Hospira Announces Plans to Optimize Operations, Increase Shareholder Value
24 Março 2009 - 8:32AM
PR Newswire (US)
-- Company Launches "Project Fuel" to Improve Margins and Drive
Growth -- LAKE FOREST, Ill., March 24 /PRNewswire-FirstCall/ --
Hospira, Inc. (NYSE: HSP), a leading global specialty
pharmaceutical and medication delivery company, today announced
details regarding Project Fuel, a multi-phased initiative to
improve the company's margins and fuel its growth. Project Fuel
will capitalize on the company's potential to increase shareholder
value and improve operational efficiency by optimizing its product
line, evaluating non-strategic assets and streamlining its
organizational structure. In conjunction with these actions, which
are slated to occur over the next 24 months, Hospira expects to
reduce its global workforce by approximately 10 percent and deliver
annual cost savings of approximately $110 million to $140 million.
"To maximize our opportunities for growth and sustainable
shareholder value, Hospira is taking a number of important steps to
simplify our business, strengthen our financial position and
establish a strong foundation for our future," said Christopher B.
Begley, chairman and chief executive officer, Hospira. "By reducing
costs and improving efficiencies, we can free up more dollars to
invest for profitable growth and shareholder returns. And with a
streamlined, focused organization, we will reduce complexity,
improve performance and be better positioned to advance our
significant opportunities." Optimizing the product line Hospira's
global product line encompasses thousands of list numbers, or SKUs,
many of which represent multiple presentations of the same drug
compound and serve the same medical need. By simplifying
presentation choices, Hospira can better meet the needs of its
customers with a focused, yet robust, portfolio. In addition to
improving inventory management and manufacturing efficiency,
Hospira expects the streamlined product line to produce indirect
cost reductions through associated decreases in functional support.
Importantly, customers will also realize enhanced service levels
and value, while continuing to benefit from product choice across
the continuum of care. Evaluating non-strategic assets Hospira's
Specialty Injectable Pharmaceuticals (SIP) and Medication
Management Systems (MMS) product lines have been established as key
growth drivers, delivering strong performance and providing
significant opportunity for future growth. As a result, the company
is now able to turn its attention to rationalizing non-strategic
assets that detract from the company's overall growth trajectory
and margin expansion opportunities. Streamlining the organizational
structure Evolving Hospira's organizational structure is another
key step in optimizing its performance and in continuing to ensure
Hospira delivers on its global growth promise. Hospira has
identified, and is pursuing, significant opportunities to improve
efficiencies and performance in several functional areas, including
global procurement, finance and information technology. Efforts
will include de-layering the company's management structure,
consolidating certain functions and heightening the focus on
process improvement to reduce complexity and redundancy, accelerate
decision making and raise overall productivity. Workforce impact
The net projected reduction associated with these collective
actions represents approximately 10 percent of the company's global
workforce, with the majority of reductions occurring in the next 12
months. Hospira will help prepare employees for the transitions
through the provision of assistance packages. "Every day our
employees make valuable contributions to Hospira, our customers and
the patients we collectively serve," said Begley. "We understand
the impact these decisions have on our employees and their
families, especially during tough economic times. Our actions,
while difficult, are designed to benefit all of our stakeholders by
ensuring a strong foundation for our future." Financial information
In connection with these actions, Hospira estimates it will incur
total pre-tax charges in the range of $140 million to $160 million,
of which approximately $90 million to $100 million will be incurred
during 2009. The total charges for the project include cash costs
of approximately $120 million, primarily related to restructuring
costs, including employee-separation and other costs, as well as
process optimization implementation costs. Approximately $30
million of non-cash costs is related to various potential asset
write-downs. Hospira expects these actions will deliver annualized
pre-tax savings of approximately $8 million to $10 million in 2009
and approximately $110 million to $140 million on an annualized
run-rate basis, which it expects to reach by the second quarter of
2011. Webcast A 30-minute conference call for investors and media
will be held at 9 a.m. Central time on Tuesday, March 24, 2009. A
live webcast of the conference call will be available at
http://www.hospirainvestor.com/. Listeners should log on
approximately 10 minutes in advance to ensure proper computer setup
for receiving the webcast. A replay will be available on the
Hospira Web site for 30 days following the call. About Hospira
Hospira, Inc. is a global specialty pharmaceutical and medication
delivery company dedicated to Advancing Wellness(TM). As the world
leader in specialty generic injectable pharmaceuticals, Hospira
offers one of the broadest portfolios of generic acute-care and
oncology injectables, as well as integrated infusion therapy and
medication management solutions. Through its products, Hospira
helps improve the safety, cost and productivity of patient care.
The company is headquartered in Lake Forest, Ill., and has more
than 14,000 employees. Learn more at http://www.hospira.com/.
Private Securities Litigation Reform Act of 1995 -- A Caution
Concerning Forward-Looking Statements This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including projections of
certain measures of Hospira's results of operations, projections of
certain charges and expenses, and other statements regarding
Hospira's goals and strategy. Hospira cautions that these
forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially from those
indicated in the forward-looking statements. Economic, competitive,
governmental, technological and other factors that may affect
Hospira's operations and may cause actual results to be materially
different from expectations include the risks, uncertainties and
factors discussed under the headings "Risk Factors" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Hospira's latest Annual Report on Form
10-K filed with the Securities and Exchange Commission, which is
incorporated by reference. Hospira undertakes no obligation to
release publicly any revisions to forward-looking statements as the
result of subsequent events or developments.
http://www.newscom.com/cgi-bin/prnh/20040503/HSPLOGO
http://photoarchive.ap.org/ DATASOURCE: Hospira, Inc. CONTACT:
Media, Stacey Eisen, +1-224-212-2276, or Financial Community, Karen
King, +1-224-212-2711, both of Hospira, Inc. Web Site:
http://www.hospira.com/
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