FRANKLIN ELECTRIC UPDATES PLANS FOR EUROPEAN MANUFACTURING OPTIMIZATION
Fort Wayne, Indiana – December 3, 2014 – On July 1, 2014, Franklin Electric Co., Inc. (NASDAQ:FELE) announced a plan to close its Wittlich, Germany manufacturing facility and complete other asset write-offs, miscellaneous realignments and fixed costs reductions in other European based business units and facilities. As part of this action, the Company will transfer the existing Wittlich manufacturing activity primarily to its Brno, Czech Republic facility. The Company had initially estimated the costs of this action to be between $13.2 million and $14.0 million.
The Company now estimates the pretax charge for these actions to be approximately $19.4 million. The charges, which include severance expenses, professional service fees, asset writeoffs, and temporarily leased facilities costs, began in the third quarter of 2014 and are now projected to conclude by the end of 2015, with the majority of charges to be incurred prior to the end of the second quarter 2015. The increase in estimated costs is entirely due to higher payments for severance and other employee separation costs. Approximately ten percent of these charges will be non-cash.
Finally, the Company estimates these charges will have a payback period of approximately 5 years, mostly as a result of direct labor and facility savings.
Franklin Electric is a global leader in the production and marketing of systems and components for the movement of water and automotive fuels. Recognized as a technical leader in its specialties, Franklin Electric serves customers around the world in residential, commercial, agricultural, industrial, municipal, and fueling applications.
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