Sypris Solutions, Inc. (NASDAQ:SYPR) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05 Costs Associated with Exit or Disposal.
After initial negotiations with its unions, on November 22, 2016, the Board of Directors of Sypris Solutions, Inc. (the “Company”) approved moving forward with the exploration of a range of strategic options for its Louisville, Kentucky automotive and commercial vehicle manufacturing plant (the “Broadway Plant”), including the divestiture of the plant, the transitional reduction in its operations to accommodate lower volumes, the relocation of production to other Company facilities as needed, and/or the closure of the plant. The implementation of any such option is targeted to be completed before the end of 2017. As previously disclosed, the Company had made several strategic decisions to migrate away from certain of its traditional Tier 1 customers in the commercial vehicle markets, while seeking to replace these customers with longer-term relationships, especially among the heavy truck, off-highway and automotive original equipment manufacturers (“OEM”s) and others who place a higher value on the Company’s innovation, flexibility and core commitment to lean manufacturing principles. As a result of these decisions, the Company anticipates a significant reduction in its commercial vehicle revenues in the Broadway Plant which has prompted the Company’s decision to exit or dispose of the Broadway Plant in an orderly fashion during 2017.
The Company is finalizing its analysis which will take into consideration various cost reduction initiatives, the potential sale of some or all of the plant and its manufacturing assets, the anticipated expenses associated with any closure, and the potential transfer of some manufacturing operations to its other facilities as needed to service customers.
The Company’s ability to implement its plans during 2017 will depend on several items, including obtaining consents from existing customers, successfully completing union negotiations, selling all or a portion of the Broadway Plant or its equipment, and reaching agreement with a number of raw materials suppliers. Accordingly, the Company is unable at this time to provide a firm completion date for these activities. The Company is also unable at this time to make a good faith estimate of the major types of costs or amount or range of amounts that may be incurred in connection with this exit and disposal plan, nor an estimate of the amount or range of amounts of any future cash expenditures. In accordance with Item 2.05 of Form 8-K, the Company will timely file an amendment to this report upon the determination of such estimates or ranges of estimates.
About Sypris Solutions, Inc. (NASDAQ:SYPR)
Sypris Solutions, Inc. (Sypris) is a provider of outsourced services and specialty products. The Company offers a range of manufacturing, engineering, design and other technical services. The Company operates through two segments: Sypris Technologies and Sypris Electronics. Sypris Technologies segment, which consists of Sypris Technologies, Inc. and its subsidiaries, is engaged in the sale of goods and manufacturing services to customers in the market for truck components and assemblies and from the sale of products to the energy and chemical markets. Sypris Electronics segment, which consists of Sypris Electronics, LLC and its subsidiary, is engaged in the sale of manufacturing services, technical services and products to customers in the market for aerospace and defense electronics. The Sypris Electronics is organized in three business lines: Information Security Solutions (ISS), Electronic Manufacturing Services (EMS), and Cyber Security and Analytics (Cyber). Sypris Solutions, Inc. (NASDAQ:SYPR) Recent Trading Information
Sypris Solutions, Inc. (NASDAQ:SYPR) closed its last trading session up +0.001 at 0.971 with 37,881 shares trading hands.