Valspar Corporation has implemented a restructuring program and other initiatives to “eliminate redundant facilities resulting from the Lilly acquisition and to accelerate performance improvement,” according to a company-released statement. The activities will result in a $39 million pre-tax charge to earnings for the fourth quarter ending Oct. 26.
The company has also announced further plant closures and a workforce reduction. “When we completed the Lilly acquisition, we announced that we planned to close eight to 10 plants. To date, we have closed seven plants. The restructuring plans announced today will result in the full closure of seven additional plants, the partial closure of four additional sites and an additional reduction of our global workforce by 350 people,” said CEO Richard M. Rompala.
“The restructuring actions that we are announcing today will increase the annualized savings to the $90-$100 million range,” he added. “The increased savings from these actions are expected to be realized over the next two years with more than half occurring in fiscal year 2003.”
Valspar has “transferred over 10 million gallons of production” to date. “With this restructuring,” Mr. Rompala said, “we plan to move an additional 14.5 million gallons. We believe these initiatives will strengthen Valspar’s financial performance in a difficult economy and position us for significant growth as our industri