MAYFIELD HEIGHTS, Ohio, Dec. 6 /PRNewswire-FirstCall/ -- NACCO Industries, Inc. (NYSE: NC) today announced that its operating subsidiary, NACCO Materials Handling Group, Inc. (NMHG), will phase out its Lenoir, North Carolina, lift truck component facility and restructure its Irvine, Scotland, lift truck assembly and component facility. NACCO indicated that these actions are designed to essentially complete the restructuring of the company's global manufacturing facility structure. Previously announced programs such as Demand Flow Technology(TM), selected component outsourcing and innovative lift truck designs have enabled NMHG to maintain substantially unchanged lift truck production capacity in fewer facilities and at a reduced cost.
The Lenoir component facility, which employs approximately 310 people, is expected to be phased out over a 12- to 15-month period. The Lenoir plant's lift truck component operations, including mast and cylinder manufacturing, will be consolidated into NMHG plants in Sulligent, Alabama; Berea, Kentucky; and Greenville, North Carolina.
The Irvine assembly and component facility, which employs approximately 450 people, is expected to be restructured to an appropriately sized operation over the next 36 months to manufacture three- and four-wheel electric rider lift trucks and mast components for the European market. Other lift truck components currently manufactured in Irvine will be outsourced to independent suppliers.
An internal NMHG study concluded that consolidating the Lenoir component operations into other NMHG plants and restructuring the Irvine assembly and component operations would be expected to significantly reduce the company's global manufacturing costs and improve asset utilization.
As a result of its decision to phase out the Lenoir plant and restructure the Irvine plant, NMHG expects to take a restructuring charge of approximately $8.3 million after-tax in the fourth quarter of 2002, which includes a non- cash asset impairment charge of approximately $2.8 million after-tax. Although this charge will reduce net income in the fourth quarter, NMHG anticipates certain one-time gains in the fourth quarter, including a favorable settlement from a transfer pricing tax audit and a favorable U.S. customs anti-dumping award, to substantially offset the effect of this charge.
In 2003, NMHG expects to recognize costs of approximately $6.4 million after-tax related to this restructuring program. However, total costs of this restructuring program incurred in 2003 and beyond are expected to be substantially mitigated by government incentives. Initial benefits from this program are expected to be realized in 2004 with fully mature estimated annual benefits of approximately $6.8 million after-tax expected beginning in 2006.
The statements contained in the news release that are not historical facts are "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are made subject to certain risks and uncertainties which could cause actual results to differ materially from those presented in these forward-looking statements, including delays in or increased costs of restructuring programs. Readers are cautioned not to place undue reliance on these forward-looking statements. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
NACCO Materials Handling Group designs, engineers, manufactures and sells a full line of lift trucks and replacement parts marketed worldwide under the Hyster(R) and Yale(R) brand names and under the Yale(R) and Sumitomo-Yale(R) brand names in Japan through its 50-50 joint venture with Sumitomo Heavy Industries, Ltd.
NACCO Industries, Inc. is an operating holding company with three principal operating businesses. In addition to NACCO Materials Handling Group, Inc., NACCO Industries owns The North American Coal Corporation, which mines and markets lignite coal for use primarily as fuel for power generation by electric utilities and fuel for a synfuels plant, and also provides dragline mining services for a limerock quarry in southern Florida; and NACCO Housewares Group, which consists of Hamilton Beach*Proctor-Silex, Inc., a leading manufacturer and marketer of small electric motor and heat-driven household appliances as well as commercial products for restaurants, bars and hotels, and The Kitchen Collection, Inc., a national specialty retailer of brand-name kitchenware, small electrical appliances and related accessories.
