Aeroflex Incorporated Announces Strategic Consolidation of Certain of Its Manufacturing Operations.
Business Editors
Aeroflex Incorporated (Nasdaq Symbol: ARXX)
Company Expects to Save in the Range of $5.0 to $5.5 Million
in Annual Operating Expenses
Aeroflex Incorporated (Nasdaq Symbol: ARXX), a leading designer, developer and manufacturer of microelectronics and automated testing solutions for the fiber optic and wireless communications markets, announced today its strategic plans to consolidate three of its manufacturing operations to take advantage of excess manufacturing capacity and reduce operating costs.
The Company will also record fourth quarter charges to eliminate excess equipment capacity, primarily in its microelectronics division, and for the impairments to goodwill and other intangibles related to its TriLink and Amplicomm fiber optic acquisitions.
In connection with its recently completed acquisition of IFR Systems, Inc., the operations of Aeroflex's RDL subsidiary will be folded into IFR's U.K. operations and Aeroflex's Plainview, NY facility. The costs associated with these actions and other workforce reductions in Aeroflex's Test Solutions Division, are expected to total approximately $2.3 million. These costs include severance costs and the write down of RDL's owned facility to net realizable value. The cash costs associated with these restructurings are anticipated to be approximately $1.5 million. The moves are expected to be completed by March 2003.
In addition, Aeroflex's Microelectronic Solutions Division will consolidate the operations of its Amplicomm fiber optic modulator driver subsidiary into its Plainview, NY facility and its TriLink fiber optic modulator subsidiary into its Colorado Springs, CO facility. The cost of these moves, which include the write down of excess production equipment (including excess production equipment at its Plainview, NY facility), lease buyouts and severance costs, are expected to be approximately $2.4 million. The Company will also record fourth quarter impairment charges for goodwill and other acquisition related intangibles of approximately $11 million. The cash costs associated with these actions are anticipated to be approximately $1.1 million and the moves are expected to be completed by November 2002.
Upon completion of these actions, it is expected that the annual operating expense savings will be in the range of $5.0 to $5.5 million, of which $3.5 to $4.0 million will be cash.
