Decoma announces consolidation plan and fourth quarter impairment charges
06 Dezembro 2004 - 11:01AM
PR Newswire (US)
Decoma announces consolidation plan and fourth quarter impairment
charges CONCORD, ON, Dec. 6 /PRNewswire-FirstCall/ -- Decoma
International Inc.'s (TSX:DEC.SV.A; NASDAQ:DECA) board of directors
announced today that it has approved a plan to cease anodizing
operations currently being conducted at the Company's Anotech
facility located in Concord, Ontario. The plan provides that those
programs that are currently at Anotech will be transferred to the
Company's Mytox and Rollstamp facilities. As a result, the shutdown
plan will not have a significant impact on the Company's overall
consolidated sales. The above plan is expected to be fully
implemented during the second quarter of 2005. The plan will result
in a write down of Anotech's anodizing fixed assets to salvage
value in the fourth quarter of 2004. The write down is currently
expected to approximate US$16.4 million (US$10.8 million after
tax), subject to final determination of asset salvage values. In
addition, the plan will result in severance costs which are
expected to approximate US$3.6 million (US$2.4 million after tax)
which costs are also expected to be recorded in the fourth quarter
of 2004. The above course of action is expected to result in
improved capacity utilization at both the Mytox and Rollstamp
facilities. As a result, the Company's overall manufacturing costs
are expected to be reduced commencing in the third quarter of 2005.
With respect to its European operations, the Company also announced
today that it will record a fourth quarter impairment charge
related to Prometall's metal trim assets and the extrusion assets
located at its Decotrim facility. The impairment charge will
approximate US$16 million (US$16 million after tax), subject to
final determination of asset salvage values. This impairment charge
is a result of losses that are projected to continue throughout the
current business planning period as a result of existing sales
levels and limited sales growth prospects, relative to certain
assets at these facilities. The above write down will have no
impact on the operations of Decotrim or Prometall, which will
continue in the normal course. Decoma designs, engineers and
manufactures automotive exterior components and systems which
include fascias (bumpers), front and rear end modules, liftgates
and running boards, plastic body panels, roof modules, exterior
trim components, sealing and greenhouse systems and lighting
components for cars and light trucks (including sport utility
vehicles and mini-vans). Decoma has approximately 16,000 employees
in 52 manufacturing, engineering and product development facilities
in Canada, the United States, Mexico, Germany, Belgium, England,
France, Austria, Poland, the Czech Republic and Japan. This press
release contains "forward looking statements" within the meaning of
applicable securities legislation. Readers are cautioned that such
statements are only predictions and involve important risks and
uncertainties that may cause actual results or anticipated events
to be materially different from those expressed or implied herein.
In this regard, readers are referred to the Company's Annual
Information Form for the year ended December 31, 2003, filed with
the Canadian securities commissions and as an annual report on Form
40-F with the United States Securities and Exchange Commission, and
the discussion of risks and uncertainties set out in the "Forward
Looking Statements" section of the Management's Discussion and
Analysis of Results of Operations and Financial Position set out
therein, and subsequent public filings. The Company disclaims any
intention and undertakes no obligation to update or revise any
forward looking statements to reflect subsequent information,
events or circumstances or otherwise. DATASOURCE: Decoma
International Inc. CONTACT: For further information about this
press release, please contact S. Randall Smallbone, Executive
Vice-President, Finance and Chief Financial Officer of Decoma at
(905) 669-2888. For further information about Decoma, please visit
the Company's website at http://www.decoma.com/.
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