|Greatbatch Consolidation Plan to Drive Annualized Savings and Enable Future Technology & Business Investments|
CLARENCE, N.Y.--(BUSINESS WIRE)--Nov. 3, 2006--Greatbatch, Inc. (NYSE:GB) today announced a plan for consolidating its corporate and business unit organization structure. As a result, the Company intends to eliminate approximately 40 corporate and business unit positions. This reduction will enable the Company to better match its human resources with the management and technical skill sets required to optimize long-term operating performance. A significant portion of the annual savings will be reinvested into Research & Development activities and business growth opportunities.
Thomas Hook, the Company's President and CEO, stated, "We have successfully completed two-thirds of our three-year plan to consolidate facilities. It is now time to align our organization and cost structures to be consistent with our facilities footprint and the way we will manage our business. This planned organization change will enable more aggressive investment in core product technologies and other business opportunities ensuring Greatbatch's continued growth. In addition, the organization change combined with the consolidation of facilities will substantially improve the Company's cost structure."
The annual gross savings is estimated to be $8.0 to $10.0 million upon plan completion and will generate annual net savings of $2.0 to $4.0 million. Approximately, $6.0 million will be reinvested in critical areas including Research, Development & Product Engineering. The severance costs associated with the consolidation plan are estimated to be $2.1 to $2.3 million and the majority will be recorded in the 4th quarter of 2006. As a result, the company is decreasing its full year 2006 diluted earning per share guidance by $0.06 from the range of $0.71 - $0.77 per share to $0.65 - $0.71 per share.
Some of the statements in this press release and other written and oral statements made from time to time by the Company and its representatives are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended, and involve a number of risks and uncertainties. These statements can be identified by terminology such as "may," "will," "should," "could," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or the negative of these terms or other comparable terminology. These statements are based on the Company's current expectations. The Company's actual results could differ materially from those stated or implied in such forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those stated or implied by such forward-looking statements include, among others, the following matters affecting the Company: dependence upon a limited number of customers; customer ordering patterns; product obsolescence; inability to market current or future products; pricing pressure from customers; our ability to timely and successfully implement our cost reduction and plant consolidation initiatives; reliance on third party suppliers for raw materials, products and subcomponents; fluctuating operating results; inability to maintain high quality standards for our products; challenges to our intellectual property rights; product liability claims; inability to successfully consummate, integrate and protect against liabilities arising from acquisitions; unsuccessful expansion into new markets; competition; inability to obtain licenses to key technology; regulatory changes or consolidation in the healthcare industry; and other risks and uncertainties described in the Company's Annual Report on Form 10-K, and in other periodic filings with the Securities and Exchange Commission. The Company assumes no obligation to update forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results, financial conditions or prospects, or otherwise.
About Greatbatch, Inc.
Greatbatch, Inc. (NYSE: GB) is a leading developer and manufacturer of critical components used in implantable medical devices and other technically demanding applications. Additional information about the Company is available at: www.greatbatch.com.
CONTACT: Greatbatch, Inc. Anthony W. Borowicz, 716-759-5809 Treasurer and Director, Investor Relations email@example.com SOURCE: Greatbatch, Inc.