Friday, steel and iron company Haynes International Inc. (HAYN), said it would axe 12% of its global workforce and freeze salary to all salaried employees. The company said these cost reduction initiatives were necessary in the light of the current economic environment.
Consequent to the job cuts, annualized savings to cost of goods sold is expected to be about $8.4 million, with an impact of about $5.3 million as net of severance expense for 2009. The annualized savings to selling, general and administrative expense is expected to be approximately $1.1 million, impacting a $0.7 million of net of severance expense for the fiscal year.
Mark Comerford, President and Chief Executive Officer, said, "We believe we must take these actions not only to maintain our financial strength and competitive position in this challenging environment, but also to ensure that we preserve Haynes' capabilities to capitalize on the positive long-term indicators in our end-markets."
Kokomo, Indiana-headquartered Haynes' backlog as of December 31, 2008, was about $199.7 million, lower than $229.2 million as of September 30, representing a 13% decline in dollar revenues and 4% fall in volumes. The fall was followed by a 10% reduction in average selling price from quarter-to-quarter, reflecting continued decline in raw material costs.
Initially, Haynes' planned capital spending in 2009 was targeted at approximately $15.1 million. However, the company is evaluating this planned spending and may postpone certain projects to the latter part of fiscal 2009 or possibly fiscal 2010. Projects are being evaluated to ensure that, if postponed, there will be no material unfavorable impact to operations either in the short-term or long-term.
HAYN is currently trading at $20.43, up $0.36 or 1.79% on the Nasdaq.
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