CooperVision, Inc., the contact lens unit of The Cooper Companies, Inc. (COO) said Thursday that it intends to discontinue the operations of its soft contact lens manufacturing plant in Norfolk, Virginia, over the next 15 months due mainly to increased manufacturing efficiencies gained over the last year. The move is expected to reduce headcount by roughly 570.
CooperVision's Norfolk facility manufactures about 7% of its annual lens production. The company intends to relocate lens manufacturing from Norfolk to Juana Diaz, Puerto Rico, and Hamble, UK. The company also plans to transfer part of its contact lens manufacturing operations in Adelaide, Australia, to Hamble, UK, over the coming four months. No additional hires are expected in Puerto Rico or the UK as part of this transition.
Robert Weiss, Cooper's president and chief executive officer, said, "Our manufacturing employees are first-rate, and this is an extremely difficult decision. Over the past year, we have increased manufacturing throughput while reducing manufacturing headcount by roughly 685 employees. We expect these additional moves will allow us to reduce headcount by roughly 570 more employees while continuing to increase production."
CooperVision expects to recognize pre-tax restructuring charges of about $25 million associated with these moves. Of this, about $6 million will be in fiscal third quarter, $7.5 million in fiscal fourth quarter and the remainder in fiscal 2010. CooperVision expects about $10 million of the charges to be cash related with minimal cash impact in fiscal 2009.
Upon its completion, the company anticipates annual cash savings of about $14 million beginning in 2011 and earnings improvements of approximately $7.5 million in fiscal 2011 and $15 million per year thereafter.
COO is currently trading at $28.04, up $0.31 or 1.12%, on 39,673 shares.
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