Dec 16 2008
Air Products (NYSE:APD) today announced that it will take a restructuring charge to earnings in its fiscal 2009 first quarter to move to a lower cost structure and better align its businesses to reflect rapidly declining economic conditions around the world. The company also announced that it is revising its earnings outlook for its fiscal 2009 first quarter.
The pre-tax charge to earnings in the first quarter is expected to be in the range of $140 to $160 million, or approximately $0.43 to $0.50 per share. About three-quarters of this restructuring charge is for severance costs related to the elimination of approximately 1,300 positions, or about seven percent of Air Products’ global workforce. The reductions are targeted at reducing overhead and infrastructure costs, reducing and refocusing elements of the company’s technology and business development spending, and lowering its plant operating costs. The remainder of the restructuring charge is for business exits and asset management actions.
The restructuring charge is expected to reduce fixed costs by approximately $50 million in fiscal 2009, with savings expected to exceed $110 million in fiscal 2010 and beyond.
Chairman, President and Chief Executive Officer John McGlade said, “These cost-reduction actions are necessary to reach our margin improvement goals. They are also in response to declining business conditions around the world. This is clearly one of the weakest business environments we have seen across our end-markets. However, our financial position remains strong, and with a significant portion of our business under medium- and long-term supply contracts, we expect to continue generating strong cash flow.”