Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) Files An 8-K Costs Associated with Exit or Disposal Activities
Item 2.05
|
Costs Associated with Exit or Disposal Activities. |
On April 6, 2017, the Board of Directors of Aerojet Rocketdyne
Holdings, Inc. (the Company) approved Phase II (Phase II) of the
Companys previously announced competitive improvement program
(CIP). A copy of the press release issued on April 10, 2017
announcing Phase II is attached hereto as Exhibit 99.1.
to Phase II, the Company plans to expand its CIP and further
consolidate its Sacramento, California, and Gainesville, Virginia
sites while centralizing and expanding its existing presence in
Huntsville, Alabama. By 2019, the Company expects to have
incurred Phase II restructuring and related costs of $122.1
million (before any anticipated Phase II incentives to be
finalized with state and local authorities and recoveries through
the pricing of the Companys U.S. government contracts),
consisting of employee related costs of $65.2 million, facility
costs of approximately $36.2 million, and $20.7 million for other
costs relating to product requalification and knowledge transfer.
The Company had previously launched Phase I of the CIP (Phase I)
in March 2015 to maximize facility utilization, increase
operational efficiency and improve the affordability of its
propulsion products for customers. The Company is on track to
reach its annual cost savings goal for Phase I of $145.0 million
by 2019.
When fully implemented, the Company anticipates that the CIP will
result in annual cost savings as follows (in millions):
| Annual savings upon completion of Phase I (expected 2019) | $ | 145.0 | ||
| Annual savings upon completion of Phase II (expected 2021) | 85.0 | |||
| Total annual savings | $ | 230.0 |
The Company expects total costs associated with the CIP, before
any anticipated Phase II incentives to be finalized with state
and local authorities, and recoveries through the pricing of the
Companys U.S. government contracts, as follows (in millions):
| Phase I costs through December 31, 2016 | $ | 47.3 | ||
| Remaining anticipated Phase I costs | 65.7 | |||
| Phase II anticipated costs | 122.1 | |||
| Total costs | $ | 235.1 |
Cautionary Note Regarding Forward-Looking
Statements
This Form 8-K contains forward-looking statements as that term is
defined in the U.S. Private Securities Litigation Reform Act of
1995. No forward-looking statement can be guaranteed, and actual
results may differ materially from those projected depending on a
number of risks, uncertainties and other factors, including,
among other things: economic and financial conditions; the
ability to build, renovate and occupy new facilities by specified
dates; the amount and timing of any expected reduction in
operating expenses; the amount and timing of any costs associated
with relocation of employees; and the ability to implement the
anticipated business plans. Forward-looking statements in this
Form 8-K should be evaluated together with the many factors that
affect the Companys business as described in more detail in its
annual reports on Form 10-K, quarterly reports on Form 10-Q and
current reports on Form 8-K filed with the U.S. Securities and
Exchange Commission. Any forward-looking statement made by us in
this Form 8-K is based only on information currently available to
us and speaks only as of the date on which it is made. We
undertake no obligation to publicly update any forward-looking
statement, whether as a result of new information, future
developments or otherwise.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits | |
| Exhibit No. | Exhibits | |
| 99.1 | Press Release, dated April 10, 2017. |
Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) Recent Trading Information
Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD) closed its last trading session up +0.26 at 21.75 with 608,311 shares trading hands.
