Business News
Multi-Color Corporation Announces Framingham, MA Plant Closing and Third Quarter Sales Volume
Friday 09. January 2009 - Multi-Color Corporation (NASDAQ:LABL) today announced plans to consolidate its heat transfer label (HTL) manufacturing facility located in Framingham, Massachusetts into its other existing facilities. The transition will begin immediately with final plant closure within the next several months.
“This is another step forward in the continuing optimization of our manufacturing assets,” said Frank Gerace, President and CEO of Multi-Color. “These actions will strengthen our competitive position by reducing fixed costs and increasing manufacturing efficiencies. While this plant closing is a difficult business decision, it is a necessary step that the Company must take to align our manufacturing capacity and fixed cost structure to match current market conditions. I would like to thank all of our Framingham associates for their hard work and commitment to provide quality products to our customers.”
In connection with the closure of the Framingham facility, the Company expects to record a total charge of approximately $2.6 million during its fourth quarter period ending March 31, 2009, consisting of approximately $1.4 million in cash charges for employee severance and other termination benefits related to 62 associates and approximately $1.2 million in non-cash charges related to asset impairments.
In addition, the Company expects total net revenues for the third quarter period ending December 31, 2008 to increase approximately 30% to $63.0 million from $48.3 million. The increase in revenues is due to the Collotype acquisition completed in February 2008. Collotype revenues of approximately $22.0 million for the quarter were offset by negative organic growth of approximately 15% or $7.3 million. Total net revenues are expected to be lower than analysts’ estimates as a result of continued softness within North America and the impact of foreign currency fluctuations.
The Company will provide complete financial results for the third quarter of fiscal 2009 in its previously scheduled earnings announcement on January 30, 2009.