rendered less
than fully recoverable by the decision to close the manufacturing facility.
These charges are expected to be incurred primarily in Post's fourth quarter
of fiscal 2015, of which approximately $2.5 million to $3.5 million will be
incurred in fiscal 2016.
The estimates discussed above exclude any non-cash impairment charges, which
cannot be determined at this time. Post will be evaluating the need for
non-cash impairment charges on the carrying value of goodwill, intangibles
and property, plant and equipment associated with Dymatize in connection
with the preparation of Post's fiscal fourth quarter financial statements.
Confirmation of Fiscal 2015 Adjusted EBITDA Guidance
Today, Post management also affirmed its fiscal 2015 Adjusted EBITDA
guidance to be between $635 million and $650 million, which includes the
impact of the write-off of approximately $9.2 million of unsalable inventory
described above, which will not be treated as an adjustment for the purpose
of calculating Adjusted EBITDA and other non-GAAP measures.
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