Breeze-Eastern Corporation Completes Move to New Facility, Takes Reserve Charges
May 06 2010 - 8:51AM
Business Wire
Breeze-Eastern Corporation (NYSE Amex: BZC) announced today that
it has completed its move from Union, New Jersey to Whippany, New
Jersey; the move has been underway in stages since December, 2009.
President and CEO Mike Harlan said: "I am very pleased that we have
been able to complete this move and still meet all of our delivery
commitments to our customers. Despite the extra challenges involved
in relocating all of our operations, we still finished our Fiscal
Year 2010 with total revenue at the upper end of the $65-70 million
range we presented to the investment community during our Fiscal
Third Quarter earnings teleconference. Our customers are conducting
their on-site quality audits of our new facility, with positive
results, and we are ramping up production. Our new facility
incorporates many modern advantages over our previous facility,
which enable greater efficiencies and facilitate teamwork."
The Company also announced that during its Fiscal Year end
reviews, it has determined that it must adjust its estimates of
inventory obsolescence and environmental reserves. These changes
will impact Fiscal Fourth Quarter earnings as follows:
1) Inventory Reserve - In
the process of moving, the Company reviewed its inventory and
identified $2.2 million of items which would cost more to move and
restock than their current or projected future market value; these
items have been scrapped. Since this amount was more than was
expected, the Company's management reassessed the methodology used
for estimating inventory obsolescence and determined that a
modification was warranted. This change in methodology will
increase the Company's estimate of inventory obsolescence to $2.5
million at the end of March, 2010. The combination of these two
events will result in a one-time (non-cash) pretax charge of
approximately $3.3 million ($1.9 million after tax or $0.20 per
share) against Fiscal Fourth Quarter earnings.
2) Environmental Reserve -
During the past several months, the Company received and evaluated
new information regarding several of its environmental sites which
triggered a reassessment of its environmental liability estimates.
To support this reassessment, the Company retained the services of
WSP Environment and Energy (WSP), a nationally recognized
environmental consulting firm. Based upon the new information and
WSP’s analysis and recommendations, the Company has determined that
its best estimate of its Reserves for Environmental Liabilities is
now about $14.5 million (before offsetting cost-sharing of about
$1.5 million), which will result in a one-time (non-cash) pretax
charge of approximately $8.2 million ($4.7 million after tax or
$0.50 per share) against Fiscal Fourth Quarter earnings.
These charges are due to sites related to previously divested
businesses (not the Union or Whippany sites), and involve a
combination of previously-unforeseen work that is now required and
extensions of the timeframes required to complete previously-agreed
remediation and monitoring plans. Although this is a significant
increase, and calculating potential environmental liabilities is
inherently imprecise, the Company believes that this increase will
bring its best estimate of Reserves for Environmental Liabilities
to a level which is reasonable in light of all the factors known at
this time.
Charles Grigg, Chairman of the Board of Directors said: “While
we are pleased to have met our revised revenue projection for this
fiscal year and to have completed our move, we are obviously
disappointed to have to take these two significant reserve charges;
however, it is clear that they are necessary. We are very pleased
with the initial work of our new executive management team, and
fully support their actions to deliver sustained long-term growth
and profitability.”
Mr. Harlan concluded: "When we started the Fiscal Fourth
Quarter, we did not expect these significant one-time charges; but
these reserve adjustments are necessary, and are now behind the
Company. Our core business remains strong and we look forward to
continuing to deliver extraordinarily reliable products, meeting
our customer commitments, winning new orders, and delivering more
favorable returns to our investors in Fiscal 2011. I look forward
to addressing our shareholders and the investment community at our
next earnings teleconference in May."
Breeze-Eastern Corporation (NYSE Amex: BZC;
http://www.breeze-eastern.com) is the world’s leading designer and
manufacturer of sophisticated lifting and pulling devices for
military and civilian aircraft and vehicles, including rescue
hoists, cargo hooks, cargo and retrieval winches, and
weapons-lifting systems. The Company, which employs approximately
175 people at its facility in Whippany, New Jersey, reported sales
of $75 million in the fiscal year ended March 31, 2009.
Important Information about
Forward-Looking Statements:
This news release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, regarding our future operating performance, financial
results, events, trends and plans. All statements in this
news release other than statements of historical facts are
forward-looking statements. Forward-looking statements
involve numerous risks and uncertainties. We have attempted
to identify any forward-looking statements by using words such as
"anticipates," "believes," "could," "expects," "intends," "may,"
"should" and other similar expressions. Although we believe
that the expectations reflected in all of our forward-looking
statements are reasonable, we can give no assurance that such
expectations will prove to be correct. Such statements are
not guarantees of future performance or events and are subject to
known and unknown risks and uncertainties that could cause our
actual results, events or financial positions to differ materially
from those included within the forward-looking statements.
Such factors include, but are not limited to competition from
other companies; changes in applicable laws, rules, and regulations
affecting the Company in the locations in which it conducts its
business; interest rate trends; a decrease in the United States
government defense spending, changes in spending allocation or the
termination, postponement, or failure to fund one or more
significant contracts by the United States government or other
customers; determination by us to dispose of or acquire additional
assets; general industry and economic conditions; events impacting
the U.S. and world financial markets and economies; and those
specific risks disclosed in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2009, Quarterly Report on Form 10-Q for
the period ended December 31, 2009, and other filings with the
Securities and Exchange Commission. We undertake no
obligation to update publicly any forward-looking statements,
whether as a result of new information or future events.
Breeze-Eastern Corp. (AMEX:BZC)
Historical Stock Chart
From May 2024 to Jun 2024
Breeze-Eastern Corp. (AMEX:BZC)
Historical Stock Chart
From Jun 2023 to Jun 2024