January 28, 2000 Fourth Quarter Special Charge
Stackpole Limited announced today its intention to record a special non-recurring charge against operations in the fourth quarter ended December 31, 1999 of $11.7 million before tax, or $0.82 per share. This charge consists of: a writedown of the note receivable relating to the 1997 sale of Stackpole Ltd. (U.S.A.) in the amount of $5.0 million; a writedown of Corporate and Automotive Gear Division capital assets of $4.0 million and $1.1 million respectively; and a provision for personnel and other costs of $1.6 million.
In June 1997, the Company sold the net assets of its Stackpole Ltd. (U.S.A.) subsidiary for cash, assumption of certain liabilities, and two notes receivable with a book value of $5.0 million net of currency translation adjustment. In light of the current financial performance of the purchaser, management has determined that repayment of the notes receivable is unlikely.
The Company has identified assets for which it has no planned future use, associated with its Corporate research and development and information systems activities as well as its Automotive Gear Division, and is accordingly recognizing the required writedown of those assets in the aggregate amount of $5.1 million.
"This special charge is a result of a complete review by management of the assets and operations of the Company. In addition it includes a provision to allow for a reorganization of corporate departments in which management and technical staff have been deployed to the operating divisions," noted Robert Lander, Stackpole's President and Chief Executive Officer.
"The assignment of key resources to the divisions is already contributing to improved operating results and will enable the Company to more effectively introduce new products and technology in the future."
Stackpole Limited is one of the world's leading manufacturers of highly engineered, technologically differentiated, automotive powertrain systems and components. Stackpole has more than 1,700 highly-skilled employees at five operating plants in Canada and the United Kingdom. Stackpole is a public company and its common shares are listed and traded on The Toronto Stock Exchange under the symbol SKD.
For further information: Mr. Gary S. Love, Vice President, Finance and Chief Financial Officer, (905) 829-2050 (Ext. 225) |
