Current market conditions continue to be challenging, necessitating further capacity reductions. The Company believes these actions will better position it for a business environment that it expects will continue to be challenging in the near future.
"The decision to close the Hampton facility has been very difficult," said Winnebago Industries' Chairman, CEO and President Bob Olson. "Unfortunately, it has become necessary to decrease our manufacturing footprint to reduce overhead expenses for the Company. It is particularly difficult to lose valued employees, however, the wholesale and retail market for the Company's motor homes continues to be very challenging and it is important to down-size to market demand."
As a result of the facility closure, the Company expects to incur a non-cash impairment charge of $1.4 to $2.4 million on the facility in the Company's fourth fiscal quarter. In addition, other associated out of pocket costs with the idling of the facility are estimated to be approximately $600,000. The Company will continue to evaluate the need for additional right-sizing measures in accordance with market demand.
Winnebago Industries' management met with its Hampton employees today and will help coordinate employee support from state, regional and local agencies in an effort to assist with job placement, training and various other services and benefits available to dislocated workers. An estimated 40 salaried and hourly employees will be impacted by the facility closure.
Olson continued, "Although the current economic environment is extremely challenging, we continue to believe we are in a strong financial position with sufficient cash and investment balances, no long-term debt and with the benefit of a respected brand name known for its quality products."
Winnebago Industries will host a conference call on Thursday, June 18, 2009 at 9 a.m. Central Time (CT) to discuss the financial results for its third quarter of fiscal 2009 ended May 30, 2009. The Company will release its financial results on June 18, 2009 at 6:00 a.m. CT.
Winnebago Industries' conference call may be heard live via the Company's website, http://www.winnebagoind.com/investor.html. The event will be archived and available for replay for the next 90 days. To access the replay, click on http://www.winnebagoind.com/investor.html .