James Hardie Industries plc. (JHX,JHX.AX) announced new measures to optimize its manufacturing footprint as part of its ongoing commitment to operational excellence through the Hardie Operating System or HOS.
As part of these actions, the company will close its manufacturing facilities in Fontana, California, and Summerville, South Carolina within the next 60 days. The operations from these sites, which represent approximately 6% of James Hardie's year-to-date North American volume, will be absorbed by other facilities. Importantly, the Fontana site's Innovation and Research & Development functions will remain in operation.
The company expects these closures and optimization initiatives to deliver annualized cost savings of approximately $25 million beginning in the first quarter of fiscal year 2027. These savings will be driven by reduced fixed costs and improved utilization across the remaining manufacturing network. They are incremental to any cost synergy savings related to the recent AZEK acquisition.
James Hardie anticipates incurring one-time pre-tax charges of approximately $40 million to $44 million in connection with the closures and optimization actions. These charges will primarily consist of employee severance, benefits, transition-related costs, contract termination, and facility exit costs, as well as asset impairments and other non-cash charges.
The company expects these one-time charges to be recognized mainly in the fourth quarter of fiscal year 2026, split approximately evenly between cash and non-cash items.
In connection with this announcement, James Hardie reaffirmed its guidance for the third quarter and full year of fiscal year 2026.
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