December 4, 2008 -- Belden has announced plans to streamline its manufacturing, sales and administrative functions worldwide. The restructuring will result in a work force reduction of approximately 1,800 associates (20 percent) and consolidation of some of the company's manufacturing operations.
John Stroup, president and CEO of Belden, said, "As we reported in October, we have seen softening of our major markets globally, and we expect that economic conditions will remain challenging for some time. Therefore it is necessary for us to further adjust our cost structure so that we can continue to be competitive under such conditions. We regret the hardship these actions will impose on our associates."
In connection with the restructuring plan, Belden expects to incur one-time charges of between $55 and $65 million pretax, or $0.85 to $1.00 per share. The expected charges include severance and other cash costs of $35 to $40 million and asset impairment and other non-cash charges of $20 to $25 million. The company expects that $35 to $40 million of these charges will be incurred during the current quarter, with the balance following in future periods. These actions are expected to provide annualized cost savings of approximately $50 million, with 2011 as the first full year of impact and 2009 savings of approximately $30 million.
Additionally, Belden conducts its annual test for goodwill impairment in the month of December. Given current difficult market conditions, the company expects that there may be some impairment of goodwill and, if so, expects to report any impairment as part of its year-end disclosure of results.
"With Belden's liquidity, strong balance sheet, and history of generating strong free cash flow, we are well positioned to capture market share and successfully execute other strategic initiatives even in a challenging market," Stroup concluded.
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