Symmetry Medical, Inc. (SMA) recently announced a restructuring plan that includes facility consolidation and related headcount reduction. The restructuring aims at increasing Symmetry’s operational efficiency through cost savings. This will help the company to maintain its leadership position in the orthopedic industry.
Per the restructuring plan, Symmetry will consolidate its Auburn, Maine (ME) operations in other existing facilities. The consolidation is expected to be completed by the middle of 2010. The company is also evaluating long-lived intangible assets of its Auburn, ME operations that were acquired in May 2006 as candidates for potential asset impairment.
Symmetry anticipates the restructuring to generate a pre-tax annualized cost savings of approximately $3.4 million. The company will incur a one-time cost between $2.4 million and $2.8 million due to restructuring.
Out of this, Symmetry will record pre-tax charges of $1.8 million to $2.2 million in the fourth quarter of 2009. In addition, the company expects $0.4 million of related expense resulting from relocation and equipment moving expenses in 2010.
Excluding these one-time expenses, Symmetry has reaffirmed its 2009 earnings per share guidance in the range of 63 cents to 68 cents.
Symmetry Medical is the largest original equipment manufacturer (OEM) provider of orthopedic implants and instruments to orthopedic device manufacturers. The company has created a distinct competitive position in the orthopedic device market with its Total Solutions approach. Under the approach, customers are provided with a broad range of products relating to orthopedic implants as well as comprehensive services and production capabilities to bring these implant systems from the drawing board to commercialization in a timely and cost efficient manner.
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